On March 13, 2020, Glenn Kelman, the executive director of online real estate agent Redfin, was biking to work when he received a call from Henry Ellenbogen, a long-time Redfin investor who had launched his own fund.
At Harvard, Mr. Ellenbogen studied the history of technology. One big thing he’s learned, he said, is that technology is developed well before people are able and willing to use it.
“Tell me something,” Mr. Ellenbogen asked Mr. Kelman, according to a report the manager posted on Redfin’s website. “If people start looking at houses on an iPhone, won’t many of them even decide, even after this whole pandemic is over, that this is just a better way of looking at houses? And if the whole process of buying and selling houses is largely virtual, how are other agents going to compete with you? “
Mr. Kelman, a little preoccupied with the fact that Seattle’s normally busy streets were eerily empty, said he didn’t know.
“I do,” said Mr. Elbow. “The world is changing in your favor.”
This was not a common view at the time, and it was certainly not what Mr. Kelman was experiencing. The first confirmed coronavirus death in the United States was a resident of a nursing home in suburban Seattle on February 29. Within hours, home sellers decided that they might not want strangers to breathe in their living room and bedrooms. Buyers also began to withdraw.
For Redfin, that was the beginning of a crisis. In a matter of days, it closed its 78 offices across the country. The stock crashed and lost two-thirds of its value.
“The magnitude of the decline was increasing day by day,” Kelman said. He agreed to sell Mr. Ellenbogen more shares for $ 110 million, thinking Redfin might need cash to weather a long drought. In early April, Mr. Kelman took 41 percent of the company’s agents on leave who were employees. More than 1,000 people were affected.