Robert Reffkin Wants Compass To Be The Amazon Of Real Estate
The Compass CEO shared insight into his company’s approach to technology and why brokers need to make decisions with the next decade in mind.
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Compass CEO Robert Reffkin has had a banner year, as his company went public on the New York Stock Exchange and logged two solid quarters of earnings that reveal profitability may come quicker than initially anticipated. Beyond his intelligence and knack for innovation, Reffkin said an “abundance mindset” has made all the difference in how he approaches life and leading Compass to the next phase of growth.
“The abundance mindset is something I see in the top agents in the country,” Reffkin told Inman founder Brad Inman during Wednesday’s general session at Inman Connect Las Vegas. “It’s something that my mom raised me with. It’s the mindset of ‘there will always be more,’ as opposed to ‘there’s never enough.’”
“The pie is getting bigger, not smaller,” he added. “It’s embracing change and risk and not fearing it.”
Reffkin said his abundance mindset was a factor in deciding to go public, despite his personal need for privacy. However, he realized the move was necessary to fund the company’s quest to provide the best end-to-end support platform for agents, which includes in-house digital, print and social marketing, transaction and customer relationship management tools, IDX home search capabilities, and a bevy of other tools agents need to provide seamless service.
“I like to be private,” he said with a laugh. “But as a company, the question is ‘What’s the goal?’ The goal is to build the company that can best support agents in this country and ultimately the world.”
“Now to do that, you have to be able to invest,” he added. “So going public, it’s really a capital raise. It gives you access to more capital to invest, and so from that perspective if you want to be the one that invests the most [in agents], you, by definition, have to go public. That’s the only way to access more and more capital.”
Reffkin said Compass’ aggressive funding approach has enabled them to front-load more than $600 million in staging and cosmetic repairs for Compass Concierge and grow the company’s technology team to a force of 1,500. “That is likely larger than every brokerage combined,” he said. “This just isn’t people like IT who integrate third-party software [into our platform]. These are people building a single thing in one place, and that’s not just for today. It’s for the long run.”
That long-term goal, he said, is worth the criticism Compass gets for its expensive spending habits.
“I have the conviction that the only way to build the future of this industry is to give the best agents in the industry the best support in the industry and the best technology in the industry,” he explained. “I have a conviction that a lot of people don’t. A lot of people think you don’t need the best agents. A lot of people don’t think you don’t need the best technology.”
“A lot of brokers will hire anyone and take iBuyers for discounters,” he added. “They’re not trying to hire the top agents, and if every brokerage firm thought they needed the best technology, they would be hiring 1,500 software engineers.”
Reffkin said consumers and agents are expecting a seamless transaction process where everything is in one spot, and Compass’ latest round of title company acquisitions and OriginPoint launch is a reflection of that. “I don’t design what we do,” he said of agents’ request for additional ancillary services. “Everything we do comes from our agents.”
Although the quest to build the best end-to-end platform means a short-term hit to Compass’ profitability (the company is currently profitable on an adjusted basis), Reffkin said it will set the company up to be ahead of the curve 10 years from now, when the idea of a one-click or one-stop real estate transaction process could be reality.
“I think from a 10-year perspective that things are going to change,” he said. “I think we’re moving to a world where people expect everything to be in one place. Amazon has everything in one place. When I buy a soccer ball for my 3-year-old on Amazon, I have 100 options on my plate and I can do everything right there.”
“That doesn’t exist in real estate yet. The iBuyers haven’t done it, but they’ve put the transaction, mortgage and title in the same place,” he added. “So, from a 10-year perspective, the question for the agent is who’s going to empower you to be able to have the speed, simplicity and seamlessness of a transaction as an iBuyer can give?”