This Week in Startups - Redfin CEO Glenn Kelman on the current state and future of the US housing market | E1261

Episode Date: August 6, 2021

Redfin CEO Glenn Kelman joins to discuss the current U.S. housing situation (05:05), homebuilding rates, San Francisco (23:43), remote work (28:22), generational work-life balance differences (35:24), Redfin's approach to real estate (46:52), regulation, DOJ & MLS (58:33), & more.

This week in startups is brought to you by Indochino makes custom fitted suits, shirts, and casual wear at affordable prices. Shop for your next best look or book a virtual style consultation at Indochino.com. Right now, you can get $50 off any purchase of $39 or more by using code Twist at checkout. Com for business. Healthy and happy employees create successful companies. And that's a fact. Com for business can help your employees be their best selves at work. Get a free well-being e-book and one month free of Com for business after you attend a free demo at com.com slash twist.

And Notion is one place for notes, docs, projects, and everyday work that goes way beyond a wiki. Go to Notion. dot SO and use promo code twist to get $250 off an annual team plan. So just so anybody knows, this is an interview with my friend Glenn who runs Redfin. Good to see, Jason. Good to see. It's going to be a kind of different interview. We're starting from wherever, catching up with each other.

I'm in Florence. He's in, you want to disclose where you are? I'm in Seattle. He's in Seattle. And we've been friends for over a decade, I guess. We met at Sequoia back in the day, I guess. And you were not only that I was at war

I just want all of your investors to know that I got into a funk with my investors and I talked to you because I thought about quitting or I didn't know what to do and I was being totally dysfunctional and you told me just to grow up and to grow a pair

which I did and it was some of the best advice I've ever gotten so whenever you asked me to be on this podcast of course I have to say yes and it's also just a lot of fun well you know it's like that scene in the godfather he comes godfather godfather i need this part and he goes you can stop by acting like a man i think i'm frayno i think i'm frayno in that

slap me around a little jason i basically gave you the tough love but you know i to your question i always tell people on this podcast if you see me on the street even if i'm with my family it's no big deal just say hey j cowl love the pod if you want to tell me an episode or a guest you love oh i love sock oh i love glen i love this person the pot. That even makes me feel better because I know you're a legit fan. The only thing I do ask is don't be weird. Like, somebody sat next to me in a restaurant and at the end of dinner. And I had a whole conversation with my fiance and now wife at the time for an hour and a half in New York. And the person was sitting right next to me. At the end, he just lived over me. I love the podcast. I love the show.

And it's just like, oh, man. You just overheard the whole conversation. That's a weird time. And then you're rewinding. Say, what did I just say. Well, that's exactly what I was thinking. And then second, the other one that's happened multiple times. What would be the most inappropriate time to pitch an angel investor? Think that's real. I'm drinking your espresso, Glenn. When you're losing it with your kids. That would be terrible.

Yeah, if I'm like trying to get the kids to behave. That would be actually worse than what I was thinking. At the urinal. I've been pitched three times at a urinal. This is not a joke. The urinal is sacred, Glenn. that's my time to you know to just be there with one reflect and get one thing done release it's just about the release and i you know and you're i already have a hard enough time in a public

bathroom getting things started you know every man has a little bit of that you're trying to get the flow going i thought you were the one person confident enough to always let it go all right usually i would but it kind of breaks your flow when somebody starts pitching you you and you're starting to just get going, it kind of puts a, it breaks the flow. I'll leave it at that. I don't want to get too bad. You lead an entirely different life than I do. I have never once been recognized anywhere. Maybe being on this podcast will change it. It will start. Every once in while, my twin brother is recognized where people say, you're going to walk right by me, and he'll say, I'm not Glenn. And they'll say, come on. But he is there. He's my twin. We just

look the same. He's your twin. Listen, there was a lot of reasons why I wanted to have you on the pod, one, to catch up like this. It's always fun. But number two, so much is going on in real estate. And I was so confused by trying to understand the market. I was like, who do I know who's really smart? And I thought, Glenn, Redfin. Now, you didn't come to real estate for background here.

Like, you didn't come to Redfin and run Redfin as CEO from 2005 to the president because you loved real estate. You were going to be a doctor. and you're going to go to med school, all this kind of stuff. Yeah. But you then figured out you loved it and you've done a lot of innovative stuff there. Let's start with, and we'll get into Redfin and all the innovations that have gone on in the space. I wanted to start with, what is your take on what is going on with the housing crisis slash bubble slash appreciation? Because I've never seen anything like this.

And I lived through the last bubble, the 2008 time when I bought my first house. and so just generally people are watching housing prices go through the roof people migrating I don't get the sense that a lot of the people in our circles are selling their original home they're just buying a second home and then they're sitting on the first one because it's appreciating faster than the stock market which then is screwing with supply tell us everything from where you say because you have the data oh wow well I don't know where to start I think there are two trends and one is that chickens are coming home to roost and the other is that the dam is broken and you've definitely spoken to that second trend, which is that all this money built up in San Francisco and

New York, everyone in Pittsburgh and Tulsa, Oklahoma, were talking about how they could create Silicon Valley wherever they were, and we never thought they would, but now they finally have. And so I think it's actually good for the country that technology expertise, the professional classes can live anywhere, but it does create these social disruptions. People moving to Nashville are paying nearly twice as much as the folks who live there for a home. They come in with monopoly money from New York or California, and they send home prices shooting through the roof. And the reason that those prices have continued to go up

is that in San Francisco, when prices went up, it just reached a natural limit. But for someone moving to Boise, Idaho, you could pay three times as much, and you're still spending less than a million dollars for a house, so it feels so cheap. It's just that the people who started in Boise are suddenly priced out of the market.

this idea that you could have a working class job and be able to afford the American dream was still possible in the middle of the country. And that has changed not over a 20-year period, but over a 20-week period. And it's just a massive disruption. And so that's the first thing. It's just we are now all free to move about the country. Yeah. Yeah.

So we have the pandemic. People realize they can work from anywhere. Big companies paying big salaries to tech workers, information workers, say, we want you to come back and then they realize, oh, wait a second, we are in a prison's dilemma here. You know, Netflix and Apple said, you have to come back. It's not negotiable. And then the employees were like, yeah, you know, we're not coming back. I'm going to go work at Google or Twitter or Square because Jack believes we can work from anywhere.

And they were like, okay, you can work from anywhere because we're not losing our top talent. That's kind of what happened, which means now people can live anywhere and do that arbitrage, A $3 million condo or a house in San Francisco, a three or four million dollar brownstone in Brooklyn. Now it gives way to a million dollar place in Austin. And you feel like, wow, I'm a genius. And the people in Austin are like, you paid a million dollars for that. I paid $600,000 two years ago. You're an idiot.

That's exactly. And it's a ratchet. I've seen this over many, many moves. The people who suddenly get a three-car garage and have a bedroom. for each kid, never go back. Even if you're a zillionaire, you get addicted to the cost of living in Texas or Florida. So I think in Florida, for every one person who's leaving the state, seven are coming in. In Texas, it's five.

And in general, for low-tax states, for every person leaving four are coming in. So there's just this great migration. And it's also causing a political upheaval because San Francisco, New York, Seattle, have all gone through protests, Black Lives Matters, a bunch of issues that have really royal the social fabric and they want to invest in that and some of them will call you as an entrepreneur or a CEO and say that we want you to support higher taxes, which is something that I've always been supportive of. But now when they ask, are you going to leave Seattle? They act as if my personal decision matters when really we don't have one office in Seattle anymore. We have a thousand

offices, each employee deciding do I want to live in Florida or North Dakota or Texas or Utah and they are migrating to the lowest cost place to do that. So I think it's actually destroyed some of the leverage that big cities have had to raise revenues and solve some social problems. And that's just going to put more pressure on the federal government. So there's all sorts of fun implications about it. But I think the second challenge is that we just had so long to build housing. Like for 10 years, I've been saying, we just need to build more housing. And we've argued about whether it should be affordable housing or housing for rich people. It doesn't really matter because when you increase the supply, you are going to lower prices overall. And whether it's a left wing person or a right

wing person, we have not been able to get behind that, especially on the left. You have a lot of nimbism where people worry about the character of neighborhoods. They worry about zoning. They don't want density. Mayors who used to be proud to go to a ribbon cutting ceremony with a developer are just absolutely averse to that. They wouldn't be caught dead with a developer because people are so opposed to growth. And so that's one of the reasons that I ended up I think San Francisco is just because the city just stuck its head in the sand. You know, I lived in the mission for a long time, which was a very diverse area. It became an absolute tech zone by the time I left.

And it was because we couldn't build any more housing. And so that has happened from San Francisco up to Seattle, down to Denver, out to Portland, over to Boise. The money just arcs from one place to another. And in every place, it just wrecks home prices. And so I think that's the other challenge. We just have to figure out how we can get very aggressive about building houses because this is still an incredible land. There is so much space in America compared to where you are or anywhere else in the world. And we just have more room to grow.

We worry about inflation. But I think one check on that is this idea that we can just spread out in a way that no other country can. And so I think that's happening. But I still wish we could invest more in housing. I think it would help the working class. I think it would help the whole country. Listen, I know you're going to feel angry. buying an expensive suit and oh my god what if I get a stain on it and can I afford it?

All of those worries and fears are going to go away right now. Because if you go to Indochino like I just did, you will get a perfect fitting. You go in, they've got a great staff, they show you an unbelievable amount of fabrics, all beautifully organized. And then they measure you perfectly, takes like 15 minutes, all your measurements right into a computer, beep, beep, beep. Then they tell you the price. And I'm like, wait a second. Is that the price for one suit? Or that's just for the pants, or that's just for the vest or just for the jacket? Like, no, that's the whole, that's the whole price, JCal. I was like, that's impossible because

$3.99 for an incredible suit with all of this intricate choices. You can pick the monogram, the lapel, the linings. They make your suit perfect. Indochino is now open at Select Nordstrom's stores. giving you even more ways to get a great fitting for your personalized clothing. And you can find your nearest location at Indochino.com. I-N-D-O-C-H-I-N-O-C-H-I-N-O-C-N-O-C-N-O-C-N-O-C-O-C-T-O-C-T-C. Indochino.com, use the promo code twist, and they're going to give you $50 off any purchase of $399 or more just by using Twist. Again, Indochino.com, use the promo code twist.

It's a really, really great experience. I want to unpack one piece of that because, and this is one of the reasons I wanted to have you on the show is that you're not afraid to talk about the second order and third order effects of this. You have a nimbism here in San Francisco in the Bay Area that is very peculiar in that you have a very liberal city that wants to solve social problems, is very woke, is very progressive, I mean, the most progressive in the country, let's face it. There's no place more progressive.

I think on planet Earth than San Francisco. But at the same time, they were. refuse to build more housing. And you said all units help the housing because if you add supply, then the price is a law of supply and demand. Yes. It's just a law of supply and demand. But we in San Francisco in the Bay Area have been so nimbie that they are fighting and they have now tainted the concept like you're saying of developers building luxury units because in their mind, luxury units signal something bad. but if you had luxury units going up,

then affluent Facebookers or Googlers would not be taking a three-bedroom with a non-bathroom in the mission. And they would take the one that's already done. Yeah, the economics on this are universal. You can't find an economist who would argue against building more housing as a way to limit home price appreciation.

I would prefer affordable housing too, but you are still making housing more affordable by building anywhere. And I think some of the issues are about, you know, what type of housing we build. But some of them are much more selfish than that. People are worried about shade. They're worried about traffic. In my own neighborhood, I was at a block party where my neighbor was trying to get me to sign a petition to block a condo development that is now about 40 yards from where I'm sitting. And my wife was like, just sign it.

It's so important to her. she made the macaroni and cheese, she walks our dog for us, we should really do this. And I just said no, because that's the whole problem is in single family neighborhoods where you have just a lot of houses, we need a little more density. We're close to transit. It's a perfect place to build a condo building. And it's made the neighborhood better. It's made the neighborhood more diverse and it's limited home price appreciation. So, you know, I guess I wish my house were a little more expensive, but I don't wish that housing in general more expensive. And that's the other problem, is that some of these groups almost function like cartels. So you have these neighborhood associations

that try to block construction because people want to maintain the value of their own home. And we're not thinking about that as a cartel where whenever you systematically organize to limit supply so that you have a monopoly on a good and increase the price of that good, you are damaging society to your own benefit and acting in anti-competitive ways, but that's exactly what it is. So I am tired of seeing the Black Lives Matter sign and the not my backyard sign in the same freaking lawn. It is such a contradiction in terms. It's basically the same thing.

And they've really dressed it up by saying, well, we want to protect the shade. We don't want this park to get shade for 45 extra minutes or, oh, my God, the traffic is going to be unbearable. But what they're really saying is we want, we don't want a certain group of people to live here. A person who could afford a $1,200 studio, a $1,500 one bedroom is different than the people who can afford a $7,000 a month mortgage on a $1.5 million house. I kind of think that's what's really going on. I think that's part of it.

And I think people just generally prefer space. And part of what we need to do is just make room for everyone. So there will be a little more traffic. But density is also good. Yeah. You get another coffee shop. Yeah. with the density, I think when people don't realize, and having grown up in New York, when things got more dense, the single family homes skyrocketed in value.

Yeah. So if you built an apartment and in a, if you put a six, if you made a six story, you know, whatever, 20 unit apartment complex in an area where there were a bunch of single family homes and a bunch of people lived in that, not only would those apartments become more valuable because you had a good school district, etc. All the houses around it would become. more coveted. Everybody wanted to be in that area. In a way, they're working against their best interest. Yes. Yes.

Yes. People are dumb. It's unbelievable. Yeah. Well, I don't know if they're dumb, but I just think that they haven't squared their broad political aspirations with what they're doing at the neighborhood level to welcome different types of housing and different types of people. And so we're getting better at it.

We're getting better at it. what's the best argument to these, or is there a great argument to these nimbie people to get them, especially these crazy liberal ones, to get them to just appreciate more development in San Francisco. Is there any argument in your mind that you've ever seen permeate their nimbianism? I have seen it. I've seen a lot of people switch on this issue. And I think the best argument is that all of your progressive ideals don't square with your anti-development stance. Because everyone has a narrative.

that I am basically a good person and when you appeal to their goodness and when you talk about how just one part of their ideology doesn't square with all of their other aspirations, I think people can change. And then maybe the other argument is that people have Manhattan as the model of what they don't want and your hometown of Brooklyn is probably a better model. You don't have to go up 40 stories right next to my house. That's more than 40. five minutes of shade, that's almost all day. But what about five? What about seven?

What about four? That's progress. Yeah, especially when it's a single family home and it becomes a five-story. You could have 10 units in the place that was one unit. One home could be 10. Yeah. Yeah. And so there are cities that have handled it well in their cities that have.

Yeah. You don't want to. So you basically have to sell, listen, it doesn't have to be Hong Kong in Manhattan. It could be Brooklyn and Austin or something. like that. Is there a city that is doing this well that NIMBY people could look at and say, wow, that's another city where like Brooklyn's one. What's another, or let me phrase this question differently. What's a city that is the most pro development in the country or what three cities are the most pro development and are booming because of it? Who's winning?

Well, let me give you two examples. Yeah. So Nashville would be an example of a city. that is booming because it is so pro-construction. People are voting with their feet. If you're not going to build housing in San Francisco, I'm going to move to Nashville. And I actually am a progressive person for the most part. But this would be one A-B experiment where the conservative side has one. Almost everyone is moving to more conservative parts of the country, even if they personally are liberal, because.

we're building more housing there. The cost of living is lower there and the taxes are lower there. And so some of that is a race to the bottom that they want good schools and good roads without paying the taxes or they want to start a company in California and then sell the stock for it in Texas, which you can take issue with. But some of it is about just the fact that I can find a home to buy at almost any price because in Nashville they are building them hand over fist. And so I'm not. What's the next city after Nashville, you think? Atlanta would be another cities when you go down. Let me give you another tale of two cities

is just Seattle and Vancouver. So Vancouver is about three hours north of here. It's in Canada. It does actually look a little bit like Hong Kong. It's been very welcoming to immigrants. And that city has been booming when there was this huge real estate crisis in the United States.

Canada did not have that problem. There were plenty of people who wanted to move there. prices kept going up but at a reasonable rate because they have built so much density. And so if you were to compare Seattle to Vancouver, two cities that used to be very similar, there is much more density in Vancouver. And it's an incredible, beautiful, walkable city. If you're an urbanist, you love Vancouver. I actually went there and I was just like transfixed with how vibrant it was. I was like, this reminds me of Sydney, another high functioning city I love. Yeah, yeah, yeah, yeah. A city by the bay. And that is very interesting, the two.

cities, both of them very liberal. And then during the Trump era, correct me if I'm wrong, those four years, United States was blocked off for Indian or Asian immigrants in large part. And Canada, I had a person very high up in the government say to me, J-Cal, you have people you want for your startups. We'll take them here. We'll give you tax credits and the cost of living will be lower. We will get them a visa in under 10 days. Just email us. And I was like, I've never gotten that phone call from Trump's office or from Biden's. or Obama's previously. I was like, well, Canada is aggressive.

It is a competition right now for talented people. Oh, yeah. Well, we've had people get stuck on the wrong side of the border where you employ a Chinese national who goes back home and then can't get into the United States to do his job at Redfin. And so we ended up opening an office in Vancouver for that purpose. And I know so many other tech companies that are doing that. So I guess there's something for everyone.

of every political stripe in this podcast so far. There's some liberal policies that work. There's conservative policies that work. I hope you can be ecumenical about it and really pick the best ideas regardless for your politics. Well, I mean, it is one of the great things about, you know, it's not, this isn't a, this is a podcast about innovation and startups. And I think what you're saying is the 50 states in the United States, as well as some,

you know, next to us like Canada and regions, are actually like startups now. and they're innovating and they have an offering for consumers, and those consumers are businesses and citizens. And that means two types of real estate. I know you don't work in the commercial real estate space, but we have something like 14 Salesforce towers of open office space in San Francisco. What is going to happen in commercial real estate in a city like San Francisco, given that you had massive building of commercial real estate in San Francisco,

and at the same time, work from home appeals most of the companies who were there. And nobody, including yourself or myself, wants to live in San Francisco. I lived in San Francisco. I lived in San Francisco. I left. It wasn't safe for my family. I wanted more space. And I didn't appreciate the way it was being run. And so what happens to all that commercial real estate if you had to speculate? Well, first of all, I think San Francisco is mostly a safe city and it's a beautiful city. So I left for my own reasons, but it's not a rejection.

of the city, I do wish that they had been more aggressive about solving the housing crisis by building more housing. But massive deflation is what's ahead for commercial real estate, because even if you convert some of those buildings into condos, the rationale for living downtown was to be next to Twitter or Salesforce or whatever your employer was. And now when people are working remotely, I don't think they necessarily want to live downtown as much. So just looking at the housing market, the housing market for single family homes, as you had already observed, has been red hot. The housing market for condos has been less so.

Some of that's about sharing an air conditioning or heating system with other people. But mostly it's just about the fact that people have wanted more space. So I don't think that converting commercial real estate into residential is going to solve many problems. I actually, my kid is on a soccer team with another kid whose parent holds the, owns the building that Redfin leases. And he was telling me that I know y'all are coming back. Commercial is going to be back bigger than ever. That's just watching the game.

I don't think so. You're like, okay, fella. Yeah. That's optimistic. I mean, being delusional is part of being a great entrepreneur, isn't it? Like, you have to be a little delusional. But that's straight up delusional. the idea that tech companies are going to be able to take people who have left and relocated, like you said, to a bigger space and to a working for a moment.

I mean, that's just farcical that that will happen in our lifetimes, I think. Yeah, I mean, almost every CEO right now is comparing the length of their leases because we're all trying to figure out when we can get out. Oh, you just signed a 10-year lease in 2019. Oh, man, what are you going to do about that? then somebody else would say, I signed a 10-year lease in 2011. And so it came to do it the perfect time. And if you look at the companies. Yeah, yeah.

Well, we sort of went through peak office in 2020 or 2021, early 2021, where Facebook and Google weren't just doing the sushi chef and the little ball thing that you jump into, but they were also thinking about building housing for their employees next to the campus and Apple had a big tower. And it was just peak office. And now the companies that were most militant about asking people to come back are the ones that had the biggest edifice complex, the ones who had either built their own space or signed a very long lease or did something that was sort of an ego trip kind of landscape architecture and crazy building architecture. And it just seems a little silly now.

And so turns out people work well remotely, as you've probably already established on this show. Healthy and happy employees create successful companies, and that's a fact. Com for Business can help your employees be their best selves at work. Partner with the number one mental fitness app. Provide support and tools for all of your employees. Com can help kickstart mental well-being initiatives by empowering employees to stress less and to rest better and build their resilience. Com has an entire library of content specifically designed for the workplace, and it includes Lo-Fi music playlist so you can get in that flow state, quick breathing breaks, guided meditations,

and hundreds of soothing sleep stories so that your team gets a great night's sleep and they come back the next day ready to take on the world. They even have programs tailored for mental health and productivity like their mindfulness at work series. Millions of employees at over 600 companies like Lincoln, iterable, and Universal Studios, use Com for Business. I have been a Com user, and I was an investor in the company. Luckily, it's such a great company. It works so well. And I'm so proud of them that they have this business product now because a lot of my employees

are under a lot of stress, not just because they work for me, but working from home, all the things going on in the world. You need a little equanimity, and the way you're going to get that is with Com for business. So get in there, folks. Com is offering a free well-being e-book for HR and Benefit Leaders and one month free. after you attend a free demo at com.com. slash twist.

That's right, a free ebook and one month free after just attending a simple demo at com.com slash twist. Once again, C-A-L-M dot com slash T-W-I-S-T. I have a friend whose theory is, he's one of the most successful entrepreneurs ever, and I'll leave it at that.

And his theory was Taj Mahal syndrome. When people start to build their like Taj Mahal syndrome at their company, like they they want to build that Frank Geary building no offense Frank Geary yeah iM pay for for CAA frank Geary for Zuck whatever the apple headquarters whoever designed that yeah when you're when you get into that mode it's so encompassing to build your you know structure it's like your pyramid it's like your Taj Mahal that what about the business that got you there like are you putting the same amount of consideration into the next iPhone is instagram and facebook's next next

update as considered in the ad network and privacy settings as considered as the frank geary building i'm guessing zuck and you know tim cook put as much time into those buildings during that six month period or year when they were being built as any other thing on their plate and that's yeah it's a waste but okay what about converting because you said you think that's too hard because of centralized system but if this you know work from home then continues then you won't will convert but it'll still be deflationary you're just never going to get the money back that you put into that space because being downtown it just isn't as good of a location as it once was.

So I believe in cities long term. I am an urbanist. I love density. I love walking to restaurants and coffee shops and grocery stores and all the rest. But the actual downtown business space where all the lawyers and bankers were, I just think that that has been overvalued. And now we're going to see the air come out of that balloon. almost entirely. And there's just nothing that's going to make it stop.

Now, were you 100% work from the office before the pandemic? Were you 80%? Where were you? And then how do you think about it as the CEO of a thousand-person company? How do you think about it? Because you're listening now. Yeah, no, I know. In your opinion. I hope they are. Mostly we worked from an office. And I've had time to reflect on how much of that was my own ego, the feeling that I got when I walked into the office and seeing everyone working hard and feeling the buzz of the culture, how important was that to me? One of the reasons that I got involved with startups almost right out of college was because there was this huge hole in my life.

I missed the dorm. I missed the sense of purpose that I had as an idealistic college student, and I found it again in working 24-7 with other entrepreneurial people. first to build Plumtree software and later to build Redfin. And so I really wanted us to all be together. And I still think that there is a living death doing one Zoom after another. I sometimes feel like a zombie.

But I also know that cracking the whip and just making people come in when they have to commute 70 or 80 minutes to get to the office, it ain't worth it. And what you have, because of a housing crisis, every employer is going through this is people say, especially when they work at a housing company like Redfin, I'm a software engineer, I'm a highly paid professional, and yet I still don't make enough to buy a house in one of the core parts of the city. And when they say what I'm going to do is work remotely, you don't have to give me a raise.

I'm moving to Nebraska, and suddenly my wife can actually stop working or my husband can stop working because one income is going to be enough to pay the bills on a $250,000. house. All you feel is relief. You don't try to tackle them and say you've got to stay in Seattle. You feel relieved. And our challenge had been that we have a San Francisco office and a Seattle office. And we always wanted people to move to the San Francisco office because the home office was Seattle was easier for us to recruit there. And so some people would want to do that, especially younger folks. San Francisco is so beautiful. But then when they went down there, even though we were offering to pay them 50 or 60 percent more, they'd say it's not worth it because they tore homes over the and say, I'm not going to move into that shoebox.

So we have had, you know, a slow migration. And America had had a slow migration out of these major urban centers for a long time. The pandemic was just the straw that broke the camel's back. It may have been leading California for five years before. It feels to be like the pandemic is massive accelerating because we were already having this conversation and employees come to us and say, hey, can I stay where I am? I'm like a top tier employee. I might leave if you do.

And it was like this negotiation. Now it's like the balance of power. I don't know if you saw Apple folded, Netflix folded. Everybody's basically folded and just said, you know what? Okay, do what you want? As long as the ball keeps moving forward, what have we lost? Because some of the things in coming to an office, you know, the espri de corpse and the, and the energy was palatable. So for everything that is gained, getting rid of the commute, all of that seems amazing.

And I think it's probably, I don't know, what percentage great and upside. But what is lost? And then what percentage is, you know, in this tradeoff in your mind? Is it 80% good, 20% downside or all upside? What do you think? I think it's on balance good. It's definitely on balance good for the employee, especially if you have a family. I think it hurts new hires who are just trying to learn the lay of the land,

especially if you're younger and you don't already have a network of friends and family in town. There was this time when work, especially at a startup, was almost like going to a church that people met their friends that way, they met their spouse that way, they got their sense of purpose in life from that office. And now it's all being mediated through this screen and that is definitely a downgrade. Yeah. So I think in general work has been. become less important for Americans. And what's been hard for me is that I was never the smartest entrepreneur in the world. I was just the hardest working one. So somebody else would figure something out in 30 minutes, but I was willing to be there all night to grind it out. And if you

develop that blue collar ethic generally across the company that we're just going to have to work a little harder to deliver more value for our customers, it doesn't quite square with the labor shortage that we now have, the remote work, liberation that we've all gone through, I have lunch with my kids, and I'm still a driven nut job. I work all the time. You're asking me about my vacation, and it's just this anxiety that I'm not a good enough CEO to slack off. So I need to figure that out, and I think Silicon Valley. I'm trying to figure that same thing out. Yeah. But so tell me where you are in this, because it, there is also, you and I are both Gen Xers.

We were raised with like, well, maybe we could take over the system and we could be in charge and we could start our own things. And now this seems like this other generation was like, why would you want to give that up when you could become a freelancer and take six months off and Yolo and go to Coachella both weekends? And we're trying to manage a workforce that now is disconnected from we wanted from our lives. They want something different, it seems. work-life balance, I guess, is how most people say it.

So did you think it's generational? Because that's kind of my thought here is like, when I hear work-life balance, I'm like, I'm sorry, I don't understand. You know, Jason. You're talking about. I love what I do. Why would I want balance? I love this.

Well, have you ever read, I know this is a bizarre reference, but there was this, I think, 10th or 11th century monk, the venerable beat. And I remember reading him in college. he said that the monks now and, you know, 1050 are so much worse than the monks in 1030. And I was like, oh, please, all of you were very religious and very devoted. And so I try to avoid the crankiness that one generation is lazy and another generation isn't. But I do think that, I do think that for me, I've needed a calling that in between plum tree and redfin, went public. I made plenty of money. I could have gone anywhere in the world and learned kite surfing

or sat on a beach in Costa Rica. And what I really wanted to do was to make a difference in my life. You referenced at the beginning of the show that I had this crisis of conscience where I almost became a doctor, which would have been the worst thing that could have ever happened to me because it is so rules-driven and narrow in some ways and so good in other ways. But I just had to be free and creative, but I still had to figure out a way that I could make a difference. And I'm not sure that speaks to everyone in the same way. You know, some people feel that in joining a company and signing up for a mission, they're just giving up their freedom.

And so there's always going to be that group of folks who want more degrees of freedom, who want less meaning out of their work and just more time to spend on their hobbies. And then I think they're going to be those special little freaks who I still want to gather around me who really want to change the world. and are willing to put their shoulders to the wheel and work together with other folks to do that. And I don't know how else to change the world. I don't think you can just do it by yourself four hours a day,

contracting and dialing in. Teams today need a central hub for their information and work more than ever, especially in a world of remote work. That's where Notion comes in. It's one place for notes, docs, projects, and everyday work that goes way beyond a wiki. When we went fully remote back in March of 2020 when the pandemic started, Notion became our internal knowledge bank. Here is one of my producers going through our PodNotes page on Notion, where we highlight the top lessons in every episode.

And it makes it really easy for us to edit these, get up and running, and share that knowledge. Notion is the one place where every team from engineering to sales can work together seamlessly with 500 integrated apps, including, of course, Google and Slack collaborate in real time and tailor. workflows to your needs. Hundreds of thousands of teams worldwide are already delighting their employees with Notion. Notion has a worldwide community of millions of users creating templates and tutorials, so the product is continuously improving. Now, every part of our group from the investment side, diligence when we do an investment, to the podcast booking guests and pre-production plus post-production and marketing, all done with

checklist. We keep them on Notion to make sure everything gets done. And they got comments on Notion. It's such a great product. Go to Notion. S.O and use the promo code twist to get $250 off the annual team plan. That's incredibly generous. That's a couple of months free, actually, for your growing team.

So go ahead and go to notion. Dot S.O and use the promo code twist at checkout for $250 off. Nicely done, Notion. Okay, let's get back to this amazing episode. I am so in agreement with you. And I think it's not, you can't pay it with a wide brush, because there are millennials that I invest in. constantly and Gen Z people who are exactly like us.

They have a sense of purpose. They're starting a company, but they're self-selecting into the entrepreneurial class. And then there's a group of people who, for whatever reason, I think also their debt and their disillusionment from the American dream is part of this. And since we're going there and talking big picture in this conversation, which I love, you know, I think that maybe what happened to them in college getting $200,000 into debt or $100,000, and not being able to afford a home because of the centralization of cities, the lack of development. We kind of said to them like, you're screwed. We've pulled up the ladder behind you. Education for us was basically free. I mean, Fordham when I went was 9, 10, and 11,000 a year. I was a commuter. And so total $40,000. My first, I was making $60,000 when I was working and go to school at night for $40,000. Now you graduate with $200,000 an expense and you still make $40,000.

thousand or 50,000 when you graduate. Yeah. And then they can't buy a home. So do we blame them for saying, you know what? No. Screwed. Why would I participate? I'm opting out.

Well, I think the other cynicism is about capitalism. Yeah, you just hit on it. And some of that is well founded because sometimes you join a startup and you think we're all in this together and you're told that you're getting 10,000 options or 20,000 shares. And you never ask how many shares are outstanding. And then you realize that. the founder owns 90% of the company. And of course, I revere founders. I've started a company myself.

It's gone public. It was a great experience. But I just think that we're going to be challenged more and more if we want to subscribe to this rhetoric, that we can do this together, that we really invest in the we and give up a little more of the equity so that we all win in the end. And that has been the challenge for me is that I think there are so many tech startups that expect us to all be on it together, but they never publish the cap table that just shows how asymmetrical it is. And of course, the founders should get more than everybody else. It's just the question of how much more. And that is also driving some of the cynicism about this. And who am I to object to that? I think people are right to be cynical about it. You're pointing out, like even in our backyard,

In our little world, there are things we can do better to make it more equitable. And I think two things I've seen that are really important is the options window, a lot of people are now saying a five-year or a 10-year option window. So if a employee leaves the company, you know how painful this was for some people, 30 days to execute your options? And you've got to write a $40,000 check or a $10,000 check even when you're leaving the company to keep your options and you're like, most startups fail, I'm not going to do that. Now people have a 10-year window.

They're like, yeah, put in three years. Or just give more options. Just give more. I mean, I think that's the most basic thing. And this is maybe an experience you can speak from personally. Once you've made a decent amount of money, the difference between $10 million, $100 million, and a billion dollars is zero. Except if you want to be a senator or the president of the United States.

Then- Why? Explain to people why, because in people's mind, they think, A hundred million is ten times and a hundred and a hundred billion to a billion is ten times. Well, I don't know what going from a hundred million to a billion is like, but not yet, but keep it up. I mean, well, by choice, to some extent. Yeah. The stock is doing well, but I really believe that every redfin employee should benefit from that.

And I would just say that I would explain to me why. I've got cheese on my cheeseburger, man. I've got like, yeah. So look, you can drive a Ferrari to drop off your kids. at elementary school and they will become insufferable little brats. Yep. But what's really, you know, I mean, look,

people are just going to get cynical about it and say, I want to make $100 million and then decide. But the stuff that you're going to buy with $10 million, I'm really into cycling. I already have a bicycle that's used in the Tour de France. It was $12,000. And that felt splurgy to me. And I basically buy the same clothes.

and I go to the same places. I think especially if you have a family, it limits just how splurgy you could be on yourself. And then if you're environmentalist, it kind of limits how splurgy you could be on yourself. You know, you want to get a private jet? Okay, but, you know, you're going to have to live with the global warming consequences.

I just think you could only go so far before you screw up your kids and screw up the planet. You explained it perfectly with the bike metaphor. This is what I tried to explain to somebody recently who was talking about this. And they were trying to ask me, with FU money, what's the number? And I said, listen, FU money is $10 million, period. And let me explain to you why. Once you get to that level, if I'm sitting there and I have $10 million and you're sitting there, you have a million,

and then Jeff Bezos is sitting with us and Glenn is sitting with us. And we're all having, and we go to a restaurant, there's nothing on the menu that one of us can afford. Maybe you can get on the wine list and get obnoxious in order a $5,000 bottle of wine. No offense, Jamath. I'm not picking you out specifically. But, you know, like the cheeseburger tastes insane. He did just figure about specifically. All right, whatever.

I mean, he stuck me with the bill that time. I'm still upset about it. I paid the bill and he ordered like a multi-thousand-dollar bottle of wine. I was like, I'm picking up the tab. He goes, okay, I'm ordering the wine. Put it aside. He's one of my great LPs and supporters for all time. It was a valid use of that.

I'm standing by that. But you're right. And what's the difference between your $12,000 bicycle, the six and the $1,000 and the $1,000? Let me tell you another story. It's marginal. It's marginal. Yes. And every year, all the people who help build plum tree or a bunch of them go on a trip together.

And because they made some money and I made some money, we can all rent the same boat. And that is way better. You are going to be more proud when you're 40 or 50 or 60 or 60. of the people that you built up, of the network that you've created, where folks have gone on to run other companies, then you will be of like the product that you shipped. And I'm a product person, and I say that. I never thought I'd say that in my 30s.

But I want to ask you about Redfin and what's happening with your change from, okay, we're going to put everything on a map. That was an incredible innovation in the early days. We talked about that on previous episodes. And then you said, hey, what if we, employed the real estate agents. Okay, wow, that's really interesting. I am a huge advocate.

I sold two, no, I bought two homes. Yes. Had an amazing experience. Anybody who's not using Redfin for buying crazy. I tried to sell one. Didn't work out, but it wasn't your fault exactly. It was the first time you were ever working in the high end in the Bay Area. And the market was just very hard.

No, it wasn't your fault. It was literally I wanted to sell the price for a certain home. and there were not buyers for it. But I will say during that time period, I felt a little bit of tension between the other agents and the Redfin agents. Where are you at

with that tension in the industry? Because while all this has been happening and you were such a pioneer and saying, hey, we're going to hire people and we're going to give them salaries as opposed to commission only. We're going to give them benefits.

And then I see companies coming out now, there's for sale by owner, there's this thing, Rex. There's all these people innovating. They're people like Keith were Boy's company, buying companies. What is the, innovation that's happened since the time you decided to bring real estate brokers in-house.

Probably since you listed your house, we've invested a lot in the high end, and I think we tripled our share of high-end listings year over year. So that's been a problem that we've really needed to solve, and it's just by paying people more money at the high end, giving them more upside. You know, we kind of wanted to run an equitable company, but a million-dollar agent is a million dollar agent and it's really led to better service. And so, I think what's going on in the industry had kind of gone through two or three phases. The first was getting all the listings on a map and the second was actually changing the quality of the service itself. Redfin has been a pioneer there. And now you're just seeing massive vertical integration where you have the website,

you have the brokerage, you have the lender, you have the title company, you have the iByer, which is where you buy the home lock, stock, and barrel. And all of that is converging because it used to be that the lender would pay the broker a little bit of money, and then the broker would pay the title company a little bit of money so that they would send each other customers, and it was just a huge amount of economic waste. And given the fact that there's now $50 or $60 billion pouring into property technology, there's a venture firm that exists just for property technology. Wow. The face is massively overfunded. And so you just have lenders trying to add brokerages. You have brokerages trying to buy title companies. You just have the,

this massive consolidation. And the goal is that it shouldn't take six months to move where you got to figure out how do I line up the money to get a mortgage for my old place and a mortgage for my new place when it's really hard to do that. How do I close quickly? How do I compete like a cash buyer? There should just be much more liquidity in the housing market. It should be easy to move. It should happen in a matter of weeks instead of taking all summer. And so what's interesting to Exactly, like just making it super simple for the customer to not have to deal with as many parties. And not have to deal with as many parties, but also everybody knows what's going on. So some of that's about a fast closing, but it's also about if we're the ones selling your house and you're trying to buy another place,

you shouldn't have to submit a pre-approval letter and try to pretend that you have the money. You should just get the money. We should give you bridge financing to give you the cash to go into the old place because we know. know that into the new place because we know the old place it's going to sell that it's going to sell for at least you know, $800,000 or $1.4 million or $3.8 million or whatever it is. So I think the consolidation is going to not just lead to more convenience of faster closing, lower costs, it's going to lead to structural change where the way that people buy a home is going to be really different.

Is the eventuality that you'll be holding some amount of real estate and then people will come to Redfin and say like, I'm moving to Austin from San Francisco. I have a million dollar home. I'm going to have a million dollar. You have a million dollar condo. I'm going to get a million dollar home. You say, okay, we'll buy that off you for a million. We'll represent you in Austin. And instead of six percent, you're going to pay this lower fee. And we'll just take that house and we'll, we'll take the risk. We'll buy it now price of 95. Well, that's what we're doing. Yeah, we're doing that right now. Open Door is doing that. Zillow is doing that.

Explain how that has changed the industry this. We're going to just buy it now. Well, I mean, I think what's interesting to me is... How often is it happening? Yeah. If you were to describe this from an investor's perspective, it used to be that you really only made media sites that nobody wanted to be in the business of employing real estate agents

because that was capital intensive. And then the idea that you would either become a lender and have, you know, all these loans on your books or become an eye buyer where you have properties on your books was so capital-intensive. it was just unthinkable. And as the amount of money flooding into technology companies has increased, and as the appetite for risk has increased, you have seen businesses that were just unthinkable now become totally possible.

And some of it is this arbitrage opportunity or this asymmetry. So consumer credit is actually pretty tight still. Ever since 2008, you know, where you heard about strawberry pickers buying houses in the Central Valley, about half of America can't qualify. for a loan. But at the same time, a company like Redfin or any other companies in property technology have sovereign states in Singapore in the Middle East and the Far East, just throwing money at us where you see these convertible notes coming with zero coupons. You're basically borrowing money for free. And so the consumer can't hold two loans at the same time, the old house and the new house,

and it's just really hard for them to move. And tech is basically becoming a provider of liquidity because our access to capital is so much easier. So we'll buy someone's house and say, you go ahead and move. And the money we used to buy that house was almost free. Whereas the money that the consumer would try to get their hands on to move up is very hard to come by for them. And so very easy consumer credit, or very tough consumer credit right now to hold two mortgages, very easy corporate credit. And that's what's driving a little bit of... You kept saying, I buyer?

What does that mean? It means institutional buyer. So you basically have companies. You sometimes see these signs when you drive around the United States that say, we buy ugly houses on telephone polls and stuff like that. That is now we buy ugly houses.com tech companies using machine learning algorithms to price the property without having to walk through it. It turns out, I used to be a little bit old school. and would hesitate to buy a house

where a human being hadn't walked through it, but actually sending the human being through before you make the offer only creates a relationship between the seller where you kind of want to give them a good price because you understand that they're in a jam. The machines have been better at pricing homes. You still need to make sure the foundation isn't cracked

and that the roof doesn't need to be replaced. Sometimes a machine can't do that. You get an inspection. But mostly, you know, houses warrant like stocks you know a stock you can look it up on yahoo and you can see the price of every single stock instantly and with housing what it would really trade for was always a little bit of mystery and that mystery has been compressed and it's created a lot of liquidity where we're willing to give you an offer within a few seconds of your submitting a request just give us the

address we'll crunch the numbers and and send you a bid and so people are doing that because they don't want somebody walking through their house during COVID, but increasingly they're doing it just because they don't want to clean up the house every day. You have two five-year-olds. If you were listing your property, try to get them to clean up their room is impossible. So you get more money. You get more money. You get more money if you list it.

You get a little more convenience if you just take the cash offer. And just the world is moving toward convenience. Not everyone. Most people are going to list, but some people are going to do this, this cash off. Okay. So you have this massive innovation on one side. Now I want to get to the controversial topic, which I leave always towards the end of the interview. You're not going to hurt my feelings?

No, but this is my interview technique. I got all the softballs and then I get into some of the more challenging stuff at the end because I got you warmed up. But I can tell you that because we're friends. But also, by the way, as a note, isn't it funny that the investment community like 10 years ago when you were struggling and it's dog-fills? of trying to make advertising work, totally, like, gave up on your business. And now everybody's throwing money at it just 10 years later. I mean, what do you take from that as an entrepreneur?

You know, I don't know John Foley very well, and I don't want to pretend that I do. But I did go on a run with him once. He's the founder of Peloton. I think I have his name right. And, you know, I told him nobody's ever been passed on more than we have. And he said, that is not true. I remember he stopped running.

Try starting a hardware company. Try selling bikes with line bars. Try selling an exercise bike as Facebook, that it's a social network. And, yeah, so many investors were just really wary of going into the real world. The old model was Instagram, 13 employees, billion dollar exit. Everybody would love that. But it's just so hard right now to build an audience, the person who pitched you on an app in Florence. Yeah, their challenge isn't, you know, building exercise bikes or hiring real estate agents.

Their challenge is that they're going to be giving 40% of their revenue to Facebook every month. and so it's just really hard to build an audience. And I think also entrepreneurs just want to go out into the real world and make a difference in the real world. Most of the media company plays have been played. So I'm excited about it. I'm excited about it. Well, if you think about it, like what Elon did with Tesla and SpaceX

and then Joe at Airbnb and then Travis at Uber, those companies really were like, we'll go into the real world. And the funniest story ever, like, I'm trying to help. Travis raised the first round, the seed round, $5 million valuation for Uber. And literally one of the most prominent investors that you and I both know was like, can you get him to not do it

as a consumer full stack play? Can you get him to sell enterprise software to taxi companies? Oh, Jesus. I should have said that word, but yeah. No, Jesus, Jesus spoke to me at that moment and said, turn the other cheek, Jake Al. And I was going to tell the person

you're a moron, but they were like so famous as an investor. I couldn't say that to them because I was starting my career and I didn't want to say you're a moron. So Jesus whispered to me, Glenn, and said, tell him that's really fascinating. You'll think about it. And I said, that's really fascinating. I'll think about it. And Jesus said, good job.

Now turn the other cheek, walk away and never speak to that person again. And I didn't speak to them again. And I went to Travis and I said, you know, somebody was talking about doing enterprise software. I'm sure you've considered that. And he stopped me right there. He goes, what that means, and I told him the story, and he said, what that question doesn't understand is that we're getting rid of the taxi companies. They're the problem.

They're taking 70 cents of every dollar. And we're going to take 30 cents of every dollar and give 70 cents to the drivers. And it wound up being 20%, whatever. But he's like, they don't understand. We're taking them out. It's like taking out the middleman. We don't want them in here. Okay.

Now to the controversial question. you have this massive innovation happening here and then I see that the DOJ goes after all these MLS services and the National Association of Realtors and says you're a cartel and that all these MLS systems which are run locally

which have a grip on the system I think and I don't know exactly how it works but my understanding is MLS systems are local a bunch of realtors say hey if you want to be on this you have to play by these rules which we're setting and then there's a bunch of innovators like

yourself or Keith Rabeoy and what he's doing or I guess this company wrecks other people out there trying to innovate and then they say oh well you can't have access to the MLS and I saw Zillos I was doing a search there and I love your product much more than Zillow period but putting that aside I think your interface much more they had this like a little tab that was like other listings and they gettoized the other listings I don't know if you're doing the same thing what is going on with the DOJ the ghettoization of like half the listings and then this cartel going on and then I saw Biden said, hey, he, he, in his executive order, which doesn't really mean anything, it's an executive order. It's just like a mandate, I guess. But he asked to

address the persistent and recurrent practices that inhibit competition, including unfair trying tying practices or exclusionary practices in the brokerage or listing of real estate. What is going on here? Unpack it for us. I'll do it as fast as I can. Take your time. And of course, you'll get, you'll get my take on it. And first, I just want to establish my credentials. Redfin has refunded a billion dollars in commissions. We are interested in burning down the whole 6% structure. We have testified before Congress.

We've done all sorts of things to favor the consumer. The whole reason I'm in this isn't just to make a buck. It's to make real estate better for everyone. However, I think there are some parts of that narrative that I would disagree with. I don't think the MLSs are the villain here. They were the villain 10 or 15 years ago. All they do is they collect all the listings from different real estate agents and share them with every broker. So that if somebody has a better website than Redfin, they can get access to all the data and beat us at our own game.

They can beat Zillow at their own game. and what's happening among some brokers is they're withholding listings. It's such a hot market right now. They pocket the listings. This is especially prevalent in Austin, Texas, and Chicago, and the fancy neighborhoods of San Francisco so that people just can't see all the homes for sale, and that helps them build their own little website. And they've tried to sue to say, we're stopping these monopolists at the MLS, and it's just

such a crock of S-H-I-T. It really, really is. it is a fair housing violation. If you ask people who, you know, try to make sure that black people and white people and brown people can all see the same homes for sale, they say the number one thing you should do is not pocket listings. And so that is a wolf and sheep's clothing. But there's this other thing that the DOJ is doing. The DOJ hasn't really been involved in that. What the DOJ has been involved with is saying that, you know, most people think the buyer's agent is free.

You ought to have it really clear to the consumer what the buyer's agent is making. and consumers should be able to choose what price they pay the buyer's agent. And I'm like, yes, I love that. So I think there's one case that is sort of a red herring, and then there's another case that is just an arrow right at the heart of the way the whole system has worked. There's no other place in the world where you pay two real estate agents as much as you do in the U.S.

And the DOJ has taken dead center aim at that. So when I went to look at homes in Austin, because as I told people on the podcast, I'm considering leaving the Bay Area in the next couple of years. And I looked at Florida, Miami, I looked at Austin. I'm considering it. I'm 50-50 right now. It's kind of a coin toss for me and my family.

But we're thinking about it. And I was like, what did people pay for that home? I saw a couple of months ago. They're like, we don't know. And I'm like, well, I looked it up on Redfin. I don't see it there. Where is it? And then they would send me homes.

I'm like, I can't find it on Redfin. And they're like, oh, that's a pocket listing. I'm like, okay, what's going on here? I just want to see the homes. And I'm trying to understand what, they're selling for. What did Joe Rogan pay for his house? And they're like, well, it's a no register state or something or a no disclosed state? Explain that. There's also two issues here. So Texas is a non-disclosure state where the county tax records are not disclosed publicly

what you paid for a house. In most other states in the country, you can see when anybody paid for a house just by going to the county register and a bunch of websites figured that out. We all started publishing it in Texas. The county doesn't always disclose that information. And then we try to get it from individual real estate agents. So that's one thing, which is just what people paid for houses is hard to get in the state of Texas. It's almost nowhere else the United States is that the case. And then the second thing, the second thing is that when a listing agent meets you in your living room and says, I want to sell your house instead of putting it on the open market, he'll market it to only his own clients, which helps him build his own business. And when he's doing that, he's obviously screwing you because you would rather have 10 offers than one offer.

Why does anybody go for that? Well, the argument would be that we're not going to put your listing on the web, that we can get a quick sale. And I would just argue that if you want a quick sale, the best way to do it is to put it on the internet and get as many buyers as possible. Sometimes a real estate agent is just kind of playing his own game where he's trying to build his own business. And so agents have started withholding listings so that you come to them. And the reason they're doing that is because of the rise of reds. Finn and Zillow and Realtor and Trulia, where they think, oh, God, you know, the only reason somebody's kind of come to my little website is if I have a listing there that nobody else has.

And so they have started to secede and splinter and balkanize the market. And look, if you're selling electric shavers or ab crunchers or desk chairs, go mess around all you want. But running the housing market is a public trust. And you have been hired to sell this house. you have a fiduciary obligation to the person who hired you to get as many bidders as you can, but you also just have this public trust that it makes people feel terrible when a moving van shows up in front of a house where there was never a yard sign.

We should all get a chance to live in that fancy neighborhood. And right now, you kind of have to know the secret handshake in a couple of places in America. And it is so evil and wrong. It goes back to the whole smoke-filled backroom BS of the real estate industry in the 50s. So. Yeah. Feels a little racist. Fair housing, baby.

Feels racist. So the DOJ case with the National Association of Realtors was supposed to be resolved. And then the DOJ just said, hey, we want to audit some stuff. And I guess the National Association Realtors is backed out. What's that case about for a layperson? Well, what it's been about is just Redfin wants to be able to show for every listing how much you pay a buyer's agent. So when you sign up to sell a house, you agree to pay the agent who brings you a buyer 2.5% or 3%. And by the way, one juicy, weird little fact, I know this complicates the matter slightly, but it's worth it.

I promise you is that when I buyers, when businesses sell houses, they pay real estate agents much, much less. How much less? 50% less. The fee is... Okay, so 1.5% or 1%? Yeah, 2%. instead of 3%, 1,5%, they're driving it down. And basically that's because people who worked on Wall Street as asset portfolio managers

are now charged with liquidating 1,000 houses. And of course, you look at the commissions you pay and you get a bulk discount. And so what we wanted to do is just tell all the other people listing their houses, you don't have to pay a buyer's agent that much. We want to publish the commission on our website so you can see what each listing is paying. And there was a little bit of a brouhaha about it. The DOJ and the National Association of Realtors worked it out. And now they have decided that they're at odds with each other.

And I think the real juicy thing here is that not just publishing the information, that used to be like, okay, that's what we're going to fight about. now it's about actually we want the buyer to be the one who pays the buyer's agent and when a buyer has to get out $20,000 or $30,000 to pay a buyer's agent they are suddenly going to become very sensitive to the prices they're paying and that is going to compress the market quite a bit so I think I think it used to be about an obscure website feature and now it's about the whole dual agent system in the United States that doesn't exist anywhere else where you pay two agents and you pay them both what you would normally pay just one. And it was the seller who paid both.

What you're saying is that the seller could say the buyer is, buyer is, I hired my agent. You pay your agent. Yeah, you want to have an agent to negotiate against me? Great. You pay them. That might be worth it,

but you pay them. This is so brilliant because what it does is it makes two customers for the real estate agent. One of the problems with health care in our country is, when you and I get knee surgery, we don't know what we paid and we didn't comparison shop and that's the same thing I suspect

correct me if I'm wrong in real estate which is if I don't have to pay the buyer if I'm the buyer and I don't have to pay the buyer commission I don't care what it is that's how the seller screw the seller I hate the seller they're making too much money but if I have to pay them yeah I'm going to say you know what 3% is a little too rich

if I'm buying a $4 million home I don't have to pay you $120,000 I'll pay you $25,000 but I'm not paying you $120,000. Forget it. So they're going to create a second buyer in the system. Wow. So you're saying when I list on Redfin, I could say, I want the, not only may I'm not going to give you 3% or 2.5%.

I want you to pay it. I'm paying $0. Well, I think that's what the DOJ is trying to get to. They're trying to force that issue. It would. And I just think that, you know, listen, if you're a great buyer's agent and you do a lot of work to protect someone. from buying a house it's about to fall apart, you should be paid for it, but the person who should

be paying you is the buyer, and that person is going to be careful about how much it's for it. So what turned into, like I said, or what started as sort of a nerdy little, can we publish this one little fact, has become much more existential and exciting. By the way, Jason, I thought what you were going to ask me about, I thought you were going to get to the only dust up we've ever had, which was about the New York Times. Do you remember that? No, tell me. I thought was maybe it wasn't with you. Well, it was definitely with some Andreessen guys. My memory is going away. So what was the New York Times? I was in favor of having CEOs talk to the New York Times. And you were saying that sometimes these journalists have an agenda

and they take advantage of a naive entrepreneur. Yes. Yes. Yes. Anyway, Yes. And we don't have to dredge it up if you don't want. No, I want to. This is, okay, so I tweeted my position today was that because the New York Times, and I picked the New York Times specifically, has gone so far left that they are anti-capitalist and talking to them, they are going to spin your words. So I told my CEOs, who asked me, entrepreneurs, listen, it's, you're going to get misquoted.

If they're calling you, the angle is 90. percent or 95 percent negative and bad for you. Therefore, you should write your own blog post or your own podcasts or only do podcasts because you can get your full message out. And you should only do email exchanges if you do talk to a reporter, but don't talk to a report on the phone, period, because they'll talk to you on the phone. Then they have this background that they can transcribe it. You don't have a recording or they selectively quote you, leave out the second half of your sentence where you say, well, on average, I believe this. but there are situations when this happens

and then they just leave out everything that you just said and leave out the back and they have an agenda when they started this story don't talk to the New York Times you took the other side why?

Why are you right? I'm wrong. Well, first of all, I've gotten coverage where I had to lie down. I turned out the lights, close the door, and I had to lie down

because it annihilated me. So I understand where you're coming from but I don't know where to start. I first of all think that most journalists are trying to get it right. everybody has a point of view.

Different newspapers tend to have one point of view or another. I get that. But I think most journalists are trying to get it right. And most startups don't get enough attention. The world doesn't know that they exist. So you can't be different or better if people don't know you exist. And then you definitely want to build a relationship with the journalist because the reason that they don't understand what you do is because you've never

talked to them. And so I would talk to a journalist just for self-interested purposes to try to get the word out. And some of it is not going to be perfect. If it was exactly the way you wanted, it would be an ad. You used to be in this business, so you know. But I think there's a deeper issue, which is just that if you're going to run a major technology platform, at some point, it is a public trust and you just have to be accountable to the press. Of course they're going to ask you nasty questions.

Joe Biden doesn't like all the questions that Fox News asked him. Donald Trump hated the New York Times questions. And yet still, it's just a level of accountability. And I think that we can say, oh, all these tech companies are doing beautiful things. Why are they being challenged? But the history of tech over and over and over again has been that it's had unintended consequences that we didn't fully consider. And so I would just be accountable to that and talk to the press. we're going to raise these issues because your employees are already thinking about it.

Your customers are going to worry about it at some point. Face the music. I think it's a reasonable position. And I do think like Facebook should be accountable. I think what's happened is almost every time I've had a founder talk to the New York Times and give them that benefit of the doubt, they've been treated unfairly in my mind. And I feel like it used to be that, you know, there was like a reasonable take. but I feel like a lot of the journalists

are coming into it with too many anonymous sources and not enough of a balanced approach to it where they take the anonymous sources and run with it. But you're the one encouraging anonymous sources because every journalist would rather have it on the record and attribute it and instead,

the only people in tech who will talk to them. Yeah. Oh, they totally want the CEO they would much rather have it all be on the record. Yeah, I kind of feel like they like, this is my take on as a former journalist, I think you get more juicy quotes when you give people off the record because they'll go a little ham and they don't feel any accountability. So this is what I think this younger generation of what I call activists

journalists. Like they really have an agenda base. You know, they want to get Trump out office. They want to stop capitalism. They want to stop, you know, wealth disparity. A lot of journalists are coming to the table, I think, with this advocacy approach. And I think they love when they can get, I don't know if you saw the away CEO coverage, but this poor woman who was the away CEO kind of was it. The UAEA-W-A-Y, the luggage company. She was kind of stern in her approach with employees,

like, okay, we have to do this, we have to hit our numbers, everybody buck up. Yeah, she was kind of. Yeah, I saw some of her emails. It was a little, but that's an example where if you actually just saw the primary documents,

they spoke for themselves. And I don't know. I just think we're used to really glowing coverage. I agree. So I think that you were right, like maybe a couple years ago, where like we were used to glowing coverage, then it got a little harder, and now I think the pendulum has swung the other way. And I just thought their coverage of her was particularly unfair and sexist, because if that had

been a male CEO, it was like, listen, you all got to buck up, we're going to work 12 hours a day. If you can't handle it during the holidays, you're at the wrong company because this is a company that is driven by customer support and people buy us during the holidays. There's no vacation on Christmas and over the holidays. We got to get this done, whatever she said. And I just that they treated unfairly. And I think if it was a male CEO, we'd all be given high fives.

Oh, male CEO puts the hammer down, tells everybody to buck up and work harder. I don't know. We're going to agree to disagree on this one. I think we probably agree. We are. I do disagree, but lots of love for you, Jason. I love you too, glad. This has been great.

Thank you for doing it. I'm glad my internet sounds like the first. Lawrence. Let's do it again. I said, I'm booking it right now. I know your PR people are very like they get a lot of requests. They're great, but they get a lot of requests. And I, even I had to work a little bit here to get this on. I'm going to put you on the books for a year from now. Is that okay with you? One year from today. I put you on the show. Angelis on the phone with me. We'll do it together. We're locking it in now. One year from now, we're going to do this yearly thing where we check out. Why don't you see the ratings and then decide, Jason? I don't know if I'll be the top

Here's how it goes, Glenn. This is how I've always run the show and why it works. If I find the conversation interesting, I think that's the proxy for the audience. If I think it's interesting as a startup founder and angel investor, that's it. All right, continued success. If you want to own a great stock, Glenn can't say this. I think Redfin's a great stock to own. He can't say it.

I can. And if you want to work at a great company with a great leader who cares about you, that's Glenn. So go ahead and apply. Go to Redfin. dot com slash jobs or careers or careers.orghum. It's one of those. Just type in redfin jobs. Jason. Jason. Go work for Glenn. Thank you. Thank you. He needs to hire more people, especially if you're a million dollar agent. If you're one of those crazy million dollar agents selling Malibu homes or Palo Alto homes, go work with Glenn. It's going to give you a lot of RSUs. You're going to make money too

ways. Jason, I really appreciate it. All right, Glenn. Have a good time. Talk to you soon. Bye bye.