On March 13, 2020, Glenn Kelman, the chief government of the web actual property dealer Redfin, was biking to work when he obtained a name from Henry Ellenbogen, a longtime investor in Redfin who had began his personal fund.
At Harvard, Mr. Ellenbogen majored within the historical past of know-how. One large factor he discovered, he has stated, was that know-how is developed effectively prematurely of individuals’s skill and willingness to make use of it.
“Inform me one thing,” Mr. Ellenbogen requested Mr. Kelman, based on an account the chief government posted on Redfin’s web site. “When folks begin touring houses by way of an iPhone, received’t plenty of them determine, even after this entire pandemic ends, that that is only a higher method to see homes? And if this entire course of of shopping for and promoting houses principally goes digital, how will different brokerages compete with you?”
Mr. Kelman, a bit of preoccupied by how Seattle’s usually bustling streets had been eerily empty, stated he didn’t know.
“I do,” Mr. Ellenbogen stated. “The world is altering in your favor.”
This was not a common view then, and it definitely was not what Mr. Kelman was experiencing. The primary confirmed coronavirus dying in america was a nursing residence resident in a Seattle suburb on Feb. 29. Inside hours, residence sellers determined that possibly they didn’t need strangers respiration of their front room and bedrooms. Consumers started to drag out as effectively.
For Redfin, that was the start of a disaster. Inside a number of days, it shut down its 78 places of work across the nation. Its inventory plunged, shedding two-thirds of its worth.
“The magnitude of the decline was rising each day,” Mr. Kelman stated. He agreed to promote Mr. Ellenbogen extra inventory for $110 million, pondering Redfin would possibly want money to make it by means of a protracted drought. In early April, Mr. Kelman furloughed 41 % of the corporate’s brokers, who had been salaried workers. Greater than 1,000 folks had been affected.