Redfin CEO: Glenn Kelman

Summary

Glenn grew up in Bellevue, WA, in a middle-class family.  He was the son of an aeronautical engineer and had two brothers, one of which was a twin brother.  From a young age, Glenn felt like he didn't fit in with other kids at school because most of them were rich kids that showed off their wealth.  His older brother frequently made front-page news in Bellevue, which added to his feeling of difference growing up.

He would then attend the University of California-Berkeley and get his B.A. in English.  He made an attempt to write a novel, and after running out of money and hitting a low point in his life, he decided writing a novel wasn't meant for him.  He would then go on to meet some brilliant people whom he started a business with (Plumtree Software).  That business would eventually be purchased by a large company (BEA) in 2005 after going public and raising $40 million.

Shortly after, he joined Redfin as their CEO and has been there ever since.  Redfin is a publicly traded, technology-powered real-estate brokerage now valued at over $1.7 billion, and is revolutionizing the way people are buying and selling homes.

Podcast Transcript

Note:  There may be errors to this transcript (some funny, some confusing - we used an automated transcription software!)

00:00:00 Glenn Kelman: I tried to write a novel one time, and my girlfriend dumped me because I didn’t have any money. My roommate came in one day and said get a job. I remember going into the bank because my ATM card wouldn’t work because I had less than $20, and you can’t take out $14 with an ATM card.

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00:00:27 Ash Faraj: Hey! Welcome to the ExecuTalks podcast. It’s the show that gives you insight to the personal stories of today’s top executives. In this episode, you will hear from Glenn Kelman, Redfin CEO. Redfin is a technology-powered real estate brokerage that represents both sellers and buyers for a small fee. Now valued at over $1.7 billion. You want to make sure to stick around until the end to hear about how Glenn thinks and hear him reflect on what he would tell his younger self.

00:01:04 Ash Faraj: Hey guys, so we initially had this conversation a little over a year ago. At the time we recorded in an open space where there was definitely some background noise. We apologize in advance for the quality of the audio.

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00:01:30 Ash Faraj: Glenn grew up in Bellevue, Washington, in a middle-class household. His father was an aeronautical engineer, and he had a twin brother that he admits, helped develop his competitiveness. During his childhood, he felt like he didn’t fit in with a lot of the other kids at school because he wasn’t raised to advertise or to show off his wealth like a lot of the other kids did. For example, he had one car that was the crappiest car in the parking lot that he’d split with his twin brother. He also admits that his brother got into a lot of trouble and it amplified his feeling of not fitting in even more. Now this feeling of being different than everyone else was the catalyst for Glenn’s personal development.

00:02:12 Glenn Kelman: I was the son of an aeronautical engineer. He founded his own company to create parts for spaceships, most of which blew up. [laughter] My mom was a nurse. I had a twin brother, my identical twin, Wesley. I think that made me more competitive. We were always sort of racing with the car or trying to eat a slice of pizza first. I had an older brother and he was a dark, or no, a black sheep I think is what you call it. He got into a lot of trouble. It made front page news in Bellevue. It really did. I think it affected me because there was just no point of trying to fit in. I felt like we were going to be a different family. That I couldn’t be so worried about what other people thought, because if I was, I just wouldn’t have survived. Other than that, it was just a goofy lonely family. I was really lucky because my parents had almost no ambition for me -- I think it’s hard when you feel that pressure from your parents to be a doctor or a lawyer -- to think for yourself. But my parents were just really glad I was there, and they let me become whatever I wanted to be. It made it easy to become what I am now.

00:03:37 Ash Faraj: Were there any sort of key events that happened when you were a child? When you look back at that, “Man, that was painful,” and that struggle? You know what I’m saying?

00:03:48 Glenn Kelman: You’re interviewing me like I’m Winston Churchill, like greatness was born at the age of nine or something like that. [laughter] I can tell you I really did get lucky. I think I just had a chip on my shoulder. I went to Interlake High School which was full off rich kids. That chip on my shoulder, I wasn’t one of the rich kids. I had the crappiest car in the parking lot which I split with my twin brother. I felt like I never fit in. You just decide you’re going to work harder than everybody else. If you’re not born with a silver spoon in your mouth, and you feel like you just have to hustle, it’s this incredible gift. I remember that at one point, we were living in this neighborhood where there was a “Yard of the Year” competition. My father didn’t even own a lawnmower. There was a point at which he was trying to cut the grass with a machete or something like that. [laughter] Yeah, I was so ashamed that we couldn’t be like everybody else and just decided there’s no point in trying. I think feeling like I had to work harder than everybody else. I’m feeling really loved, but also feeling like we were a little bit of a misfit family was just a perfect breeding ground for thinking for myself as an adult, which is just the hardest thing to do.

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00:05:10 Ash Faraj: Glenn would go on to attend the University of California at Berkeley and get his BA in English. He initially had ambitions to write his own novel, and it took him some time before he realized that that wasn’t his calling. At one point, he ran out of money and his girlfriend broke up with him and there was tension between him and his roommates, all at once.

00:05:32 Glenn Kelman: I feel like I could live my life 100 times over, and the other 99 times with the same amount of talent and drive, I would not have the outcome that I have now. I really feel that way. I think that many successful people want to attribute all their success to themselves, and it limits your empathy for people who are less successful. That’s obviously narcissistic and it’s totally destructive. I feel all the time like there are a bunch of people at Redfin who might be able to run this company better than I do it. It just makes me try harder every day to be worthy of the honor. If you think you are God’s gift to leadership, if you think that you’re the only one who can run a company or start a company, you probably shouldn’t be anywhere near that job. I just think it’s easy to let it go to your head.

00:06:28 Ash Faraj: On that topic by the way, you said in an interview one time that you tried so hard to mess up your life and it makes you like queasy a little bit. What makes you feel like you tried to mess up your life?

00:06:42 Glenn Kelman: Well, I tried to write a novel one time, and my girlfriend dumped me because I didn’t have any money. My roommate came in one day and said get a job. I remember going into the bank because my ATM card wouldn’t work because I had less than $20, and you can’t take out $14 with an ATM card. I was trying so hard to be unhappy. I didn’t enjoy writing a novel. I just thought that somehow that seemed like a good thing to do. If I hadn’t run out of money, I would still be trying to do that. I wanted to become a doctor at one point. This older brother, who was a black sheep, ended up drinking too much. We ended up taking him to the hospital every week. I just really admired the doctors who took care of him when there was no percentage in it. He wasn’t going to get better, but they kept trying to help him, even though he was angry that he was going to die. And I thought I should be a good person like that. I should be a doctor. I applied to medical school and almost went. I’m so relieved that I didn’t. Not because it isn’t a good thing to do, but because I would have been a terrible doctor. I think I had these notions of what I should be and were at war with who I am. I just didn’t listen to who I am for a long time. I really like being in business. I think it’s creative. I think it’s fun. I think it’s exciting, and I think there is a moral way to do it where you can still make the world a better place. But coming from Berkeley and being a little bit of a hippie, it took me a while to find my way.

00:08:24 Ash Faraj: I want to go back to the point where you didn’t have any money, your girlfriend dumped you, and all that. How did that feel at the time? What were your thoughts on what you’re going through?

00:08:36 Glenn Kelman: Well, I was really lonely and sad. [laughter] I don’t know if there was a lot to it. I think the most distressing part of it wasn’t anyone’s external judgment. It was the deep self-knowledge that I wasn’t a very good writer, and that I had no business publishing a novel because I didn’t have enough to say. There are people like Jonathan Safran Foer who come out of college and they have so much to tell the world, and I didn’t. Going into your study and trying to put out 2,000 words a day before you eat lunch, just made me miserable. It meant that I didn’t get to eat until three in the afternoon. I was just trying to do the wrong thing because I’d psych myself out. I convinced myself that this is what I should do, and it wasn’t what I loved doing. I don’t think that you can discover that through any process of ratiocination. I actually think you just have to try a bunch of different things. I felt so much urgency when I was your age. I thought, “Oh my gosh, I’m 23 and I still haven’t figured everything out.” Now I know people who settled into one groove. It’s the wrong groove. But they say, “I’m 25. It’s too late to change,” and they’re so miserable in middle age. I just think you have to try a bunch of different things until you find your thing. And what I had were parents who just said, “You are something special. If you don’t like this do something else.” Instead of telling me, “Well, it’s just the way life is. You work for a job or you work for a paycheck and you kind of stumble through.” They felt like, “No, you should do something you really love.” That’s why I just kept trying until I found it.

00:10:23 Ash Faraj: At one point you were lonely. You were sad.

00:10:26 Glenn Kelman: Everyone has been lonely and sad. You guys have. [crosstalk]

00:10:30 Ash Faraj: No, absolutely. What I’m trying to say is how did you pull out of that?

00:10:38 Glenn Kelman: Well, you know, evolutionary biologists have tried to understand the value of depression. Not many animals become so depressed they can’t get out of bed in the morning. I guess they don’t have a bed. But there’s really no reason for it except this, which is that it’s your body’s way of saying enough is enough. I am not going to let you continue on this path. If you’ve known anyone who’s been in a horrible relationship or has been writing a dissertation and then they no longer believe in it, at some point you just can’t go on anymore and you realize you have to change. I just think that I was miserable doing that and I kept trying to do it. Eventually everything that I had that was joyous to write about just sort of receded from me. That’s why so many people who are not listening end up writing about depression, and insanity, and things like that because it’s a really tough life.

[music]

00:11:44 Ash Faraj: One thing you’ve probably realized by now is that Glenn has an extremely humble demeanor. Before joining Redfin, he cofounded a company called Plumtree Software which was eventually acquired by a larger company in 2004. Glenn then later joined Redfin. Four years after Glenn had joined Redfin, the great recession that happened in 2008 led to very rough times for lots of companies including Redfin. Glenn has a very unique approach to handling rough times and his philosophy on leadership doesn’t begin during the bad times. By then it’s too late, Glenn says.

00:12:27 Male Voice: On that note of struggling, I know you started -- Redfin was founded in 2004, right?

00:12:32 Glenn Kelman: It was founded by David, yeah.

00:12:35 Male Voice: And like any start-up you’re trying to keep it afloat, right?

00:12:38 Glenn Kelman: Yeah.

00:12:39 Male Voice: And then a few years later 2008 happens.

00:12:43 Glenn Kelman: Yeah.

00:12:43 Male Voice: What was going through your head and how did you overcome that?

00:12:48 Glenn Kelman: Well, first of all, Redfin was hard almost from day one because at the time it really wasn’t popular for people who made websites to have a real-world business operation. We wanted to hire our own real estate agents and give them healthcare and all of that. And I thought it would be easier to raise money because I had made so much money for Sequoia and the other venture capitalists who had funded the deal. It was just impossible. Almost everybody said no. Then in 2008 when the great financial crisis hit -- I mean part of it was a relief because the pain we were going through was being shared by everyone else and misery loves company -- I think because I’d been through 2000 -- Plumtree had been growing very fast and .com bubble burst -- I just felt that I knew what to do which was right away to live to fight another day; reduce our expenses drastically. We had to do a layoff. The rule there is just to cut once and cut deep. You don’t want to cut ten percent of your workforce and six months later do another ten because then nobody feels safe. I just felt like we are going to need to do this. We need to do it now, so we can pay everyone a really large severance. When we talked about it with our Board there was some thought around waiting and seeing if things got better. But I thought, like the people who were working at Redfin, we could pay through the end of the year. If we waited ‘till the end of the year, there would be almost no severance. And if we let them know now, they could start making other plans. But it was horrible. It was horrible because if you run a start-up where you really pride yourself on having a loving culture some of that just seems like a lie when you have to let people go. Now I’m just being really careful about it. We’re growing very fast, but we’re not hiring as aggressively as we could because I don’t want to let anyone down again. It’s impossible to avoid all risk. You’re going to have to take some risk, but I just think you have to be more careful about risking people’s careers and their livelihoods and all that.

00:14:55 Male Voice: During that time of struggle, what was it like? How did you motivate your team?

00:15:03 Glenn Kelman: Well, I think it’s too late. If you wait to talk about the mission of the company, the reason you come to work every day being more than just money, only when Shiitake mushrooms have hit the fan you can’t really start singing that song. You’d have to say from the beginning there are going to be some ups and downs. You know they’ve studied families and there’s this narrative that different families have. Some are, “We used to be great and now we’ve fallen on hard times.” Other are, “We were immigrants and every generation does better than the last.” But the narrative that’s actually best for kids that makes them the most resilient is great for companies too which is, “We’ve had some ups and downs, but we’ve always stayed together.” I think even when we were doing reasonably well, I’ve just always said there’s going to be another hard period. If you’re just jumping on the bandwagon because you all need a boatload of money that’s great. I hope we make some money, but you have to care about what we’re really doing here which is making real estate better for regular people. I think you have to stay true to that through the good times and the bad. If you only go to that in the dark times, it just sounds a little disingenuous.

00:16:17 Male Voice: So kind of moving on. Ash was telling me that you commute to work on bike?

00:16:24 Glenn Kelman: That’s true.

00:16:26 Male Voice: I thought that was awesome, so I want to know why. What’s your philosophy behind that? I’m just curious.

00:16:32 Glenn Kelman: [laughter] [crosstalk] Well, I’m an environmentalist and so, some of it is just to avoid pollution. I’m an exercise freak so it’s high yield. You get transportation, but you also exercise. I think the hidden agenda there is that I work in this very seasonal business. Redfin sales are half in the winter of what they are in the summer. I came to Seattle after living in California for a while from college through my early adult years. And I just thought, oh my gosh, it’s great all the time, and we’re not selling any houses. And my wife just said you need to get outside every single day, no matter what. It’s such a discipline now that, even if it’s snowing I will walk my bike to work, and then if the snow clears I get to ride it back home. But I just feel like I know that I need to do this. I think this is some self-knowledge that as an adult the older you get the more you know the instruction manual to make yourself happy. These are the things that I need to do to put myself in a productive place where I can be a good parent, where I can be a good colleague and friend to people here at work. That’s just one of my setups. There’s so many times when something is driving me crazy at work and I don’t want to walk into my house feeling that way. There was a time I’ve time trialed up Capitol Hill.

00:18:04 Male Voice: Awesome. What would you say are maybe your top three habits to stay happy? For yourself. Maybe, you know, translate to the audience watching.

00:18:14 Glenn Kelman: Well, I have probably three or four. Number one is getting outside and exercising. Number two is I just make a list of the things that I want to get done and then it really makes me happy crossing those things off.  I think you have to kind of break things up into little pieces and get them done. I have an incredible family. I love my wife and my children. It’s hard to imagine that you can be happy if you don’t love your spouse. I know people who are in marriages that are okay and I just think you can never be a ten. You can only be a six or a seven or an eight. So if you guys aren’t married yet, just be really careful about the choice. [laughter] It’s the most important choice.

00:19:06 Male Voice: I’m actually in the process [indiscernible]. I’m kind of scared.

00:19:11 Glenn Kelman: Aren’t you worried your girlfriend is going to watch this video? [laughter] Or your boyfriend?

00:19:16 Male Voice: Maybe we’ll edit it out. I don’t know. [laughter]

00:19:22 Glenn Kelman: [laughter/crosstalk] That would be hard for me to hear about. [laughter]

00:19:32 Ash Faraj: If you were to choose -- If you wanted to learn more about a different executive in Seattle. Who would that be?

00:19:40 Glenn Kelman: Well, I think everybody’s favorite CEO right now is Jeff Bezos. He just has a [crosstalk/indiscernible] He can’t even take it. It’s sort of like, who’s your favorite quarter back? [funny voice/laughter] He is the gold standard. [crosstalk]. No, I know, but Russell Wilson would be a little bit more unconventional, whereas Jeff Bezos [indiscernible] So, I think that’s the obvious candidate. I admire Jim Sinegal because he founded Costco and he’s just tough as nails on expenses. He once told me this story about how the Kirkland private label Reese’s peanut butter cup got redesigned from one shade of orange to another. I said, “Which shade did you like better?” He said, “No, it was just a waste of money to redesign it.” What I really admire about him the most is that he has 4% of Costco. They did one round of financing maybe. And so, he gave most of that company to employees. I met them when I first came here and that was when Walmart was just running up the score against Costco. It was hard to believe, what he and the CFO were saying, which was just that they treat their employees terribly. It makes you feel terrible when you walk in the store. That brand isn’t going to endure. Now, when you go into Costco you see people pushing carts around who have a pin that say they’ve been there since 2011. And you know that’s a good company. It’s one of the only retailers that’s effectively competed against Amazon. I think it’s because they put other people first and they weren’t lining their own pockets. And right now, there’s a crisis for tech. There’s a lot of people in tech who are just cashing in.

00:21:41 Ash Faraj: So, you’ve heard -- I think you told me about this [indiscernible]. Go ahead.

00:21:46 Male Voice: I was just going to ask you what are your thoughts on Zillow’s new venture in purchasing homes? How do you, you know, what are your plans?

00:21:58 Glenn Kelman: Well, we got into that business about 18 months before Zillow. I think we’re probably more measured about it because you borrow money to buy houses. Because you think you’re smarter than everybody else and you could end up owning a thousand properties in Phoenix that you just can’t sell. Zillow certainly is aware of that, and there are other companies, like Opendoor, they’re aware of it. It’s sort of the first time that tech has used artificial intelligence or machine learning to really take a massive bet like that with our own money. I just think be careful. There’s certainly people who need that liquidity, who need to be able to sell their house and stuff. But you can just wind up upside down on a lot of houses.

00:22:49 Ash Faraj: We’re going to switch gears just a little bit. It’s called rapid fire. We’ve got five questions. But before that, I just wanted to say that last night I was watching your TEDx spot from 2013.

00:23:01 Glenn Kelman: Oh man, you guys have gone through the archives!

00:23:04 Ash Faraj: You were talking about how pure software, there’s only four percent of pure software companies, fortune 500, and pure software companies are actually real. I forget which companies exactly you had, but it was um…

00:23:21 Glenn Kelman: Well, I just think a lot of pure software companies that actually ventured into the real world -- you got Google strap on a camera on top of a car using Google maps to build a self-driving car. That’s exciting to me. You got Amazon buying Whole Foods. You got Netflix. [crosstalk] Yeah, they’re not just an algorithm for recommending movies. They’re hiring Kevin Spacey and other actors to make movies. I just think that tech is going into the real world and changing the real world in exciting ways. That seemed a little bit revolutionary back when everybody just wanted to make Instagram. Thirteen people build an app and a billion people download it. Now you’ve got Snapchat, which is one of the last really pure media companies, and there’s a question about whether it can compete at half a billion monthly active users. Half a billion! I think that more entrepreneurs are just going into the real world and doing really cool things. And technology is going to be part of that, but it’s not the only part.

00:24:28 Ash Faraj: Alright, now it’s time for rapid fire. So, in your opinion, what is the most important life skill?

00:24:41 Glenn Kelman: Humility.

00:25:44 Ash Faraj: Can you explain that a little bit?

00:25:46 Well, at least it is for me because it’s so easy to be a stuck-up CEO. I think you live in this little fortress inside your brain where you constantly trying to defend what you did, and other people are trying to help you. They’re trying to help you get better, and you can’t hear them because it’s easy to get stuck up. It’s easy to feel defensive. I don’t know it’s just... There’s so many virtues that are impossible to reach, right? Like I wish I were the warrior that Steve Jobs was. I wish I had the brain of Jeff Bezos. I can’t do those things, but anybody can be humble. That would be I think the hallmark of our culture is that we’re not going to be arrogant. We’re just going to work hard, and listen carefully, and try to learn from one another.

00:25:34 Ash Faraj: I’ve got to say, you’re like -- I’ve never met somebody that is so successful, and has achieved so much, and downplayed themselves that much. That shows how humble you are.

00:25:44 Glenn Kelman: Oh well [indiscernible/laughter]

00:25:53 Imagine you’re a new addition to the crayon box. What color would you be and why?

00:26:00 Glenn Kelman: Well, my instinctive reaction is pink. That’s because my youngest son loves pink. He just went to the playground and figured out that he’s not supposed to love pink. And I’ve been on the war path to convince him that it’s totally fine. So I feel like I need to embrace that too.

00:26:28 Male Voice: I thought you were going to say red. [laughter/crosstalk]

00:26:35 Ash Faraj: How many books have you read so far this year?

00:26:38 Glenn Kelman: Ten. Probably ten.

00:26:41 Ash Faraj: Favorites?

00:26:43 Glenn Kelman: I love Pachinko. It’s this novel about a Korean family over many generations in Japan. It turns out that lots of Koreans immigrated to Japan. They couldn’t really prosper there. It was sort of a racist society. And, I don’t know, it’s just a tearjerker. It’s uplifting. The whole of people are somehow good. She sees the good in everyone, and it helps me see the good in people. That’s my fave. I wish there was some, like, business reason I like it, but I just like it.

00:27:18 Ash Faraj: Okay. One advice that you would give to 15-year old Glenn.

00:27:30 Glenn Kelman: Just don’t settle. I think you can settle for the wrong girlfriend or boyfriend. You can settle for a job that you don’t really love. It takes confidence to say, “I think I can do better” than “I’m going to keep trying”. To break up with your job, to break up with whatever is making you unhappy. To try to really… Go for a little bit of joy, a little bit of passion, a little bit of excitement. But mostly I would say, “It’s going to be all right.” I felt the stakes were cataclysmic about which school I went to, about what my first job was. You can fix almost anything if you’re willing to just say, “Wait, I don’t want to do that. I’m going to try something else.” That’s probably what I would say.

00:28:25 Ash Faraj: And the last one is a quote you live by.

00:28:28 Glenn Kelman: I don’t really have one. I know that there’s supposed to be some maxim that I live by, but I don’t really have one. One of my favorites is from Ezra Pound, but I don’t know that I live by it every day. But here it is. He says that “The fault lies all in the not done, all in the diffidence that faltered.”

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00:28:53 Ash Faraj: Thank you for tuning into this episode. If you enjoyed listening, please subscribe on Spotify or Apple Podcasts. Please leave a review so that we can better serve you. Take care, dream big, and we’ll see you next Monday.