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

“I’ve developed a fairly good playbook round what I’d name provocation advertising and marketing. When you might have a very provocative characteristic that individuals are going to really feel emotional about in some way and so they’re going to speak about it, you’re on to one thing.”
— Wealthy Barton

Wealthy Barton (@Rich_Barton) is the co-founder and co-executive chairman of Zillow, an organization reworking how folks purchase, promote, hire, 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 govt 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 accomplice 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 mates and has to spend an growing period of time conserving robust and match to be able to be so energetic.

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Wish to hear an episode with somebody who’s labored carefully 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 functions, the conviction of community results, undervalued aggressive benefits, cultivating anti-tribalism, America’s future, and far more.

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The transcript of this episode may be discovered right here. Transcripts of all episodes may be discovered right here.

Establishments/Firms/Locations

• Zillow: Actual property market firm co-founded by Wealthy Barton and Lloyd Frink.
• Expedia: Microsoft-originating journey expertise firm that went public beneath Wealthy’s management.
• Glassdoor: Job/firm assessment web site co-founded by Wealthy Barton and Bob Hohman. Talked about for its provocative information (salaries, CEO opinions) and “give to get” mannequin.
• CNBC: Wealthy’s favourite supply of stories as a result of “enterprise information is usually completely satisfied.”
• Hyperice: Firm making wellness/restoration merchandise (just like the Venom).
• Marvel: New York Metropolis-based comedian ebook writer and media juggernaut.
• Abercrombie & Fitch: American way of life retailer.
• 4 Seasons: Worldwide luxurious resort chain.
• Microsoft: Multinational company and expertise conglomerate — certainly one of Wealthy’s first jobs out of school.
• 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 america.
• 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 world administration consulting agency.
• Alliance Consulting Group: Technique consulting agency the place Wealthy labored proper out of school.
• Stanford College: Extremely selective, personal analysis college.
• Apple: American multinational company and expertise 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 Straightforward Sabre.
• College of Washington: Analysis-intensive public college with a powerful concentrate on STEM fields.
• GE (Basic 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 magnificence and seaside appeal at this iconic seaside resort. Sorry, however day passes for locals 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 (Expertise 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 ranking attorneys and subsequent lawsuits (“provocation advertising and marketing”).
• Sand Hill Highway: This stretch of roadway serves as the house to companies which have funded a number of the largest tech firms available in the market.
• Tripadvisor: Journey assessment web site, used as a comparability/mannequin for Avvo.
• FBI (Federal Bureau of Investigation): Talked about metaphorically within the Die Exhausting analogy relating to the Avvo launch technique.
• SEC (Securities and Alternate 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 scores however not caring.
• Stripe: Monetary expertise firm, talked about for instance of a late-stage personal firm doubtless compensating administrators effectively.
• Automattic: Firm based by Matt Mullenweg (WordPress), recognized for its distributed workforce mannequin.
• Shopify: E-commerce platform firm, talked about as one other instance that dealt with the pandemic/distant work effectively.
• MindHead: Fictional cult-like faith/group from the film Bowfinger.
• Burning Man: Per 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 govt 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 delivery of their twins, and household choices (transferring to Italy, getting tattoos).
• Brad Chase: Wealthy’s first vital boss at Microsoft. Inspired him to take large 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 throughout the DOS for Dummies bundle challenge.
• John Kilcullen: Creator of the For Dummies ebook sequence, met with Wealthy for the failed bundle challenge.
• Nina Marton: Stanford engineering classmate who acquired a job at Microsoft first and inspired Wealthy to affix.
• Michael Porter: Educational related to aggressive technique ideas discovered by Wealthy throughout his consulting stint.
• Invoice Gates: Co-founder of Microsoft. Talked about particularly for greenlighting the inner enterprise that grew to become Expedia and promising to contemplate spinning it out.
• Steve Ballmer: CEO of Microsoft on the time Expedia was spun out.
• Jack Welch: Chairman and CEO of Basic Electrical (GE) between 1981 and 2001.
• Greg Maffei: CFO of Microsoft, grew to become Chairman of Expedia after the spin-out.
• Barry Diller: Media govt, 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 accomplice at Benchmark for greater than 20 years.
• Garrett Camp: Implied co-founder/early determine at Uber. Talked about self-funding early phases.
• 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 visitors. In comparison with Oprah when it comes to affect on the time.
• Oprah Winfrey: Iconic American discuss present host, tv producer, actress, writer, 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 Basic Counsel), co-founder of Avvo with Wealthy.
• Bruce Dunlevie: Enterprise capitalist at Benchmark Capital.
• George Clooney: Actor talked about relating to his position within the film Up within the Air.
• Chris Sacca: A mutual buddy of ours.
• Wile E. Coyote: If he catches you, you’re by way of.
• Matt Mullenweg: Founding father of Automattic (WordPress). Influenced Barton’s considering on distant work (“Cloud HQ”) throughout the pandemic.
• Mark Helprin: Creator 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 writer of magical realism fiction.
• Neal Stephenson: Science fiction writer (Snow Crash, Cryptonomicon, Termination Shock, Polostan).
• Ted Chiang: Science fiction writer of quick story collections (Tales of Your Life and Others, Exhalation). His story was the premise for the film Arrival.
• Jeremy Renner: Actor talked about for his position in Arrival.
• Ken Liu: Science fiction/fantasy writer (The Paper Menagerie).
• Amor Towles: Creator (Lincoln Freeway) who previously labored in finance.
• Hugh Howey: Creator 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 position in Bowfinger.
• Heather Graham: Actress talked about for her position 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 Weight-reduction plan: Wealthy’s 12-egg technique for getting his son to achieve weight.
• 640k Barrier: Technical limitation in early MS-DOS overcome by MS-DOS 5.
• COGS (Value of Items Offered): Enterprise time period talked about relating to the “DOS for Dummies” bundle price.
• Intrapreneurs: People who act like entrepreneurs inside a bigger group.Wealthy identifies with this and discusses defending them.
• Company Immune System: Metaphor for a way massive 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 Extensive 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 components.
• Compensation-Accountability Disconnect: Subject 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 relating to Expedia’s IPO.
• IPO (Preliminary Public Providing): Time period for the primary time a personal firm sells shares of its inventory to the general public on a inventory alternate.
• IPO Roadshow: Strategy of pitching an organization to institutional buyers earlier than an IPO. Wealthy described his expertise.
• Zestimate: Zillow’s proprietary house valuation algorithm/characteristic. Key innovation and “provocation advertising and marketing” device.
• 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, doubtlessly impressed public sale concepts for Zillow (which failed for housing). Talked about potential origin from Overture/GoTo.com (Idealab).
• Value Discovery: Financial idea, purpose of Zillow’s early public sale concept and later the Zestimate.
• Vertical Integration (Google): Strategic concern for marketplaces counting on Google visitors, as Google enters their enterprise areas (journey, opinions, and so forth.).
• Tremendous App (Zillow Technique): Zillow’s long-term purpose 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): Desire made-up phrases, uncommon letters (Z, X, Q), fewer syllables (2 preferrred), evocative of optimistic issues, potential verb use, double letters/palindromes.
• Board of Administrators Function: Mentioned capabilities in personal (teaching, technique, recruiting) vs. public firms (shareholder illustration, CEO hiring/firing, capital allocation). Mentioned potential pitfalls (course of focus, CYA, ISS scores).
• 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 relating to Mark Helprin’s writing themes.
• A&R (Artists and Repertoire): Music business position (expertise scouting/growth), talked about relating to Brian Koppelman’s previous.
• “Don’t Panic”: A phrase from The Hitchhiker’s Information to the Galaxy by Douglas Adams, usually used as a normal recommendation in difficult or sudden conditions.

Merchandise/Manufacturers/Companies/Video games

• iPad: Apple pill pc.
• Pocari Sweat: Japanese electrolyte drink favored by Barton (beneficial 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 transferring to the buyer division.
• Home windows NT: A household of working techniques developed by Microsoft that use the “NT” (New Expertise) core.
• CD-ROM: Optical disc format, talked about relating to 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 device 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 machine/platform, how Barton primarily reads now.
• Starlink: Satellite tv for pc web service, talked about as making disconnection tougher.
• 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 vogue model.
• Prada: One other luxurious vogue model.
• Zoom: Video conferencing software program, talked about relating to IPO roadshows doubtlessly transferring on-line.

Awards

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

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 large.
• [00:15:46] The failed DOS for Dummies ebook 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 staff 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 position in Expedia’s acquisition.
• [00:45:23] From a post-Expedia sale sabbatical in Italy to the delivery 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 characteristic.
• [01:01:29] Making lemonade from the lemons of Zillow’s launch day server crash.
• [01:03:49] Wealthy’s provocation advertising and marketing playbook.
• [01:05:30] Regulatory battles and resistance to business disruption.
• [01:10:44] Founding Glassdoor and its “give to get” information assortment mannequin.
• [01:12:58] Avvo and ranking attorneys — authorized challenges as advertising and marketing.
• [01:16:11] Digital marketplaces and Google disintermediation considerations.
• [01:19:52] How Wealthy names firms to be memorable.
• [01:25:28] Why Wealthy recommends leaving concern out of the provocation advertising and marketing equation.
• [01:26:48] Working with Benchmark Capital.
• [01:30:37] What serving on a board appears 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 way of absence — the two-week disconnected journey.
• [01:49:34] Constructing a great firm by conserving good firm.
• [01:51:42] Growing the talent 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] Really helpful studying.
• [02:12:17] Wealthy’s billboard.
• [02:14:25] The significance of sabbaticals and disconnecting from digital gadgets.
• [02:17:41] Taking on 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 large swings and don’t punish them when it doesn’t work out in response to plan.”
— Wealthy Barton

“Energy to the folks, child. You construct magic stuff for lots of shoppers that they need to speak about with their mates, 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

“In case you’re not proud of the efficiency of this individual, I assure you the individual isn’t completely satisfied both. Subsequently, you’ll be able to improve love on the earth by releasing that individual to seek out the place that individual belongs.”
— Wealthy Barton

“I’ve developed a fairly good playbook round what I’d name provocation advertising and marketing. When you might have a very provocative characteristic that individuals are going to really feel emotional about in some way and so they’re going to speak about it, you’re on to one thing.”
— Wealthy Barton

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