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Compass S-1

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Re: Compass S-1

#61

Post by tamade »

doitLP wrote: post #60
emilsedgh wrote: post #51

Earlier quoted context omitted.

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.

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…

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...

Re: Compass S-1

#62

Post by sloreti »

nyc_pizzadev wrote: post #28

I have been house hunting lately and my agent works for Compass. The website experience kind of sucks. Horrible mobile experience, lots of UX glitches, it’s just annoying to use. In fact, half the time we are using StreetEasy to look at listings (they are a local competitor). Other than that, your buying experience is completely based on the quality of your agent and how well he can navigate your market. Not sure how…

StreetEasy is far and away my favorite real estate platform and it’s a shame they only serve NYC.

Re: Compass S-1

#63

Post by dvt »

RobLach wrote: post #44
Axsuul wrote: post #2

Compass is a real estate technology company that provides an online platform for buying, renting, and selling real estate assets. https://www.compass.com

What's the technology?

There's no technology, it's WeWork 2.0 (heck, it's even funded by SoftBank).

Re: Compass S-1

#64

Post by 1290cc »

This is a company that helps realtors more than home buyers/sellers. The realtor business is a patchwork of messy solutions and mom/pop shops. Compass has brought many realtors into the modern age with managed business processes and a way to leverage all the tech behind managing home sales.

My realtor switched from his own excel sheets to their way of doing things and loves it.

Re: Compass S-1

#65

Post by conductr »

matthewfcarlson wrote: post #50

I’ve been looking at houses lately and I don’t understand why I can’t get a predicted score on a house. They know what I want by the filters. Why can’t I filter by houses within a 10 minute drive of a grocery store and a public library (two things that are important to me). I guess it’s a case of why not built it yourself.

Many of the apps allow you to draw polygons on the map. The polygon thing is how they handle the long tail of searches, by giving you DIY functionality.

I just wish having a basic 2D floor plan was a listing requirement/standard. I’ve wasted so much time going to view properties I could have instantly ruled out if I saw the floorplan. Also. This is how I searched for apartments online 20 years ago. Matterport is the new shiny thing and borderline overkill. Nice if you have genuine interest. But during the browsing phase, I prefer the simple 2D format because I can quickly tell if it’s something I’m interested in.

Re: Compass S-1

#66

Post by conductr »

sib wrote: post #41
didip wrote: post #27

Our business has experienced rapid growth. In 2019 and 2020, our revenue was $2.4 billion and $3.7 billion, respectively, representing a year-over-year increase of 56%. Our net losses were $388.0 million and $270.2 million in 2019 and 2020, respectively. For a company that sells expensive inventories, this falls below my expectation. Compared to Coinbase, given my limited amount of money, I'd rather invest in Coinbas…

I'm pretty sure that they don't count the value of the homes themselves as revenue when they complete a transaction. I think they can only count the commissions on one or both sides (depending on whether they represent the seller, the buyer, or both.)

Gross Revenue is deceptive in an industry where you pay such a high percentage as commission to your agents. It’s basically a pass through function, they get to brag about a big revenue number even though it comes with a large liability. No measure of profitability will ever be impressive on this business is my guess. Unless there’s something else to it. But based on the comments here, sounds like they just bought a bunch of good agents who will walk as soon as they start trying to reduce their commissions.

Re: Compass S-1

#67

Post by dillondoyle »

DevKoala wrote: post #24
Axsuul wrote: post #2

Compass is a real estate technology company that provides an online platform for buying, renting, and selling real estate assets. https://www.compass.com

It looks a lot like Zillow. Do they also advertise mortgage rates? I couldn’t find that. That is one of my favorite Zillow features.

That's my guess at where real disruptive $ could be; actually vertically integrate and originate loans + sleeker/lower fee real estate transaction. If they corner enough inventory they could probably eliminate many human agents too

Re: Compass S-1

#68

Post by dmode »

nknealk wrote: post #11
twostorytower wrote: post #3

$270M loss on $3.7B in revenue. If they can get opex down, there's some serious money to be made and a lot of growth left here. In my neighborhood I'm seeing more and more houses go up for sale with Compass signs.

Their single biggest expense is “commission and other transaction related expenses” which clocks in at just over 3B. I don’t know how much control they really have over commissions.

Isn’t the revenue number kind of misleading ? Essentially it seems like it is the total value of the transaction and their revenue should essentially be the take rate from the transaction.

Re: Compass S-1

#69

Post by melomal »

emilsedgh wrote: post #51
nyc_pizzadev wrote: post #28

I have been house hunting lately and my agent works for Compass. The website experience kind of sucks. Horrible mobile experience, lots of UX glitches, it’s just annoying to use. In fact, half the time we are using StreetEasy to look at listings (they are a local competitor). Other than that, your buying experience is completely based on the quality of your agent and how well he can navigate your market. Not sure how…

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.

The unicorn playbook. There's going to be VCs on LinkedIn trying to explain why this is such a good long term play...

Re: Compass S-1

#70

Post by benhoyt »

dvt wrote: post #63
RobLach wrote: post #44

Earlier quoted context omitted.

What's the technology?

There's no technology, it's WeWork 2.0 (heck, it's even funded by SoftBank).

Compass is partially funded by SoftBank, but the rest is not true -- there's a whole lot of tech behind it (source: I used to work there as a software engineer). It's mostly tools for agents, and some tools for consumers. They pull in dozens of real estate feeds, normalize and index them and make them searchable; they have a decent app for agents to keep track of listings and contacts; they have a marketing tool that allows agents to produce nice brochures of their listings; they have some newer tools to allow creating videos from photos with one click; and lots more.
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