Economy

Silicon Valley’s Best Pandemic Ever

On March 13, 2020, Glenn Kelman, the chief government of the web actual property dealer Redfin, was biking to work when he bought 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 technology. One large factor he discovered, he has mentioned, was that technology is developed effectively prematurely of individuals’s capability and willingness to make use of it.

“Tell me something,” Mr. Ellenbogen requested Mr. Kelman, according to an account the chief government posted on Redfin’s web site. “When people start touring homes via an iPhone, won’t a lot of them decide, even after this whole pandemic ends, that this is just a better way to see houses? And if this whole process of buying and selling homes mostly goes virtual, how will other brokerages compete with you?”

Mr. Kelman, a little bit preoccupied by how Seattle’s usually bustling streets have been eerily empty, mentioned he didn’t know.

“I do,” Mr. Ellenbogen mentioned. “The world is changing in your favor.”

This was not a common view then, and it actually was not what Mr. Kelman was experiencing. The first confirmed coronavirus dying within the United States was a nursing house resident in a Seattle suburb on Feb. 29. Within hours, house sellers determined that possibly they didn’t need strangers respiratory of their front room and bedrooms. Buyers started to tug out as effectively.

For Redfin, that was the start of a disaster. Within just a few days, it shut down its 78 workplaces across the nation. Its stock plunged, shedding two-thirds of its worth.

“The magnitude of the decline was increasing every day,” Mr. Kelman mentioned. He agreed to promote Mr. Ellenbogen extra stock for $110 million, pondering Redfin may want money to make it by means of a protracted drought. In early April, Mr. Kelman furloughed 41 p.c of the company’s brokers, who have been salaried staff. More than 1,000 individuals have been affected.

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