Entrepreneurs need to be flexible and pick themselves up even after things don’t go as planned, because invariably things will take unexpected turns during the startup journey. Those were some of the words of advice from Zillow co-founder and former Expedia CEO Rich Barton who addressed a crowd of entrepreneurs today at The Startup Conference in downtown Seattle.
In fact, Barton told the story of the early days of Zillow, noting that the company originally tried to create online auctions for homes.
“It was a disaster and we were depressed and unhappy,” said Barton, explaining the early days of Zillow. After that failed effort, Barton, co-founder Lloyd Frink and early Zillow employee Stan Humphries changed gears and stumbled upon the idea of the Zestimate, a home valuation that it could affix to every home in the U.S.
“The new idea emerged from the ashes of the first idea,” said Barton, adding that the transformation took about four months.
Being flexible was absolutely critical to the success of Zillow, said Barton. But so was having the right team members on board.
An early investor in companies such as Avvo, GlassDoor and RealSelf, Barton said he really just looks for two things in new business opportunities: “The size of the pond and the team that is fishing.”
“Exactly what bug they are fishing with or lure that they are fishing with or how they are going to try to catch the fish, I don’t know. It doesn’t matter that much to me,” he said. “Because I am 100 percent certain that it is not going to end up the way you think.”
In the case of Zillow’s original auction idea, Barton said that it was “the wrong bait.”
Barton also offered some interesting remarks in terms of how to split equity among co-founders, noting that a 50-50 division is a recipe for disaster. (Related guest post on GeekWire by entrepreneur Dan Shapiro: The only wrong answer is 50/50: Calculating the co-founder equity split)
“When Lloyd and I sat down and created Zillow, I knew that an even 50-50 voting and equity split with two founding partners was a recipe for danger down the road. It is trouble,” said Barton.
Barton noted that somebody in the company at the end of the day has “to be empowered alone to make the decisions.”
“I said either way: ‘I’ll go either way, I’ll take 49, and you take 51. I don’t care. But one of us has to have a little bit more voting control. It ended up that he said: ‘No, you take the 51, because if you take the 49, you aren’t going to show up for work.'” (Laughs).
Barton said that has led to a great partnership because no one could come to blows to “grind the company to a halt.”
Previously on GeekWire: ‘Closet revolutionary’ Rich Barton of Zillow on startups and swinging for the fences
[Editor’s note: GeekWire is a media partner of The Startup Conference]