Duet:  JohnLScott vs Redfin

8/2/07

Late start again on notes because of tech problems with the wiki. Will edit notes later:

We're two years into a new business model and have 2% market share of buyers in Seattle

Q:  Glenn, what is different from what you are doing?

We think this is a different company.  I've talked to ZipRealty and others, and they are still sales driven.

That's not the culture at Redfin. 

Always tempted to drive transactions, not sure how much market share we will have two or ten years from now. 

Q:  Why would you go into new markets rather than expanding market share into existing markets?

Glenn:  We need to travel to new markets to make sure

Our challenge is to grow the business.  I think we will take a break after we open Chicago.

Q:  How does Glenn grow without hiring sales people?

Glenn:  An agent is NOT a sales person, they are a customer service representative.

Brad:  Somehow this word sales person has a bad connotation.

Lennox:  When the internet came along, we switched from customer to client -- client for life!

One of our mottos is that we are known through our competency.

Q:  What's wrong with a sales person?

Glenn:  I do think there is difference between the service you need to sell a house, and the time you invest to acquire

new clients.

Q: 

Glenn:  You can buy and sell homes online.  If you find your home online, you can

Our goal is to work with the client after they've identifed their home. One of the mistakes we've made is that we now show

homes. Junior agents provide tours, usually they are someone just out of school. They really don't question whether you

like the house, they just provide access to the house.

Q: 

Glenn:  Buyers have changed, and if they hadn't, we'd

Q:  Explain why the commission is

Lennox:  Our clients want expertise, during and after the sale.  Buying and selling a home is a personal, emotional,

and financial advisor.  80% of our customers come from relationship.

Q:  To get that relationship, you need a commission model - why not work with someone who is an employee?

Lennox:

Glenn:  Wonder if folks are influenced by studies on commissions. The original study by the economists at Northwestern

and more recently (second study).

I would say that John L Scott would be an even better company if agents were compensated on customer satisfaction.

Lennox:  The commission model draws the best people into the industry.

Q: New Tech?

Lennox:  If it isn't instant, it isn't quick enough.  Now we are moving forward with real time real estate.  Mobile clients.

Richardson, TX:  100,000 people live there, and they are laying out their 3rd generation mesh network.  They say you will

be able to upgrade to 10 times the speed of T1 connections, and that is on your mobile phone!

I got the info on a trends tape -- I have not been to Richardson, TX but this is going to blow the lid off the future

(check qoute).

Q:  Glenn, how much do you pay your agents?

Lennox:  We outsource to RealTech, we created our new map application with help from MicroSoft.

Q: 

Brad:  The reason I like both of you is that you are both crusaders. I really want to congratulate both of you.