![]() ![]() No auto dealer or manufacturer has ever made the list. For the sixth consecutive year, Fortune just chose CarMax as a Top 100 company to work for. CarMax built a culture of respect for its employees, despite competing in a dog-eat-dog industry.CarMax has always focused on the long-term, limiting its initial appeal to investors, but maximizing return on invested capital over time.CarMax’s online competitors are lead-referral sites, which send customers to dealers of varying quality, operating in a broken system.CarMax’s first contact with customers is online, in an industry where the in-person salesman had been king.CarMax accumulated operational expertise in a complex business that eventually created barriers to entry so deep that the company now has virtually no competition.CarMax builds competitive advantage by gathering data about inventory, customers & operations that individual dealerships can’t match. ![]() CarMax grew slowly, market by market, perfecting the customer experience before expanding.CarMax believes that only way you can disrupt an industry is by being better and cheaper, not just one or the other.The industry in which it operates has been unapologetic about trying to maximize per-transaction profit, and hostile to the ideas of value or efficiency. CarMax is unapologetic about offering low, no-haggle pricing.CarMax pays its field organization to do the right thing, not just sell cars at any cost.CarMax focused first on building consumer trust, in an industry where consumers were skeptical, and no brand was well-trusted.Here are some of the similarities between Redfin and CarMax that Redfin’s management team was talking about long after the meeting was over: Over the course of the day, it became clear just how relevant Austin’s experience is to Redfin - it was almost as if he were genetically engineered to be able to help us - and how much inspiration we can take from CarMax’s success. The morning after we sent this note, we had our first board meeting with Austin his insights were even better than we expected. We’ll announce the news publicly this week or maybe next! If you want to read more about Austin’s perspective, check out his presentation to Redfin when he visited our Seattle office this summer. And he is a firm advocate of taking a long-term view and building a customer-driven business, both consistent with our values. Beyond that, Austin should help us figure out some tricky issues around managing a field organization, building a consumer brand and scaling a business. What does this mean for Redfin? Well, it’s a big vote of confidence in our business that someone of Austin’s caliber wants to get involved. The board will join the Seattle employees for lunch, so if you have any questions, grab a chair next to Austin and fire away. He’s participating in Tuesday’s all-day board meeting. Like Redfin, CarMax is complicated, with huge analytical and online components, and operations spanning many locations.Īustin helped build CarMax into a company with $7.5 billion in 2006 sales, and retired a few years ago. CarMax, which opened its first store this week in 1993, is in many ways the Redfin of used cars, building trust with consumers by being honest and open with information in an industry that people haven’t always trusted. I’m also on the board.Īustin is an ideal outside board member. Until now, the board has consisted of venture capitalists from firms like Madrona, Vulcan, DFJ and Greylock. The board meets quarterly to see whether we’re making money, and to go over any big initiatives we have planned.Ī board usually consists of major shareholders and one or two folks known as outsiders, who have extensive operating experience but a very small stake in the company. The big news this week is that Austin Ligon, founder and former CEO of CarMax, is joining our board of directors! The board’s role is to ensure the management team makes money for shareholders over the short term and long term. The note we sent out Monday night to everyone here at Redfin captures some of our excitement at Austin’s arrival: What a coup for Redfin! The founder and former CEO of CarMax, Austin Ligon, joined Redfin’s board of directors this week, and also made a small investment in the company. ![]()
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