I do remember speaking to you early-on, and I know Barton still hasn't given up on doing something with you mortgage-wise, so you should give him a call.
RedFin, unlike its local competitor (BuySide Realty) has one significant advantage: big cash backing. Huge cash backing with a sound profit model. They are completely analogous to Wal*Mart in Real Estate: high volume, low margins, highly organized, and well planned. And with backing from Vulcan Capital (ex-Micrsoft founder, Paul Allen), they have a virtually unlimited well to go to while acquiring new markets... and Chicago is coming soon.
While I don't doubt that there will always be niche players, reducing the playing field -- by, say, 10% of online leads -- is going to hurt a lot of independents trying to play the Internet game. How much more business do you have to do in order to cut your margins to 1% commissions? Can whatever you offer offset the shiny-safe-big-corporate feel, even though they only have 35 people? With that in mind, they will probably threaten the online efforts of Realogy more directly, but they will undoubtedly compress your market opportunity... not to mention what happens with Realogy fights back.
I don't mean to be all doom'n'gloom, but, per our earlier conversation, some regulations that may slightly hurt you directly also protect you (as a little guy) from the big predators. MLSNI's policies mean that sites get weighed more fairly on merits, and forced login means you actually get to figure out what features people like, which they don't, and click-paths that need to be optimized.
In summation: Learn from RedFin, be ready for RedFin, be better than RedFin.
-Matt