Entrepreneurs, Study Redfin Carefully

Who should we look up to?

As HubSpot grows, that question keeps coming up. Sure, we look up to Google and Facebook, but what are smaller, earlier-stage companies doing equally amazing things?

This summer I discovered a new answer to that question: Redfin.

I recently finished buying my first home, and I did it through Redfin. It was a fantastic experience. I left Redfin a happy customer, and a deep admirer of their business.

There are five main reasons:

(1) Their product and service are easy to love. Every bit of my experience with Redfin was a pleasure: searching the site to find listings, visiting properties with my field agent Mark Sanders, wandering around neighborhoods checking out properties with their iPhone app, using data on the site to do my own market analysis, and finalizing the purchase with my agent, Hannah Driscoll.

(2) They empower users with data. Most companies bottle up data like some kind of secret sauce. Redfin understands that everybody wins when data is shared. They publish all the MLS listings on their site and make them easily searchable.  That means buyers can find properties they like on their own. That saves time for the buyer and the agent since the properties they visit are ones the buyer is most interested in. No more visiting dozens of places just so the agent can understand what the buyer wants.

(3) They align incentives correctly. Traditional real estate agents are paid on a commission of the sale. That means their incentive is to get a deal done, even if it's not a property that makes sense for the buyer. Redfin flips this crappy model on its head. Redfin agents are paid on a salary and get a bonus based on feedback from the buyer. That means Redfin agents have an incentive to make sure the buyer is completely satisfied with the sale.

(4) They’re blowing up an inefficient market. Real estate brokers exist largely because of imperfect information — but now that information is digital, there is no reason it should be imperfect for consumers. If it’s possible to know all the real estate listings and recent sales in a neighborhood, no business should be able to keep that information behind a gate and charge for access.

(5) Their employees are happy. — The Redfin employees I met — Mark and Hannah — were both genuinely passionate about the company. As a customer, there’s no better signal you can get about a company.

I do have one nit to pick with Redfin: They don’t have a good marketplace for service providers. Instead, they recommend specific lawyers, mortgage brokers and inspectors.  As a consumer you have to wonder about service providers — particularly lawyers — recommended by your broker. Is a lawyer recommended by Redfin regularly going to represent your interests or Redfin's? Probably Redfin's. Redfin could remove this conflict of interest by replacing the recommendations with simple listings and customer reviews.

Finally, the thing that makes me happiest about Redfin: Companies like Redfin will eventually pull us out of this recession we're in — companies that are creating thick new value, simplifying life for consumers and freeing us up to do more of the things we love and are good at.

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Don’t Build a Personal Brand. Build a Lasting Institution.

Yesterday
at the Online Marketing Summit in Minneapolis somebody asked me whether
HubSpot encourages its employees to build personal brands. 

My
answer was unequivocal: Yes. We want our employees to be active on
social media. We want them to blog. We want them to grow their reach.
And as a company we want to help them do all that. If HubSpot's
employees have powerful online presences its message will spread
organically and authentically.

But I'm not happy
with that answer. There’s a problem with excessive focus on personal
brand. I don’t want to work at company full of individuals focused on
polishing personal reputations. I want to work on a team. The team can
have stars, but the stars need to know how to pass. They need to focus
on winning, not being the individual scoring leader.

I
think this why, if you look at companies building products changing people's lives, they're not hiring on the basis of Twitter followers
or blog subscribers. They're making hiring decisions based on
individuals' ability to build — to build products, to build
institutions and to build teams.

There Are More Smart People Outside Your Company Than Inside

I love this passage from Atul Gawande's book Better:

Among the many distressing things I saw in Nanded [India], one was the incredible numbers of patients with perforated ulcers. In my eight years of surgical training, I had seen only one patient with an ulcer so severe that the stomach's acid had eroded a hole in the intestine. But Nanded is in a part of the country where people eat intensely hot chili peppers, and patients arrived almost nightly with the condition, usually in severe pain and going into shock after the hours of delay involved in traveling from their villages. The only treatment at that point is surgical. A surgeon must take the patient to the operating room urgently, make a slash down the middle of the abdomen, wash out all the bilious and infected fluid, find the hole in the duodenum, and repair it. This is a big and traumatic operation, and often these patients were in no condition to service it. So Motewar [an Indian doctor Gawande visited] did a remarkable thing. He invented a new operation: a laparoscopic repair of the ulcerous perforation, using quarter-inch incisions and taking an average of forty-five minutes. When I later told colleagues at home about the operation, they were incredulous. It did not seem possible.

Motewar, however, had mulled over the ulcer problem off and on for years and became convinced he could devise a better treatment. His department was able to obtain some older laparoscopic equipment inexpensively. An assistant was made personally responsible for keeping it clean and in working order. And over time, Motewar carefully worked out his technique. I saw him do the operation, and it was elegant and swift. He even did a randomized trial, which he presented at a conference and which revealed the operation to have fewer complications and a far more rapid recovery than the standard procedure. In that remote, dust-covered town in Maharashtra, Motewar and his colleagues had become among the most proficient ulcer surgeons in the world.

I came across this story yesterday on a flight back from Austin, where I was speaking to a group about social media marketing — only instead of speaking to the group, I ended up speaking with them, and learning as much from them as they learned from me.

This happens most times I speak — it's how the world works now. If you're a top surgeon at one of the world's leading hospitals, you should expect doctors in India to teach you new ways of operating on ulcers. If you give talks on social media marketing, you should expect the people at your talks to introduce you to new ways of building businesses on Facebook. Innovation is now democratic.

This is a big change for businesses. Information monopolies — expertise — used to be a core competitive advantage for many companies. Now those monopolies are gone; almost everybody has access to the same information.

So, as an entrepreneur or a business owner, how do you deal with this shift? I think John Hagel has the answer. He explains:

We are moving from a world where the source of strategic advantage was in protecting and efficiently extracting value from a given set of knowledge stocks – what we know at any point in time.  As knowledge stocks depreciate in value at an accelerating pace, the focus of economic value creation shifts to effective and privileged participation in knowledge flows. Finding ways to connect with people and institutions possessing new knowledge becomes increasingly important. Since there are far more smart people outside any one organization than inside, gaining access to the most useful knowledge flows requires reaching beyond the four walls of any enterprise.

When I think about what we need to do at HubSpot, I don't think much about building some ephemeral internal expertise — instead I'm focused on how we can become curators of expertise everywhere.

Don’t Worry About China, Just Innovate

For the past few days I've been in Hong Kong visiting my brother. I've been walking around the city, gawking at everything that's changed (a lot) since 1999, when I was last here. Earlier in the week I took day trips to Shenzhen and Macau, cities growing as fast or faster.

With these changes in mind and in front of me this morning, I read David Brooks' recent column comparing China's economic growth with U.S. stagnation. He says that, "The Chinese, though members of a famously old civilization, seem to possess some of the vigor that once defined the U.S. The Chinese are now an astonishingly optimistic people. Eighty-six percent of Chinese believe their country is headed in the right direction, compared with 37 percent of Americans."

This kind of woe-is-us thinking resonates when you're visiting this part of the world. When you see a 30-year-old city like Shenzhen that dwarfs Boston, or when you see wealth accumulating like it is on Hong Kong Island, you wonder why the U.S. economy doesn't have such visible signs of strength.

But I don't think it's useful to frame this discussion in national terms. The vigor, optimism and growth David talks about are decreasingly connected to place. Increasingly, what matters is the ability to constantly learn and re-invent your livelihood.
 
China's economy is vigorous, but there is equal vigor in the U.S. economy if you look at the right individuals or institutions. Google and Apple are thriving because they focus more on developing new businesses than on propping up old ones. The same goes for small business owners like Charlie King and Duncan Page who are figuring out how to use new tools to run their businesses more efficiently.

This type of constant innovation is the key to creating vigorous, competitive businesses today. It will certainly be the key for us at HubSpot as we grow from a successful startup to a thriving institution — and whenever we're ready to start selling in China.

Photo: A bus stop in Shenzhen on Wednesday.

News Is a Part of My Life, But Not as a Profession

Earlier this week somebody I respect asked if I ever thought about
getting back into the news business — trying to build Faneuil Media
again.

The answer is unequivocally, no.

HubSpot is an extremely rewarding place to work; we are building something important, and it is filled with people I learn from.

Beyond
HubSpot, there's a more fundamental reason I don't plan to go back to
the news business: Today journalism is less a career path, and more
something people just do. I was a photojournalist last night when I
took pictures of the fireworks.  I was a trade journalist this morning
when I posted video of a talk I gave last month.
I was an editor yesterday when I linked to the Kremlin's video blog.

I got into the news business because I love to create content and
help spread information. I can do that with my iPhone and my blog now,
so there's no need to endure the spiritual and financial pain of work
in a shrinking industry.

As Magdalena Georgieva, one of our many fantastic summer interns at
HubSpot, put it in her job interview this spring, "news is always
something that will be a part of my life, but not as a profession."

Same for me.

Clambering on Board The Times?

http://www.hulu.com/embed/2Pdcv5dybjTfDD5vE7efYg

This is a super video, and I'm optimistic about The Times' future, but one comment gives me the creeps.

Explaining his paper's current situation, Bill Keller says, "It's always
been one of the higher aspirations in the business to work for The New
York Times. Nowadays we're a little bit like the last ship afloat, so,
you know, we have all these life boats floating around underneath us
and people dying to clamber on board."

No, no, no!

People are not trying to clamber on board. They're not
looking for an institution to save them. They're busy building their
own boats, creating great content, solving problems and building small businesses on their own,
independently.

(Here's the link to the video above for international folks who can't view Hulu.)

The 50 Biggest Election-Season Buzz Generators

This chart, published in the March-April issue of Technology Review, is very cool. 

The image shows the 50 phrases that generated the most buzz during the last three months of the presidential campaign. The vertical axis is number of web items; the horizontal axis is date. 

This came from computer scientists at Cornell, but it seems like a harbinger of the type of text and meme analysis that will become common as the data and processing needed to do such work becomes easier to manage (see the work of Radian6, Crimson Hexagon and others).

A Sign Tom Friedman Has Jumped the Shark

This is his idea of a solution to our current economic crisis:

I wake up every morning hoping to read this story: “President Obama announced today that he had invited the country’s 20 leading bankers, 20 leading industrialists, 20 top market economists and the Democratic and Republican leaders in the House and Senate to join him and his team at Camp David. ‘We will not come down from the mountain until we have forged a common, transparent strategy for getting us out of this banking crisis,’ the president said, as he boarded his helicopter.”

This kind of plutocracy is one of the reasons we've stumbled into such a crisis.

Today, the things that work are done out in the open, not in isolation, at the top of a mountain.

(More on jumping the shark.)

This Spring’s Economic Snow Drops

Last night I met my family for dinner at a popular but unusually empty
Cambridge restaurant. Earlier in the day the
government announced another 651,000 jobs lost, and there was a
lot of dire economic language around the table: "complete collapse,"
"breadlines," "16% unemployment."

It was a bleak conversation,
but I think there are economic snow drops appearing this spring — signs of new, different
growth:

WhiteHouse.gov — Our president is speaking to us
directly. You don't have to be part of the establishment to get
unfiltered information from the government. Everybody has equal, if not
perfect, information.
Best of all, there's a growing expectation of such transparency. With the White House blogging, we increasingly expect corporations, non-profits and branches of government to do the same.

Twitter — Conversation is public and connected. This
puts everybody on equal footing. You don't have to live in Silicon
Valley to know what the most successful entrepreneurs of our time are
thinking. They tell you publicly. Companies with tons
of money have a harder time selling their bad products, and companies
with far less money can sell good ones.

HubSpot — Marketing budgets are no
longer barriers to entry. It used to be that if you had a promising
new business, you had to spend tons of money to get your message out
and build scale. Now you don't have to do that. Anybody with a quality product or
service can use inbound marketing and a simple set of tools to compete
with the big guys. (Check out this marketing roi page for two studies
that spell this out analytically.)

These stories are all
exciting because they're giving creative individuals power — power that is being use to solve
problems, to remake industries like transportation, apparel, and finance
and, slowly, to rebuild our economy.

Umair Haque on Constructive Capitalism

This is a fantastic video. Well worth the time.

http://vimeo.com/moogaloop.swf?clip_id=3204792&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=00ADEF&fullscreen=1

Umair Haque @ Daytona Sessions vol. 2 – Constructive Capitalism from Daytona Sessions on Vimeo.

HubSpot's methodology and concept of inbound marketing are based squarely on the ideals Umair articulates here — particularly equity and democracy.