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by emilsedgh 1935 days ago
They got VC money by pretending to be a tech company.

Then they set up very good branding.

Then they used the VC money to acquire best agents.

So their edge is not tech, but branding + good offers to agents.

5 comments

Yep, this is what they did.

They swept through all the big markets a couple years ago and got all the top-selling agents by offering amazing packages. My brother was a top agent in Austin and he got stock, excellent brokerage rates, a lucrative bonus program and a huge stipend for marketing, branding and even 40k toward hiring an assistant. It was an offer no other brokerage could match and he and basically everyone he knew went to Compass.

Some of these top brokers have already started to bail. They've also cut back on their Compass Concierge service, which is just an interest-free loan for sellers to dress up their homes. Guess all that Softbank cash is starting to run out...
Actually, I can tell you that their original strategy was to have exclusive listings. Last year because Compass had so many agents, they were able to "preview" listings on their site days before MLS. Their hope was that this edge would attract users into using Compass to search for listings over RedFin/Zillow/etc. Fortunately, this practice was banned and they no longer have that card to play.
The unicorn playbook. There's going to be VCs on LinkedIn trying to explain why this is such a good long term play...
What if someone jumps in with a even better offer for agents (fed also by VC money) to "disrupt" Compass? Wouldn't this sink Compass?
we got a sales pitch from them

basically "we have a culture that the big agents can't and that attracts the best agents to us" so basically culture + back-end not horrible tech = massive success.