From the outside, it would make total sense for New York-based real estate brokerage and tech company Compass to put its new West Coast engineering hub in Seattle, vs. the Bay Area. After all, this is the home of Redfin and Zillow, two grizzled veterans of the tech-fueled real estate sector.
Backed by big investors, with a $6.4 billion valuation and hints of an IPO ahead, Compass was sued this year for hiring three of Zillow Group’s former employees in alleged violation of non-compete agreements. The case quickly settled, but clearly Compass came here to poach tech talent from its fellow real estate companies, right?
Actually, that’s not the case, says Robert Reffkin, CEO of the New York-based company, speaking with GeekWire at the new office Tuesday afternoon before cutting a ribbon and handing out cake pops to passersby on the street outside the new Seattle building where Compass just moved into three full floors.
Reffkin acknowledges that Compass was drawn to Seattle in part by the presence of a homegrown company, but he says it’s a different one.
“This is a city of Amazon, where Jeff Bezos started his company out of his garage and it became something that really transformed the world we live in. Effectively what books are for Amazon, the brokerage model is for us,” Reffkin said. “If we can get everyone searching Compass because it has the best inventory of listings, the best technology and agents around it, then we can add mortgage title, insurance, escrow, moving services, ultimately all of these things.”
More important than its standing as a real estate tech center, Seattle is a place where people “understand the inventory-based platform model more than others,” Reffkin says.
Amazon played no small role in putting that DNA into the region’s the tech economy. And yes, Reffkin acknowledges, many of the same people who helped the Amazon expand beyond books into everything else would be well-positioned to help Compass, as well.
“Amazon has a truly world-class engineering team,” he said, citing the tech giant’s work in artificial intelligence and the cloud. “Same with Microsoft. Same with Facebook here, and Google. Those companies were the ones that really drew us here. A lot of big companies have enough people that want to be part of transforming a new industry.”
That helps to explain the location of the new center, at 503 Westlake Ave. N., smack in the middle of Amazon’s headquarters campus in Seattle’s South Lake Union neighborhood. Compass occupies more than 21,000 square feet on three floors of the building, enough room to eventually accommodate 100 engineers and 70 operations staff, according to the company.
As of this week, Compass has more than 40 engineers working in the space, with an average current tenure of just two months at the company. They’re building a platform that the company hopes will bring in more real estate agents and homebuyers and sellers, including new features launched this week that use artificial intelligence to recommend homes for buyers to consider.
Reffkin calls it a “collaboration center,” because the company has top agents interact with engineers in the office to help shape new features. While the company’s New York headquarters helps to inform its approach to high-rise residential real estate, Seattle gives the company an engineering center in a city defined by neighborhoods and an abundance of single-family homes.
Compass was previously located in a co-working space in Seattle, but this is its first standalone office. The company has already been mining the region for talent. Joseph Sirosh, an Amazon veteran who previously oversaw artificial intelligence initiatives at Microsoft, joined Compass in December as its CTO. Another former Amazon engineer, Rahul Singh, previously CEO of developer tools startup Distelli, joined Compass in February as vice president of engineering.
The company’s regional president in the Seattle office, Paul Peterman, led advertising and technology business initiatives for Facebook out of the social network’s Seattle office, before joining Compass earlier this year. He said he was drawn to the new role by the opportunity to disrupt another established industry with new technology.
“In the past few months we’ve just been knee-deep in collaborating with the product and engineering team and we’re starting to ship actual features to our clients, to the agents, and then eventually the end consumer based on that collaboration,” Peterman said. “This company moves fast.”
He added, “I’ve been trying to explain to our staff the implication of the collaboration that we’re having. Sometimes I think it’s hard for them to realize that the work that we’re doing together here is actually going to change the face of not just Compass, but potentially how real estate is transacted nationally.”
Compass was founded in 2012 by Ori Allon, a veteran of companies including Twitter and Google; and Reffkin, who worked previously at McKinsey, Goldman Sachs, and as a White House fellow. (Reffkin’s mom, Ruth, is a real estate agent.) The company has raised more than $1.5 billion from investors including SoftBank Vision Fund, Dragoneer Investment Group. Canada Pension Plan Investment Board and the Qatar Investment Authority.
In addition to its technology platform, the company is looking to stand out with initiatives such as its Compass Concierge program, which provides no-interest funding and coordination of home upgrades for its clients, with the goal of selling a home faster and at a higher price.
However, Compass has so far stopped short of buying, renovating and selling homes itself, avoiding the so-called “iBuyer” trend that is a growing part of the businesses of Zillow, Redfin and others. Explaining why the company hasn’t gone down that path, Reffkin sounded a lot like his company’s big new Seattle neighbor.
“Our agents haven’t asked for it,” he said. “We’re really customer-driven, which is another reason I like this market. I think there’s a customer obsession in Seattle that is more unique than you would realize.”