Longtime friends Robert Reffkin and Ori Allon teamed up to simplify NYC apartment hunting
Anyone who has ever searched for a home in Manhattan knows the process can be a nightmare. Even if money is no object, there are bidding wars to endure, mountains of paperwork to fill out, and mercurial landlords, brokers, and co-op boards to contend with. It’s Social Darwinism at its best.
“I’ve never heard anyone say they enjoyed the apartment search,” says Robert Reffkin, CEO of Urban Compass. “It should be fun.” He and Ori Allon, the start-up’s executive chairman, founded the company less than a year ago with one mission: to help New Yorkers find a great place to live in the fastest and most enjoyable way possible.
Combining business and technology—Reffkin was previously chief of staff to the president and COO of Goldman Sachs, and Allon held senior roles at Google and Twitter (both companies purchased and implemented technology he developed)—the longtime friends created a formula they believe works. The company’s site and mobile app guides users through the city’s many neighborhoods, displays only active inventory (“It is the most accurate database in New York City,” Reffkin says), and allows them to schedule appointments and apply for apartments online, all the while being helped by in-house or independently contracted brokers. In December, the firm modified its business model, doing away with agent commission caps to attract well-known brokers and top listings. The company is also moving into home sales after its initial focus on rentals. Gotham recently caught up with Reffkin, 34, and Allon, 33, to talk about revolutionizing the notorious NYC home search, city living, and why their business became a success. (Less than six months into existence, Urban Compass was valuated at $150 million, after a Series A fundraising round.)
The entrepreneurs recently opened a second office near Union Square
How long have you each lived in New York?
Robert Reffkin: I’m from Berkeley, California. I moved here to go to college and have been here ever since. I’ve been in the West Village for three years now. It’s a really good place to raise a family—I got married a little over a year ago, and I have a 5-month-old baby girl.
Ori Allon: I was born in Israel, did all my studies in Australia, and now New York is my main residence. I’ve been in the Lower East Side for about three years. This neighborhood traditionally was Jewish. You can still see the roots—the synagogues, Katz’s [Delicatessen].... I feel at home here. And there’s a really good vibe with the bars and restaurants.
What led to the founding of Urban Compass?
RR: Ori and I have known each other for about eight years. We wanted to do something together that combined his engineering talents with my business talents, and we wanted to focus on a big problem for New Yorkers.
OA: I said, “If he’s going to leave Goldman Sachs and I’m going to leave Twitter, it will not be just for another company.” And we realized that people are very unhappy with the current situation of finding an apartment in the city. That’s worthy of fixing—that’s something worth doing right. That’s a tall order.
OA: We analyzed why the traditional way doesn’t work. And basically, there’s a lack of technology. Technology has invaded every aspect of our lives. But in real estate, not so much. You have websites where you can search properties, and that’s pretty much it. From there, you have to trust the broker to do the rest of the job, and the broker himself doesn’t have the right tools. That was very obvious to us. We can improve that.
RR: Our goal is so people don’t have to visit countless apartments and deal with many brokers. Our inventory is updated multiple times a day, much of it instantly by our technology. Our agents also have an app with a tremendous amount of data that helps them give customers access to apartments and [helps them] apply much faster.
Allon’s neighborhood, the Lower East Side
What did the $150 million valuation mean to you?
OA: It was a good deal for investors, because I think the value is actually higher. People didn’t invest in us just because we’re nice.
RR: But we are nice.
OA: Unlike other tech start-ups, we make money. This is a real business, as opposed to another tech dream that could one day be monetized. But we don’t think in terms of money. We think of impact—how many people we actually help. Money is important, but it is not a measure of our success.
Speaking of impact, you’re both very involved with different causes.
RR: At Urban Compass we have Charity Miles. Our agents walk a certain amount of miles, and for every mile they walk, their friends donate toward it. It’s pretty cool. Like a marathon effort, but walking through the city doing your job.
OA: I’m involved with Shalva, one of the largest nonprofits in Israel that helps children with mental disabilities.
RR: I also founded New York Needs You five years ago (soon to be America Needs You as we expand nationally). It’s an intensive career-development mentorship program specifically for first-generation college students, because they are paving the way for their entire families. I had a wide network of young professional friends who wanted to give back to the community with their time and knowledge, not just their money. Too often people are asked for just their money, when New Yorkers have so much more to give.