This is the first episode of a new series: What Didn't Work. I'm diving into the real estate companies and ideas that just didn't work out, unpack exactly why, and reveal the key lessons learned -- directly from the entrepreneurs involved.
My first guest (who inspired this idea) is Nick Narodny, CEO and founder of Aalto, which just didn't work out. With over $50M raised from top tier VC firms, Aalto was a private listing marketplace and then pivoted to a "digital agent" once Clear Cooperation shut down their business. In the end, neither idea worked.
Nick opened up about exactly what didn't work, why, and what he learned through the process. From navigating buyer emotions in real estate to product market fit suction to the three hurdles of fear, these are hard-fought learnings that I think everyone in the space should know!
I'm doing this for two reasons. First, I want to reduce the stigma around talking about failure. Nick didn't fail. He tried and learned, and that should be celebrated. Second, I want to capture and publish these valuable learnings, which are really worth their weight in gold for other would-be proptech entrepreneurs in the space.
Not everything is great all of the time. Sometimes things don't work out. Let's explore why, and get smarter together. Thanks for your vulnerability and openness, Nick.
Austin Allison, CEO and co-founder of Pacaso (and dotloop), and I discuss what makes a real estate startup successful, the advantage of raising money from retail investors, why you need agents on your side, why we’re all resistant to change, surviving the past two years, listening to constructive feedback, skepticism as a validator of new ideas, and what he would do differently if he had to do it all over again.
If I were to start a real estate brokerage today, what would it look like? In this long-form conversation, I sit down with Austin broker-owner Eric Bramlett to answer that question. We cover:
1. What’s broken in brokerage today -- from “masses of asses” recruiting and misaligned incentives to the flood of part-time agents and industry noise.
2. What’s actually working -- the common threads between the brokerages and agents thriving, including eXp’s recruiting flywheel, Compass’s communications machine, various new business models, and the overlooked importance of emotional value and culture.
3. How we’d build it from scratch -- a focused brokerage designed for the top 20%: lean, selective, efficient, culture-rich, and boringly effective.
The themes that emerge again and again: focus, clarity, culture, recruitment, and communication. If you want to understand where brokerage is heading -- and what it really takes to compete where you can win -- this is for you!
Garth Graham, Senior Partner at Stratmor Group, and I chat about the biggest problem in mortgage, the cost of origination ($12k), optimizing the consumer experience, being worse than you think, spending bad money after good, the loan officer compensation issue, training AI models, what consumers really hate (the 7 deadly sins), what makes a great loan officer, and why Garth will never be on my podcast again.
Let’s try something new. I’m joined by Carey Armstrong for a deep dive on Redfin — the business, the model, and the legacy. With Redfin’s acquisition by Rocket, one chapter closes and another begins, so let’s see what we can learn.
Over an hour and forty minutes, we unpack Redfin’s history, do a deep dive into the business model(s), discuss key challenges and structural issues, and wrap it all up with some timeless lessons learned.
Among other things, we talk about:
This is the first long-form podcast I've done. Let me know what you think!
Varun Krishna, CEO of Rocket, and I discuss when to pick up your phone in the morning, being a newcomer to the housing industry, what he wishes he knew when he joined Rocket, the industry’s adversarial dynamic, AI as the removal of experience, why he got the top job, structuring the org chart to match strategy, different vs. better, the art of customer-driven innovation, and how to get big companies to innovate.
Levent Künzi, CEO at Switzerland’s Properti, and I discuss disruption and data limitations in European markets, sustainable growth, going against the grain of an end-to-end ecosystem, moving faster with more focus, international inspiration, permanently improving yourself, generating seller leads, why brand is so important, and exclusive listings in the Swiss portal landscape.
Lisa Farrar, COO at Sweden’s leading real estate portal Hemnet, and I discuss starting your day with a forest run and swim, the importance of clarity in strategy, Hemnet’s top KPIs, balancing demands of different customer groups, partnering with agents, balancing a portal’s role in exclusive listings, copying with pride, a specific product f*ck up, and moving fast vs. moving perfectly.
Lukas Rose, CEO of Germany’s ProperBird, and I discuss the exclusive inventory power dynamics across Europe, how it encourages competition, the U.S. being the exception and not the rule, how to monetize home seekers, why tech adoption is so slow, killing new ideas, and why an agent’s top lead sources are his dog, his kids, and firefighters.
Here's the research I mention: Scout24: Growing a New Consumer Revenue Stream
Rory Golod, president of Growth and Communications at Compass, and I discuss his 10 year journey at Compass, focus as a luxury, building boring products, being a lightening rod in the industry, companies as confusion machines, the inventory strategy and its momentum, outworking your competitors, a 2019 fortune cookie, and the lack of brokerage innovation.
With $7.3B in mortgage origination volume in 2024, Justin Messer, CEO of Prosperity Home Mortgage, and I discuss being affiliated with Berkshire Hathaway, why attach rates top out at 25%, where tech is having an impact, why being on the road is a winning formula, powering a 15 minute pre-approval, starting a mortgage company from scratch, lead source durability, and why mortgage is so hard.
Steve Sanders, with deep brand and marketing experience from working with Zillow and Pacaso (and fellow CU Boulder professor), and I chat about key learnings from iBuyer consumer research, the power and limits of Zillow’s brand, the importance of differentiation, which iBuyer is getting it right, what consumers really want from their agent, how to do real estate branding wrong, understanding unmet needs, the Homes.com ad strategy, and a great case study in defining Pacaso’s brand.
Damian Eales, CEO of realtor.com, and I talk about the necessity of disciplined focus, the origin of the flat white, turning negatives into opportunities, partnering with your closest competitor, leveraging News Corp assets, doing the right things in the down cycle, why everything starts with audience, scheduling think time, investing in MLS relationships, and “debate, decide, deliver.”
Joe Rath interviews me! We discuss trends in real estate tech, what’s surprised me, the impact of AI, the best product not winning, great ways to incinerate millions of dollars, the only thing that matters to portals, the “perfect house” fallacy, the decreasing value of a lead, psychological bulwarks, news vs. entertainment, strategic planning advice, and competing where you can win.
And in case you missed it, check out my interview with Joe from February 2024.
Sean Soderstrom, CEO and co-founder of Courted, and I discuss goat yoga, working in a sauna, motivation vs. inspiration, predicting agent migration, solving actual problems, strategic mistakes, unbundling the brokerage business model, recruiting innovation at Compass, the value of the Hub, making data easily actionable, and trusting your instincts.
Tamir Poleg, co-founder and CEO of Real, and I discuss work days beginning at 3pm, how agents are underserved, growing from 800 to 22,000 agents in four years, what he would do as CEO of an incumbent, how everyone failed with tech, the one stop shop graveyard, replacing 90% of agent tasks with AI, and the most important thing he does as CEO.
Wendy Forsythe, CMO at eXp Realty, and I discuss why the industry is so slow to change, tech that’s moving the needle, the last mile solution, what agents really want, the power of scale, international network effects, how to talk to human beings, corporate bingo, and rate the job performance of eXp’s CEO.
Jeremy Wacksman, CEO of Zillow, and I talk about taking big swings, celebrating failure through learning, constructive feedback from customers, why clear cooperation is such a big deal, extending the Zillow brand, the changing value of a lead, solving the last mile problem, making less people cry, and what the CEO of Zillow actually does.
Mark McLaughlin, interim president at Compass, and I discuss the 9x Pacific Union turnaround, downsizing until someone screams, either growing your market share or slowly going out of business, the hardest part of getting acquired, brainstorming without financial constraints, his greatest recruiting tool, the key post-acquisition message, the cost of low performers, and leading with confidence.
Chris Heller, president of Movoto and former CEO of Keller Williams, and I talk about the importance of making decisions fast, learning from mistakes, how consumer behavior is changing, agent natural selection, operating in an industry without logic, building real relationships, and there being no bad leads, just bad follow-up.
