real estate: We’re transforming real estate with software, and India is key: Robert Reffkin, Founder and CEO, Compass
IDCs are responsible for advancing the company’s technology stack, working on different technologies including mobile apps, cloud computing, AI, and data analytics. In an interview, Robert Reffkin, Founder and CEO of Compass, discusses how real estate is changing, Compass’s expansion plans and more. Edited excerpts:
Where does the IDC (India Development Center) fit into the Compass scheme of things?
At Compass, we are replacing the outdated, overly complex, paper-based process of buying and selling a home with an end-to-end digital platform that empowers all stakeholders in the real estate process to have a better experience. Thus, the real estate agent, the buyer, the seller, the title agent, the loan officer, the building inspector, the home insurer, the home appraiser, the home adjuster in all benefit. And there should be a platform that allows them to work together in this very extensive process.
Now it’s really the digital transformation that we’re doing – from a very offline to online experience. Now, in terms of IDC, Indian software engineers have played a major role in revolutionizing almost every major industry in the world. And real estate will be no exception. But real estate just hasn’t been transformed by software yet, it’s one of the greatest legacy businesses out there. And I don’t know of a buyer or a seller or a tenant that likes the way things are, somebody’s gonna make it lovable, but it’s gotta go, it’s gotta be digitally transformed. It makes perfect sense for us to be able to tap into and partner with the best software engineering talent in the world, much of which is in India.
In terms of efficiency and savings, how has the Indian center helped?
IDC’s strategy is not cheap labor. This is the strategy of top talent and partnerships. The IDC builds tools to make our global employees more efficient.
What is your roadmap for IDC?
We are in Hyderabad. We are opening new development centers in Gurugram and Bengaluru. We currently have about 250 people. We plan to hire over 100 more people this year alone.
Digitization has accelerated the demand for engineers and some of the IT companies in India have 30% annual employee attrition? It is becoming increasingly expensive and difficult to access talent. What was your experience like?
We had 14% attrition last year. I think people want to work in places where they can have a really big impact on a really big industry. Real estate is the last big legacy business that hasn’t been transformed by software.
The second thing that is unique to us is our culture of entrepreneurship. Our company values aren’t just things you hang on the wall. It’s about dreaming big, acting fast, being solution-focused, opportunity-obsessed, collaborating, maximizing strengths, and more. In every part of what we do, we somehow infuse these principles of entrepreneurship.
I think both of these aspects of Compass have been very helpful in attracting top talent. We have amazing leaders from some of the best companies like Microsoft, LinkedIn, Amazon, Google.
Are you planning to launch Compass services in India as well?
We’re going. But we want to complete the vertical integration of the platform in the United States, as well as further geographic expansion. Yes, I would expect us to start going international in about two years.
We’ll probably start in London, Hong Kong and Canada, but then we’ll go into a market like India.
So what is Compass’ whole value proposition? How will Compass be relevant to real estate markets in different countries?
Buying and selling a home is not just a transaction. It’s a process, where we have to collaborate with a number of different real estate professionals in order to make it happen. Someone has to take the pictures, and then there are agents, buyers and sellers, loan officers, different players, depending on the market. We are building a collaborative platform that allows everyone to complete their entire workflow in one place, which creates harmony and simplicity in the real estate process.
Does Compass do the trading or do you license software to the broker community and others?
In the United States, we allow the transaction, but we intend to open it in most international markets and obtain a license.
Real estate is quite complex with local regulations. How do you handle this?
Well, actually the same problem exists in the United States, each county has a different regulatory environment. And there are over 700 different ways to access real estate data in the local MLS (Multiple Listing Service)! Each of them has different search criteria and they have different terms.
For example, an outdoor space in New York might be a patio, in Miami a balcony, and in Hawaii it’s called a veranda. One of the reasons this industry hasn’t been transformed by software is that it’s incredibly local in nature. And there’s a lot of friction and fragmentation in the process. We’re here to bring it all together on one platform with a local schema but giving everyone access to collaborate with each other.
What is the big challenge you are facing?
We invest over $300 million a year in R&D, and our biggest competitor has invested much less in R&D. We have huge R&D advantage in this industry. But we are entrepreneurs. We want to go fast and we dream big. And so, every year, we ask ourselves how can we move faster?