Aiming to Dominate Real Estate Brokerage: Robert Reffkin, CEO of Urban Compass (Part 2)

Sramana Mitra: How did you get it off the ground? Was Ori someone you knew or did you meet him after you decided to do this project?

Robert Reffkin: I met Ori when I was working in the White House. I was an advisor on the company that he sold to Twitter. A year after selling, we got together and thought about doing something together? We sat down and said, “Where can we bring technology to a space that didn’t have it?”

Sramana Mitra: Ori was part of the selection process of what problem you were going to focus on?

Robert Reffkin: Absolutely. We’re co-founders.

Sramana Mitra: What was the next step? Did you guys bootstrap and launch a prototype and got yourself going or did you immediately go out and raise money? How did you get the company off the ground?

Robert Reffkin: We went out to firms and raised $8 million in the seed round.

Sramana Mitra: You didn’t do any work before raising that financing?

Robert Reffkin: No, we didn’t. We just created a business plan and we shared that with Goldman Sachs who invested along with Live Capital, a consortium of real estate developers, the CEO of American Express, and the CEO of Salesforce.com.

Sramana Mitra: What was the investment thesis? What was the business model? How was this company going to make money?

Robert Reffkin: The investment thesis was bringing new technology to simplify the process of buying homes by creating mobile apps that allow agents and customers to work outside of the office and make the entire experience mobile. That would save time.

Sramana Mitra: Who pays?

Robert Reffkin: The compensation structure is market-based. In New York, the seller pays the fee.

Sramana Mitra: The seller pays the fee to use your technology to be on the marketplace?

Robert Reffkin: The seller pays a broker’s fee to our agents to sell their home.

Sramana Mitra: Meaning you actually have agents as part of this business. It’s not like you’re selling technology to real estate agents.

Robert Reffkin: We integrate technology into a real estate broker business. We are a hundred agents. They charge broker fees.

Sramana Mitra: This is the usual real estate brokerage model except that it’s a highly technically-oriented execution of the business model. That’s the summary of the story?

Robert Reffkin: Exactly.

Sramana Mitra: You got $8 million from investors and you and Ori have now started. Are we talking 2012?

Robert Reffkin: Yes.

Sramana Mitra: What happens next?

Robert Reffkin: We launched in May of 2013 with Mayor Bloomberg. At that time, we had just moved to our second office. We started with a small office with six people. Six months later, we had 40 people in a much bigger office. We developed 103 corporate location partners. We went to Fortune Banks and consulting firms that became our corporate partners and referred employees to us. What really differentiates us was, unlike many real estate companies, we’ve diverse experiences. We have 21 engineers, primarily from Google, Twitter, and Facebook. We have marketing design expertise in-house. Then we have real estate experts. The culture that we built very early on was one of collaboration and entrepreneurship.

This segment is part 2 in the series : Aiming to Dominate Real Estate Brokerage: Robert Reffkin, CEO of Urban Compass
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