On March 13, 2020, Glenn Kelman, CEO of online real estate broker Redfin, was cycling to work when he received a call from Henry Ellenbogen, a longtime investor in Redfin who started his own fund.
At Harvard, Mr. Ellenbogen majored in the history of technology. One important thing he learned, he said, was that technology is being developed much earlier than people can and are willing to use it.
“Tell me something,” Mr. Ellenbogen asked Mr. Kelmann, according to the bill – wrote the executive director on the Redfin website. “When people start home travel on iPhones, won’t many of them decide, even after the pandemic is over, that this is simply the best way to see at home? And if this whole process of buying and selling homes becomes largely virtual, how will other brokerage firms compete with you? “
Mr. Kelman, a little concerned that Seattle’s usually bustling streets were eerily deserted, said he didn’t know.
“Yes,” said Mr. Ellenbogen. “The world is changing in your favor.”
This was not the general opinion then, and certainly not what Mr. Kelman felt. The first confirmed death from coronavirus in the United States was a resident of a nursing home in the suburbs of Seattle on February 29. After a few hours, the home sellers decided that perhaps they didn’t want strangers to breathe in their living room and bedrooms. Customers also started to leave.
For Redfin, this was the beginning of a crisis. Within days, she closed her 78 offices across the country. Its shares fell, losing two-thirds of their value.
“The scale of the recession has been increasing every day,” said Mr Kelman. He agreed to sell Mr. Ellenbogen more shares for $ 110 million, believing Redfin might need the money to weather the prolonged drought. In early April, Mr. Kelman fired 41% of the company’s agents who were employees. More than 1000 people were injured.