Many entrepreneurs are influenced by early childhood experiences managing a paper route or a lemonade stand. Spencer Rascoff’s most indelible experience as a kid was running the stage lights during “Sympathy for the Devil” at the Rolling Stones’ historic 1990 concert in East Berlin, after the fall of the Berlin Wall.
The story of his unlikely upbringing around the music industry, and its influence on his life in business and technology, is one that the Zillow Group CEO has only recently started to share outside of his family and friends. It’s a personal story, inextricably linked to his late father.
Before his death last April, Joseph Rascoff had spent decades reinventing the way musicians made a living. A longtime business manager and tour producer, he handled affairs for some of the biggest names in rock ‘n’ roll, from the Stones to U2 to Pink Floyd, David Bowie, Paul Simon, The Police and many more.
The first piece of business advice that Joseph Rascoff gave to his son: don’t go into the music business.
Spencer Rascoff, a onetime investment banker who became Zillow CEO in 2010, clearly followed his father’s advice, and chased a career in internet startups. But while he didn’t choose to work in the music industry, music — and his dad’s association with it — left a lasting mark on him, from the experiences he had at concerts to the business practices he still draws upon today.
Rascoff discussed some of the key life lessons at the Zillow Premier Agent Forum in Las Vegas last fall and again at his company’s annual meeting in December. GeekWire caught up with him for an interview at Zillow headquarters in Seattle.
“It’s hard for me to talk about,” Rascoff said of his father, who died of prostate cancer at age 71. “The reason I did it at those two events is the company is going through a lot of changes right now. Our business models, our focus is changing, our value proposition to consumers and to professionals are changing, so I told this story about my dad’s career and how his business changed a lot and his personal journey changed a lot as he had different challenges come his way, as a narrative arc to describe what I thought was happening to our company.”
Founded 14 years ago, Zillow’s innovative practice of providing consumers with transparent access to information has now become “mundane,” in Rascoff’s words. Consumers pull out a smartphone and expect it be a remote control for their life, and the rise of startups like Instacart, Postmates, Uber, GrubHub and more are pushing web 1.0 companies like Zillow to pivot and meet rapidly changing expectations.
“The reason I started talking about my dad is my dad was getting sick and then passed away kind of right when we were developing this strategy, and I saw a lot of parallels between his career and what we were trying to pull off here,” Rascoff said. “What impressed me about my dad’s career was his willingness to reinvent himself and his business when he was presented with new business challenges. It goes back to the very beginning when he left accounting and entered the music industry.”
A chance encounter
At age 27, Joseph Rascoff was the youngest partner at the New York accounting firm Hurdman & Cranstoun when he had a chance meeting in 1974 at a men’s room urinal.
He struck up a conversation with Prince Rupert zu Loewenstein, the financial adviser for the Rolling Stones. Loewenstein was lamenting his inability to get the firm to take on The Stones as an accounting client, and Rascoff decided right then and there that he wanted the job.
He left the firm to audit the Stones’ European tour and never looked back.
“What causes a newly married, one-kid-with-another-on-the-way partner at an accounting firm to leave that cushy existence and try what we think of today as a startup?” Spencer Rascoff said. “I think it was the old phrase, ‘luck is what happens when preparation meets opportunity.’ You could say my dad was really lucky because he happened to be in the men’s room next to the manager of the Rolling Stones. You could also say he was prepared for that moment and opportunity struck and that’s what constitutes luck.”
It’s a mentality that the 42-year-old Rascoff — who was a co-founder of Hotwire.com and a VP at Expedia — applies to his own experience.
“Clearly, my career you could say the same thing,” he said. “I mean, was I lucky to have gotten on board with Rich (Barton) and Lloyd (Frink) when we were starting Zillow? Absolutely, no question that luck played a part. But luck is what happens when preparation meets opportunity.”
As Rascoff focuses on the pivots necessary to keep Zillow relevant in 2018 and beyond — pointing to Instant Offers as a recent endeavor — he can’t help but rattle off the numerous times his father changed direction, beyond leaving the accounting firm to become a tour accountant.
“When I was a kid, his bread and butter was doing royalty audits, which meant that bands like 38 Special and Lynyrd Skynyrd and ZZ Top and Cyndi Lauper would hire him to make sure they were paid by the record labels what they were supposed to get paid.”
But long before the days of streaming music, Joseph Rascoff could see that record sales were on the decline, and he started focusing the business much more on touring. He applied the movie production model to the concert industry, where a producer would buy a tour outright without sponsors and take all the risk, just like a movie producer takes all the risk and then hires the writer, director, actors and so on.
“He helped create that and brought that to the touring industry with U2 and the Rolling Stones and many others,” Spencer Rascoff said. “And now, really, most tours are done that way in 2018.”
Joseph Rascoff and his longtime partner Bill Zysblat also reinvented the business around Elvis Presley at the request of the late rock icon’s estate, and they created what were called Bowie Bonds when they securitized David Bowie’s catalog. And in 1993, when Paul Simon played most of the month of October at New York’s Paramount Theater, the idea of the artist in residency was born. Today, lengthy stays in one place are a staple in Las Vegas (Britney Spears), New York (Billy Joel) and elsewhere.
Even toward the end, when he was getting older and was pretty sick, Joseph Rascoff had one last pivot in him when he saw something in the electronic music industry. From 2010 to 2015, techno and rave and electronic dance music looked to him like the rock ‘n’ roll of the mid ’70s.
“It was the Wild West,” said Spencer Rascoff, who happens to be a big fan of the genre. “The artists were young and untamed. The business side of it was driven by festivals, just like the huge rocks concerts of the ’70s. And those were typically owned by individuals. So they raised a lot of money and took the company public to try to vertically integrate the electronic dance music industry by buying all these festivals.”
SFX Entertainment went bankrupt a couple years after going public before eventually emerging with a new name in 2016.
“He probably wishes he could have that one over again as a mulligan,” Rascoff said. “But I applaud and applauded when he was alive … he was indefatigable, and even at the end was trying a startup.”
The connection between concert promotion and production and the startup industry is one that Rascoff draws on repeatedly. He said when his dad was asked to create a two-year tour for U2, for example, it would be like creating a startup within a couple weeks, with 300 employees.
“They would create a revenue model with corporate sponsorships, with merchandise sales, with ticket sales, with album sales supporting the tour,” Rascoff said. “And that startup would rise out of nothing and generate hundreds of millions of revenue and have a couple hundred employees that were all mission oriented, that all supported the product — in that case the product was the concert — that had all the functions of an internet company from product to marketing to PR to advertising, HR, and other functions.”
At the end of two years, the startup would vanish. But there were multiple ones going at any one time — U2 could be touring in Europe, the Stones in Asia, The Police in the U.S., Pink Floyd in South America.
“Managing multiple overlapping startups, each with their own unique challenges and with a lot of balls in the air, was something that I watched his whole career,” Rascoff said. “So it’s not unlike what we experience here in terms of having so many irons in the fire and trying to balance the core with new initiatives and resource allocate between the two. That was something I watched him do his whole life.”
‘He was not a music guy’
The irony of Joseph Rascoff’s dedication to the music industry and the artists he worked with along the way is that he was not a fan of their music. In fact, he didn’t really like music much at all.
“He would rarely listen to music. He was not a music guy,” Spencer Rascoff said. “I mean, he went to a rock concert pretty much every night for 50 years but he wasn’t that into music.”
The same cannot be said for the younger Rascoff, who has fond memories of thousands of concerts he saw and the unique opportunities that were presented to him because of his upbringing. His best memory by far was in 1990, as a 14-year-old.
“The Wall had just come down and it was the first Rolling Stones concert ever in East Berlin,” Rascoff said. “There were 100,000 people there seeing the Stones for the first time. My dad let me sit on the mixing platform and control the lights during the show. And so during ‘Sympathy for the Devil,’ when the song goes, ‘woo woo, woo woo,’ I would get to move all the house lights up and down to the beat throughout that song. And I got to do the lights for most of the show … and that was fun.”
That tour took Rascoff to Budapest, Prague and throughout Eastern Europe. He remembers being able to pick up pieces of the Berlin Wall with his mom and put them in his suitcase. When he was even younger he attended the Live Aid and Farm Aid benefit concerts. He saw shows by Jeff Beck, Eric Clapton, The Psychedelic Furs and Pink Floyd.
Shoeboxes stuffed with every backstage pass or ticket he ever used have been turned into a framed art piece in Rascoff’s home in Los Angeles. And on the walls he has hung a couple dozen gold and platinum records — from more than 150 or so that he was given permission to take from his dad’s offices in New York.
Electronic artists such as Calvin Harris, Steve Aoki and Afrojack are among his favorites today, and when he listens to music, it’s always through Spotify — the streaming service where his younger sister Brooke works. During GeekWire’s visit, he opened his phone to show the last thing he listened to — a playlist called Good Vibes.
Despite the appeal to some of the return to analog music and vinyl records, Rascoff keeps his large collection of old compact discs in binders in a closet. He spent days ripping them all to iTunes when that service was launched, but he never listens to them.
“I remember when my dad brought home the first CD that I had ever seen,” Rascoff said. “It was the Rolling Stones’ ‘Tattoo You,’ I was 6, my brother was 9. And [my dad] was like, ‘This is a compact disc. It’s amazing because it doesn’t scratch.’ And I remember my brother and I played frisbee with it around the house — we didn’t have a CD player so we couldn’t listen to it. But it was so cool because it didn’t scratch.”
Rock ‘n’ roll ‘n’ tech
So with such a history and love of music instilled in him from an early age, why was Rascoff advised not to go into the business by the man who made his living off of it?
“He felt that in 1997 when I came out of college the music industry had already become too corporate — thanks to people like my dad,” Rascoff said. “It was very difficult to be innovative and entrepreneurial the way he had been in the ’70s and ’80s and ’90s. In his mind, better to seek out areas like technology and consumer internet where it was more of a fresh-tracks opportunity than in music, which had been consolidated by just a couple of labels, a couple giants of concert promotion, and just harder to innovate.”
Joseph Rascoff and his wife Jane also felt very strongly that their son needed to make it on his own, and after paying for him to attend a great high school and a great university, after he turned 21 he never got another penny from them.
“He was violently anti-nepotistic, so it was a non-starter to go into the music industry after that,” Rascoff said.
He doesn’t plan on sticking to the same standard with his own children, ages 12, 9 and 6, when it comes to whether they want to pursue careers in the world of internet startups.
“I would love it. I would love it. I would love it,” Rascoff said. “I am constantly talking to them about tech and the internet and teaching them to code and nothing would please me more. My 12-year-old daughter says, ‘How old do I have to be to work at Zillow? Can I work at 14 or 15?’ They’ll all work here, as soon as the law allows. The prohibition on nepotism applies in wanting my kids to stand on their own two feet and accomplish things on their own, but it doesn’t extend to giving them jobs here. I would hope I could help them get jobs here and they would be awesome and could get advancement from there.”
Whether the kids come across any of the same types of characters in tech as their dad did while growing up around rock ‘n’ roll will remain to be seen. When asked to name the Keith Richards of the tech industry, Rascoff laughed. And then he went with Steve Wozniak.
“Kind of old, grizzled, legendary, anti-establishment,” he said of the Apple co-founder. “Elon Musk is definitely the Mick Jagger.”
Rascoff also laughed about how tech companies have stopped putting “rock star” in their job descriptions, but he did try his best to equate his company to the music industry.
“We’ve made Zillow Group pretty unstructured,” Rascoff said. “Our ownership structure allows us to take risks and be bold and be long-term oriented. The fact that we’re a founder-led company means that we act a lot more like Amazon or Google than most publicly traded companies. So it’s not exactly rock ‘n’ roll, but it is pretty free-wheeling in terms of how we approach challenges and the types of decisions that we make.
“It’s glamorous to me.”