Glenn Kelman: GOAT

One of the greatest innovators in real estate announces his retirement

A couple of days ago, as I write this, Glenn Kelman, CEO of Redfin, announced his retirement via social media:

Rocket CEO Varun Krishna will take over as CEO in the interim.

Since Glenn himself has said he will take his monumental talents to some other industry, perhaps it is not too early to reflect on his achievements in real estate. One never knows, though, since this industry does have a sticky tendency.

Regardless, if we were to ever setup a Real Estate Industry Hall of Fame, Glenn Kelman would be enshrined in it on the first ballot alongside other truly monumental innovators like Dave Liniger, Gary Keller, Rich Barton and Lloyd Frink, Art Bartlett and Marsh Fisher (who launched the first real estate franchise) and probably a few I am forgetting.

Glenn did not found Redfin; three guys in Seattle—David Eraker, Michael Dougherty, and David Selinger—did that. But he joined as CEO in September of 2005 and for all intents and purposes, Redfin is Glenn’s magnum opus since two of the founders left before he joined, and the third left shortly thereafter.

In Redfin’s early years, Glenn Kelman was quite combative; something he acknowledge later in interviews. He thought the industry was a cartel that was out to stomp out Redfin for trying to save consumers money. I think I first became aware of Glenn Kelman because he was one of a very few people willing to go before Congress and testify, which he did in July of 2006 at the House Subcommittee on Housing and Community Opportunity’s hearing on The Changing Real Estate Market.

So much of what he said at that hearing would echo over the years from others like Trelora and the lawyers for Sitzer and Moehrl. For example:

Competing agents have threatened us with violence and tried to intimidate our clients, concocting grade school legal mumbo jumbo about the perils of Internet service. We expected a combative reception, but it is the industry’s impunity that has come as a shock. We have drafted complaints to the State commission, only to realize that the commissioners ran the brokerages we were complaining about. We posted photos of agents who were blocking our customers to a Web site that we called the Hall of Shame, only to have Realtors apply to join. The industry has failed to regulate itself.

Over time, Glenn moderated both his tone and message, as Redfin went from a bete-noire of the industry to one of its staunchest supporters. This video, which I just saw researching for this article, hints at his evolution:

“Software is not eating the world; the world is eating software.” I think the 2006 version of Glenn would not have thought that. The 2013 version, after years of working with actual real estate agents on the ground helping actual buyers and sellers transact the least-virtual of assets (structure on land), did.

This interview with James Dwiggins and Keith Robinson of Real Estate Insiders Unfiltered is illustrative of his and Redfin’s evolution:

His evolution was, in a way, the evolution of technology itself as it mixed with the most real of industries. Both were profoundly changed.

Kelman’s Contributions & Innovations

Redfin under Glenn Kelman has been one of the most important pioneers who constantly pushed boundaries, often without success but always moving the ball forward.

As one of the (if not THE) first website to enable map-based search, Redfin essentially pioneered the real estate web as we know it today. And Redfin under Kelman has consistently had some of the best UI and UX in real estate, even against far larger rivals like Zillow. More than a few Zillow executives have told me over the years that they personally use Redfin for their own real estate search and I know that Redfin has pushed Zillow, Realtor and others on creating better UI and UX across the board.

But Kelman’s innovations and contributions do not stop there.

Redfin pioneered the use of W2-employee agents. It still remains a W2-based brokerage, with its agents actual employees of the company instead of being independent contractors.

As a technology company that happened to operate a brokerage, the in-house tech at Redfin was the best of the best in agent productivity technology for years. Numerous agents over the years who worked at Redfin, but then left for other brokerages, have told me just how great the Redfin system was. It may be still. I do not believe that Compass with its in-house technology platform exists today if Kelman had not pioneered brokerage technology as he did at Redfin.

The rebate model was, of course, both visionary and controversial at launch. REALTORS went to the mattresses to pass anti-rebate legislation in a number of states, most of which still remain to this day. Kelman’s relentless focus on saving consumers money may have rubbed his competitors the wrong way, but it also paved the way for other discount brokerages to trod.

Yes, Redfin has adjusted the discounts based on the market, it has tried bundle pricing, etc. etc. but the goal always was to compete on price—not something that has taken the industry by storm, and not something that the industry tended to love. Still, that Redfin so consistently competed on price is a contribution and an innovation as well.

Many of Redfin’s innovations died on the vine. Often, it was because of fierce industry opposition. One example is Agent Scouting Report, that made public the complete sales and performance histories for every agent in a Redfin market. In effect, Kelman exposed the holiest of holies in the MLS, which brokerages get and use for recruiting. But when consumers were able to look up just how many sales an agent had, or what her DOM stats and List-to-Price ratios were, all hell broke loose.

1000watt wrote about it at the time, and got comments from Glenn Kelman that showcase exactly what made him so special:

You might wonder, too: doesn’t this hurt Redfin? Their agents are going to come up short against agents at other companies in a lot of cases.

Here’s Kelman’s answer:

In some cases, what you’ll see is that an agent at another brokerage is a better fit for that neighborhood, an inevitability that has been a source of great controversy within Redfin. Why would we ever help anyone realize that a Coldwell Banker agent is her best choice?

But once you ask that question, you’ve already framed the debate in terms of short-term consequences rather than long-term principles. It leads you down a path where every market analysis concludes that it’s a good time to buy, and every review of a Redfin agent is five-stars.

The world doesn’t need more brokers like that. It needs a broker who will just tell the truth, the whole truth, and nothing but the truth. We’ll win more clients that way than we’ll lose — and we’ll win everyone’s trust.

Well, the industry went after Redfin with a vengeance, and forced Kelman to pull the program. But while admitting defeat, Kelman made a statement that most of us still have not dealt with adequately:

As you may have heard, Redfin just pulled the Scouting Report we released last Thursday to allow consumers to see the deal history and performance metrics of any real estate agent. The basic problem is that the data wasn’t accurate, first because of bugs then ultimately because of problems with the source data in MLSs.

Only a tiny fraction of transactions weren’t accounted for but it would have been enough to destroy our credibility if we had insisted on keeping Scouting Report live. Had the data been accurate we’d have defended ourselves from MLS and agent complaints ’til hell froze over, but in the absence of accuracy we have no defense.

Other innovations, such as RedfinNow and Redfin Direct kind of sputtered along, but didn’t truly take off. Still, Kelman needs to be recognized for trying them, for experimenting, for pushing the envelope.

Among the Greats

To go through the entire history of Redfin, its innovations, its fights with the industry, with everything it has done (brilliant or otherwise) would take a book. I hope Glenn Kelman will write that book, as it will also be a history of how the internet and technology changed real estate.

I have had my issues with Glenn Kelman. Sometimes I thought he was the best leader in real estate who combined intelligence with humor with steadfast courage with quirky nerdiness (“Delayed Blast Fireball” will forever go down in history). Other times, I thought he embodied the woke and silliness of his hometown Seattle.

I wouldn’t say we were close, but I did know Glenn. I have spoken to him multiple times, met with him a couple of times on real topics, and corresponded once in a while. In all of my interactions with the man, I found him to be charming, scary smart, funny, self-effacing, but with a steely determination underneath the aw-shucks nerd surface. I have always respected the hell out of him, and still do.

Now that he is moving on from real estate, I wish him the very best. I am confident that he will make an impact wherever he lands, whatever he puts his very capable hands to next, and that we will be hearing about him in years to come.

There are a few truly great leaders and innovators in real estate. Glenn Kelman is without a doubt one of them. Happy trails, GK!

-rsh