JEFFREY P. FRIEDEN Innovating Real Estate: The Journey of Jeffrey P. Frieden and Auction.com

Early Life And The Stereo Connection

Jeff Frieden, the entrepreneurial genius behind Auction.com, has carved an extraordinary path of success throughout his career. Born and raised in Anaheim, California, just a stone’s throw away from Disneyland, Jeff’s upbringing was influenced by his parents’ work at the Internal Revenue Service in Los Angeles after World War II, which laid the foundation for his future endeavors.

In 1979, Jeff graduated from Loara High School, where fate brought him together with his partner, Rob Friedman, who would become his trusted ally for the next 35 years. The similarity of their last names, Friedman and Frieden, often resulted in them being photographed side by side. Inspired by Rob’s anesthesiologist father, the duo seized the opportunity to establish their own stereo store in Orange County, an idea that took shape in 1979-1980.

Thus, The Stereo Connection was born in

Anaheim in 1980, introducing Korean electronics to a market dominated by Japanese brands like Sony and JVC. Their innovative approach paid off as they became the first to offer a 19-inch color TV for a mere $199. Jeff’s prior experience working in a Los Angeles store had given him valuable insights into the workings of the stereo business. With a $5,000 loan from his uncle and Rob’s investment of $10,000 to $15,000, they launched their store, following the successful model they had observed in LA.

THE STEREO CONNECTION’S METEORIC RISE

The moment the doors of The Stereo Connection opened, it was evident that Jeff and Rob were onto something big. A line of 100 eager customers awaited them, and they sold out all their merchandise in no time. With the profits, they promptly returned to LA to restock, establishing a line of credit with Samsung and other vendors along the way. This rapid expansion continued with the opening of store numbers two, three, four, and five, all located in Orange County, and an additional one in San Diego by 1981. Despite their youth, Jeff and Rob were raking in an impressive $40,000 to $50,000 per month.

Venturing Into Auctions And Real Estate

Continuing their entrepreneurial journey, Jeff Frieden and Rob Friedman successfully ran The Stereo Connection from 1980 to 1983. During this time, they witnessed the tremendous potential of the auction business firsthand. Intrigued by its possibilities, they decided to hire an auctioneer for a special event. Containers filled with televisions were placed in the parking lot, and the resulting auction surpassed their expectations, generating more sales in a single day than they typically achieved in weeks. This experience left them captivated by the auction industry.

In 1983, Jeff and Rob made the decision to sell their stereo business. Following the sale, Rob pursued his interest further by enrolling in Auction School, located in Billings, Montana. Their success in the stereo business had brought them substantial wealth at a young age, enabling them to explore new ventures. One such opportunity presented itself when they discovered an advertisement in the LA Times for a land auction at the LA Convention Center. Intrigued, they attended the auction, meticulously documenting the prices of approximately 200 pieces of land, primarily situated in California.

Eager to leverage this newfound knowledge, Jeff and Rob sought out county recorders to access additional information. Utilizing the available records, they cross-referenced the auction prices with the prices paid by the buyers, gaining valuable insights. Armed with this data, they embarked on a quest to acquire 200 parcels of land using the profits they had amassed from their successful stereo business. Over the course of several years, they diligently purchased the targeted parcels, building a portfolio of land holdings

AUCTION.COM: A NEW FRONTIER

By 1986, Jeff and Rob were prepared to hold their own land auction. The Orange DoubleTree Hotel served as the venue for this milestone event, attracting a staggering turnout of 1,000 eager attendees. To ensure widespread awareness, they ran full-page advertisements in the LA Times and aired radio commercials, effectively promoting their auction.

Jeff Frieden’s relentless drive and passion for entrepreneurship led him on a new journey as he bootstrapped Auction.com. Over time, the company reached a revenue of approximately $180 million and turned profitable. Recognizing the immense potential of his company, Jeff raised private equity financing and growth capital, positioning Auction.com as a prime candidate to become a public Unicorn. Unlike many other overhyped ventures, Auction.com boasts a legitimate revenue and profitability model, scaling phenomenally well and proving itself as a true success story.

A Lasting Legacy

Jeff Frieden’s remarkable path from a candy sales prodigy in Anaheim to a pioneer in the stereo retail business and an accomplished entrepreneur with Auction.com exemplifies his unwavering dedication and ability to spot unique opportunities. With his entrepreneurial spirit and visionary mindset, Jeff continues to make a significant impact in the business world. Together with his partner, Rob Friedman, he has consistently demonstrated an unparalleled drive to succeed, transforming ideas into thriving ventures and leaving an indelible mark on the industries they have entered. Their entrepreneurial journey serves as an inspiration for aspiring business leaders, highlighting the rewards of perseverance, innovation, and a keen eye for emerging trends. Continuing their entrepreneurial journey, Jeff Frieden and his partner, Rob Friedman, successfully ran The Stereo Connection from 1980 to 1983. However, their aspirations reached beyond the world of stereo retail. During the period of 1983 to 1985, when Orange County still boasted its namesake oranges and Riverside and San Bernardino were sparsely populated, Jeff and Rob embarked on an ambitious quest for land.

These pieces of land, spanning various locations, carried price tags ranging from $1,000 to $20,000. However, the duo faced a significant hurdle—there was no external financing available to support their ambitious endeavor. Undeterred, Jeff and Rob relied on their own resources to finance the acquisition of these 200 parcels of land. They invested an estimated total of $1.5 million, drawn from the proceeds of their earlier business ventures and the sale of their first company. Remarkably, this represented nearly all of Jeff’s personal wealth at the young age of 23, as he possessed a million dollars in the bank and owned a house—a testament to his unwavering dedication and entrepreneurial spirit.

With their financial commitments and aspirations intertwined, Jeff and Rob forged ahead, driven by their belief in the immense potential of these land holdings. Their willingness to invest a significant portion of their hard-earned wealth into this venture reflected their unwavering confidence and remarkable ability to make bold business decisions.

In 1986, their efforts culminated in a land auction at the Orange DoubleTree Hotel, which attracted a remarkable turnout of 1,000 eager attendees. This auction marked a turning point in Jeff and Rob’s entrepreneurial journey, signaling their entry into the auction industry and the beginning of their remarkable success story.

Jeff Frieden’s remarkable journey, spanning from his early days as a successful stereo retailer to his ventures in the auction industry and real estate market, showcases his unwavering determination and knack for identifying lucrative opportunities. With each step, he continued to push boundaries and chart new paths, cementing his status as an entrepreneurial trailblazer.

Through his unwavering dedication, innovative thinking, and keen business acumen, Jeff Frieden has made a lasting impact on the business world and continues to inspire aspiring entrepreneurs around the globe.

REVOLUTIONIZING AUCTIONS: FROM LAND SALES TO ONLINE HYBRID AUCTIONS

In the timeframe of 1987 to 1988, during a robust real estate market, the auction generated an astounding one million dollars in a single day. Thousands of enthusiastic participants competed fiercely for the land parcels, creating an electrifying atmosphere. Jeff and his team managed to hold a second auction before the market downturned in 1990, purchasing an additional 200 parcels of land.

The Birth of REDC However, the onset of the Gulf War recession brought about a significant shift in the real estate landscape. Developers who had constructed numerous homes and condominiums in Southern California found themselves struggling as buyers became scarce. Sensing an opportunity, Jeff and his team devised a new approach—instead of acquiring ownership of the properties as they did with land, they proposed conducting auctions on behalf of the developers, earning a fee for their services. This innovative concept gave birth to Real Estate Disposition, later known as REDC, forming the foundation of what would eventually become Auction.com. The eBay Inspiration The auctions conducted by REDC were offline ballroom events, heavily advertised through traditional media channels of the time. A key breakthrough came in the early 2000s when Jeff and his team implemented a technology inspired by eBay. They introduced live auctions where participants could participate remotely through the Internet. This hybrid auction format allowed individuals attending the physical event and those participating online to bid against each other, enhancing the reach and competitiveness of the auctions.

From 1990 to 2007, Jeff and his team effectively managed two distinct business streams: Land Auctions and Fee-Based Services. They continued to run land auctions, conducting approximately 30 auctions per year at the market’s peak in 2005. Simultaneously, they expanded their fee-based business model, facilitating auctions for developers’ homes and foreclosures. This dual focus propelled their success, and the company eventually evolved into the renowned Auction.com. Redefining the Auction Landscape Jeff Frieden’s entrepreneurial journey exemplifies his ability to adapt to market dynamics and leverage emerging technologies. By embracing online platforms and creating hybrid auctions, he transformed the way real estate auctions were conducted, fostering greater accessibility and competition in the market. Through innovation and astute business strategies, Jeff continued to redefine the landscape of auctions, positioning himself as a true pioneer in the industry.

ADAPTING TO MARKET SHIFTS: FROM REAL ESTATE FOCUS TO FORECLOSURE CRISIS SUPPORT

The market crash of 2007 presented a formidable challenge, prompting a swift pivot in their operations. Recognizing the urgent need for assistance from institutions grappling with a wave of foreclosures, particularly large banks, Jeff and his team adeptly adjusted their strategy. In 2007, during the height of the crisis, they organized their first ballroom auction in Los Angeles. This event, held for Bear Stearns, featured an impressive lineup of 350 homes. The scale of the operation was immense, attracting a staggering 6,000 attendees. To ensure its success, they executed a strategic marketing campaign, investing between half a million to a million dollars. Leveraging their proprietary hybrid technology, which had been developed in-house, they seamlessly integrated online participation with the physical auction format.

horizons, Jeff and his team began exploring opportunities beyond traditional physical auctions. By harnessing the power of online platforms, they established a robust digital presence, enabling auctions to be conducted entirely online.

This strategic shift propelled their growth, allowing them to rapidly adapt to the changing dynamics of the real estate market. Jeff’s entrepreneurial journey continued to intertwine with his personal investments, particularly in commercial real estate. Over the years, he allocated portions of his earnings into various avenues, including banks, stock markets, his own business ventures, and significant investments in purchasing commercial properties in Orange County.

Jeff Frieden’s ability to navigate through market fluctuations and identify new opportunities demonstrates his astute business acumen and forward-thinking mindset. By embracing technology and expanding their services to address the foreclosure crisis, Jeff and his team solidified their position as industry leaders, revolutionizing the way real estate transactions were conducted in the digital age.

THRIVING AMIDST CRISIS: SEIZING OPPORTUNITIES IN COMMERCIAL REAL ESTATE

The outcome proved transformative. The demand for their services skyrocketed as the foreclosure tsunami gained momentum. Expanding their

During the early 1990s downturn, when faced with the challenges of the market, Jeff and his team strategically directed a significant portion of their resources toward commercial real estate investments. Reflecting on their choices, Jeff highlights the exceptional returns they experienced, surpassing those yielded by the stock market. Their timing proved fortuitous, as the surrounding county underwent a significant transformation, with orange trees making way for progressive development. They acquired substantial real estate holdings in 1991, making additional purchases during the 2001 recession, and seizing lucrative opportunities in 2009 and 2010.

By capitalizing on the fluctuations of the market and leveraging their financial strength, Jeff and his team not only navigated through crises but also positioned themselves to reap substantial rewards from commercial real estate investments. Their ability to recognize favorable timing and make prudent acquisitions further solidified their financial success and affirmed commercial real estate as one of their most fruitful ventures.

Jeff Frieden’s astute investment strategies, coupled with his resilience and adaptability, enabled him to flourish amidst market volatility. His entrepreneurial journey serves as a testament to the rewards of strategic investments and seizing opportunities during periods of economic turbulence.

NAVIGATING TRANSFORMATIONS: EXPANDING INTO ONLINE DISTRESSED COMMERCIAL REAL ESTATE

During this time, they made significant strides in reshaping their business. Under the REDC brand, they made a strategic decision to sell 50% of their company to a private equity firm called Stone Point Capital, based in Connecticut. This move not only infused capital but also positioned them for further growth.

Simultaneously, recognizing the immense potential of the online marketplace, they made a game-changing acquisition: the URL Auction. com, procured for a substantial sum of $1.8 million. This acquisition laid the foundation for a groundbreaking transformation. Building upon their established reputation and expertise, they embarked on a new venture in 2009, launching their commercial business under the Auction.com brand.

allowed them to tap into a vast market of online buyers, expanding their reach beyond traditional boundaries.

The integration of technology into their operations opened up unprecedented opportunities for efficiency, accessibility, and transparency. By streamlining the process and eliminating geographic limitations, they facilitated seamless transactions for both sellers and buyers of distressed commercial real estate.

Through these strategic moves, Jeff Frieden and his team successfully positioned Auction. com as the go-to platform for online auctions of commercial properties, carving out a niche in the real estate industry and solidifying their status as innovators.

Their ability to adapt to market trends and leverage the power of technology propelled Auction.com to new heights, transforming the way distressed commercial real estate transactions were conducted. The cohesion of their business model, combined with their unwavering commitment to excellence, enabled them to thrive in an increasingly digital landscape and cement their position as industry leaders.

REVOLUTIONIZING THE REAL ESTATE INDUSTRY: BUILDING AN ONLINE MARKETPLACE

With the launch of Auction.com, their focus shifted to the realm of distressed commercial real estate. Leveraging their online platform, they pioneered the concept of conducting 100% virtual auctions, revolutionizing the way commercial properties were bought and sold. This bold step

Auction.com has emerged as the largest online platform specializing in property auctions, catering to both residential and commercial sectors. Jeff emphasizes that the real estate industry as a whole often lacks transparency, with buyers and sellers having limited visibility into the offers being made. However, Auction.com sets itself apart by offering complete transparency, providing a clear view of who is participating, and facilitating wide distribution of properties. Remarkably, on the commercial real estate side, 70% of their buyers have never met real estate brokers, underscoring the power of their platform.

Their online marketplace has transcended geographical boundaries, enabling the sale of properties in various locations, including China, the United States, and the Middle East. This extensive reach has been made possible by the wide distribution capabilities of Auction.com. Jeff credits the contribution of Jake, who recognized the immense potential and urged them to establish a Silicon Valley office, attracting top talent to propel the growth of the online marketplace.

In terms of scale, Auction.com has achieved remarkable milestones. In the current year, they anticipate selling approximately 75,000 homes and conducting transactions totaling $4 billion in commercial real estate. With a Total Addressable Market (TAM) estimated at $1.6 trillion, the potential for further growth and expansion appears limitless.

By harnessing the power of technology and creating a transparent and efficient platform, Auction.com has disrupted the traditional real estate landscape. As they continue to innovate and offer wide-ranging opportunities for buyers and sellers, they remain at the forefront of transforming the real estate industry into a dynamic online marketplace.

Evolution Of Financing And Strategic Partnerships

Auction.com has undergone significant developments from a financing standpoint. Initially, the company had $150 million in debt. However, as they transitioned towards building an online business, they shifted their financing model from debt to equity.

In early 2014, Auction.com closed a round of funding with Google Capital, a strategic partner that brought valuable expertise and resources to the table. Jeff highlights the importance of combining the real estate DNA, financial services DNA, and technology DNA at all levels of the organization, including employees, executives, and shareholders. With Google’s profound knowledge in areas such as search engine marketing (SEM), search engine optimization (SEO), mobile technology, and product development, they saw Google as the ideal partner to enhance Auction.

com’s capabilities.

Jeff also mentions another significant investor, Stone Point, which is the largest private equity firm in the financial services vertical, managing $13 billion. Stone Point’s experienced professionals, including Chuck Davis and Steve Friedman, who previously held leadership positions at Goldman Sachs during Barry Stearns’ time, provide valuable insights and guidance in the commercial real estate industry.

The strategic vision revolves around integrating technology and real estate expertise. Auction.com’s transition from a private equity company to a growth equity company underscores its commitment to raising growth capital. Approximately a year and a half ago, they successfully raised additional growth equity capital to support their expansion plans and further fuel their growth trajectory.

Through strategic financing and partnerships, Auction.com has been able to combine the strengths of real estate, finance, and technology, positioning itself as a leading player in the online real estate marketplace.

Jeffrey P. Frieden, recently announced his resignation as chairman of the board of the company, according to a statement released by F&F Capital Group, LLC. Reflecting on his journey with Auction.com, Frieden expressed gratitude to the partners and employees who contributed to the company’s growth since its inception over 20 years ago. He conveyed mixed emotions but expressed excitement about pursuing new entrepreneurial endeavors.

Frieden, alongside his long-time business partner Robert D. Friedman, played a pivotal role in establishing Auction.com in 2007. Starting from humble beginnings, they bootstrapped the company and transformed it into the largest online real estate marketplace in the country, achieving a multi-billiondollar valuation. Recognizing the demand for a dedicated platform for commercial real estate, the co-founders launched Ten-X Commercial in 2011, leveraging cutting-edge technology to enhance the real estate marketplace.