Does Compass’ software really make the company worth so much more than the other Boston real estate companies
Compass has denied the allegations, as well as similar claims made by other firms in similar suits. But there are other signs of trouble ahead for Compass.
Compass’ chief operating officer, chief financial officer, chief marketing officer, chief technology officer, general counsel, head of product and chief people officer have all quit in the last 18 months, according to the Wall Street Journal. That’s not a good sign for a company that was considering going public soon.
A larger pattern, though, is becoming clear. Software engineers at companies like Compass Real Estate mistakenly believe they can reinvent the wheel with a string of code. They convince investors that they can turn a lead to gold. But selling Boston real estate is not about software code. Obviously it helps, but also ab be easily duplicated.
Uber and Lyft, for example, are fancy taxi companies, no matter what they claim. Airbnb and HomeAway are clever hotel room search sites. Compass is just a Boston real estate firm with a good app.
Tech can make our lives and businesses easier, but software is a tool not that can change rapidly. Wise investors should focus on the underlying business, not the software, when evaluating the value of the next startup.