Compass CEO Robert Reffkin believes the real estate industry is experiencing a “Netflix versus Blockbuster moment,” and he wants his company to emerge as a one-stop shop that provides all services associated with moving.
Reffkin outlined his vision for Compass during an interview this month with Bloomberg, saying that his goal is “to realize the greatest real estate dream of the last 25 years, which is one-stop shopping.”
“Not just a place where consumers can come and search, but where everything is in one platform,” he explained. “Mortgage, title, insurance, escrow, inspectors, move-in services, everything in one place creating harmony.”
Though Reffkin did not reveal the specifics of how Compass might achieve that goal, he did say a new batch of engineers the company has been hiring could end up working on the problem and figuring out how to go “beyond just the transaction to what happens afterward.”
“It may be transaction management and the aftermarket,” he said of the work Compass’ engineers will do going forward.
Asked about Compass’ ambitions and Reffkin’s comments, company spokesperson Jason Post told Inman in an email that “our hope is to build tools to take part in more of the transaction.” He also noted that Compass already owns an escrow company in Southern California, and that “we recently hired Max Henderson from Google to look at these possibilities.”
Reffkin further told Bloomberg that Compass currently employs 200 engineering staffers but wants to have 400 by the end of the year. The company also has so far raised $1.2 billion in funding and is valued at $4.4 billion.
Compass has famously leaned into its identity as a technology company, and Reffkin’s comments indicate the firm believes that identity remains key to its growth — including hitting the oft-stated goal of having 20 percent market share in the top 20 markets by 2020.
During the Bloomberg interview, Reffkin further elaborated on the role of technology in real estate by saying the industry is experiencing a “Netflix verses Blockbuster moment.”
The comment was a reference to the battle between the two movie rental giants that ended when the former’s tech platform became ubiquitous and mostly put the latter out of business.
Clearly, Reffkin sees Compass playing the role of Netflix in that analogy, though as he has pointed out himself in previous interviews, real estate is exceedingly fragmented and filled with players vying for dominance.
Moreover, many of those other companies — from Zillow to Opendoor to Keller Williams — are leaning heavily into technology as well. In the case of loanDepot, the strategy even closely parallels what Compass is doing; the lender’s mello platform connects consumers to agents, homebuilders and iBuyers. Mello should ultimately connect consumers to other services as well, and the company has described it as providing in some cases a “one-stop shopping experience.”
Ergo, the final, rightful heir to the “Netflix of real estate” title arguably remains to be determined.
This competitive environment, and Compass’ bullishness on its own prospects, have repeatedly put the company squarely in rivals’ crosshairs. Notably, Ryan Gorman — CEO of NRT, Realogy’s brokerage owning subsidiary — slammed Compass earlier this year for “taking advantage” of agents. Marketing and automation provider MoxiWorks has also criticized Compass over productivity claims — a criticism Reffkin disputed.
However, during his Bloomberg interview Reffkin didn’t single out any competitors by name. Instead, he dinged traditional “brokerage firms” generally, saying that “they haven’t improved in any meaningful way for many years.”
“If you ask the average agent, ‘what do you have today from your brokerage firm that you didn’t have a year ago?’ they always say nothing. It’s the same thing year after year after year,” Reffkin said. “Brokerage firms aren’t building technology. If they’re doing anything they’re paying a third party provider to integrate different components of other people’s technology.”