How Wealthy Barton Constructed Expedia and Zillow from $0 to $35B — Audacious Targets, Provocation Advertising and marketing, Scrabble for Naming, and Highly effective Every day Rituals (#806)

Wealthy Barton (@Rich_Barton) is the co-founder and co-executive chairman of Zillow, an organization reworking how folks purchase, promote, lease, and finance properties. Wealthy has been a member of Zillow’s board since its inception in 2004 and has served as each its CEO and government chairman. 

Earlier than Zillow, Wealthy based Expedia inside Microsoft in 1994 and efficiently spun the corporate off as a public firm in 1999. He served as president, CEO, and board director of Expedia and later co-founded and served as non-executive chairman of Glassdoor. Wealthy was a enterprise companion at Benchmark Capital and continues to be a board director for Qurate, Stanford Board of Trustees, and Zillow Group.

Wealthy has been married to Sarah since 1993 and has three grown, kick-ass youngsters, who couldn’t be extra superior and completely different. He likes to snowboard, surf, play tennis, golf, hike, and fish together with his household and pals and has to spend an growing period of time retaining robust and match as a way to be so energetic.

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Wish to hear an episode with somebody who’s labored intently with Wealthy Barton? Take heed to my dialog with Benchmark’s Invoice Gurley, wherein we mentioned sell-side analysts versus buy-side analysts, monetary fashions, repurposing good concepts for various purposes, the conviction of community results, undervalued aggressive benefits, cultivating anti-tribalism, America’s future, and far more.

What was your favourite quote or lesson from this episode? Please let me know within the feedback.

SELECTED LINKS FROM THE EPISODE

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LinkedIn

Establishments/Firms/Locations

• Zillow: Actual property market firm co-founded by Wealthy Barton and Lloyd Frink.
• Expedia: Microsoft-originating journey know-how firm that went public beneath Wealthy’s management.
• Glassdoor: Job/firm evaluate web site co-founded by Wealthy Barton and Bob Hohman. Talked about for its provocative knowledge (salaries, CEO opinions) and “give to get” mannequin.
• CNBC: Wealthy’s favourite supply of stories as a result of “enterprise information is mostly joyful.”
• Hyperice: Firm making wellness/restoration merchandise (just like the Venom).
• Marvel: New York Metropolis-based comedian e-book writer and media juggernaut.
• Abercrombie & Fitch: American way of life retailer.
• 4 Seasons: Worldwide luxurious lodge chain.
• Microsoft: Multinational company and know-how conglomerate — one among Wealthy’s first jobs out of faculty.
• Egghead: Defunct software program retail retailer chain. Wealthy’s first job concerned getting MS-DOS 5 into Egghead.
• Barnes & Noble: Firm working roughly 600 retail bookstores throughout the USA.
• Borders: As soon as mighty, now defunct American bookselling chain.
• Bear Stearns: American funding financial institution, securities buying and selling, and brokerage agency that failed in 2008.
• BCG (Boston Consulting Group): American international administration consulting agency.
• Alliance Consulting Group: Technique consulting agency the place Wealthy labored proper out of faculty.
• Stanford College: Extremely selective, personal analysis college.
• Apple: American multinational company and know-how firm.
• Patagonia: Retailer of outside clothes targeted on environmental sustainability.
• Disney: American multinational mass media and leisure conglomerate.
• Northwestern College: Non-public analysis college in Evanston, Illinois.
• Prodigy: Early on-line service supplier the place Wealthy used Simple Sabre.
• College of Washington: Analysis-intensive public college with a powerful give attention to STEM fields.
• GE (Normal Electrical): An American multinational conglomerate based in 1892.
• Honeywell: Publicly traded, multinational conglomerate company.
• IAC (InterActiveCorp): Media and web conglomerate based by Barry Diller, acquired Expedia. Wealthy served on its board.
• Gurney’s: Immerse your self in coastal class and seaside appeal at this iconic seashore resort. Sorry, however day passes for locals now not honored.
• Italy: The Tenth-largest nation in Europe by space.
• Idealab: Startup incubator based by Invoice Gross. Talked about as potential origin place of the AdWords idea.
• TCV (Know-how Crossover Ventures): Enterprise capital agency, co-invested with Benchmark in Zillow’s A spherical.
• Avvo: On-line authorized market co-founded by Wealthy Barton and Mark Britton. Talked about for score attorneys and subsequent lawsuits (“provocation advertising”).
• Sand Hill Highway: This stretch of roadway serves as the house to companies which have funded among the largest tech firms available in the market.
• Tripadvisor: Journey evaluate web site, used as a comparability/mannequin for Avvo.
• FBI (Federal Bureau of Investigation): Talked about metaphorically within the Die Arduous analogy concerning the Avvo launch technique.
• SEC (Securities and Change Fee): US authorities company the place Mark Britton labored.
• ISS (Institutional Shareholder Companies): Agency that charges public firm boards/administrators. Wealthy talked about having low rankings however not caring.
• Stripe: Monetary know-how firm, talked about for example of a late-stage personal firm doubtless compensating administrators nicely.
• Automattic: Firm based by Matt Mullenweg (WordPress), identified for its distributed workforce mannequin.
• Shopify: E-commerce platform firm, talked about as one other instance that dealt with the pandemic/distant work nicely.
• MindHead: Fictional cult-like faith/group from the film Bowfinger.
• Burning Man: Every week-long, large-scale desert occasion targeted on “group, artwork, self-expression, and self-reliance.”

Books and Written Works

Films/TV Reveals/Music

Folks

• Eddy Cue: Apple government talked about within the context of Apple’s product “magic” (particularly Common Management).
• Sarah Barton: Wealthy’s spouse, talked about in relation to her residency match, the start of their twins, and household choices (shifting to Italy, getting tattoos).
• Brad Chase: Wealthy’s first vital boss at Microsoft. Inspired him to take massive swings, supported him regardless of the failure of the DOS for Dummies bundle challenge.
• Leonard and Stephen Riggio: Talked about in relation to Barnes & Noble management through the DOS for Dummies bundle challenge.
• John Kilcullen: Creator of the For Dummies e-book collection, met with Wealthy for the failed bundle challenge.
• Nina Marton: Stanford engineering classmate who acquired a job at Microsoft first and inspired Wealthy to hitch.
• Michael Porter: Tutorial related to aggressive technique ideas discovered by Wealthy throughout his consulting stint.
• Invoice Gates: Co-founder of Microsoft. Talked about particularly for greenlighting the interior enterprise that grew to become Expedia and promising to think about spinning it out.
• Steve Ballmer: CEO of Microsoft on the time Expedia was spun out.
• Jack Welch: Chairman and CEO of Normal Electrical (GE) between 1981 and 2001.
• Greg Maffei: CFO of Microsoft, grew to become Chairman of Expedia after the spin-out.
• Barry Diller: Media government, founding father of IAC. Acquired Expedia. Was Wealthy’s chairman for a interval.
• Dara Khosrowshahi: Labored for Barry Diller/IAC, key strategist concerned within the Expedia acquisition. Later grew to become CEO of Expedia after Wealthy.
• Ermelinda Campani: Ran the Stanford program in Florence, helped Wealthy’s household once they moved there.
• Lloyd Frink: Wealthy’s Stanford classmate, Expedia colleague, and co-founder of Zillow.
• Invoice Gurley: Has been a normal companion at Benchmark for greater than 20 years.
• Garrett Camp: Implied co-founder/early determine at Uber. Talked about self-funding early levels.
• Travis Kalanick: Implied co-founder/early determine at Uber.
• Jason Calacanis: Implied early determine/investor at Uber.
• Invoice Gross: Founding father of Idealab, talked about in relation to the potential origin of the AdWords idea.
• David Beitel: CTO at Expedia and Zillow.
• Walt Mossberg: Influential tech columnist who reviewed Zillow favorably at launch, inflicting a surge in site visitors. In comparison with Oprah by way of affect on the time.
• Oprah Winfrey: Iconic American speak present host, tv producer, actress, creator, and media proprietor.
• Amy Bohutinsky: Head of Advertising and marketing at Zillow throughout launch, credited with the “lemonade out of lemons” method to the launch day crash and the data-driven PR technique.
• Bob Hohman: Expedia colleague, co-founder of Glassdoor with Wealthy.
• Mark Britton: Expedia colleague (former Normal Counsel), co-founder of Avvo with Wealthy.
• Bruce Dunlevie: Enterprise capitalist at Benchmark Capital.
• George Clooney: Actor talked about concerning his function within the film Up within the Air.
• Chris Sacca: A mutual good friend of ours.
• Wile E. Coyote: If he catches you, you’re by.
• Matt Mullenweg: Founding father of Automattic (WordPress). Influenced Barton’s considering on distant work (“Cloud HQ”) through the pandemic.
• Mark Helprin: Writer of fiction books together with The Oceans and the Stars, Soldier of the Nice Battle, A Winter’s Story.
• John Mearsheimer: Political scientist related to “offensive realism,” talked about in relation to Mark Helprin’s writing themes.
• Haruki Murakami: Japanese creator of magical realism fiction.
• Neal Stephenson: Science fiction creator (Snow Crash, Cryptonomicon, Termination Shock, Polostan).
• Ted Chiang: Science fiction creator of quick story collections (Tales of Your Life and Others, Exhalation). His story was the idea for the film Arrival.
• Jeremy Renner: Actor talked about for his function in Arrival.
• Ken Liu: Science fiction/fantasy creator (The Paper Menagerie).
• Amor Towles: Writer (Lincoln Freeway) who previously labored in finance.
• Hugh Howey: Writer talked about in passing.
• Brian Koppelman: Co-creator of Billions, co-writer of Rounders, host of The Second podcast, found Tracy Chapman.
• Tracy Chapman: Musician found by Brian Koppelman.
• Eddie Murphy: Actor/comic talked about for his roles in Bowfinger.
• Steve Martin: Actor/comic talked about for his function in Bowfinger.
• Heather Graham: Actress talked about for her function in Bowfinger.
• Christiane King: Procreate tutorial teacher.

Ideas

• Common Management (Apple): Described as “magic” when Wealthy’s mouse moved seamlessly from Mac to iPad.
• Anaconda Eating regimen: Wealthy’s 12-egg technique for getting his son to realize weight.
• 640k Barrier: Technical limitation in early MS-DOS overcome by MS-DOS 5.
• COGS (Value of Items Bought): Enterprise time period talked about concerning the “DOS for Dummies” bundle value.
• Intrapreneurs: People who act like entrepreneurs inside a bigger group.Wealthy identifies with this and discusses defending them.
• Company Immune System: Metaphor for the way giant organizations can reject innovators.
• Purchasers and Servers: Software program structure idea utilized by Wealthy as an analogy for dividing the world into service suppliers and builders.
• Web Bubble: a speculative bubble that developed following the popularization of the World Vast Internet in 1991.
• Aggressive Technique / Michael Porter 5 Forces: Enterprise technique frameworks discovered/referenced by Wealthy.
• Conglomerate Low cost: Monetary idea the place diversified firms are valued lower than the sum of their elements.
• Compensation-Accountability Disconnect: Problem Wealthy noticed at Microsoft that the Expedia spin-out aimed to handle (partly).
• S-1: Doc filed for an IPO (Preliminary Public Providing). Talked about concerning Expedia’s IPO.
• IPO (Preliminary Public Providing): Time period for the primary time a non-public firm sells shares of its inventory to the general public on a inventory trade.
• IPO Roadshow: Technique of pitching an organization to institutional traders earlier than an IPO. Wealthy described his expertise.
• Zestimate: Zillow’s proprietary residence valuation algorithm/function. Key innovation and “provocation advertising” instrument.
• TAM (Whole Addressable Market): Enterprise idea mentioned in relation to Uber’s market dimension notion.
• AdWords (Google): Promoting platform/mannequin admired by Wealthy and Frink, probably impressed public sale concepts for Zillow (which failed for housing). Talked about potential origin from Overture/GoTo.com (Idealab).
• Value Discovery: Financial idea, objective of Zillow’s early public sale concept and later the Zestimate.
• Vertical Integration (Google): Strategic concern for marketplaces counting on Google site visitors, as Google enters their enterprise areas (journey, opinions, and so on.).
• Tremendous App (Zillow Technique): Zillow’s long-term objective to be a one-stop built-in platform for renting/shopping for.
• Excessive Level Scrabble Letters (Z, X, Q): Utilized in Wealthy’s firm naming technique for distinctiveness.
• Naming Guidelines (Wealthy’s): Want made-up phrases, uncommon letters (Z, X, Q), fewer syllables (2 preferrred), evocative of constructive issues, potential verb use, double letters/palindromes.
• Board of Administrators Function: Mentioned features in personal (teaching, technique, recruiting) vs. public firms (shareholder illustration, CEO hiring/firing, capital allocation). Mentioned potential pitfalls (course of focus, CYA, ISS rankings).
• Cloud HQ / Cloud Headquarters: Wealthy’s time period (influenced by Matt Mullenweg) for Zillow’s distributed/distant work mannequin post-pandemic.
• Offensive Realism (John Mearsheimer): Political science idea talked about concerning Mark Helprin’s writing themes.
• A&R (Artists and Repertoire): Music business function (expertise scouting/growth), talked about concerning Brian Koppelman’s previous.
• “Don’t Panic”: A phrase from The Hitchhiker’s Information to the Galaxy by Douglas Adams, typically used as a normal recommendation in difficult or sudden conditions.

Merchandise/Manufacturers/Companies/Video games

• iPad: Apple pill laptop.
• Pocari Sweat: Japanese electrolyte drink favored by Barton (advisable by his nutritionist).
• Hyperice Venom: Heated vibrating again wrap utilized by Barton throughout his morning routine.
• MS-DOS 5: Microsoft working system Barton labored on early in his profession.
• Home windows 95: Main Microsoft working system launch Barton labored on earlier than shifting to the patron division.
• Home windows NT: A household of working programs developed by Microsoft that use the “NT” (New Know-how) core.
• CD-ROM: Optical disc format, talked about concerning multimedia merchandise (Encarta) and the failed journey information concept.
• Encarta: Microsoft’s multimedia encyclopedia on CD-ROM. Barton managed a portfolio together with an Encarta journey information idea.
• easySABRE: Software program instrument utilized by journey brokers (accessed by Barton by way of Prodigy) that impressed the Expedia idea.
• Peloton: Train bike/platform utilized by Barton.
• Scrabble: Board sport, used as an analogy for letter frequency/worth in Barton’s naming technique.
• Taco Cat (Goat Cheese Pizza): Card sport talked about as easy enjoyable throughout disconnected time.
• Google Maps: On-line mapping service, built-in with Zillow’s Zestimate idea (costs on roofs).
• Kindle: Amazon’s e-reader system/platform, how Barton primarily reads now.
• Starlink: Satellite tv for pc web service, talked about as making disconnection more durable.
• Airstream: Model of journey trailers.
• Procreate: Digital portray app for iPad utilized by Barton.
• WordPress: Content material administration system/platform related to Matt Mullenweg/Automattic.
• Balenciaga: Luxurious style model.
• Prada: One other luxurious style model.
• Zoom: Video conferencing software program, talked about concerning IPO roadshows probably shifting on-line.

Awards

• Hugo Award: Annual literary award for the perfect science fiction or fantasy works and achievements of the earlier 12 months.
• Nebula Award: Annual award for the perfect works of science fiction or fantasy revealed in the USA.

Related Assets

SHOW NOTES

• [00:00:00] Begin.
• [00:05:30] Eddy Cue magic.
• [00:06:14] Wealthy’s morning routine and exercise philosophy.
• [00:13:38] How Brad Chase at Microsoft taught Wealthy to swing massive.
• [00:15:46] The failed DOS for Dummies e-book bundle challenge.
• [00:18:52] Steering an organization towards a tradition of innovation.
• [00:20:26] Wealthy’s journey from administration consulting to Microsoft.
• [00:24:34] How Expedia got here to be.
• [00:32:32] Pitching and recruiting crew expertise.
• [00:37:18] Diploma design at Stanford.
• [00:39:45] Realizing the worth of actual work as a youth.
• [00:41:44] A fascination with Italy.
• [00:43:01] Promoting Expedia to Barry Diller/IAC.
• [00:43:51] Dara Khosrowshahi’s function in Expedia’s acquisition.
• [00:45:23] From a post-Expedia sale sabbatical in Italy to the start of Zillow with Lloyd Frink.
• [00:55:41] “Huge pond, good fishermen” as enterprise standards.
• [00:56:50] Early Zillow errors.
• [01:00:05] The Zestimate: Zillow’s killer function.
• [01:01:29] Making lemonade from the lemons of Zillow’s launch day server crash.
• [01:03:49] Wealthy’s provocation advertising playbook.
• [01:05:30] Regulatory battles and resistance to business disruption.
• [01:10:44] Founding Glassdoor and its “give to get” knowledge assortment mannequin.
• [01:12:58] Avvo and score attorneys — authorized challenges as advertising.
• [01:16:11] Digital marketplaces and Google disintermediation issues.
• [01:19:52] How Wealthy names firms to be memorable.
• [01:25:28] Why Wealthy recommends leaving worry out of the provocation advertising equation.
• [01:26:48] Working with Benchmark Capital.
• [01:30:37] What serving on a board seems like and Wealthy’s membership standards: “Is it native? Is it enjoyable? Is it profitable?”
• [01:39:00] Wealthy’s motivation and routine for staying wholesome in his 50s.
• [01:47:13] Cultivating management by absence — the two-week disconnected journey.
• [01:49:34] Constructing a great firm by retaining good firm.
• [01:51:42] Creating the ability to fireplace folks as a win/win proposition.
• [01:54:41] Wealthy’s household tattoo design and symbolism.
• [01:57:29] Recommendation for balancing household {and professional} life.
• [02:01:08] The advantages of distributed workforces post-pandemic.
• [02:03:23] Beneficial studying.
• [02:12:17] Wealthy’s billboard.
• [02:14:25] The significance of sabbaticals and disconnecting from digital gadgets.
• [02:17:41] Taking over Procreate digital artwork throughout COVID.
• [02:19:05] Parting ideas.

RICH BARTON QUOTES FROM THE INTERVIEW

“Nice organizations encourage innovation, encourage big-idea folks to take massive swings and don’t punish them when it doesn’t work out in accordance with plan.”
— Wealthy Barton

“Energy to the folks, child. You construct magic stuff for lots of customers that they wish to discuss with their pals, unprompted on the sidelines of the soccer sport or what have you ever.”
— Wealthy Barton

“[Almost] all of my errors as a pacesetter have been leaving the pitcher on the mound too lengthy hoping that the arm would get higher.”
— Wealthy Barton

“If you happen to’re not proud of the efficiency of this particular person, I assure you the particular person isn’t joyful both. Subsequently, you possibly can improve love on the planet by releasing that particular person to seek out the place that particular person belongs.”
— Wealthy Barton

“I’ve developed a reasonably good playbook round what I’d name provocation advertising. When you might have a very provocative function that you realize persons are going to really feel emotional about someway and so they’re going to speak about it, you’re on to one thing.”
— Wealthy Barton

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