This Week in Startups - Glenn Kelman on Market Trends, Home-Buying Hacks and Redfin Insights | E1871

Starting point is 00:00:00 People our age own a house and have seen it appreciate like crazy. But there's another group where the latter got pulled up at just the wrong time. And it's creating all sorts of discontent. People wonder why this TikTok generation has bad vibes about the economy? Well, you would too if you were sleeping on your parents' couch. If you couldn't even have anyone over, how are you ever going to get married? So it's a real problem for American society that we don't have enough houses. We're about five million short.

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Starting point is 00:00:58 And Open Phone brings your team's business calls, texts, and contacts into one delightful app that works anywhere. Get 20% off your first six months at OpenPhone.com slash twist. It's time for another appearance of my guy, Glenn Kelman. He is the president's CEO of Redfin since 2005. We've been friends for decades. And this is his fifth appearance here on this week. In startups, he gets the five-timer jacket. That's in the mail, Glenn.

Starting point is 00:01:26 Welcome back to the program. I can't wait to wear my jacket. It's a pretty gray jacket, yeah. It's, you know, to Armani, Zanya fabric. It's pretty nice. And the inlay, it has the five episode numbers you've been on. It's quite nice, but we don't talk about it too much here on the program. Hey, listen, this has been a crazy couple of years, obviously you're the CEO of Redfin.

Starting point is 00:01:45 It's been a crazy couple of years for housing. We had COVID hit. Housing market went on a complete roller coaster. Everybody moved to Austin, Miami, whatever. And the boomerangs, people came back. And all of this was going on during the city. 12-year bull run, all of a sudden, ZERP ends, and we start raising interest rates. But the Fed just said, hey, maybe interest rates, it's time for a pause, and which means then mortgages, I guess mortgage

Starting point is 00:02:12 rates would come back down. So what is the state of the residential real estate market in the United States today as we end the year in 2023, which seemed like a really tough, difficult year? tenuous, but hopeful. I've been on CNBC 15 times over the past six months saying that housing is dead as a doorknail, that it's a whale turret at the bottom of the ocean. But now, with rates lowering, there is hope. And even before that happened, we were seeing a flurry of listing activity. This has been the weirdest correction, Jason, just because normally, when you have a correction,

Starting point is 00:02:48 listings pile up, prices fall. But this time, we didn't even get that. There was a standoff on the buy side. There was a standoff on the sell side. Everybody who could have listed their home decided to hang on to a 30-year mortgage at a 3% rate. And so it was an absolute standstill. But just in the past two months, more and more people have been saying, I'm planning to list my home in January, which makes me one step more hopeful about more sales volume in the first quarter. Yeah.

Starting point is 00:03:17 It does seem like there was a standoff. And the standoff happens every time. You have people who are emotionally connected to their home, and you've told me this, they'll anchor their price to whatever the craziest price was around their home. Just like a startup might's coming out of an incubator, be, oh, what was the highest price anybody got out of my accelerator class? That's the price of my company, without having any other information. Hey, maybe this home has a movie theater in it.

Starting point is 00:03:42 Maybe it's got, you know, gold faucets. Who knows? So let's talk a little bit about the standoff. Why didn't the standoff eventually break down with... the seller saying, hey, I got a divorce, hey, I need a bigger place. Did the sellers never hit desperation because unemployment is so low? What happened? Why did the standoff not break like it did in the past?

Starting point is 00:04:04 So in 2008. Oh, did I guess it? Wow. You did guess it. Maybe it wasn't even to guess. Maybe you know a little bit more about housing than you're letting on. But in 2008, housing dragged the rest of the economy into the abyss where unemployment, low wages, all sorts of economic problems, forced people to sell.

Starting point is 00:04:20 nobody wanted to sell in 2008. The bank forced them to do so, either through a short sale or a foreclosure, that ripped the bottom out of the market, creating all this distressed inventory. We got over it faster as a result. You had 50% price drops in places like Phoenix. This time, people are still worried about affordability. It's at a four-decade low. So the buyers are in full flight, but the sellers are sitting pretty because employment is strong, productivity is strong, wages are strong. So the arrest is, the economy is doing just fine. And housing is at this standstill. Okay. For a young person coming into the market, let's say they're a young professional, they got a great job. They're making

Starting point is 00:05:01 six figures. Maybe they even have a spouse now. They got a fiance. And they are also making, you know, six figures, dual income, no kids. And they're ready to, you know, they're 30 years old. They saved up a couple of hundred K. They're living in a great city, Boulder, Phoenix, Miami, or whatever. And they say, I want to make the jump, I want to buy home. Is now the time to buy home or is now the time for them to rent? How would you advise them if this is your niece and nephew, your kids? Yeah, well, I would just base the decision on how long they want to stay on the home because timing the market is for the birds.

Starting point is 00:05:34 It's hard to do that in the equity markets. It's hard to do that in the housing market. What really destroys wealth is buying a house and then having to sell it two or three years later because the transaction fees will eat you up when you trade a stock. You pay almost nothing to trade it. but when you trade a house, you give up about 5 to 10% of the value, which is really about half of what you've put into it because your down payment was 20. And so Warren Buffett tells you to buy and hold stocks.

Starting point is 00:06:00 I would give the same advice to people. Make sure you're buying the right house and you're doing it for the right reason because you want to live there for a long time. But the real issue is that two people who went to Harvard got six-figure jobs, haven't had kids haven't even put cheese on their cheeseburger are still struggling to buy a house. You've got this four-decade low in affordability, and you've got this arrested development and family formation and all this other stuff because America's forgotten how to build houses. Just one brief stat for you. At this point in baby boomers development, when they

Starting point is 00:06:36 were turning 30, they owned about 30% of U.S. national wealth. But millennials at this point, when they are coming of home buying age, they're starting to have kids, they want to get married, They own less than 20%. And so what's happening is that the housing market went kaput at just the wrong time. Prices shot through the roof. Baby boomers are sitting pretty. Even people our age own a house and have seen it appreciate like crazy. But there's another group where the latter got pulled up at just the wrong time.

Starting point is 00:07:06 And it's creating all sorts of discontent. People wonder why this TikTok generation has bad vibes about the economy? Well, you would too if you were sleeping on your parents. couch, if you couldn't even have anyone over, how are you ever going to get married? So, it's a real problem for American society that we don't have enough houses. We're about five million short. Five million short. And so before we get into that, you had mentioned like, hey, you got to be in a place for a long time. Okay, let's imagine in our scenario here, the dual income, no kids, six-figure earners, went to Harvard or a great school, whatever it is. And maybe they don't have their student

Starting point is 00:07:41 debt. They've been working that out. They're in their early 30s. And they can work remote. They're part of the blessed keyboard class. And they can pick any city. So they don't necessarily have to be in New York City, San Francisco. They could be within a hundred, let's just say, you know, a hundred miles of a major city. So they're going to pick some secondary market. So they're going to buy. But what is the number of years to stay in a place?

Starting point is 00:08:03 You mentioned if you're going to be there for a long time, buy. If you're going to be for a short time, don't. So I just want to put a number on that for folks. Is the number five, six or seven or a different number? What's a long time? Five is the minimum. But I'd feel a lot more comfortable. with seven, I think five is a good number. If you're going to be there for seven,

Starting point is 00:08:19 go with seven. Yeah. Okay. So let's go six or seven. If you're going to be there for six or seven, consider buying under five, you're probably going to, you're going to rent. Let's talk about building homes. I saw Joe Jebia from Airbnb is working on the ADU company now. He was on the pod talking about that. We got to build more houses. But everybody I talked to, and I'm talking about rich people, I know, who are trying to build right now, they were telling me it's taking four, five, six years to build a new home. And that it's costing a thousand or $2,000 a square foot. In other words, they're going to lose money building a new home.

Starting point is 00:08:55 And even if you're rich, you still have to push and push and push to get it done in four years. This seems insane to me. Is this an intractable problem or is there a solution, perhaps ADUs or mobile homes? I don't know what. Factory building of houses? Because why is it so effed? Why is building new homes and construction so effed in America? Well, part of it is the regulatory regime.

Starting point is 00:09:19 Even a place like California where you live has finally pulled its head out of its fanny and said we've got to make it easier to build houses. The whole reason a place like Orange County exists is because somebody who ran an Orange Grove made a deal with a developer and said we're going to create a city and we're going to build 20,000 houses in two years. So the federal government probably needs to get involved. We've gotten industrial policy for semiconductors, for, or green cars, we should do the same thing for housing because you have to cut through county and

Starting point is 00:09:49 municipal regulations. There's all sorts of zoning and environmental reviews. And I am an environmental nut, but I also care about affordable housing. And so we have to cut through that and make it easy to build housing. The people who care the most about affordable housing, crunchy left-wing folks need to go arm and arm with developers and cowboy boots and help them build more housing, at market rate, luxury homes, affordable homes, all of it trickles down to benefit people who are trying to get a break and buy their first home. Right now, startups have to do more with less. And fundraising, well, we all know that's really hard today.

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Starting point is 00:11:30 And Twist listeners get 15% off their first four weeks. So stop burning money and hire developers smarter by visiting lemon.com slash twist. So all units matter. All units matter. If we get any units belt, all units matter. But I think the second thing is, because the building and sales cycle has gotten longer and capital is so volatile right now, I think we need to guarantee some kind of loan for builders. Because the reason they won't stick their neck out and do a really big plat and build a large number of homes at a lower margin is because their cost of capital can shoot through the roof. They're holding the bag on a really expensive loan.

Starting point is 00:12:11 and the rest of Americans who are owning homes actually get a 30-year guarantee. We need to provide some of that stability to the builders to make it easier for them to build housing. This was something I was shocked by. The building loans versus what we pay in mortgages. A mortgage right now is 7% I guess, something in that range. Yeah, yeah, yeah. What does a builder pay if they need money for two years to build a house on spec?

Starting point is 00:12:38 Where are they going to get charged? Well, it's just going to vary from week to week. So they're going to have a project that looks profitable and then the cost of their capital varies with the debt market. So you know this because of all the startups you're involved with that have venture debt. And suddenly the rate on those loans shoots through the roof. The same thing happens here where they're in a very volatile world with a long sales cycle. And suddenly they're left holding the bag. And it's made them very risk averse.

Starting point is 00:13:05 By the way, if we're playing king for a day, I've got more ideas. I think we ought to tax unused land so that people either build on it or give it up. There are so much land speculation in the United States right now. There's this crazy kind of tinfoil hat movement to eliminate all sorts of other taxes and tax unused land. And even like respectable mayors of Detroit, folks like that have suddenly embraced this. So that's something that I'm really excited about to. This is a very interesting concept. People are sitting on plots of land because you have money and you need to park it somewhere

Starting point is 00:13:45 as an affluent person or a business or a fund. And a great thing to do is buy land. We know it's not going down. Historically, that hasn't happened. It's possibly good. But generally speaking, it's a protected investment. So they buy plots of land and they land bank. They just sit on it.

Starting point is 00:14:00 No, it's going to grow 10% a year. So how would that work? people, well, if the land is undeveloped, you're paying a very high property tax, whereas if you put it to good use and you actually build a home that someone lives in, that person pays a lower property tax. And the higher property tax is basically subsidizing a lower tax for people who are living in houses or people who are building properties and using that to run businesses. So it's 1% generally speaking in places like California, Texas 2% tax on the cost. of your home. It's high. So let's just take Texas as an example. So I'm in Texas. I got a million dollar home. I'm paying $20,000 per year. I don't have a state income tax, but I got to pay on my nice home. So then my neighbor or some land baron has 10 plots of land and they're paying

Starting point is 00:14:53 2% on it as well. You would push their rate up to what to get to loosen up that land? I don't know. Maybe three and then have the other one go down to one and a half or something like that. I like it. What's interesting to me, by the way, is that I hadn't heard about any for sales except in Austin, Texas, where suddenly we have heard that people who are running Airbnb empires in a city like Austin, which has been so boom and bust, are now saying, I have to sell these properties. There are a bunch of sales right before property taxes were due this fall because they can't get anybody to rent those properties out. The regulatory regime has definitely turned against these Airbnb empires. And so all sorts of people,

Starting point is 00:15:33 both institutional and retail are liquidating some of their investments. And that's helping ease the market just a little bit so that there is more liquidity in the market, more inventory in the market. Yeah, it was very interesting. We talked about this on a previous episode. We were considering, hey, maybe we'll try Austin for a little bit. A lot of my friends move there. And I was looking at it, listen, I need a nice home. And they were asking two or three thousand dollars a square foot. And I said, wait a second, I'm coming from the most expensive real estate in the world, or at least in the United States, the Bay Area, where two, $2 to $3,000 per square foot, if you can imagine it.

Starting point is 00:16:06 I know for some people, this sounds insane, is the norm. And then Austin, I was like, well, shouldn't I be getting $800 or $900 or $1,000? Shouldn't it be a discount because it's Austin? But I guess so many people rush there at once. Now I'm seeing the same homes I had looked at two years ago, still on market, being repackaged, redone, and they're at $1,000 a square foot. So it has returned to the mean there, I believe, for the high end. Yeah.

Starting point is 00:16:27 And I was going to say that most markets have not had any price drops whatsoever. People keep worrying about it. hasn't happened. The exception are these little boom and bus markets. Austin would be at the far edge of size on that. Boise would be at the lower end where Californians and New Yorkers have played havoc where they flooded in and then left. And now Austin is in freefall. It's been like 10, 20 points of price depreciation, which is not the norm in the rest of the country. But in these little places, it's been really hard on the people who live there. They saw prices get crazy and then they They saw prices fall and they're just trying to plan their lives.

Starting point is 00:17:06 Let's talk about the second home phenomenon. A lot of people like to get a second home. We get the lake house, the dream ski house, whatever it happens to be. Mazel tov, if you can swing it and have something for your kids. Maybe their kids eventually. It's a beautiful thing to do. And what kind of impact is that have on the market? Because you talked about Airbnb.

Starting point is 00:17:26 That was constraining housing. People were building Airbnb empires. And then, you know, the second home thing. And then there was this Picasso, Picasso, whatever, was trying to split up a home into eight pieces. It seemed like a clever idea. I had one or two friends who tried it who actually did like it. They bought one friend had a place in Palm Springs. And I guess he was that he had an eighth, and maybe he had two of the eighth share.

Starting point is 00:17:47 So we had a quarter share. So, you know, of the 365 days a year, you know, maybe he had 90 of them or something in that range. What do you think of those kind of ideas or just generally speaking, second homes that don't get put into the Airbnb market or a just, you know, people use them for 50 to 100 days a year. What do you think about those? Are you asking for my moral judgment on those people? Not necessarily moral judgment, just the impact it's having on the markets. Hawaii would be another incredible example. It's hard to have workers in Hawaii because there's no housing. Any ski town is going through the same thing. People buy second homes and ski towns. Okay, fair enough. Airbnb speculators buy up the rest of the

Starting point is 00:18:28 inventory. And you know who gets squeezed out is the person who runs a restaurant. at that ski mountain or a ski rental store. In Hawaii, there's a lot of tension because if you work in Hawaii and you're a native to the land, you're getting pushed 45 minutes, an hour, an hour and a half from the city center, and you're going to have some resentment. So let's talk about that phenomenon if there's easy solutions, common sense solutions. Well, there aren't any solutions without tradeoffs, but what Canada has done is draconian and I think exciting for many affordable housing advocates where they put this massive taxed on

Starting point is 00:19:05 four unknown investment properties and on unoccupied vacation housing. And as a result, almost no one can afford to have a second house and say Whistler or something like that. You're paying an extra $100,000 or $200,000 a year just in taxes if you're not living in the property at least 28 days. And it greater the Canadian real estate market. And you know what Canadian said about that? Good.

Starting point is 00:19:30 Good. We want housing to become more affordable. We want prices to crash. And as an American, I was so interested in that because here the politics are quite divided. Homeowners form a cartel. I'm a homeowner myself. So, of course, all of us want prices to be high, but we forget what that does to younger people who are trying to catch that break. So I think there are different countries who have really different attitudes about,

Starting point is 00:19:57 affordable housing and when Americans say we wish we had affordable housing we just don't know how to get it this is the easiest problem to solve climate change hard income inequality hard building houses and making them affordable is so easy and the real reason we don't have it is because not all of us want it even people who think they want it don't really want it they don't want that condo next to their house casting shade or blocking their view they don't want taxed that would lower property values. They don't even want more supply because that again would lower property values. And so, you know, you read in your history classes about primogeniture where the oldest male son gets all the property and it created conditions for colonialism, revolution,

Starting point is 00:20:45 and the second son going to Australia or America, what we have isn't primogeniture. It's like denogeniture. Like we're dinosaurs like me. Own all the houses and young people don't own any of them. And I think we're not going to have like a revolution where French people are storming the best deal over the price of bread. But we do have a lot of social unrest because kids can't afford houses. And it's a problem we can solve. It's so easy to solve. Yeah. Make more supply.

Starting point is 00:21:15 Get rid of red tea. There's some creative things like changing tax structures for unused land. I love that. Yeah. Foreign ownership maybe pays a different tax rate. That's a really interesting idea. Listen, if I go to your website and it looks terrible, the design's no good, it's not responsive, I'm out.

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Starting point is 00:23:06 Valley. Somebody will find a mansion with eight bedrooms. They rent it for, you know, 15,000 a month, 20,000 a month, or even 30,000 a month. But since it has eight bedrooms divided by 30,000, you know, it's not that bad. It's 3,000 a room or something, right? It's usually two to three thousand a room versus getting a one bedroom for 4K in the Bay Area. And you get a backyard, a pool, and, you know, giant kitchen and living room, everything like that. So people, and it's more fun. So, and then there's also people buying ADUs, mini homes in lots, in Texas, etc. Nashville, other places, this trend of, hey, we bought an acre or two or three.

Starting point is 00:23:41 And then we just started putting air streams on them. Rest in peace, my friend, Tony Shea, he lived like this. He's a billionaire. And he, because he liked the socialization. So are those creative ideas where people try to break the same? system or hack the system? Have any of those tipped over into being viable yet? And are there other examples of hacking the system like those? Well, I think ADUs, accessory dwelling units have tipped over. There's a promising startup, a Bodu that is really pushing this. And they've made it easy and

Starting point is 00:24:09 affordable where you go to a website and you just click a button and one plops down in your backyard for 200 grand, you know, a month later. And what's interesting to me about that is that people who build big apartment buildings, who big build housing projects, suddenly see an opportunity wherever they have unused land just to get a better cap rate where they can get more tenants into the same physical footprint. And so they're the ones who are advancing it as fast as the consumers are. So I think there's something to that. Where I'm a little bit skeptical is, yes, you're willing to have roommates in your 20s. You'll go into your 30s doing that if you have to. But I used to believe there are all these new hippie,

Starting point is 00:24:49 communes with polyamorous type relationships that were going to happen. Polycute. FTX. Yeah. I read about that stuff. It's not my way. But mostly I still think people are like pretty normal. They turn 35.

Starting point is 00:25:05 They have a kid. They want a little yard. Like it's so boring and conventional. I promise myself it would never happen to me. It has. And what's even worse is now that I'm a proselytizer for everyone else to do it too. Because eventually, whether it happens, when you're 28 or 38, people still want that. I've tried talking people out of the American dream

Starting point is 00:25:26 because we meet so many people who can't afford a house. And it's actually pretty hard to do. Let's talk about your company, Redfin, who was brutal, COVID, crushed all the real estate stocks. But what a great year. Market cap up 132%. You're back above a billion, back to the Trace Thomas Club after you got your butt kicked, but it's a long road back. Still, great revenue, $269 million in Q3, even in this down market, and you're cutting your losses. You know, how has it been? I know you did the riffs. That was really tough.

Starting point is 00:25:57 We talked about that previously. Yeah, yeah, yeah. But this experience of being in a boom market, black swan of COVID and then the market correction and the interest rates, inflation, insanity, the end of ZERB. How do you look towards 2024 and get in the company, you know, back in that growth position? Well, I'm really excited about the company. I know I'm supposed to say that, but it's how I really feel. There were times that I felt kind of blew about it in late 2020, early 2023 because we were halfway done with the cuts and we knew we had more

Starting point is 00:26:30 to go. We didn't think the housing market would get better. And we also knew that when you cut, you decrease your ability to take share so that in a declining market, we might have lower share in that market. But now, first of all, I feel like, I just feel like I've learned so much. Like, I should have known it all along, but I've learned what really matters to our customers and what stuff was just things that I was too in love with. And so if we grow our business now and we're going to grow, it's all going to fall to the bottom line because we're running so much leaner and faster and I'm so much happier. I hadn't realized how miserable it made me

Starting point is 00:27:11 trying to do too many things. And I took a lot of inspiration. Airbnb kind of went through this terrible phase when travel shut down. And I read one of the founders talked about how finding their focus actually liberated the company. And it's totally how I feel. Like, if I had all the money in the world

Starting point is 00:27:30 and I could refund all these projects that we were doing that were just roads to nowhere, I wouldn't do it. And I used to feel the other way about that. So anyway, we just got all the executives together. We did a little presentation about why we're so hopeful on 24. And what I said is that it's a freaking miracle that all of you are here that you actually stood with us because we told the board a year ago that we know we've got a good value proposition.

Starting point is 00:27:57 We've got a good website. Everything's going to be fine. We're going to keep growing except for one thing that when you trade down the three bucks a share, all the talent walks out the door. and whether you're a Pied Piper or not, that'll kill you. And that's why I'm not sure we're going to make it. But everybody stayed. Almost everybody stayed.

Starting point is 00:28:19 That's pretty great. Now, you know, they got $3 stock that's trading at 9, and we think it can double or triple again. That's what we hope. That's why we're here. And so it feels better than when we were trading at, you know, some insane multiple and, And even if we executed perfection, we probably couldn't build on that price.

Starting point is 00:28:40 Yeah, the way up is just such a great place to be. And yeah, you know, you have these Black Swan events, things get shaken up. Yeah. Ending all of the side quests, is what I hear from a lot of founders. And I think Brian Chesky talked about it here on on this, on this, he was doing a magazine, he was doing this, he was doing that. And really what he needed to do is take the core product and just make it 10% better every six months, every three months, whatever he could do to make it a better experience. And you've seen him with his product launches, I'm sure you've been watching. Hey, what is the number one thing you hate? Tell me what you hate. Oh, you hate the fact that when you do a search for pricing on Airbnb, oh, you don't get the full cost. And then you get sticker shock when you do get it. Okay. We'll change that. Okay. You hate taking out the garbage and having to make the beds. Great. We're going to change that. We're going to tell hosts no more making it painful to leave your Airbnb. If you got to go catch your flight, you should just be able to catch your flight. And so he went through that and he just found all the pain points and fixed it. That's a beautiful, simple, elegant way to run a business.

Starting point is 00:29:40 How do we make it less painful? How do we make it less more joyful? The end. And no more side quests. No more six, seventh, eighth business unit, right? And that's what you did too, right? Yeah. And it really was, this Brian Chesky tweet that just reminded me.

Starting point is 00:29:54 It's going to be a good thing. Like, people want to have a funeral for every project that you kill and you have to do that because you believe that other people worked hard on it. But after you've grieved, unlike when a person dies, you're glad. the project. So it's just been addition to come to an action. Yeah. Yeah. Where did you wind up with work from home and remote work? I know you like the energy of being in the office, but yeah, we made people come in. We did. And what was it like? Tell me about the first week you made people come in and then tell me about week 10 and have you gotten to week 50 of it. What's it been like

Starting point is 00:30:31 to be in an office with humans? I just didn't realize how depressed I was when I was working alone. think you probably walk on a wider ridge than I do for mental health where you could walk through hell and you'd be fine. But for me, I thought I was fine. It was nice and convenient. You know, I'd go toast a muffin in the middle of the day in my kitchen. But when I got back to the office, I just went, pooh, I felt so much better. And you've got to get over this little hump because it sucks to commute. Even if you ride a bike like me, you've got three inches of dust on your desk and 20 on open packages and nobody's there and you want to kill yourself. But when we brought people back. We only did two days a week and we said, look, if you talk so much about the

Starting point is 00:31:13 redfin culture and yet you're not even willing to commute 10 or 15 minutes to get here and see people twice a week. So there was just a lot of complaining about it. And then it's turned out to be okay. And it's not about productivity. We think you can be really productive at home. It's just actually that when you have some gnarly problem where you're totally freaked out about what are we going to do and it's very unbound, it's just really easy to get in a room and it feels so good. It feels so good.

Starting point is 00:31:40 So I think we've struck a good balance for ourselves. I know every boss says that. You went high, two days home, three days, three days home, two days work. Yeah, we almost did three and two and maybe we will at some point. But right now it's a good group. It's a good group.

Starting point is 00:31:55 And people are coming in on the other days anyway. So I don't, I've always hated taking attendance saying, When do we have to be at our desk and can I go to the dentist? Like, I don't care. Just get your work done. Yes. But I do think part of your job is just.

Starting point is 00:32:09 Yeah, go ahead. Finish your thought. Part of your job isn't stamping out widgets. Part of your job is inspiring the people around you and get together and coming up with a good idea. If I were competing against a company and they were all remote, I would be, oh, good. That's how I would feel. Yes. Are you still using your personal number for business?

Starting point is 00:32:30 Well, stop. Such a common mistake that founders make, but you never have to make that mistake again because of Open phone. Open phone has rethought every single detail of what a modern business phone should look like. Open phone makes it super easy to get a business phone number not only for you, but for your entire team. And here's the magic. It works through a gorgeous app that works on your phone and your desktop. I can tell you open phone is amazing because all of our sales team and ops teams use it every day. Why? I don't want people using their personal numbers. then they leave the company and they're still getting phone calls from our customers, clients,

Starting point is 00:33:05 and partners? No, I want all of that to be professional and open phone. Is the number one rated business phone on G2 for customer satisfaction because it's so professional and easy to use? Here's a feature I love. You can create a shared phone number with multiple employees fielding calls and texts from that number. So we want to reply to our founders, to our partners really quickly, and we don't want to miss a call, we don't want to miss a text, and that's why we use open phone. And it's already affordable starting at just $13 per user per month, but Twist listeners get an extra 20% off for the first six months at openphone.com slash twist. If you got existing numbers and you're paying through the nose for some insane service, you can port those right over

Starting point is 00:33:44 to Open Phone at no extra cost. So here again is the offer. Go to openphone.com slash twist and get this all organized. Get the 20% off as well. Openphone.com slash TWI-S-T. You see correctly the people who are working together are an advantage. I was talking to a major LP, a limited partner of venture firms like mine, he said, wanted to do my strategy for you in person. I'm like, I can't get people in office. I'm sorry. It's just like everybody went to the five, you know, corners of the earth and 90% of we do Zoom meetings. It didn't happen for us. He said, I would invest twice as as such money in a venture firm that only invested in companies that didn't invest in remote workers, remote work startups. And I said, let me ask you why. He said, obviously, this is such a huge

Starting point is 00:34:27 competitive advantage. So would you invest only in founders that guarantee that they're going to have an in-office culture? And I was like, no, not going to make that concession. But I get it. He's like, can you find me a venture firm that does it? So anybody out there can have that idea as a thesis. But this is an LP who's smart, like a super smart LP. I mean, the abuse of the system was also too, I guess part of the problem. You know, there were probably 10% of people, 20% people who were abusing this. I found people abusing it in my system. And they're no longer with me. And it is what it is that people, some people will abuse trust. And, you know, then they're, the good news about that is, right, they're opting to save you time because they've opted out of being a good citizen in the

Starting point is 00:35:08 company, a good, a good coworker. So yeah. Did you find tons of abuse in that make you lose your mind like me? I think we found the abuse before we actually brought everyone back because when you go remote, the first thing you figure out is you thought you were able to measure productivity. You thought you were able to judge people on results, but really you were still taking attendance and looking at who is here at five and who got here before nine, which is the wrong way to run a company anyway. And so, you know, after everything that we've been through, these crazy ups and downs, we've just really been able to focus on how quickly did you build this technology? How quickly did you develop this program? How good is it? And so I didn't have a huge trust gap with

Starting point is 00:35:50 people where I thought they were secretly at home and they didn't give a crap. I think we kind of figured out how to make sure folks were engaged and productive. So the managers are better at managing remote people and productivity. They're better at just managing for results. It's the culture part of it where your culture can, like a Zoom meeting, it can only ever be a five or a six. And your culture can only ever be a five or a six. And I'm not saying that, you know, work can ever be a 10. where you're like, ooh, I love my job every second. But it can be a good thing. It can be a source of meaning and a way you connect with friends and all that other stuff.

Starting point is 00:36:29 I don't know if I told you that I was reading this book to my kids. What is it? It's by that guy who does cartoons who used to work at NASA. Anyway, he did this cartoon that showed how people make friends. And it had these graphs that were really big from zero to 20 for, you know, school and the playground. And then there's this huge desert from 20 to 50, 20 to 60, where the only place you really make deep friendships is at work. And especially, you know, if you're 23, like all my friends were at this startup where we were a band of brothers and sisters who worked together and we still get together to go skiing and on vacations and all of that. And it was this crucible that I just think I'd be really sad if I didn't have that.

Starting point is 00:37:17 My life would be a lot thinner. I wouldn't want my kids to start their job. I'll remove. I mean, the mentoring issue is so real. Like, how do you mentor somebody on Zoom? You know, as great as it is, you really got to get in the room and meet people. So it's nice to see society slowly click back in and people start to go to the city center and have lunch. And yeah, commuting sucks.

Starting point is 00:37:39 Just try to keep your commute under 30 minutes and you'll be fine. Anything above 30 minutes, it's going to have some mental health impact, I believe. I know. There's trade-offs. You got to just use that commute wisely. It's got to be like audio books, self-improvement, or with friends or something. This weekend startup podcast. Well, who cares?

Starting point is 00:37:57 Suck it up. What's that? What is your idea? I said, or you could listen to this week in startups. Yes, of course. No, I mean, honestly, I have people who tell me that when they were commuting, they were listening to the show every day and then they forgot about the show because they weren't commuting anymore.

Starting point is 00:38:12 And then they came back to the show. And now people who are doing commuting, I think commuting plus podcast is like a direct correlation because... Yeah, I'm just trying to help your audience count. Although it doesn't need me out. You're booming. That's done pretty. We done okay.

Starting point is 00:38:24 We done okay. All right, listen, Glenn, it's amazing to have you as a frequently guest on the program. Always such great, honest, candid insights. And we wish you great success. Thank you for fighting the good fight for consumers. And I think you're going to do awesome. And I think it's going to be a great couple of years for Redfin. Well done.

Starting point is 00:38:41 Thanks, Jason. Bye, brother. Great to see you. Great to see you. Bye, Jason.

This Week in Startups - Glenn Kelman on Market Trends, Home-Buying Hacks and Redfin Insights | E1871

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