To Survive, Sometimes You Have to Let Go of Your Vision -- and Ego
Glenn Kelman thought of himself as a software guy. He loves software. He co-founded a company called Plumtree Software. “When I applied for a passport or had to fill out my tax forms, I wrote down that I was a software entrepreneur,” he says.
This would create a years-long crisis for the company. And for Kelman, it would come to highlight an often-unspoken business challenge: Entrepreneurship means exploring unknown paths, and sometimes that leads an entrepreneur somewhere different from where they started. The result can challenge not just their business philosophies but also their very sense of identity. A company’s future may end up riding on what happens next.
To Kelman’s credit, Redfin did start with software. In 2004, it was the first to put local real estate listings onto a searchable map for consumers to use. But then Redfin decided to become a real estate brokerage, too -- building a service in which someone could search for, view virtually and then actually buy a home through the website. The company’s software was designed to allow a broker to do everything a broker does, but remotely. And it confused the hell out of customers.
“The level of dissatisfaction in those early days was intense,” he says. People would call Redfin, asking for someone to give them in-person tours of homes like a normal real estate agent would. But Kelman said no. “That would involve sending a human being and a car out to the property,” he says, “and we weren’t willing to do that, because I thought of myself as a software entrepreneur.” The way he saw it, his software should be all a customer really needs.
Eventually, some employees began pushing back. One asked him to call customers and explain why Redfin was only a “software company.” The demand stopped Kelman cold. “I thought about all those people,” he says. “I knew what they wanted. It seemed perverse for me not to give it to them just because of what I had in mind.”
In 2006, Kelman decided to treat Redfin like a true brokerage -- and so began hiring dozens of agents. But that sparked a culture clash: Redfin’s engineers didn’t like being at a real estate company, and the agents didn’t think they were at a software company. The two sides had no shared language or understanding. And this created the true moment of reckoning. Kelman’s identity crisis had become a company-wide crisis. He’d have to resolve it all.
He started by telling both sides: The word they is banned.
“I used to hear it all the time. Our software engineers would say they” -- as in, the real estate agents -- “don’t use our software because they just don’t get it,” Kelman says. “And I would start by saying, ‘Why don’t you say we aren’t using our own software?’ And the agents would do the same thing. ‘They built that software without ever knowing how a real deal closes.’ And I would say, ‘We built that software.’”
Slowly, this new thinking sunk in. The two sides worked together, collecting data on how the agents engage with consumers and then adjusting the software to make the sales process more efficient. Revenue rose, Redfin expanded nationwide, and in 2017 it went public. It last reported $267.2 million in annual profits, and now it employs more than 1,000 agents.
Today Kelman no longer thinks of himself as a software entrepreneur -- or, for that matter, as a real estate entrepreneur. “I think of myself as someone who’s trying to make things better,” he says. That’s a mission everyone on his team can relate to.