Redfin's CEO explains why competitors should fear him (RDFN)
- Online real-estate brokerage Redfin faces growing competition from venture-backed rivals.
- But CEO Glenn Kelman says those companies shouldn’t underestimate him or his team, saying they are “wild, freaking animals.”
- Kelman’s bravado aside, the growing competition comes as the company’s losses are already growing as its tries to diversify its business.
Glenn Kelman may look like a nice, even ordinary guy. But he’ll have you and everyone else know that when it comes to business, he’s an animal.
Kelman is the CEO of online real-estate brokerage Redfin. His company, which went public last year, has been seeing increasing competition of late in the form of venture-backed real estate startups, including Knock, Door, and Amne.
Not long ago, he met the head of one of his competitors and asked the exec why he thought he could beat Redfin.
“I think we’re going out-hustle you because we want it more than you do,” the competitor said.
That set Kelman off.
“It was like an atom bomb dropped down my throat and exploded,” he said in a recent interview with Business Insider.
With his bachelor’s degree in English from the notoriously liberal University of California at Berkeley, and his dad-like V-neck sweaters, Kelman may have an assuming background and appearance. But he’s determined that no one is going to out-compete him or Redfin.
“I think he had no idea what kind of savage beast master he was dealing with,” Kelman said.
He continued: “We are wild, freaking animals. You can’t sell more houses for less money any other way. You’ve got to fight and claw for it.”
Redfin’s losses are swelling as it tries to grow and diversify
Of course, Redfin’s going to need more than just Kelman’s bravado to survive and thrive. Even as the company’s competition is intensifying, it’s already struggling to build a profitable and sustainable business.
Last quarter, its loss swelled from the year-ago period even as its revenue grew, thanks in part to shrinking gross margins — the difference between its revenue and its direct costs for offering its services. And its stock price is off 36% percent in the year-to-date after missing Wall Street’s earnings expectations.
Redfin has made a name for itself — and gained market share — in part by offering lower commissions than traditional real estate brokers. The company also prides itself on paying high salaries to its brokers in an effort to attract the best ones.
But some of Redfin’s competitors are offering even lower commissions, which could potentially lead to a damaging pricing war.
The company has started to diversify its business by buying and selling houses directly to consumers rather than just serving as a broker and by offering mortgages.
“I worry all the time that we’re losing too little money or too much, that we’re investing too much in growth or not enough,” Kelman said. “But I also feel very confident that investors are getting their money’s worth.
“This company is busting its butt to make customers extremely happy.”
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Read the full article from it’s original source: http://uk.businessinsider.com/redfin-ceo-competitors-in-online-real-estate-market-should-fear-him-2018-6