Redfin was profitable last month, all while maintaining our 97% customer satisfaction. The business has been growing by leaps and bounds, in part because the real estate market has had a small rally this summer, but in part because we’ve started to figure out how to prosper in down markets too. What has made the difference for Redfin hasn’t been any one breakthrough that we could have pinned our hopes on, but a combination of small adjustments:
- Giving consumers a choice of agent, and unlimited home tours.
- Publishing agent reviews, which increased demand 36% in a single month.
- Simplifying the agent choices we offer consumers, which increased demand a further 16% in a single month.
- Generating referral revenues from customers in outlying areas that we can’t afford to serve ourselves.
- Figuring out Google optimization, which drove a 300% increase in traffic year over year, though that growth is now slowing.
It’s nice to wonder how much more profitable Redifn can be once the market really recovers. But since real estate is a seasonal business, we’ll have plenty more ups and downs in our fortunes along the way.
TechCrunch has an interesting take on the news: Redfin Turns Profitable, Real Estate Industry Shudders
Redfin CEO Glenn Kelman said his company just turned profitable. Since I was sitting next to him on the panel, I asked him off microphone what revenues were. He said the run rate is around $15 million. 2007 revenues were $5 million, 2006 revenues were $1 million.
That’s great news for everyone except the real estate industry. The Seattle-based startup represents buyers and sellers in home real estate transactions for far less than the entrenched industry rates that take 5%-6% of the sale price of a home and split it between buy and sell brokers.
Disruption is never fun for those being disrupted. The DOJ is hitting the real estate industry from one side, and Redfin is hitting them from the other. The result? A better deal for the rest of us.
Indeed. Which is why I would like to take a moment to congratulate Redfin for sticking it out in a tough time and turning out a great service in an industry that sorely needs some healthy competition.