Real-estate brokerage Redfin, which aims to disrupt the age-old model of home sales using technology and discounted fees, likes to be different — and so are parts of its initial stock prospectus. Also: Venerable French retailer Monoprix responds to Amazon Go with a parody.
“Kitty litter” is not the most unusual phrase found in the preliminary papers filed last week for Seattle-based Redfin’s $100 million initial public offering.
But let’s start there.
Redfin, which aims to disrupt the age-old model of residential real-estate sales using technology and discounted fees, likes to be different.
So after the obligatory “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and before some of the other dry, legalistic disclosures hammered out by teams of costly investment bankers and corporate lawyers, there’s a section that’s also refreshingly different.
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Once, it reports, “a journalist described us as rabid squirrels.”
“We embraced this identity. It gave us the pluck to go after big markets …”
The section, devoted to telling “who we are,” paints the company as a bunch of idealists with a “contrarian culture” who believe “our mission, in a sales-mad, baloney-gorged world, (is) to be the truth-teller, the fee-squeezer, the game-changer.”
The kitty litter? It comes up after Redfin decries how “the technology economy is increasingly divided from the rest of the world.”
Not only does Redfin actually employ real-estate agents, rather than trying to disintermediate them out of the picture, “We employ people from all walks of life. We write software and analyze financial results like other technology companies; we also scoop kitty litter and squirm through crawl spaces looking for rats.”
Alas, despite the requirement for disclosing all material facts in a stock prospectus, the document’s reams of data provide no clue as to how much kitty litter Redfin employees may have scooped, or how many rats they may have tracked and/or captured. (Note to self: Check with Redfin’s new landlords at the Hill7 office building in Denny Triangle, and its old landlords at Market Place Tower in Belltown.)
Is it possible the kitty litter and rats are merely metaphors?
That would make it a rare thing in the recent history of Securities and Exchange Commission filings. The all-knowing Lexis Securities Mosaic database of SEC filings details 109 mentions of kitty litter this century: 108 of them involve companies actually in the business of making or selling kitty litter.
But the one other mention of kitty litter did come in the IPO filing of a company whose contrarian culture, not to mention fundraising prowess and industry-shaking business model, Redfin can only hope to emulate: Tesla.
Yet Tesla, too, cited kitty litter in a down-to-earth, practical way — as one of the materials on hand for spill control and decontamination at its Palo Alto headquarters. (Note to self: Check what the heck they are doing there.)
Surprisingly, a phrase that has never before appeared in the lexicon of SEC filings, according to the Lexis Mosaic database, is the fairly prosaic name of this “baloney-gorged” section of the Redfin filing: “Letter from the team.”
It’s hard to know what impact this cri de coeur, signed by Redfin CEO Glenn Kelman and five other top executives, will have on potential investors, Redfin’s 2,000-plus employees, or anyone else.
Perhaps one day it will be studied as the founding declaration for a revolution that eventually overturned the old regime in American home sales. But not yet: At this point Redfin has only a 1.7 percent market share in markets where it’s been for a decade, including Seattle.
Regardless, investors who do get that far into the prospectus will get a flavor of the company’s culture. They’ll also get a bit of a warning that this is not a short-term play, as the Redfin team explains:
“Our idealism may not benefit stockholders over months or quarters, but we believe that over years and decades it will deliver the best results.”
— Rami Grunbaum: firstname.lastname@example.org
French chuckling about Amazon Go
When Amazon.com in December launched an experimental convenience store in downtown Seattle where customers could skip the checkout line, it portrayed Amazon Go, as the concept is known, as having “the world’s most advanced shopping technology,” like the kind seen in driverless cars.
An elaborate video, released by Amazon on YouTube to mark the occasion, showed shoppers walking through well-stocked aisles, picking up items that were automatically added to their online cart just by being taken off the shelf, or removed by being put back.
A disembodied male narrator addressed the issue via a rhetorical question: “What if we could weave the most advanced machine learning computer vision and (artificial intelligence) into the very fabric of a store so you never have to wait in line? … No lines. No checkout, no register.”
The announcement was lambasted by a union representing store employees, which said Amazon was endangering millions of cashier jobs. It also sparked waves of commentary by retail experts, and dread among rivals.
One of them, 8-decade-old French retailer Monoprix, took issue with Amazon’s techno-prophetic rhetoric — and responded with humor.
Amazon “described this service as a very futurist, innovative and creative one. In fact, it corresponded in many ways to what already existed in our store (for) many years,” a Monoprix spokeswoman recently told The Seattle Times via email.
Monoprix’s “Livraison à domicile +” is a 10-year-old service that lets shoppers just leave their cart at a stand with a cashier and exit the store. The groceries are delivered at the customer’s home, one hour later, and the payment is made there.
So a couple of weeks after Amazon Go’s unveiling, Monoprix launched a parody highlighting its home-delivery service.
“Everything you pick up you add to your basket like usual,” said a French-accented narrator, in English, in a video closely modeled after Amazon Go’s.
“If you change your mind about that cupcake, just put it back. But to be honest, we don’t see many people putting back our cupcakes.”
As for the “how it works” part, Monoprix says it learned from its customers and combined that knowledge with “Monoprix DNA.”
“We call it human technology,” the narrator intones.
The parody was a good opportunity for Monoprix — a subsidiary of the retail giant Casino that specializes in relatively small-format stores located in city centers across France — to draw attention to a feature it launched many years ago. The parodywas “very well received,” reaching some 27.1 million people, the spokeswoman said.
But it nevertheless underscored how closely grocers are watching Amazon’s moves onto their turf. Amazon, which had been tinkering with various experiments in the field, last month signaled the size of its ambitions by agreeing to purchase Whole Foods Market for $13.7 billion.
The Monoprix spokeswoman had a less jaunty tone when asked whether the French company sees Amazon as a challenge. “We do not comment on our competitors’ financial operations,” she wrote.
— Ángel González: email@example.com