Opendoor’s David Corns on AI, Real Estate & Simplifying Home Sales

Today we're thrilled to welcome David Corns, Chief Marketing Officer at Opendoor. David oversees an expansive team responsible for marketing communications, one of the most innovative companies in the real estate sector. David, so great to see you. Thanks so much for joining today.

Thanks for having me back.

Absolutely. So I was looking at your background and you've obviously spent the majority of your career up until now within Madison Avenue and some of the most prolific ad agencies out there. I saw particularly that you were working at Crispin Porter during its heyday in the early 2000s. Tell me about your experience there and how working at an agency like that really at the top of its game really kind of shaped you for the CMO role that you're in today.

Crispin was probably, I'd describe it as the, one of the most foundational moments of my career. Not only the people I got to work with and learn from and collaborate with, but also some of the brands. I worked on. And in actual fact, it also helped me learn how to build teams because I was actually employee one in the UK and we were building out Crispin Europe for Burger King, which was the client at the time. And the success in the UK led me, I then moved to the Miami office and spent time in the Boulder office. But I would say Crispin was almost like a PR agency that did advertising. Everything we did was in service of getting in the news cycle. So all of the creative concepting started with what's the headline we want to get? And then we worked back from there. And I think I use that day in and day out now. And I think from being at Crispin, I've kind of taken that forward into the CMO role of like, how do you get more than you are paying for by Frankly, being more audacious with what you're saying and how you're going to market.

Yeah. Although now nearly 20 years later, not to date either of us, 'cause I worked with Crispin on Victoria's Secret Pink business back then in that same time period. But the world has changed because it used to be if you needed buzz, especially in a pre-Facebook world, you needed the traditional media, or at least industry media to cover you. And now I find that a little bit less important. I find PR in general a little less important. How do you think the notion of buzz and virality, so to speak, has been redefined in today's age?

Yeah, I think we used to say in that period you needed to play to play rather than pay to play. If you played, it got picked up, it got shared. I think creativity always wins. So if you find a way to be creative with the new toolset and the new toolbox you have to work with, you can cut through and get some buzz. I'll give you an example. In February, we got over $7 million worth of free PR impressions from doing something unexpected, which was we knew our audience was big into football, was watching the Super Bowl. And so we decided, how do we get attention during this time? Well, the reality is if you sell with Opendoor, It's so simple, certain, and fast. You could do it during halftime, which meant there was an authentic way of us to insert ourselves into the game to say, rather than watching Usher, you could sell your house to us. It's that simple. And so during halftime in the last Super Bowl, we cut live to a real consumer's phone and they did a house tour and in the next break sold their house to us in less time than it took Usher to perform. And because the idea was audacious, it got additional press. Also, it was $7 million for a 30-second spot nationally. In this macroeconomic climate in real estate, that would not have been a good use of money. So we did it only in Atlanta, and Atlanta was the hardest place to sell in at the time.

You did the promotion only in Atlanta. It wasn't shown to people nationally.

Exactly. It just played in Atlanta. But the buildup to it, because it was audacious, got a lot of PR. The fact we did it got a lot of PR and our national aided awareness lifted by 8% after doing that. So I think I always used to say, I can make you a video. I can't guarantee it goes viral, but I think if you are creative and strategic with how you go to market, I think consumers appreciate when you are doing something original. No one's sat at home waiting to be advertised to. So if you do something unique, it feels like it gets the buzz and it gets the attention.

Right. And I mean, normally I think what brands used to do is essentially they would reinforce that unique selling proposition. In the case of Opendoor, which we'll get into, is you can transact really quickly. They would just tell you you can do that and they'd cram that message down your throat with a 30-second spot. And instead what you're doing is because you're showing them you can do it and you're doing it in the form of engaging content. So you're getting that same unique selling proposition across, but you're doing so in a way that's sort of built for the way that consumers essentially consume content today.

Exactly. And there's a couple more examples too. We realized last year, given mortgage rates, if you look at 2022, first half of 2022, it was the hottest housing market on record. Mortgage rates were 2-3%. Second half of 2022, it was the coolest housing market in about 4 years.

It was the biggest increase in interest rates we've seen in modern history.

Exactly. It went from 2% rates to 7% rates rapidly, which slowed the entire market down. So last year, looking at who is selling right now, it became clear to us that 55+ can sell. They've got equity in their home. And they're usually moving to downsize because their kids have gone to college or they went to college years ago or left the house and they've been putting it off. So with that idea in mind, we went to UCLA and built a massive bird's nest, an empty bird's nest. And it basically had a sign that said, it's okay for you to leave the nest too. So that was an event in the moment. It got 80,000 impressions on the day. But of course, we sent a camera crew there and we talked to real parents during Parent Visitation Day about the emotions of moving and changing house now the kids have left. And so, great content that can then be packaged up and shared both on TV, on social, you name it. So, we're always looking for ways to essentially kind of hack into culture. I think the other thing is Real estate is such a traditional category. The business hasn't changed in 100 years of how you interact with real estate. And so that gives us a lot of opportunity to kind of have fun in the space and have attention come our way, which for a brand that is ascending, it's key because the higher the aided awareness, the more people that know of Opendoor, the more people that will use us.

So let's zoom out for a second for our audience who may have heard of Opendoor but don't quite know what the company does and tell us from the CMO's mouth himself what Opendoor is, what makes the company different, and where it's going here in 2024.

So Opendoor essentially brings certainty, simplicity, and speed to real estate. So 100-year-old category, unchanged, full of hassle, stress, costs, long timelines. What we do, you enter your address into our site, you get an instant offer on your home. After answering a few questions and sharing some pictures, you get a final offer on your home. What used to take months of stress and hassle is now done in days. So that's on the sell side. On the buy side, if you're buying a home from Opendoor, there's a few benefits. One, You can self-tour a home, walk up with your cell phone and through our app, open the door, tour the house yourself. If you like the house, there's essentially a buy it now button, no haggle price, press a button, the house is reserved for you. And if something changes in your life and you actually need to move neighborhoods, we have a 90-day return policy, meaning you can return the house within 90 days and get your money back, just like returning a pair of jeans to a retail store.

Now I'd imagine if you're on the sell side, the trade-off for you getting the certainty and speed is perhaps you're not maximizing your outcome in terms of a sale price. What are those dynamics like for the seller?

It varies in seasonality, but essentially we offer a price on the home and it's up to the consumer if they choose to take it. It gives them choice. And in many cases, many consumers are extremely happy with the process. And the offer. We have an 80% NPS score, net promoter score, meaning consumers that use Opendoor are happy with the premium service they get for the offer they receive on their house and therefore share that with friends and family. And so the business continues to grow.

Yeah, because on both sides of the transaction, it's just not a fun experience. I mean, I often question why in this day and age does somebody who's buying a home and getting a mortgage for that matter need to fill out so many forms? When ultimately it should be able to be decided by an underwriter with a couple of data points. And then all the fees that are involved and all the back and forth, it just doesn't seem like it has to take that long. It has to be so laborious and it seems very much like it's just a legacy industry that has not really evolved with the times.

Exactly. Selling your house is up there with one of the most stressful things, as well as dealing with divorce and death. In your family. One of the top 5 most stressful things. And that was actually one of the things that drew me to Opendoor is I felt like most categories had been transformed by digital. And yes, there's some digital brands in real estate, but the actual transaction of taking something complex and making it simple just hadn't happened. You could do it with buying and selling cars. You could do it with hotels. You could do it with travel, but something so core to our lives provides shelter. It's a home. We need places to live. That remains complicated and stressful and it just doesn't need to be.

Yeah. So you had mentioned David earlier, just the macroeconomic factors and how they impact your messaging and obviously the business opportunity. So obviously we are in a period of relatively prolonged higher interest rates. Nobody really knows What's gonna happen? It's come down a little bit, but it's still much higher than what we've seen in quite some time. How does this environment impact Opendoor's business? Does it create more demand on one side or the other of the equation? And does that impact your product roadmap and your messaging at all moving forward?

This macro is a real good time to show certainty. Uncertainty. People look for certainty, and the fact that we can give you an Essentially an offer in minutes that can then be finalized in days after some simple questions provides great certainty in the unknown. I mean, I'm not an economist, but many economists have said they don't expect interest rates to go down as low as 2% and 3% again. So I think the reality is people will get used to a higher interest rate. And actually, when you look historically, 6%, 7% is still relatively low.

Yeah, we're in the mid to high teens in the '80s, right?

Exactly. And I think even in a tough macroeconomic climate, we have possibility to grow. The pie might be smaller because less people are moving or slower to move, but our ability to grow our share of that still increases because the reality is people move because they have a life transition. They're having a baby, they're getting married and wanna move in together. They got a dog and need a bigger yard. The kids have gone to college. Life will continue to happen and people will continue to need to progress in life. And Opendoor is there for them to make that currently stressful process of selling to progress in life simple and certain.

We'll be right back with the Speed of Culture after a few words from our sponsors. So I'm curious to hear from you. I mean, you're the CMO of a brand that's publicly traded company and obviously is very much reinventing the space in the category. It's not like you're working at Coca-Cola and left from Pepsi where you're basically still selling carbonated beverages. This is a completely new business model that comes with a lot of opportunities and a lot of risks as well. What's it like being the CMO of a company like Opendoor? What does your normal day look like and how are you interacting with the various other stakeholders within the organization?

Yeah, well, I joined Opendoor in 2022, which was a year like no other. I got to see in the first half of the year the hottest market. I got to see in the second half of the year interest rates going up at a rate we've never seen before. So that for a first year was both terrifying and exhilarating, but allowed us to kind of pressure check what it is, the hypothesis I had for what the company needed, which was great product, great people, but there wasn't yet a brand or understanding of what Opendoor is. So we took it as an opportunity to step back. We created a purpose, which is powering life's progress one move at a time. Our mission is to transform the US real estate industry, which is a $2.3 trillion a year industry. And then we took that to market by taking what we had, which was a brilliant performance marketing org and building a full funnel and brand marketing org. And we saw almost immediately when we were telling these stories of life transitions, our first campaign, Be Open, was all about that. We saw a 10% increase in offers versus business as usual, and we saw awareness moving up pretty rapidly. So that actually gave us the confidence to kind of continue on that path of both brand building and delivering performance. So as you say, working with other stakeholders in the organization, one of the most fulfilling things in doing that was building a team that could bring some science to our art. So working with the Chief Data Officer, we built a marketing sciences org. So I essentially knew every attribution model's broken. So you just gotta find which is least broken. Our attribution model was definitely biased towards lower funnel, last touch attribution. So with two very different teams, marketing, which was a team that was building up its brand marketing capabilities, and our analytics team, we together with stakeholders built this organization to say, help us understand what's working, what isn't, and see opportunities on the horizon that we might not see. And through that, we've been able to test hypotheses. We've been able to forecast if we make certain decisions, how we expect them to perform. And that just continues with every wave and every day we're marketing. The data and the ability to predict and forecast continues to get better and better and better.

Speaking of BetterData, what role do you think AI is gonna play really on both sides of the equation to allow, I guess, the seller to have a better understanding of the market dynamics before they proceed? Obviously allow your company to more competitively price offers to people that are selling their homes. How does that entire dynamic work? And then just to be clear, you're also a seller of those homes too. You're on both sides of the marketplace. So I would imagine AI plays a big role there as well in terms of identifying prospects?

Absolutely. AI has been part of our pricing model and our algorithm since 2014, so it continues to grow and evolve, and we kind of see it as a copilot rather than an author. And so we're using it in a way that is helping us deliver an even better product to consumers. I mean, the future of AI, obviously everyone's talking about it. We've had the industrial age, the internet age, And now we have the AI revolution. And I don't think any of us can foresee the seismic change that's gonna have to culture, society, and business. But I think as far as being able to match consumers to homes and sellers and buyers together, the potential's absolutely huge. We are using AI in marketing now. We are starting to use it in forecasting. We're starting to use it in our predictive modeling. We're using it in how we visualize and go to market. I've been talking to a lot of people about how you use it in research through AI. Now you can essentially feed the consumer feedback from multiple research channels into AI, make your consumer, and essentially ask that AI model to give feedback on products, marketing campaigns, you name it. And right now we're running about 3 tests at any one time on our digital product to ensure we're constantly improving, iterating, and the user experience and things of that nature. Absolutely.

Yeah. And also, I think AI, in the work we've done at Suzy, we've uncovered ways to just make one-to-one sort of contextual messaging and content much more impactful. We've talked for so long about making things relevant, yet Everybody gets the same email newsletter, but I think I look at your business and you wanna establish that lifetime relationship with a customer. I'm sure loyalty's huge in terms of they've sold a house through Open Door and then you want them to sell their next house or buy their next house through Open Door. So you have them. So I would imagine that's another huge opportunity in terms of mining your customer data, unpacking the content that matters to them most, and continuing to build that customer loyalty.

Absolutely. I mean, one thing on AI that I keep thinking about is just like the internet started as a search engine and then evolved into serving you the answer. AI, we're kind of using as a search engine now. We're asking questions and getting responses. Over time, AI is going to know, hey, Matt, I know the neighborhoods you want to live in. I've found a house for you. I've searched and got the best mortgage for you. Say yes and it's done. Like, it'll end up being in service to you. And I think the potential of that is just Huge.

Or I know that you just had another child and the square footage per human in your house is not big enough anymore, so it's probably time to move. I also know that you got a raise or you have extra money to spend or whatever it may be, so maybe you can afford this. And I think a lot of people are concerned with privacy, but those same people would've said that consumers never would've purchased anything online with their credit card in the year 2002. So I think ultimately convenience tends to trump privacy. Over time because I think a lot of these privacy fears usually don't manifest to consumer harm. Obviously sometimes they do, but I think most people look at their lives and say the one thing I need more of is time. And if something can save me time, I'm willing to feed data into the system, maybe sacrifice some privacy for the sake of me having a more convenient, efficient life and spending my time. And I think the same is probably true with AI.

Yeah, we take privacy very seriously, but I think to your point, The larger point is like something arrives at culture and it takes time for society to get used to it. And over time, people get more and more comfortable with things. I was using ChatGPT to type in and get answers. I'm now talking to it. It's having conversations with me. And there's a point where I go, that's enough. You forget you are not talking to another human because it is so real now. But going back to your point about loyalty, It's really interesting with a brand like Opendoor and a business like ours because unlike if we were a candy bar or a car, a candy bar loyalty could be weekly, car could be every 3 years. People generally sell their house every 7 to 10 years. So the gap between when you are in the market and when you're next in the market is huge. But every 60 seconds a homeowner asks for an offer from Opendoor.. And with an 80% NPS score, that allows us to kind of keep this loyalty going that people have good experiences. And if you are looking for an offer now, but you're not ready to move, we're also updating offers. So we will reconnect with consumers and say, hey, your offer's changed. And that's how we're working it through right now. But again, to your point about AI, who knows where it could go in the not too distant future.

Yeah. I mean, we were talking before, the onset of the pod today that we both have small children. And I think what's gonna be really fascinating to see moving forward is just how this generation, the first generation of kids who grew up with AI in the household is gonna look completely differently at relationships, at education, at what it means to prepare for a career. I mean, I'm a Gen Xer like yourself, likely, who did not grow up with the internet in the household, or maybe the internet was first coming into households, when we were growing up. And then you have millennials that grew up with the internet and Gen Z that grew up with a mobile device. But this is a whole different paradigm that we're dealing with. And I think as a parent, as an educator, as an employer, it's just going to be fascinating to see how this all evolves.

Yeah, because unintended consequence, I think, is ability to make decisions. I'm reading a report about kids asking Alexa what to wear each day. And on the one hand, that's kind of fun and interesting, but on the other is if we are not at a point where society is defaulting all decisions to AI, it's gonna be problematic. But one of the things I noticed even during COVID was how a younger generation is even talking to Alexa. I remember got to a point with my kids where I was like, please say please and thank you to Alexa, which is ridiculous because she's not real. But equally, it's important to keep some social skills alive when interacting because those things then bleed into human connection and conversation. So again, it's like Industrial Revolution, internet revolution, now the AI revolution. We could talk again in 5 years and I think both of us will be surprised about how much has changed just because of AI.

We might not even have to talk. Maybe our avatars will do the talking for us and we could be at the beach somewhere, right?

You're on battle.

Yeah. It reminds me of that famous episode of The Office where Michael Scott, who's played by Steve Carell, and Dwight were in a car and the navigation system was telling them to ride their car into the lake. And Steve Carell's character saying, no, it has to be right. The machine's always right. And kind of lost the ability, your point, to make decisions. And I think that was prescient in a way, in terms of where we are today, where people definitely are becoming more and more reliant on this technology for better or for worse. And I think you've identified one of the opportunities and risks within this new era.

I always say creativity always wins, and there's a new set of tools to be creative with. I also think there's something great about— it used to be that academic success was how reading or writing or regurgitating information. Well, the reality is you don't need to know how to regurgitate information. It's all available to you and can come to you at any time. Which actually I think puts more onus on creativity and strategy and innovative thinking. So when I look at the kind of glass half full with AI, I'm like, actually this could lead to even more innovation and even more positivity in society because the focus has to go there because all the information is available to us in an instant and soon it'll just be given to us because we're curious and thinking about it. So it's an amazing time to be alive.

Yeah. And the question becomes, and I want to shift gears and wrap up here, but it's like, when is the education system going to evolve based upon that? Because today kids get rewarded for memorizing stuff and regurgitating it. And in many cases, whether they truly understand it or not, that drives their ability to get high test scores, even with the standardized testing, gets them into college. And I agree with you 100%. That's not really what drives success moving forward in this new world.

I couldn't agree more. I mean, it's like the school systems are set up from the industrial age. It was like getting everyone to learn the same things in order to move into factories, and it hasn't evolved and changed a great deal. And there's colleges and teachers obviously with applications now to see if people are using ChatGPT. In writing their essays. And again, I'm with you, Matt. My question is like, why are you forcing them to work in an old way and making sure they're not using modern technology when we should actually be encouraging innovation for what's ahead? And again, it's incredible to me how slow some of these changes in education are happening.

It's almost like the real estate industry, right?

Exactly. You know, they need an open door for education.

Absolutely. So shifting as we wrap up here, David, and it's been a great conversation. I'm super appreciative of you taking the time. When you look back at your career, and obviously you've worked at some of the most prolific Madison Avenue advertising agencies, and now you're at a really exciting, prominent startup in the real estate industry, what were some of the things that you think you've done right throughout your career? Some areas that you focused on that have really helped you propel as a professional to one day end up in the CMO seat?

I think A lot of it is being authentic to yourself, knowing these are my strengths, these are my weaknesses. I would say, which seems counterintuitive, don't spend a lot of time on your weaknesses. I think going back to the educational being outdated, as we just talked about, I think there's a lot of focus on improve your weaknesses. My sense is like, know your strengths and continue to strengthen them. Know your weaknesses and build teams to cover your blind spots. And then the other thing, which is another Crispin thing, is like the best idea is boss. Work for an idea, work for the smartest thought rather than a hierarchy of people. And then build a culture where everyone can bring ideas. And I like to build small accountable teams because I find with small accountable teams, you can run faster, you can make decisions faster, and there's this pride of ownership that comes with it. So if I look back at where I've worked, I think every agency and every company has kind of taught me something new that has led from taking an opportunity to move to the US when I hadn't before. I hadn't even been to the US when I took a job at Carmichael Lynch. TBWA, I think, was about brands becoming famous and inspirational leadership. Jonathan Mildenhall was, the MD when I was at TWA London. Wieden Kennedy was really about how to build generational brands with Nike and Crispin. As we said, that's when I started to learn how to build teams and PR as advertising. Vedables was running a department, the craft of Audi. And then RGA was the first time I could go from running an agency to running a network to building a strategy for innovative brands, which led to the Reddit 5-second Super Bowl. All of those things together, it's not a straight path to CMO, but it's naturally when you wrap it all up together, it's like the natural next step is go build a brand from scratch and be directly connected to how marketing is driving the business forward. And that's been the most fulfilling part, seeing how it's impacting every day.

Fantastic. And to wrap up here, David, is there a quote or mantra that you like to live by? Do you think probably sums up your career and professional strategy?

I love to say it's far harder to simplify than complicate.

Isn't that the truth? They say simplicity is the ultimate sophistication, and I agree with that wholeheartedly. Well, David, thank you so much for joining today. It's been amazing hearing about your journey, and I can't wait to see what's next for you and Opendoor here in this wild market that we're in. So thanks for taking the time.

Thanks for having me, Matt.

On behalf of Susan and I, the V Team, thanks again to David Koren, CMO of Opendoor, for joining us today. Be sure to subscribe, rate, and review the Speed of Culture podcast on your favorite podcast platform. Till next time, see you soon, everyone. Take care.