SPEAKER_00: 12 years ago when i started this show it was you know a thousand people listening now it's a quarter million and all ends a million you know it's a lot of listeners and i was getting my blood drawn because i'm on this health kick and the phlebotomist came to the house and he's like

SPEAKER_01: halfway through taking 20 pints and he's like i just want to say and i was like fan of the pod he said yeah i said you want to take a selfie he said i really do but i get fired whatever i said let's do it don't tell your boss then i go to dinner the same night and i'm like i gotta eat a chicken parm i saw somebody had tweeted a chicken parm so i go i get a chicken farm find the best one on yelp the waiter's like i hate to do this and i'm like fan of the pod big time i go to berkeley or whatever and i was like okay you want to take a selfie yeah i said let's do it in the parking lot so you don't get fired so he went to the back in the parking lot i take a picture with him it's very

SPEAKER_10: weird it is very weird well congratulations you should feel good you've been working out a long

SPEAKER_11: time so well done yeah you know i think it's like there's also something about like um doing

SPEAKER_12: things and i think it's a really good part of our conversation hey everybody welcome to this week in startup rich barton is here we're off to the races this week in startups is brought to you by

SPEAKER_16: crowdbotics great ideas can change the world and crowdbotics is the fastest way to turn those ideas into code get a free scoping session for your next big app idea at crowdbotics.com twist open phone brings your team's business calls texts and contacts into one delightful app that works anywhere get 20 off your first six months at openphone.com twist and fitbod tired of doing the same workouts at the gym fitbod will build you personalized workouts that help you progress with every set get 25 off your subscription or try out the app for free when you sign up now at fitbod.me twist so rich barton is the

SPEAKER_19: uh or was the founder of expedia glass door and now the ceo of zillow been trying to get him on the

SPEAKER_00: program for a while but he's like one of those quiet assassin executors you're not like super into doing

SPEAKER_21: media although you've had media at the core of a lot of your success in terms of strategies yeah

SPEAKER_25: yeah yeah we have uh you know i believe that the product should speak for itself and it should be amplified by earned media and word of like good old word of mouth like i really believe that's the way the good stuff gets out there so i'm certainly familiar with media but i am relatively bashful

SPEAKER_29: that will be coming through in the pod jake well i mean we'll have a good time uh you and i have a

SPEAKER_19: lot of friends in common and we're you know we're just chopping it up talking shop but i i would like

SPEAKER_12: to just double click on this one immediately because i think you're being super humble when i meet with startups and they ask me hey i want to do earned media i want to earn some media i don't

SPEAKER_30: want to just hire a pr firm i want to have a strategy and you know what the first thing i i tell them to look at zillow and this estimate because i met your cmo remind me of her name amy patinsky

SPEAKER_34: she's on our board now but yeah amy and she spoke at a couple of my conferences i interviewed her on

SPEAKER_30: this podcast i don't know five six seven years ago you came up with the ultimate earned media for zillow maybe you could explain because she's explained it to me and i have some broad strokes here but from your perspective as the founder ceo of zillow maybe talk about how you created zestimate and then the

SPEAKER_38: local reports which then let you literally take over every quarter on a rolling basis the local news cycle for real estate which is adult um porn basically all right so there's a ton in there

SPEAKER_25: and he's just brilliant there's a ton in there and i can reach i could reach back and give a little context about how we got there and then i'll tell you about it if you really want to get the story yeah but it goes back to another bestie of the pod bill gurley oh bill gurley bill gurley led our a round and is a good friend and i was a uh venture partner a benchmark for 17 years so i'd

SPEAKER_23: done a bunch of stuff with bill and those folks and we were early early azilla we didn't even have the the the the product quite down yet this is in 2006 and i had just come off selling expedient to barry diller

SPEAKER_25: um i had taken expedient public when i was 32 years old back in 1999 even you remember that yeah yep um that was when you know dogfood.com could literally go public we'll get into the expedient story that's a

SPEAKER_51: fascinating one but i had taken expedient public and i was used to spending advertising money um and

SPEAKER_52: as we were getting ready to launch zillow gurley said hey rich what if you had a zero dollar ad budget then what would you do and i was like okay what would i do like that i was like that's impossible of course you can't do that but like all all b hags big hairy audacious goals you think at first it's

SPEAKER_27: impossible then you go away and think about it for a little while and you start to shoot the shoot the

SPEAKER_23: stuff with your friends have a couple beers and think about well how how might we do that and so

SPEAKER_25: we basically ended up taking this project that turned into zillow and pivoted towards the creation

SPEAKER_57: of this estimate which most of your listeners and viewers out there know everybody knows okay

SPEAKER_21: everybody knows but it was everybody knows you gave an estimate on the price of a home

SPEAKER_12: and you did that through looking at recent sales in the home and then whatever data you had on the home that you had licensed if i understand correctly licensed a bunch of data yeah and uh it infuriated people because everybody believes that their house is worth 10 more than whatever the highest priced house that just sold is and so then they all went to you and said how dare you i'm going to sue you

SPEAKER_30: i'm upset my house is worth 67 000 more dollars than this and then all of a sudden they know zillow

SPEAKER_66: they've logged in and claimed their home yes yes i would say i wouldn't be quite so negative on it and say yeah there was some negativity to it but it was very provocative so we used yes we used ai to

SPEAKER_23: create the originals estimate long long ago yeah and we we figured oh we dropped this price on every house in the country we had updated every night and it would be provocative from uh look up your old girlfriends you know well you know from high school where she's living now what that house is worth we had a lot of that we had a lot of that's not right just like you said we had a lot of hey i'm actually looking for a home right now and i want to know what the hell that thing's worth and so it was this interesting intermingling of the the kind of titillating and the pragmatic which

SPEAKER_27: is a wonderful sweet spot to be if you're building consumer product if you can kind of if you can really get emotionally involved with your customer with the product but also be super pragmatic at the same time you're you're you're really digging in the right digging in the right spot in my opinion

David Friedberg: so there was some tension there just to unpack that because when you talk i mean i i've listened to

SPEAKER_21: three or four of your interviews in preparation for this and i i listened to it candidly i just

SPEAKER_74: respect you so much as an entrepreneur anytime i see like you're along with mark knoffler and like some other topics on my youtube you come up often so i see like nine-year-old interviews with you and girly or gerstner or whatever it's it's always great but i you gotta double click on that one

SPEAKER_21: there's some tension there yeah and that tension means attention and importance correct i like that

SPEAKER_77: i've never heard it put that way but exactly if there's no tension there's nothing interesting just

SPEAKER_78: like when you're telling a story there has to be tension and that tension has to be released and that's what a story is right did you ever study screenplay writing or think of being

SPEAKER_84: i didn't i i didn't but i really do love you know i love like you do i love i love movies and

SPEAKER_85: books so who's your favorite director coen brothers coen brothers dating myself but like

SPEAKER_23: raising arizona oh my god i used to drive i used to drive back and forth to college across the

SPEAKER_66: country i mean nick cage and holly hunter and john goodman it was you know it's brilliant every line is brilliant uh anyway and so many of the coen brothers movies are that way big lebowski i mean yeah like how many times can you watch big lebowski you know that's you know repeatability i think is

SPEAKER_30: such an important characteristic this is why really scott is i think my number one you know scorsese really scott yeah you know they always just clog up my top list and i i can watch gladiator or goodfellas

SPEAKER_12: any moment minute one minute 100 i'm watching till the end i can't get turned off can't change the

SPEAKER_66: channel do you know scott do you know ridley scott did the did the original mac ad for steve jobs

SPEAKER_23: i didn't know that i feel like it's worth it but in 1984 1984 will not be like 1984 that woman with the hammer throwing it through big brother on the screen it was like that was important to me i was watching it was in the super bowl it ran once that ad i think you're a little older than me you were

SPEAKER_30: born 1968 67 67 yeah okay so you're three years older than me so at that time when it came out in 84 you were 17 years old i was 14. yeah i had a pc junior what computer were you rocking at that time

SPEAKER_23: i i god i went through the trs what were you on there i went through the trs80 the commodore 64 and at the time i probably had an apple 2e and this this was the moment right uh the rise of ibm was

SPEAKER_52: biggest in the personal computer business and this basically was supposed to represent all the mindless drones uh watching big brothers big head on the screen representing ibm and this is apple steve jobs

SPEAKER_30: and the mac this woman this athletic woman who is breaking the spell look at that it's so subversive when you think about it you've got all these i mean on a gender basis i didn't even consider the

SPEAKER_00: fact just knowing this iconic commercial that it's a woman coming in a you know uh uh you know basically uh running like like an olympian yeah to knowing that she's outnumbered and she's just gonna blow up the screen with the man on it and all these drones it was so iconic and made you so enthused about the

SPEAKER_12: power of technology it was an inspiring call for our generation i believe the power to the people is

SPEAKER_23: kind of how i've retrofitted my whole company creation philosophy that technology empowers the

SPEAKER_52: regular person to take on the man and bust the old ways and like this is what this ad did for me and

SPEAKER_84: it has that very you brought up ridley scott it has that very blade runnery you know yes vibey dark

SPEAKER_113: apocalyptic you know thing well man against the machine right and then the same thing with gladiator etc so this tension also manifested itself in glass door hey what's it like to work at this place

SPEAKER_00: yeah rate your boss and how much are you getting paid uh it's a you know another example of there's going to be some people who are inspired and empowered by this data there's going to be a lot

SPEAKER_12: of tension as some people are going to want stuff fixed hey this was unfair but you cannot look away

SPEAKER_120: you must engage that's right that's right that was that was how and why we launched glass door we had

SPEAKER_23: kind of this you show me yours i'll show you mine give to get model for for salary so you can anonymously

SPEAKER_78: share your salary and if you do then you can see what everybody else is anonymized salaries are for this job

SPEAKER_23: and wow what a wonderful power to the people liberating data thing you know it kind of came from us printer accident i had i was running zillow at the time and i accidentally printed everybody's

SPEAKER_121: review and salary and and and raises out in the comma printer rather than my printer this is back when we

SPEAKER_27: actually had printers yes it nightmare luckily i caught it but actually it got me thinking thinking well what if everybody did see it yes well it ought to make sense right like everybody who saw

SPEAKER_23: that ought to go yeah well xyz should be making that much money and deserves that raise because of the work that person has been doing and it got me and my co-founder at glass door is bob homan who had worked with me at xpedia uh development manager it got us brainstorming on how we might build a product around that anyway it was the same provocation marketing very interesting data the data coming out of glass door the data coming out of zillow we realized with folks like amy butinski we could actually create a machine that kept pumping that day that data out through local newspapers and

SPEAKER_27: local publications on a daily basis and we would we would we found that especially for real estate information but also job information there was kind of an infinite news hole like you know newspapers and

SPEAKER_23: and media outlets would publish interesting stuff every day about real estate and jobs if they could and and and many of them do so we realized that we built an organization kind of bloomberg like to pump this data out into the world and that is how we earned our media amazing all right we all know

SPEAKER_126: the one thing that separates great startups from the good ones is product velocity what does it mean

SPEAKER_128: product velocity fancy term right here we got your product and your velocity speed the speed in which your product improves so can you ship updates can you release new features can you do bug fixes can you iterate on the interface can you solve problems for your customers and can you do it quickly because you're not alone you have competitors and your customers have choices they may fit solve their problems by writing their own custom code or they might use your solution this is what startups are about how fast can you get that product velocity going and so you know how are you how do you supercharge it everybody says okay yeah we want to go faster but you got to go faster intelligently and crowdbotics is going to help you do that they're your cto as a service basically they provide you with the most optimal architecture to get your product to market as fast as possible you'll have access to an on-demand product manager and developer talent and they will help get your app into production 10 times faster than conventional development crowdbotics can work with your in-house dev team or you can just have them work independently and you own all the ip you own all the source code let the folks at crowdbotics supercharge your product velocity today no more waiting get a free build plan at crowdbotics.com twist that's a 4.99 value just for the twist listeners you get that for free that's c-r-o-w-d-b-o-t-i-c-s dot com twist for a free build plan going back to zillow and your experience there

SPEAKER_62: the other thing that i think you're a master of is branding expedia zillow glassdoor all of them just

SPEAKER_00: incredibly well done i'm a uh branding aficionado myself i know how hard it is to name stuff take us through the naming of each of those companies and how you got there i know you know that this is

SPEAKER_19: something you're very passionate about and then you were and had an interview and you talked you

SPEAKER_00: said you had a whole theory about branding and the person was like that's great let me go to my next question and i like literally almost threw my phone against the wall because i was like he just told you

SPEAKER_74: he has a theory of branding the guys made three of the most iconic web properties or just properties companies and you literally let it go down the river and get lost forever so let's unpack this here okay

SPEAKER_00: rich barton's the theories on branding and creating iconic names go okay the title of the blog post is

SPEAKER_25: actually out there it's something like you know syllables and high point scrabble letters uh i do it's out there and back when you were already blogging a lot i tried to blog for a little while you know and you know how that goes for guys like me we do a few blog posts and we forget about it and it just sits

SPEAKER_23: there forever on the web so there is a there is a blog post that you guys can pull up and put in the show notes uh the website is called hopper and dropper.com that's a fly fishing term and there is a post in there on blogging there we go syllables scrabble scrabble letters and picking

SPEAKER_27: brand names here it is those of you are video are seeing it right now 2009 i wrote this love it this is

SPEAKER_30: after the great financial crisis so you're probably somewhere just absolutely licking your wounds wondering if it's the end of the world it was that was a big time i was running zillow yeah i was

SPEAKER_23: running zillow we we only we had to lay off 35 of the company after the you know it was a it was

SPEAKER_78: financial crisis yeah yeah the gfc happened in the real estate industry with mortgages right and we were

SPEAKER_142: like by the real estate industry let's be honest right by the real estate industry and then we were

SPEAKER_144: money losing pre-revenue oh my god that was a were you at the time no we were private but it was

SPEAKER_23: losing money really rough 150 people i think we had to lay off about 60 people it was it was rough

SPEAKER_11: that was one of the lower lower points yeah laying off people was that your first major layoff or had

SPEAKER_23: you done any of microsoft and xmedia i had you know i'd had experience with small scale ones but

SPEAKER_77: nothing like this uh your leg shake did you puke did you uh get the sweats i had to like i actually

SPEAKER_25: wrote about it jake i i had to journal on it to dump all the awful awful feelings i had get him out onto paper and talk to people about it because it did rile me up i have to say you know i've had to do it since then and like it or not we do get desensitized to it um i'm very i really really believe you have to treat people with humanity on the way in and the way out and you want to leave the door wide open because a lot of times they come back when you do yeah and when we did have a lot of boomerangs you know that's what i call the people that come back those are those are the very

SPEAKER_151: best employees of the boomerangs by the way well and it also is indicative of great management i've

SPEAKER_62: had a number of them as well and the conversation is always very encouraging which is i've i frequently

SPEAKER_116: have people say you know i i really we had our battles but i really enjoyed working with you

SPEAKER_19: there was just something about the energy and the dynamic then you know the dynamic nature of it uh would love to work with you again i think that's like people don't know how good they had it you know on both sides you have some employees you don't appreciate when they're working for you and their

SPEAKER_35: employees who don't appreciate you they get some great job offer and then they just come back 18 months later and like you know what this is home this is better right that's a song sometimes you

SPEAKER_155: gotta break up before you know you're in love right and then that that that happens a lot why do you

SPEAKER_35: think first time founders yeah take it so hard that you got a journal talk to a therapist whatever get some counseling over it just that it just hits you like a ton of bricks what what what was on that

SPEAKER_23: paper that you wrote a because we're human um you know and uh we care and we care about people more than we care about anything else and we care about socializing and our friends and support and giving more than we care about anything else most of us yeah and so it hurts and i and i also think we get this especially when we're young in our careers we get a little bit confused about our jobs and our

SPEAKER_78: families our co-workers and our families and it feel a lot of young startups that i've been a part of that you've been a part of i'm sure they do it does feel like a family yes and breaking up with your family

SPEAKER_25: is kind of the worst thing you can imagine right and so that's what it feels like as you get later

SPEAKER_23: in your career you come to realize that your work is actually not your family that's not to say it doesn't have humanity in society it does but it is more like a professional sports team than it is a family or it should be okay and and we are here to do a job and play a game and win the game mm-hmm and we want the very best players in each position because if we have a weak point guard we're not going to be able to score you know and so i don't want to take that too far if you take that to an extreme you get to read hastings at netflix you know he really really that's his that's his theory of

SPEAKER_00: hr and you know an interesting theory created a high performance culture but uh anybody who's in our industry knows at the end of the year you got netflix people who have to basically reapply for their job in january and if you've got kids if you've got friendship at work if you've got mortgage payments that's rattling and people want safety and i think he created an unsafe environment which is appealing to certain groups of people but it might be a little too cutthroat i wonder if he still holds

SPEAKER_173: that opinion now that they're successful at scale i don't know i well he does i've been i've been on

SPEAKER_23: that board for 21 years and still i am actually so i'll give you a little context oh i didn't realize

SPEAKER_155: you were on the board yeah yeah i've been on the board since it was private jason so uh but um

SPEAKER_179: incredible company um and i've learned i'm sure learned learned learned a ton and and you know i love

SPEAKER_23: it when people do things in extreme interesting and novel ways because then it begins to make you test all of your theories right and and anyway so reed has done that for me uh i'd say more than any other person um but he is now executive chairman he is no longer ceo the company is a lot bigger and the company operates in a highly creative enterprise where where the most important thing they're doing is actually creating stories and content with creative people right and so of course cultures evolve i would say the foundations of reed's performance oriented culture are there um but it is evolved it is absolutely evolving evolving well yeah yeah back to branding okay by the

SPEAKER_19: way i love the i love i love the sports team analogy i think because i was just again one of the things that

SPEAKER_11: comes up a lot is i um i watched the uh what's what's the movie based on the michael lewis book on

SPEAKER_62: baseball uh money ball money ball so i just got the money ball where um philip seymour hoffman rest in

SPEAKER_188: peace i mean what an actor oh my god is uh he gets into an argument with brad uh uh yeah he's like

SPEAKER_189: yeah you're not playing him on first base he's like oh i'm playing him the roster's mine he's like nope

SPEAKER_74: you're not playing him tonight he's like you're i am playing him and that's that and he's like you're

SPEAKER_193: not playing him because he doesn't work for our team anymore and he's trading him and he's just like

SPEAKER_115: you're killing me and it's just such a great scene but it's very hard sometimes to to make those decisions hey the team started and what got us here is not going to get us there you know this this player you know you see it all the time in product and finance and sales an organization gets to a certain scale that person just can't level up

SPEAKER_18: and they don't want to they're zero to one they're not you know one to a thousand in terms of employees

SPEAKER_23: right most of those conversations founders dread having that conversation but in my experience it's liberating for the folk the people you're having the conversation with as well it really it really is because everybody wants to you know achieve their highest and best use and really wants to contribute in a way that everybody believes they're contributing as well and getting the right people in the right places and letting them thrive that's just that's that's fantastic um anyway so back to

SPEAKER_179: the branding so back to branding yeah back to branding otherwise we risk burying that one again it's a

SPEAKER_65: fun it's a it's a fun blog post check it out if you're if you're from the from the from the show notes

SPEAKER_23: but basically i believe um first of all fundamentally i believe making up words um if you're building a consumer brand especially okay a little bit different for b2b some of the same principles hold though if you're building a consumer brand making up a new word is better than taking on a pre-existing word okay okay zappos is better than sneakers.com got it okay and the reason is but

SPEAKER_203: those of you out there are saying are saying oh but sneakers.com is going to get seo uh right away yeah so i don't need to work very hard and zappos who the hell knows what zappos means i'm

SPEAKER_23: gonna have to like tell people what zappos means okay that's absolutely right so making up a word is

SPEAKER_27: harder initially and more expensive initially but when you are successful making up a word you own the word you have defined the word you have filled that were word with the emotions that you want to

SPEAKER_23: have it filled with that come from your product and then that word if it if you get lucky enough to

SPEAKER_27: get something like like zillow uh you get you you've added to the vocabulary of humanity yes okay uber

SPEAKER_52: airbnb so many great examples yeah so many great examples okay so so i really like the harder route

SPEAKER_23: which is make up a word and then own word whereas if you you were sneakers.com you get really big

SPEAKER_27: you know it just there's no connectivity sneaker means something to people already all right amazon is an interesting counter example that existed already and had meaning but bezos took that word

SPEAKER_212: and completely redefined it yes i was about to bring that up like calm.com yeah is another example we're investors in that one but it's a meditation app it's an existing word it's a four-letter word it's in the

SPEAKER_19: dictionary it's evocative but meditation is not necessarily calm it's an output of calm uber exists as a word you know the top thing yeah but again you know and i think airbnb i remember talking to the founders early on they were considering just calling it air uh and i had this like big branding

SPEAKER_01: conversation with them and i love the concept of air uh and i i was like you should maybe do that

SPEAKER_215: i don't know you like airbnb or air i like airbnb way better because it's there like airbnb better okay

SPEAKER_23: yeah i don't like it syllables let's get to syllables okay syllables so i like making up words then once i once you make you decide you're going to make up a word here are things that i like i like high point scrabble letters okay what are those q z's x q's right they're high point for a reason why

SPEAKER_38: are they high point they don't exist there aren't that many words with them they're rare bingo they're

SPEAKER_27: rare okay so rare letters are memorable interesting rare letters jump off the page subconsciously if you could look at a screen of text the z's and the q's and the x's you see them you're the back

SPEAKER_66: of your that you you see them in your field of vision and you're processing them because they're

SPEAKER_23: rare everything else is that's not rare so i like high point scrabble letters clearly elon musk does too

SPEAKER_66: x.com yeah x x x x x x x uh i do like x's um uh xpedia okay so you like high point scrabble letters

SPEAKER_23: okay second thing i learned i made a little bit of a mistake with xpedia xpd uh xpd four syllables

David Friedberg: too many two too many many one too many two too many two too many two too many two is the right number

SPEAKER_228: two is the right number i think two is the right number two is the right number i think google yahoo

SPEAKER_233: facebook yep airbnb too many too many but still a good one because it's not bad yeah yeah amazon

SPEAKER_127: amazon one too many one okay though okay yeah so it doesn't have to take all the boxes i mean it's a

SPEAKER_236: framework it's a framework are you still using your personal phone number for your startup it's 2023

SPEAKER_00: it's time to stop it is a huge mistake that founders make why you're just getting started with your company and you don't think about phone numbers as being an important part of the ip collection of your startup with open phone you can totally solve this problem they've rethought everything about a modern business phone and how it should work it's super easy you just download the app on your phone or your desktop and you pick a number and you're done and you do it for just such a low price it's so affordable and think about it if you have your sales team using their personal phone numbers a sales person leaves and goes to a competitor you don't have any insight into what phone calls occurred what people's phone numbers are that's your company's database and if you allow the sales team to run them up or the customer support team it's just unprofessional be professional use open phone and we use it for things like event communication so we get one phone number but it can go to multiple people like a round robin thing we have a shared phone number do that for customer support and open phone is rated number one on g2 for customer satisfaction and you know i trust g2's ratings open phone it's ready it's affordable starts at just 13 bucks a month but twist listeners can get 20 off any plan for the first six months at openphone.com twist and if you have existing numbers with another service no problem easy peasy lemon squeezy open phone will port them over at no cost head to openphone.com twist to start your free trial and get 20 off

SPEAKER_23: and then one other i like maybe it's in the blog post but um i like it if it would make a good dog's name oh uh uh interesting dogs dogs names are dogs names because they're memorable and people responding dogs respond to them which means something in our brains responds to them fascinating verbs if you

SPEAKER_66: can turn the word into a verb you know you've made it as a consumer brand when you become a verb or

SPEAKER_23: i'm googling something when you zillowing something yes lawyers the lawyers will tell you oh don't never never let your brand name be used as a verb because you're going to dilute your brand you know

SPEAKER_25: sensibility whatever i'm like no don't listen to that go every conversation i have with lawyers about

SPEAKER_247: intellectual property fair use trademarks and copyrights is so fear-based yes it's the worst

SPEAKER_12: advice collectively the ip industrial complex gives fear-based advice yeah and it has no practicality like they told you probably do not do this estimate you're going to get sued i mean what was the

SPEAKER_00: the glass door i mean you you ask an attorney to evaluate the zestimate or glass door ratings they're going to give you every reason not to do it yeah don't do it at all yeah don't do it don't do it

SPEAKER_23: founding of youtube don't do it founding of uber don't do it don't do it okay so so look i i believe that you can't be a successful start very hard to be a successful startup or a company without amazing attorneys i have high high high high respect i do believe that something that lots of organizations

SPEAKER_27: especially startups a trap they do fall into is that the attorneys are so well educated so smart so articulate they command the space so well yes people kind of get get get confused about who's working

SPEAKER_19: for who exactly this is exactly what happens when i have conversation with david sachs on all in he's an attorney people are like oh wow yeah no trump's not guilty i'm like are you sure are you like

SPEAKER_57: really i have no attorney but the hard way the woes of like trying to debate a debate champion i that that's what it feels like yeah it does you can't debate you can't it's such a good point you have to

SPEAKER_00: be able to say to an attorney what what do you say to an attorney when they're overpowering the room saying hey here's all the reasons that you're bending the rules and here's all the reasons you're going to get legal letters and sued how do you over your career how did you get more confident in in managing attorneys who are trying to do the right thing but they don't want to get fired when you get

SPEAKER_78: sued so they always take the the most conservative path i guess the advice i'd give is to is to to find attorneys to work at your company and to work outside your company who really are business people okay they're they're business peoples and attorneys together god they're not just attorneys

SPEAKER_27: and when you when you when you find one and there are a lot of good ones who are business people you basically partner with the attorney to make a business decision of which the legal advice is one component okay and and trying to really assess the amount of risk and how much risk are you the

SPEAKER_23: entrepreneur or the business person willing to take from a legal perspective some of the great companies have been created in that that kind of okay it's not without risk but we're going to plow ahead and do it because you know what it's the right thing to do it's what consumers want and at the end of the day i'm psyched about standing in any courtroom and wrapping myself in the consumer flag saying i did the right thing i let the sun shine in and gave power to the people this is i think such an instructive

SPEAKER_212: point because watching what uber and airbnb did close up investor in one and just you know knowing the

SPEAKER_115: other pretty well and even doordash and postmates you know a lot of what they provided to the world

SPEAKER_19: was not already defined by the rule book and when you looked at when they did stuff to your point power

SPEAKER_30: to the people if somebody is using an airbnb doordash or uber that is very empowering if you live in brooklyn and you couldn't get a cab if you're living in arizona and you're a retiree and you have no income and you can rent out your guest house like this empowered people in a major way so when they did

SPEAKER_38: get resistance they had an army of advocates who would say yeah we want airbnb we want uber we want

SPEAKER_78: doordash we want postmates and so ultimately we'll win even though the regulations are set up to protect

SPEAKER_23: the folks who are doing it the way it's done right now be it the taxi commission yeah in new york city whatever neighborhood regs versus airbnb you know we had our own with early's estimate we had serious problems with the industry didn't want us in and they were trying to use the regulations to get us basically illegalized and kicked out of the industry and we had i remember an amazing thing happened in arizona where it got to arizona congress was debating this the the real estate lobby had brought all this pressure to bear and we had all these arizona congress people get up and say you got to be kidding i love zillow zillow is fantastic it's helping me go away and it just

SPEAKER_27: went away but anyway i i'm not encouraging everybody to go break break all the rules you gotta pick the

SPEAKER_23: rules pick the rules that you want to break based on what is the right thing for the consumer so a noble

SPEAKER_115: you know recontextualizing uh i'll use that framing of existing laws noble and i think this is where crypto um you know was so promising at the start but i found so abhorrent you know when all the hucksters

SPEAKER_19: came in they pitched it originally as this is going to empower people hey you're not going to be controlled by fiat currency you're not gonna have to pay all these fees and then i was like oh you're just sweeping all this cash off the table selling worthless tokens that don't solve any problem in the world and so this whole moral high ground that they had staked they never delivered on they never

SPEAKER_21: empowered anybody to understand the price of their home or get a better deal on a home or get a taxi in

SPEAKER_23: brooklyn yeah yeah i think i mean if there's a buck to be made it's going to be made and then there there was there was a lot of that there was a lot of that there i still hold out a lot of optimism around what emerges from the the crypto booyah bays that actually is a value and i think we'll probably begin to see that what do you think is the valuable part of it what intrigues you about it i mean i really do believe that having a digital store of value and a cross-border you know meta currency

SPEAKER_226: that concept is a very powerful and strong one and it clearly is useful and you know because of that i

SPEAKER_23: think we're going to continue to see a lot of innovation here i i'm i'm really kind of confused though i mean we're in a little bit of a resurgence of meme stocks and resurgence of of of trash right

SPEAKER_27: now and yeah and i'm just like in what world and what economy is this is this being supported i i it's confusing to me that we're seeing that and a little bit distressing but i think i i guess i write it off

SPEAKER_00: simply as people like to play games you know i you literally finished my thought in my brain i'm like i think there's a group of people who find going to a subreddit debating a meme stock and trying to cause a squeeze or just getting in a battle with some big hedge fund it's it's entertainment and then i think also buying crypto is entertainment for people so it's like sports betting if you and you and i are looking at it as investment and securities and structures and alignment and that makes it perplexing just like some people will look at a professional poker player and be like

SPEAKER_19: that's they're they're playing a game for a living i don't understand and it's like no they have a strategy here they're making a million dollars a year playing poker it's actually you could do it

SPEAKER_283: you can do both things right yeah all right you know i've been on a health kick over the past year

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SPEAKER_18: the industry you chose you know travel there were incumbents and hr there's incumbents for glassdoor

SPEAKER_00: but that's nothing compared to real estate real estate's a cartel so much so that there are lawsuits uh trying to crack this like six percent three on each side you know um there's like these real estate

SPEAKER_115: exchanges that own the data when you came into the industry there was i mean anybody who comes in and

SPEAKER_19: tries to innovate in that industry is um attacked so maybe take me through the arc of zillow and how they tried to stop you along the way and then how they how you converted that to support or is it still

SPEAKER_121: like a standoff how did they yeah all right let me that's a great question yeah jacal great question

SPEAKER_23: um and let me start out by saying before i i rewind into the history and say this assumption by smart tech and business types like like the two of us yeah um that it's some cartel that needs to be cracked and we're just the only guys that can do it that is a a pretty commonly held belief by folks like us and i would say it was one of the inspirations for me honestly getting into it because it felt very very right very power to the people turn on the lights um i've been in the industry now 17 or 18 years with zillow and i will tell you that our real estate industry here in the us is by far the cleanest most liquid game in the world most most real estate markets around the world have almost zero transparency no clearing no clearing house marketplace where you can actually see all the inventory um not a lot of places have buyers representation so i guess i would say you've learned to appreciate it i've learned to appreciate it and understand of course there are there are lots of pockets of information to be liberated and lots of efficiencies to be gained and a lot of ways we can make the interactions between buyer seller and our partners better tons and tons and that is the space we live in but i didn't want to just let you let you throw out the it's a cartel but well here's yeah

SPEAKER_18: tell me like how did they try to stop you how did how did you make them you know peace with them or you

SPEAKER_23: know and any yeah any industry that's been around for a long time wants to hold on to the marketplace

SPEAKER_27: information okay you can pick your industry name your industry and you find a set of of of of legacy players who have a control of the marketplace information and and they don't want to release that uh for for obvious reasons but gravity tech internet smartphone says there's no way you can hold on to that information that information does eventually want to be free and and the the opportunity we saw was zillow was being able to kind of tear down that wall liberate that information add a bunch new more more information onto it and create a much brighter lit better operating marketplace that is what that is what drew us to it um i would tell you that because of expedia the travel industry really didn't like us and i have had a lot of experience with the let's call it the supply side of the marketplaces that i've been building not wanting me to be there okay and actively disliking it disliking what i was doing but i always felt i i'm holding my hands up here i've got

SPEAKER_23: the supply side of the the marketplace egg here's the marketplace the supply side on one side and the demand side on the other so consumers over here on the other side um i've always felt that it's most

SPEAKER_27: important to engage the demand side and that nobody on the supply side is going to show up unless you have you're doing real magic tricks for the folks on the on the demand side and no one's even going to take your calls and care that you exist unless you have the demand side but if you do in fact show up with the demand side and you have engagement with the demand side of the marketplace eventually the supply side is going to come around to dealing with you that's kind of been been my philosophy of course both sides of the marketplace matter hugely to make a marketplace you can't have it without both sides but i've always believed that if a product manager is working on features and is trying to decide

SPEAKER_23: should i do the right thing for the consumer or do the right thing for the supplier well number one is the consumer number two is the supplier that's what i thought of course if you don't have happy

SPEAKER_115: consumers who like your mousetrap you have nothing and i i got to see this up close in person but some people believe the supply side is the hard part of a marketplace um so what what what do they why do

SPEAKER_19: people fall for that fallacy that oh if i just had the supply then everything would work out

SPEAKER_23: you know i think we could probably pick examples where that has been true especially for um highly concentrated supply side industries which there are plenty of where you don't have too many competitors there's there's there's airlines would fall into that there you go high degree of control yeah um yeah and so however if it is if it is highly fragmented supply side hotels hotels is perfect then then um and you have a lot of choice so it's it's to a certain extent somewhat commoditized in that it's replaceable uh or interchangeable or you're able you'll you're able to steer traffic one way or another then you actually begin to uh focus more on the customer side in any marketplace you have to have both i don't want to say that you know you really have to have both

SPEAKER_27: and and by the way it could be a fantastic consumer experience to have exclusive supply okay you can only find stranger things on netflix that is a really good consumer experience okay yes so it's i i'm nuancing a bit what i said yeah but in general i believe i believe at least in the

SPEAKER_23: companies that i love and that i've been a part of uh that the consumer is your north star yeah that is

SPEAKER_27: that is what we should and and by the way that's the most fun to me anyway so yeah i mean if you

SPEAKER_212: can delight a consumer uh you're going to have them use the product again and using the product again or telling your friend about the product and why you love it are the two most powerful things in

SPEAKER_219: consumer land would you say absolutely absolutely yeah we we were working on word of mouth stuff

SPEAKER_78: before there was social media before there was smartphone you know yeah um zillow the zestimate

SPEAKER_27: predated the smartphone yeah okay and predated social media there was no social media uh at

SPEAKER_83: that point and so word of mouth was like standing on the on the sidelines of this like the kids soccer game and talking to each other it was oh we call it over the shoulder uh david sax came up with that

SPEAKER_212: one uh two sax references one episode but he was talking about uber and we i had invested in and then he invested in a later round and we were talking about and he said this thing is so viral i'm like

SPEAKER_19: how is it viral the the give to get like the 25 she's like no when when i order an uber and i take somebody they ask me if i have a driver and i say no i have uber and then they say what's uber and then i take out my phone and i show them to them and i was like ah it's like over the shoulder and he's like yeah it's like over the shoulder virality yeah i'm like um we've all had that moment where

SPEAKER_18: somebody takes out a phone and does something magical on their phone and you're like what did you how did you do perform alchemy and magic wait show me that show me that what is that and it's like

SPEAKER_113: apps or spells right just like here's something amazing um be a wizard i love i love that analogy be a wizard yeah well i mean if you can conjure up something that delights a consumer that is magic right and it just it's so rare that you know it when you see it right you just yeah it is then you

SPEAKER_23: gotta think what does it take to make magic and you really have to find magicians and it's something that i you know i was i was kind of i grew up at microsoft in the in the uh early 90s uh right out of right out of college and there weren't what was your first job there i was product

SPEAKER_325: manager of ms dos five really not many of your not many of you i mean i was on ms dos but i think i

SPEAKER_19: went to windows runtime 3.0 and and then dos 5.0 still exists that was like parallel we did it was

SPEAKER_197: parallel for a while you had to actually put the windows you had to put windows on top of dos yeah

SPEAKER_23: exactly yeah and dos five dos five was the first time we did a retail upgrade of the os until then you had to basically wipe everything off your computer and then install the new operating system and then rebuild all your apps and all your data and everything right and so the idea with dos five

SPEAKER_333: was bill gates's idea was hey could we like write a little program that lifted up all your apps and data swapped out the os and then set them back down and you're like that's insane and now we have

SPEAKER_123: over the air updates and they occur without us even knowing what was insane about that was the software

SPEAKER_27: was sold in packages then we didn't have the internet right so so it was the most popular software uh skew sold of all time by a factor of 10. dos and windows the dos five upgrade literally egghead we did a midnight mad egghead did a midnight madness sale we had people camped out to get them waiting

SPEAKER_212: to get the dos five upgrade and it was like there were like five bullet points on the back and people

SPEAKER_19: forget this but the way you um interacted with software was you went to comp usa or fries or whatever store and um there were like vhs tapes a blockbuster package you could you could go buy netscape you would go buy a browser for 99 you go buy a video game you'll go buy the operating system when the operating systems came out it was a bfd it was a big deal in nerdland oh yeah um so you were going to say about what you learned at microsoft that was an interesting time the 90s was when they were

SPEAKER_35: firing on all cylinders and they were about to peak and get their knuckles wrapped by the antitrust

SPEAKER_23: department which would be a great jumping off point for a lot of discussion what was what was amazing to me at that i had studied engineering in college but i wasn't practicing engineering at at microsoft but i was dangerous enough that i could hang with those folks right and it totally felt like we knew magic we were wizards and the rest of the world was full of muggles and yeah you know um let's make some spells and change the world i mean it was really a magical a magical time and honestly i feel that way today there are a lot more people that are involved in tech now and a lot more engineers and a lot more product people and designers and marketers that are that are that are so fantastic but in general it's still a pretty small segment of really special creators of products okay of technology products and if you can if you can find those people i'm talking to the folks out there just find those

David Friedberg: people and take any job you can get to hang around with those people uh and what are the what are those

SPEAKER_115: people have in common if we look at the people who have that alchemy that ability to cast a spell but what are the attributes you see obviously gates and jobs elon you know um jack you know doing square

SPEAKER_62: and twitter i mean there's there's a lot of interesting people in that i wouldn't put zuckerberg in there because he just copied everybody's stuff i would put evan spiegel in there for sure uh you got to put reid hastings in there uh yeah what what are those people all have in common the

SPEAKER_354: conjurers you know i was i was just listening to the names as you were throwing them out um because i

SPEAKER_78: didn't really i don't really have a pad answer to your question so i was looking for patterns and i i guess i would say uh i was i was steeped in that environment on microsoft so i absorbed it by osmosis but i guess

SPEAKER_27: listening to that list i would say it's the people who love products and you know the people who love

SPEAKER_23: products because as they move through the the physical world or the virtual world with you and you watch them they are continually frustrated by bad products and bad design you know like crestron home

SPEAKER_52: interfaces for managing your lights and music okay like like questron oh i hate to say this but these

SPEAKER_27: big soft controls in the cars now with these giant screens look god the knob worked better okay it was better my light switch works better than this panel of you know and seven clicks to get to something

SPEAKER_78: right okay so you know those people in your life and maybe you're one of those people okay but and in

SPEAKER_23: fact i think those are the people that you want to hang around with yeah those are the people you want to those people are the ones who are going to invent the future breakthrough products i think

SPEAKER_62: you know one thing i think with those folks you know investing in them for a living now is they're very

SPEAKER_21: um what's the word when i don't say cantankerous but they're very annoyed when things

SPEAKER_12: should work better and they don't they're uh what's the word they're not insufferable but they're

SPEAKER_364: in they're not they're intolerant of product yep and they're frustrated and they're tenacious

SPEAKER_23: and they're tenacious and they're critical and sometimes they're not um um the most tactful in

SPEAKER_116: their sharing of feedback gates was the penultimate i mean and and he yeah or the ultimate i mean he was known for savaging people tell me about gates in that period because he was at the height of his powers in the 90s yeah when i started 90 percent of desktops were microsoft's at the time to

SPEAKER_23: give people context yeah when i started at microsoft in 91 we had maybe 3 000 people at the company so and not small but certainly not big barely barely medium medium sized and and bill gates at that time was uh uh the company was still on the scale where he knew everything about every product company and was running product reviews continuously through his conference room uh and so every product team at the company would cycle through every six months every six to 12 months and you know present what they were working on the progress they were making etc and it was mostly kind of product management engineering little program management you know not a lot of sales and marketing but sometimes sometimes and you know bill had a reputation kind of earned reputation for being incredibly difficult just steve jobs had the same kind of reputation as well for just being incredibly critical and difficult and hard uh on folks i learned a lot about how great product people think but i also learned a lot at the time about how how how i deliberately tried to create cultures that were able to be critical but also simultaneously respectful and i would say bill gates has learned that uh in his in his lifetime as

SPEAKER_18: well so why do you think at that period of time the you know let's say no a-hole rule didn't really exist

SPEAKER_00: and it was actually a bit more of a pirate ship and you could kind of get away with that or that was the culture which was i don't care if you're gonna cry and if i can make you cry when i give you this

SPEAKER_12: feedback great because i need to get you the off the ship because there can be no cry babies here and if you don't want to come in and work this weekend 12 hours to fix this i'm you're walking the plank

SPEAKER_116: that was to give people historical culture the 80s and 90s tech was pirate ships fighting in the open ocean and if you were on that ship and you complained you walked the plank period full stop correct

SPEAKER_40: it was pretty rough you know it was a culture that you and i probably were well suited let's say that

SPEAKER_379: okay but why was it like that and what was it it was it was a bunch of dudes it was a bunch of young

SPEAKER_27: dudes yes okay so it's really smart 20 we're all we you know bill was 18 when he started microsoft okay people forget my co my co-founder at zillow lloyd frank started working for microsoft at the age of 14 years old when there were 22 people because he went to the same high school bill gates went to four and his mom his mom and bill gates mom were friends and they they were at some school function in seattle and and and and you know bill's mom said to lloyd's mom my son's really into computers and

SPEAKER_40: lloyd's mom said so is mine like we should get them together anyway it was a bunch of dudes uh and they

SPEAKER_23: were young and they were smart and that particular mix of folks created the this pirate culture that that you're that you're talking about of course that culture grew up those people grew up and you know we've recognized that to harness the maximum amount of power we can in this space being way more inclusive about the the group of creators that we bring into the space meant that there had to be a different culture and so we have all maybe not all you know there may be some organizations that still

SPEAKER_384: operate this way but not mine yeah you know so and do you think the culture got too soft

SPEAKER_19: during the google you know we're going to do your dry cleaning and here's your infinity pool and hey 20 of the time do whatever you want or if you want to do nothing and just hang out on the roof and rest

SPEAKER_184: invest at hooli you can and then we're now cleaning a bit of that up so do we pendulum go too far the

SPEAKER_23: other way and entitle create a little bit of entitlement culture i mean i i think broadly speaking in you know in the industry i think it's a it's a it's a keen observation uh it's not how i've thought about my companies though jcal i i i i do believe that that culture is a symptom of simply not having

SPEAKER_83: really cool important stuff to work on ah like it's too much success on the original idea maybe

SPEAKER_27: maybe too much success or just like you're not now doing cool things that that that fire you up i i believe when you're on a mission to build something amazing and you're making progress and you're working with your team i i believe what people really want is to work on cool stuff with great

SPEAKER_115: people and win that's what i think and winning does change everything i mean even if the culture is a little bit off if you win people are like we you know yeah draymond punched somebody but we won

SPEAKER_00: right so if they won this year and draymond punched somebody who cares it's only like you know when you

SPEAKER_19: don't win and it the things were chaotic that you're like ah maybe we need to evaluate here how do what is the culture you try to breed knowing what you know about entitlement culture you know on one side and then pirate culture maybe being uh a little too rough and tumble for you know today's

SPEAKER_62: environment where did you what culture did you define for your companies i would do a third put a

SPEAKER_23: third leg on that that triangle and and and basically say oh look have a real kind of mission driven company that's building something that matters to people that we can talk to our moms and sisters and brothers about and when and so's uh about and that gets them really fired up have it be some i have a goal that is a big hairy audacious goal that seems super important you know to to people uh and then assemble a really diverse team of adventurers to go summit that particular mountain you know that's mount rainier in in seattle you know in fact probably it's over my shoulder on my background yeah this is my actual office so it's a virtual version because i'm on the i'm on the road uh uh but uh uh you know rainier is the destination we want to stand on top of rainier that's what we want to do let's go do that yes and and in order to get there and make it through the storm and the hail and that lightning and the river we got across to get to the base of the mountain and and whatever we have to have a really great team that respects each other and respects every component of it not just not just the leader you know not just the engineer you know not just the storyteller like we need we need everybody we need the whole wheel and all the spokes tightened to make the wheel roll and so yeah the

SPEAKER_27: kind of culture that i like is a culture of respect and inclusivity but hardcore adventure is you know

SPEAKER_18: trying to summit the mountain yeah and the purpose that makes everything kind of lock into place because people understand hey this is the mission and then you know here's our strategies here's our tactics

SPEAKER_113: whatever you know you can get granular on it but at least if everybody knows the mission of where you're headed it gets easier yeah yeah it gets easier and you get through the dark times because

SPEAKER_78: there are times when you can't see the mountain and you know if you don't really have a clear picture

SPEAKER_23: of where of where the mountain is what it's going to feel like to be there then you get lost in the dark right you get you get lost in the storm so um that's what leadership you know that's what leadership is and for the leaders out there you know painting a picture of the the wonderful future and the destination and and communicating that in a compelling way that gets your people fired up that's what serves you in recruiting that's what serves you in building great products that's what serves you well in in signing up uh partners and suppliers uh that's what gets you there you know

SPEAKER_115: this uh coveted thing was quite an interesting catalyst and also um you know headwind for

SPEAKER_62: different businesses airbnb i had brian chesky and joe jebbia on recent this year and uh they both said this is like you know crucible moment as rule off both who would say from sequoil crucible moment

SPEAKER_406: for the company and there's a bit of a crucible moment for you as well uh at zillow um this co

SPEAKER_212: covid sorry i got distracted yeah covid yes and that moment in time and then everybody going remote this had massive impact on your running of the business some of the business lines you were in like uh flipping homes or being an eye buyer i think is the term you use for it in your industry

SPEAKER_19: and then you know brokers not being able to show houses i mean talk about the chaos of the last three or four years and this work from home trend which impacts your business because everybody wants to buy a bigger home but also impacts your ability to run a company so walk me through like the last couple of years and coming out of this covid shock to the system because i don't think we ever experienced

SPEAKER_00: anything like a great financial crisis felt like a cakewalk compared to this in some ways i think

SPEAKER_27: it's been the most important and interesting and complicated and fraught and and quite actually

SPEAKER_23: wonderful in a way you know it's weird weirdly experience in our in my lifetime you know in my

SPEAKER_305: business lifetime my personal lifetime everything it will be the thing that defines our generation i

SPEAKER_19: think this is we're going to be i thought it would be 9 11. yeah i think it's covid because 9 11 was

SPEAKER_417: you know contained in in some places but so yeah so so all the trends all the trends that you oh yeah

SPEAKER_23: all the trends that you talked about you know dead bang on i mean i think it's trite to say at the time but you know it's trite to say now but really covid what it did was accelerate by n years five years or more a lot of the kind of pre-existing trends and name your industry name your political movement name your whatever and covid had a way of just breaking through a lot of the legacy crap that was holding back progress on these trends yeah okay uh um and in that way it's like one of the most innovative times we've seen right you know we all used we had zoom at the company we had slack at the company but they weren't very well used right and then all of a sudden bang they became the two most important things uh happening happening at the company everybody's got a podcast studio now in their house or office

SPEAKER_18: right they got a professional mic and a great camera and lighting uh we already we already were

SPEAKER_27: tending towards more hybrid work and much more nomadic nomadic work and boom this like blasted that

SPEAKER_381: one yeah out of the out of the field we already yeah we already were moving towards telemedicine we're already moving towards digital document digital routing of mortgage documents but we hadn't gotten

SPEAKER_27: there but boom now we got to because we can't be okay so so you know all of these pre-existing things just

SPEAKER_23: got blasted blasted forward um it was a huge uh initially in the real estate market it was a huge wind at the back uh for transactions because everybody wanted to move and so we saw a huge amount of demand pick up to move uh and so zillow as a business experience this incredible you know it wasn't quite like zoom and peloton uh but it was kind of you know in that uh in that same vein because so many people wanted to move and and then of course you do you know we we get the rebound from that and we're seeing that interestingly if you looked at the plot of zillow unique users on google trends or something over that time you wouldn't actually see too much um which is sort of interesting but it did change the behavior of moving itself it kind of front-loaded some transactions and now we're dealing we're dealing with the with the echo another aspect of it was you know this well but capital was free i mean you know yeah interest rates were basically zero and you know capital startups were and big companies alike were swimming in capital and so we had yeah we had unlike anything we've seen you know we thought we saw it in 99 we thought we saw the the the most euphoria you could possibly see and that was nothing compared to what we saw in the zero interest rate period right people

SPEAKER_212: would just offer you they would come to a company like yours and say hey here's money how can you put it to use whereas you have money to put in your bank account and you can pay us back at two percent

SPEAKER_19: or even personally they're just oh you have a bunch of stock here here's some line of credit that is unbelievably low and people are like yeah i should just buy the stock market with this and yeah i mean people got themselves in trouble with leverage but right so crazy so a bunch of a bunch of new

SPEAKER_23: businesses emerged where capital availability was the the defining competitive characteristic right so you know the ability to raise an infinite amount of money at a very cheap price hatched uh new business ideas as a result and so we saw a lot of that in in in the market and one of those ideas was kind of trying to flip homes at scale uh and provide a more efficient um uh mo marketplace this i buy the i buying concept pioneered by open door who's a partner of ours now and at zillow this was this was one of the things we're like all right well we can raise the

SPEAKER_78: capital too this might be super important consumers seem to really like it if we can get it to big

SPEAKER_21: scale we should give it a shot what the concept of i buying is what was the thing that attracted you to it what was the thing that made it appealing to people just a less hassle and moving like you

SPEAKER_23: know it's very it's very hard to coordinate the buy and the sell when you're moving uh from one house to the other if you're a first-time buyer this is not no problem okay other than affordability but uh if you're selling a house and buying a new house the problem of managing all the logistics between those two things and not being able to carry two mortgages it makes it difficult and so if there is a market maker that sits in the middle that could temporarily own the house fix it up and then sell it and you could you could get your money and then get onto your next house well that that makes a that that is has some consumer appeal to it um the problem we encountered however was that prices turned in covet especially prices turned out to be way more volatile than we ever anticipated they could be which made the calculation for market making and holding inventory become much more dangerous and risky and so you know we tried it for a while decided yeah we're software people we're not big capital big balance sheet people we're going to stop doing that and we're going to partner with

SPEAKER_27: the innovator in the space open door to do it and that's that's working on your is that what you did

SPEAKER_212: you did a deal to give them your inventory to kind of uh work it out as it were no we didn't we didn't

SPEAKER_27: uh we didn't do the inventory deal with them we simply did a a partnership with them on a go forward

SPEAKER_23: basis we got we had no problem we we made this call in november of 2021 so before the interest rate thing happened i just got nervous uh and so before interest rates went up and made everything look horrible in the whole world we were in and houses it was super easy to sell a house we were able to unload all of our inventory before before this i took a lot of crap i took a lot of crap for this at the

SPEAKER_51: time you know from my people too and involved a lot of layoffs and it was rough um but we as a

SPEAKER_23: leadership team looked pretty smart pretty shortly after that uh because we had we had gotten out of

SPEAKER_19: the business so anyway but only this is a lesson in learning yeah owning thousands of homes requires you to be able to have unpredictable swings being a publicly traded company that's not great for running a public company if you're some private equity firm or some giant hedge fund it's a lot easier to own a thousand homes two thousand homes if you're only you know if you're looking at it with a longer

SPEAKER_35: window and you're not doing public quarterly earnings calls correct correct and especially if you're a

SPEAKER_23: software person who's used to you know 93 gross margins which is how i grew up you know yeah and and and dealing with four percent gross margins um you just you just have to be really good uh uh uh way way better than i am jacal so so like people say this like i i i don't know if it was warren buffett or

SPEAKER_00: something he was talking about how hard it is to compete in like uh two three star hotels that you know the holiday inns whatever and it's like there are specific indian families cartels basically who are so good at operating these things that nobody can operate them better than this group and these families that own those hotels and you shouldn't even try operating right like why would

SPEAKER_19: you bother like it's just too too hard right when we look at what's happening in the market high interest rates maybe staying high for longer than people think what impact is that having on the markets

SPEAKER_12: especially after all of these covid towns bumped and then we'll get into are people going to come back

SPEAKER_317: to offices because we were looking at maybe moving to austin i was pretty public about it we're

SPEAKER_00: considering it yeah uh and this the house is like tripled in price and i'm like wait how is how are you getting 25 how are you asking 2500 a square foot when that's the price in atherton that doesn't make any sense and right so and there's no you don't record the prices in texas so you can't even do an analysis of

SPEAKER_19: what's happening and i was like i'll just wait for this all to calm down now it turns out some those places are collapsing right so maybe you can just tell us like what's happening post all this movement and then is the market frozen with these six seven percent mortgages or is it possible that

SPEAKER_73: society can deal with the six or seven percent mortgage rate yeah it's logical that some of those you

SPEAKER_23: you know zoomed zoom towns i guess they were called at the time yeah you know salt lake city bozeman austin um you know the hamptons uh wherever you know they uh are definitely experiencing a a a a pullback uh truth be told though none of those places is very big and couldn't absorb that many people anyway and so they were in they made for interesting headlines but that is really not the big story the bigger story in people movement i called it the great reshuffling at the time in people movement catalyzed by covid is um not necessarily people moving completely out of the city to a brand new city in a mountainous state or what have you it's actually people moving into the donuts around cities so the ring the thing the thick ring of places around cities is what has really been enjoying it it it has the capacity to absorb a lot of of movers uh and it's like stimulated a real boom in these donuts around cities to the detriment of the downtowns which is you know which is what's been

SPEAKER_381: we're trying to recover from right now and and that's interesting and that makes a lot of sense

SPEAKER_27: people who are working two or three days a week going into the office that can commute at the times they choose that they want to they want to move to a place that has a yard maybe a little bit different school where they can walk the dog whatever and that's that's really been the predominant trend so

SPEAKER_23: now what we're looking for and a lot of people are watching very carefully especially if you're in the commercial real estate business that has investments in office towers in downtowns you're trying to figure out what the heck's going to happen with all that space um anyway so that's that's kind of the big story what do you think happens do you think people go back to offices what are you doing at your

SPEAKER_459: company or are those going to have to get converted oh it doesn't look good for them jcal it does not

SPEAKER_43: look good right it does not look good uh explain uh i think it's way worse than it even looks in the

SPEAKER_23: data that you see because you know uh the utilization rates the kind of what's being rented out right now in these offices pick your city is kind of in the 85 percent range right now which is galactically low numbers but if you actually look at usage it's way below that and then you start thinking all right what are employers going to do you're not going to rent space for like the wednesday when everybody's in you're not going to like rent for peak loading you're going to actually figure out how to optimize how much space you use so that you when on the peak days you're not going to be able to take everybody but you're also not going to be empty on friday and monday anyway it's a really really uh tough problem for the hybrid issue is very real because yeah yeah you're you're looking

SPEAKER_19: at it i'm assuming you're going hybrid is that your philosophy going forward or do you believe in

SPEAKER_35: um or do you believe like you need to get people back to an office to really do your best work

SPEAKER_465: and what do you candidly believe i'll come i'll come to that in a sec but i think the answer i think

SPEAKER_65: the answer my intuition the answer about what's going to what a new city is going to look like is

SPEAKER_27: we have to rethink cities to the point where we are intermingling life shopping entertainment and work the the places that have intermingled those beautifully are thriving the ones who have hived off high-rise downtowns and that's where your office work happens and then over here is where the living happens and then over here is where the shopping happens that is an unsustainable model people what people want is an intermingled live work shop eat play that's what they want anyway so i i think that's how it's going to going to play out with zillow i saw the writing on the wall really early july of june july of 2020 so first year of the pandemic um i was like oh my god we're working really well together in the cloud uh this definitely and obviously feels like the future to me uh let's burn the ships and let's liberate let's liberate people and land and if you were living in new york city but your rent was your lease was coming up i said go ahead and move back to ohio be near your parents no problem uh we'll never ask you we'll never make it a job requirement that you move back to new york city and so we basically went to what i call cloud hq early on not without its problems but oh my god i'm so thankful that we didn't have to do this hokey pokey negotiation between management and

SPEAKER_468: employees that's going on at so many companies right now amazon two facebook one yeah everybody is

SPEAKER_18: everybody well i mean there is some amount of abuse that is occurring there is a lack of mentorship

SPEAKER_19: for young people and you know there's some amount of collisions i've heard you talk about this before in interviews that occurs by being in person so what what have you lost that you lament by having

SPEAKER_35: the cloud hq what have you lost and that you're struggling to recreate i mean i think the early

SPEAKER_23: career mentorship thing is a is a real issue um and our solution may be that we just do less of that you know we have more experienced people it could be uh that we'll see um you know uh the collision in the hallways thing is real but we're getting all kinds of more collisions in in slack and zoom as well if you're using those tools correctly or teams you know uh uh if you're using those tools correctly there's a new kind of meeting format where i've got slack i've got slack up and chrissy's telling me you know uh your your time is getting tight you know we can we're multi we're multitasking and

SPEAKER_27: making decisions in meetings right which has never happened before like we had to have the meeting

SPEAKER_23: after the meeting to make the decision because you couldn't say what you're really thinking in the meeting but now we can do it in slack and just say this is the answer and everybody moves on um so

SPEAKER_27: there's some more efficiency that's occurring because way way way more way more we still get together

SPEAKER_23: though so cloud hq for me means yeah you you can decide you can choose in these three time zones where you live no problem whatsoever but you are going to be for a lot of job types at least you

SPEAKER_27: are going to be required to get together at least once a quarter with your team once a quarter for a

SPEAKER_411: week and you gotta yeah so if you got a family if you got kids whatever you you got to make that work

SPEAKER_23: that's part of the deal that's part of the deal and people have a blast and it's like the human thing and you get to know people and you make the human bonds and then when you go back into

SPEAKER_27: your cloud hq seat you have more personal relationships and you're more effective so

SPEAKER_276: that's working extremely well you need 25 of the office space that you had i think that'll be

SPEAKER_27: right yeah yeah we're at 35 now we'll be we'll probably get down to 15 or 20 of pre-pandemic space

SPEAKER_11: see this is the fascinating part that it is worse because i know that the statistics you're talking

SPEAKER_19: about are correct the the the vacancy rate in uh san francisco i think is like 30 percent which is

SPEAKER_12: absurd right like 30 is crazy you said 15 is crazy san francisco is 30 but i know that other 70 is being used 15 that's right let's say give it let's give it 30 oh my god unsustainable i mean it's empty

SPEAKER_19: down there is truly uh truly scary all right listen i know you got to go you gave me a full 75 minutes

SPEAKER_173: i appreciate it i was really concerned with this because i told you at one point like i invited you

SPEAKER_483: so many times and i was just like you were like did i say something mean to you i insulted a lot of

SPEAKER_484: people and i didn't know i'm not good like that i was like this happened now three times i was like

SPEAKER_485: i told brian chesky at some point i was like brian i've invited you on like seven times i really am

SPEAKER_295: going to stop inviting you because i feel like i offended you at some point and i really don't want to make it uncomfortable and i said the same thing to you and you're like jake out i love you i didn't do it i'm like so let's do a pod it's not the end of the world and you're just like honestly it

SPEAKER_66: was i don't like to get overexposed but but uh it was really gerstner i'm really tight with your bestie

SPEAKER_23: gerstner and oh thank you know watching watching all you guys have so much fun on the all-in as well as how you're doing with this pod yeah it's like all right you know obviously i appreciate you caving

SPEAKER_00: well here's the thing there's you and i have been so blessed right to be part of a generation that grew up with the pc to build companies to invest in companies be on the board of companies it's just such an amazing privilege and these conversations i have 16 17 18 year olds that 14 year old who went to work at microsoft they listen to this week in startups they take notes they write me these long emails i saw this interview it changed my life they come up to me i've had people hug me and cry and say i watched this episode with travis and you guys talked for three hours or i saw this chris stock episode and it changed their lives and that's the what gets me stoked every thing about a mission if i can share these conversations with quarter million half million people and it just inspires 10 of them to create something in the world man what a legacy and just how great it is and you were so awesome let's put it on the books for a year from now uh really appreciate you taking the

SPEAKER_475: time i got a thousand more questions there it is folks we save it for next time thanks jake all thanks everybody rich barton all right see ya cheers now