Zillow co-founder Rich Barton shared his business creation and investment philosophy this past week at the Zillow Premier Agent Forum, calling out the need for audacious goals and business ideas that give power to the people via transparency.
Below are some excerpts from Barton’s talk , delivered to Zillow’s top real estate advertisers in Las Vegas.
On freedom and revolution: “I was 16 years old when I saw Apple’s 1984 ad, and I got really fired up. It got me thinking that freedom is primal to our species. It is innate. We want to be free. When we feel enslaved, that leads to revolution.
Revolution has played out countless times throughout human history in many countries, It is also happening in industry after industry as well. The catalyst that is driving this revolution is the personal computer, the internet, the smartphone, the cloud and the internet of things.
Uber is clearly a revolutionary company that is transforming, not the taxicab business, but transportation. People are getting rid of their cars and drunk driving rates are going down because of Uber. Amazon is clearly revolutionizing how we buy things. Airbnb is revolutionizing how we think of lodging.”
On Big Hairy Audacious Goals and joining Microsoft: “When I was growing up I had a geeky side to me. One of the guys who inspired me back then when I was geeking out was Bill Gates. I was drawn to this really audacious goal that Bill had of a computer on every desk in every home, which seemed ludicrous at the time.
Big Hairy Audacious Goals (BHAG) are fundamental to creating revolutionary companies. The great organizations have BHAGs. Mission-driven BHAGs that have to do with people empowerment will draw people to your mission, and when the side product is that you do well as a business, those are the most powerful ones.
Power to the people is a powerful concept for business creation. When you combine that with a Big Hairy Audacious Goal and you attract great people to your team, magic things can really happen.”
On founding Expedia: “When I had to book corporate travel, I could hear the click, click, click of the travel agent’s keyboard. I wanted to jump through the phone line and do it myself because I wasn’t getting all of the information. It became clear to me that travel was one of the first industries that was going to be revolutionized by what would become the internet.
I had an opportunity to get in front of Bill Gates and pitch this idea that I had. My BHAG was that we could use computers and online services to build the largest seller of travel in the world. He was very excited about the idea and said “start it inside Microsoft and if it does well, we’ll consider spinning it out.”
On the Expedia IPO: “I went to Steve Ballmer in 1999 and said “I need $100M to do TV brand advertising for Expedia”. Ballmer pounded the table and said “no, no, no, we don’t spend on brand advertising here at Microsoft, especially on things like Expedia”, but this was 1999 and everything was going public, so we had an opportunity to raise money by spinning off the company.
My wife was pregnant with our first child at the time. I actually had to cut the IPO roadshow a day short and I skipped ringing the opening bell to be at the birth of our child. My wife tapped me on the shoulder at 3AM and said “Honey, if the baby is born today, do we really have to name it Expedia?” I had promised that if the child was born on the same day as the IPO that we’d name him Expedia.”
On coming up with the idea for Zillow: “My mom was a realtor in Connecticut when I was a kid, and I was fascinated with the big books of homes listings and all of the information it contained. I wondered by consumers couldn’t get their hands on this.
I knew that Zillow was going to be very different from Expedia. A home is the largest financial and emotional decision that people make and they are never going to make these decisions without professional guidance. We knew that we didn’t want to be a brokerage, so we needed a media model where professionals could advertise their services and connect with consumers.
Lloyd and I were sharing an office because our wives had kicked us out of the house and were brainstorming business ideas. We were both shopping for homes at the time and digging through county records and making spreadsheets to compare listing prices, selling prices, $/sq ft. We looked at each other and said “Why do you have to be a spreadsheet geek to get great information like this?” The first chart we drew was what if you could chart the value of your home like a stock price. Google Maps had just come out as well, and we thought “what if we can put prices on the rooftops of these maps, what’s for sale, what has recently sold?”
— Spencer Rascoff (@spencerrascoff) October 17, 2014
Our first job listings on the web simply said “are you looking for a little revolution?” The first 20 people we hired at Zillow didn’t know what we were doing when they said yes to their job offers.”
On Zillow’s IPO and the importance of marketplaces: Like I had done at Expedia, Spencer and Amy came to me and said “Rich, we need $100M to do brand advertising”. We called the IPO “Project Step” because obviously the IPO wasn’t the end, it was just a step along the way and a tool we used to allow us to begin to spend money on brand advertising and to further the mission that we had which was to build the world’s most trusted and vibrant home-related marketplace.
Marketplace is an important word. It takes two sides to make a marketplace. It takes consumers and pleasing them, and clearly that has to be #1, since without consumers none of you would be sitting here. But, we can’t have a marketplace without professionals too.
It’s our mission to intermingle the professionals with the consumers in a marketplace that is empowering to everyone that invites the vanguard, the revolutionaries in the industry, who have vision to see where the industry is going, to come in and learn the new way and be the agent of the future and take market share from others.”
On the founding and growth of Glassdoor: “I was sitting at my desk doing performance reviews at Zillow in 2008. I was entering salaries, raises and bonuses and went to print it out to take to a review meeting, and I accidentally printed it to the shared printer. Luckily my assistant grabbed it before anyone saw it, but it got me thinking that people want this information. Wouldn’t it make big companies better managers if this information was available about how people are compensated? If the information doesn’t make sense, wouldn’t it force big companies to fix things?
Our BHAG for Glassdoor is to become the largest recruiting company in the world, to help find everyone a job and company they love, to become “TripAdvisor for employment”. Glassdoor has grown to over 20M unique users/month, operates in 200 countries, has 12M reviews. This is a revolution in the jobs industry. One day we will become the most important company, the most important marketplace, in recruiting.”
On what’s next: “We’ve seen three personal examples of my investing and company creation philosophy. Give power to the people, have a BHAG, attract great people to your team and magic things will happen.
With Expedia in travel it is now the largest seller of travel in the world. We achieved our BHAG. We’re seeing it unfold with Zillow right now. We’re becoming the most-trusted and vibrant home-related marketplace in the world. Most definitely it’s coming from the mobile app. It’s mobile, mobile, mobile and we’re beginning to see it with Glassdoor as well.
This thesis (of power to the people) is going to play out in every industry, but the big story is the device in front of you: your iPads that are connected, your smartphone and the user-generated content that we’re all creating. We’re all creators now. I can’t imagine it’s only been 7 years, but there are 7.7 billion wireless connected devices in the world. That’s more devices than humans.
Nothing has ever changed human life the way this has. I can’t imagine living my life and communicating without my smartphone, and buying things and all the things we’ve been talking about. My smartphone can now be used to open doors, I use Dropcam to monitor my vacation home. I use Nest to control the climate in my vacation home and primary home. It’s an incredible UI. I have a kid who’s skinny and I try to stuff food into him, and I’ve got this scale that’s connected to the wifi network, I get an alert with his weight, and we can plot his weight over time. I just did a remodel and I’m using Sonos to control the audio in my house.
These are the signs of what’s to come. This is magic stuff for human interaction and stuff we can’t even imagine is going to be developed.”