Why stop now? Tell Redfin that there’s more where that came from.
By: Kris Berg,
SanDiegoCastles.com,
Post Archive,
RSS FeedPosted: Wednesday, July 18th, 2007, 8:09 am MST
Category: Real Estate, Redfin.com
Of course Greg scooped me. If you believe his 11:53 PM time stamp, he was analyzing and typing away while I was dreaming up another real estate vignette. At least now I know to check the blog first. Bloodhound has all but replaced my feed reader.
In any event, a routine 6:00 am review of my email box found the news from Redfin’s Cynthia Pang that they are the proud parents of a $12 million bundle of VC joy. This, they say, should do it. Said CEO Glenn Kelman:
We expect this to be our last round of venture financing, so we looked for a guide on the long journey ahead who could help us generate profits and lead our market.
One obvious reaction might be, “Who possessing a pulse would sink $12 million dollars into what to date has been a completely failed business venture?” One obvious answer would be – people with money and brains in inverse proportion.
This came to me a few days ago from “IDRIS”:
I am writing you this letter because I believe that you are capable of helping me. I am looking for a reputable business partner to invest a huge sum of money in lucrative businesses in your country.
A huge sum? Say, $12 million? A coincidence? I think not.
So, I say to Glenn, don’t stop now! I am here to tell you that there is plenty more where that came from, and I now realize that the $12 million dollars you secured was all but mine had I just read my emails closely and not been so distracted actually representing buyers and sellers in successful transactions.
Of course, I didn’t listen. Frederick Mugabe from Zimbabwe recently offered me $450,000 to help him handle the placement of $14,982,000 into a “profitable business investment”. And, just yesterday, I learned from bank officials in Amsterdam that my email address was attached to the “winning ticket”, entitling me to 2 million euros. On second thought, forget that one. The exchange rate isn’t favorable.
On the other hand, last week a nice God-fearing lady in Darfur who recently lost her husband and is now terminally ill with cancer said she would like to will me “millions in US dollars”, the amount to be disclosed as we proceed. But she warned, “Any delay in your reply will give room in sourcing for another alternative for this same purpose.”
Dang it! It looks like Glenn responded first.
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11 Comments so far
A fun read, right on too. Lar
I might have been first (actually Jay Thompson beat me), but you’re the absolute best!
Made me laugh. Keep up the writing.
I’d give a bunch, maybe some anatomy, to find out exactly what is being said to VC’s to make them write these checks.
It must start something like, “Don’t pay attention to the numbers, and for sure don’t watch the man behind the curtain…….”
Great stuff Kris.
Kris, I’d be careful in dealing with anybody from Zimbabwe with the last name “Mugabe.” In particular, be sure to clarify which currency you’re talking about ahead of time. Last time I checked, $14,982,000 in Zimbabwe dollars got you 3 loaves of bread…wait, make that 2.5…uh, it’s down to 2 now.
Other than that, sounds like a winner.
Don’t bother with the Darfur lady as I’ve already pocketed those funds.
For more fun, check out this site.
[...] Others Opine: SeattlePI, Bloodhound, Inman (subscription req'd soon), Redfin blog, CondoDomain, 3Oceans, 360 Digest, Kris on Bloodhound, FoREM, Jonathan Dalton (a MUST read!), [...]
[...] The coverage of this event has been predictable: Techcruch claims that Redfin’s goal is to “completely remove real estate agents and brokers from at least half of a home sale” (in which case they would immediately go bankrupt, since in most states you can only claim compensation for representing somebody in a real estate transaction if you’re a licensed agent.) The Bloodhound notes that this brings investors’ stake in the company to around $40,000 per transaction, while the indefatigable Kris Berg compares Glenn Kelman to those infamous Internet scammers (”419′ers” being the technical term) promising untold riches. [...]
[...] My trusty calculator figures that they’ll burn through this pile of cash in about 300 transactions. As documented by Greg Swan, Redfin sold 500 homes in the last 17 months. At that rate they’ll need some more suckers – er “investors” – in little less than a year. Unless they put the brakes on. [...]
It is a puzzlement to me. If the VC investors were doing any type of due diligence, wouldn’t they notice the number of transactions closed in the last 17 months; wouldn’t they do the math on cost per transaction?
Like Jeff, I’d really, really like to know just what is being said to the VC investors.
While I’m entertained by the writing style, I could help but read this as one giant whine-fest. What difference does it make if Redfin acquires more VC? Does it make a difference to your clients? I’m guessing not at all.
If they keep going the way they’re going, and everything you predict is true, you won’t have to worry about them. So why run around banging the pots and pans and shouting the sky is falling?
I guess it’s just sensationalist journalism at best. I’d rather cheer for new business ventures, and especially new ones in the Real Estate area since this venue seems to be about 20 years behind the times. Who cares if the model is broken, at least they’re trying and pushing the boundaries of this dried up business model.
Jesse,
Sorry you saw it as whining – I was in fact just having some (I thought) fun. Cynthia and I actually exchanged a few subsequent light-hearted emails. She “gets” it; she gets that it is not mean-spirited and that it all equates to some fabulous free marketing for the Redfin gang. If that were not the case, they wouldn’t continue to send us advance copies of their press releases.
BTW, I do not remember suggesting the end was near, nor do I see how anything I wrote could be construed as fear or worry. If I was the least bit concerned, I would be hiding under my cone of silence hoping nobody is noticing and the whole thing will go away. Instead, they remain one of my personal favorite subjects (in part because they are such easy targets).
Redfin needs no defense. The minute we stop writing about them is the minute they need to start worrying.