Jul 26, 2021 · 1h 18m · how-i-built-this
Robert Reffkin: Compass
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
On this episode of How I Built This, Compass co-founder Robert Reffkin details how overcoming personal adversity, learning from early career failures, and executing a decisive strategic pivot helped him build a multi-billion-dollar real estate technology company.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 28.6% of the talking time here. How this is scored →
Guy as informed peer 3.8 Guest teaching 2.3 Guest disagreement 1.4 Guy pushing back 2.0
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:01:59 Competitor cynicism called offensive
Reffkin forcefully rejects the critique that Compass merely bought agent market share with VC funding, labeling the premise insulting to agents' intelligence.
Hardest push from Guy ▶ 1:05:46 Raz reads the WeWork comparison critiqueRaz insists on making Reffkin uncomfortable by quoting broker David Goldsmith's public critique comparing Compass's lack of proprietary tech to WeWork.
Biggest teaching moment ▶ 55:30 Explaining the 13 disjointed real estate toolsReffkin systematically explains to Raz why generic SaaS like Salesforce or Mailchimp fails agents, demonstrating why deep single-platform workflow integration matters.
Guy holds their own ▶ 1:05:46 Raz introduces the Goldsmith critiqueRaz demonstrates sharp journalistic preparation by confronting the guest directly with specific, pointed industry skepticism from forum commentary.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Family Roots: Rebellious Beginnings and Estrangement | 4 | 2 | 1 | 1 | Guy Raz demonstrates background research by prompting Reffkin on his book details, name origin, and family history. Reffkin candidly shares the painful story of estrangement and his father's addiction without resistance. | |
| Navigating Identity and Finding Comfort in Discomfort | 3 | 3 | 1 | 2 | Raz explores whether Reffkin felt like an outsider in Berkeley/Oakland and probes the apparent tragedy of his upbringing. Reffkin reframes the narrative, explaining how feeling comfortable being uncomfortable became his main strength. | |
| High School Hustle: Rude Boy Productions | 5 | 2 | 1 | 1 | Raz displays cultural rapport by referencing Bay Area music lore (Souls of Mischief, Green Day), which Reffkin compliments. Reffkin then explains how DJing taught him customer-centric business principles. | |
| Columbia Acceleration and Early Humbling at McKinsey | 3 | 2 | 1 | 1 | Raz gently challenges the notion of a self-described 'C student' graduating Columbia in two and a half years. Reffkin transparently admits to struggling at McKinsey and being asked to leave. | |
| Market Crash, Columbia Business School, and Wall Street Mentorship | 4 | 2 | 1 | 1 | Raz quotes Reffkin's book directly regarding racial isolation in investment banking. Reffkin expands on facing subtle racism and finding critical mentorship under Vernon Jordan. | |
| Goldman Sachs, Non-Profit Work, and the $500,000 Challenge | 3 | 1 | 1 | 1 | Raz guides the narrative through Reffkin's Goldman Sachs tenure and the founding of New York Needs You. Reffkin details how a mentor challenge led to his startup concept. | |
| Launching Urban Compass and the Flawed Rental Model | 4 | 3 | 1 | 2 | Raz contextualizes New York's idiosyncratic rental broker fee model. Reffkin explains the naive founding thesis of Urban Compass and how hiring non-real estate staff quickly led to operational failure. | |
| The Internal Mutiny and Pivoting to Traditional Brokerage | 3 | 2 | 1 | 2 | Raz asks whether the internal mutiny was personally painful. Reffkin insists he harbored no hurt feelings and describes the decisive dinner that salvaged his role and pivoted the business. | |
| Recruiting Leonard Steinberg and Developing Agent Software | 5 | 4 | 2 | 3 | Raz pushes on why existing CRMs like Salesforce wouldn't suffice and questions how Compass convinced top broker Leonard Steinberg. Reffkin schools Raz on the agent workflow and integration requirements. | |
| National Expansion, Competitor Cynicism, and Compass Concierge | 4 | 3 | 3 | 4 | Raz brings up industry criticism that Compass simply bought market share with venture capital. Reffkin vigorously counters, calling the critique an offensive misunderstanding that lulled traditional brokers into complacency. | |
| WeWork Comparisons and Navigating the 2020 Market Surge | 6 | 3 | 3 | 5 | Raz directly confronts Reffkin with a scathing quote from broker David Goldsmith comparing Compass to WeWork. Reffkin responds by rejecting the premise of a binary tech vs brokerage label. | |
| Family Legacy, Competitive Fuel, and the Definition of Luck | 3 | 2 | 1 | 2 | Raz questions Reffkin on his underlying psychological drive and whether he always believed in his success. Reffkin surprises Raz by revealing he operated out of persistent fear of getting fired. | |
| 50 Marathons Across 50 States and Episode Conclusion | 2 | 1 | 1 | 1 | Raz wraps up the episode by sharing the trivia of Reffkin running 50 marathons in 50 states to fundraise, trading playful banter on running pace. |
Statements from this episode (20)
Reffkin: Grandfather left $26M to my aunt and $100 to my mother
“He ended up being very successful. I think he and his family owned real estate in Israel, and, you know, when he died, you know, he gave twenty-six million dollars to her sister, who is, I guess, more obedient to the way that And he wanted her to be. And gave …”
Reffkin: Childhood loneliness from mixed-race identity drove my ambition to succeed
“One of the hard things about being A mixed kid is that you don't really feel like you belong, like you have no place, you have no community, and that feels lonely. So I do remember being lonely when I was younger, but those feelings are what instilled in me at…”
Reffkin: I earned over $100,000 as a high school DJ
“Yeah, I earned over a 100,000 dollars as a DJ, and better than that, I was able to employ a number of my friends and help them, you know, make money as well, and so it was a very empowering feeling, and it was fun.”
Reffkin: McKinsey did not invite me to stay after two years
“Yeah, I stayed there for two years, and I was not they did not let me continue on. They don't call it fired, but they say you are not invited to stay on.”
Reffkin: Compass Co-Founder Ori Allon Sold Startups to Google and Twitter
“I had a friend named Ori Alone who had sold a company to Google and another company to Twitter”
Reffkin: Urban Compass raised that year's largest seed round at $8M
“Yeah, we raised eight million dollars, which was the largest seed financing round that year, and we raised it from three groups of people. Venture capital firms, real estate investors, and CEOs.”
Reffkin: Veteran agents outperform hospitality recruits in real estate
“The people that are best at doing that, I could see were agents who had been doing it for 10 years, not people that we hired, you know, from restaurants or hotels that were really, really nice, and trying to train them to, like, meet someone on a corner and sh…”
Reffkin: Compass senior team secretly asked co-founder Ori Allon to fire me
“One morning, Ori Was invited to a breakfast by one of the senior members of the team. He goes to breakfast, and everyone is there on the senior team except me. And they basically tell him that they want to fire me.”
Reffkin: Over a third of Compass staff quit after pivot to traditional brokerage
“Over a third of the team left.”
Reffkin: Leonard Steinberg was New York's top agent with $500M in listings
“Leonard was the number one agent in New York the prior year, having sold or put in contract, five hundred million dollars in listings.”
Reffkin: A real estate brokerage's customer is the agent, not the homebuyer
“You can't work for everyone. And who's your customer? Your customer is the person that pays you. And buyers and sellers don't pay brokerage firms. They pay agents. And agents are the ones that pay brokerage firms. They split a percentage of what they make with…”
Reffkin: Searching listings is less than 5% of an agent's business
“Everyone thought that real estate was like searching listings, what aggregators do. That's probably less than five percent of what an agent's business is.”
Reffkin: The average real estate agent uses 13 third-party software tools
“A mobile app can connect to 13 different third party tools, which is how many tools the average agent uses.”
Reffkin: Compass placed ads directly outside competitors' offices to recruit agents
“We would market the Compass brand outside of the offices of our competing firms, and so there's like a phone booth or a billboard or a bus stop, outside of our competing firms, that's where we would put the brands so that agents at other companies would say, o…”
Reffkin: Traditional brokerages pocketed profits instead of investing in R&D
“This has been a model for over a hundred years where brokerage firms had taken the profits from the agents, split it between the manager, the manager's manager, and the owner, and on balance that owner put in their pocket and then they went on vacation. But wh…”
Reffkin: Average agent grows business 19% in first year at Compass
“The average agent that comes to Compass has grown their business 19% in their first year.”
Reffkin: Consumers use real estate agents more today than 10 years ago
“Just to be very clear, people use agents more now today than they did 10 years ago.”
Reffkin: Real estate demand for larger homes has permanently shifted
“On the real estate side, I think that we have a permanent shift in the demand curve, where people will continue to want more space and more multiple home ownership.”
Reffkin: In 2018, rival brokerage heads claimed Compass would fail within five years
“At a big real estate conference, one of the top, you know, brokerage firms says, oh, you know, this was like in 2018 I think compass is going to go out of business in five years. And then the head of the fourth largest broker from the country says, oh, I think…”