On April 30th, Spencer Rascoff, CEO of Zillow, joined us as part of the Albers Executive Speaker Series. Zillow is a web-based provider of information about the residential real estate market. Anyone buying, renting, selling, and borrowing in this market probably knows about Zillow.
Rascoff helped found Zillow in 2005 and became CEO in 2010. Zillow is expanding rapidly at the moment, hiring new employees not just in Seattle, but in California, as well. Spencer noted several times that Zillow sees its role as empowering the consumer by unlocking information. Zillow does not see itself as making the real estate broker obsolete, as there will always be a need for assistance with a complex and critical transaction such as buying or selling a house. Zillow sees the role of the agent as having changed from "information gate keeper" to " transaction consultant."
Rascoff opened by discussing his early career in investment banking and private equity, which proved to be valuable training for his later exploits, but also was too transactional and not satisfying for him in the long run. Ultimately, though, that experience set the stage for co-founding Hotwire and then Zillow.
In moving from Hotwire to Zillow, Rascoff said he grew weary of the travel industry and looked for another sector that could be impacted by the Internet. Real estate seemed like another market where industry databases were locked away from the consumer. Zillow set out to unlock that information and succeeded.
While starting out in the home sale vertical, Zillow has now moved to home lending, rentals, and, most recently, home improvements. Rascoff said this was enough to keep them fully occupied at the moment, and they planned to focus on the domestic market. In entering the global market they would start from scratch and bring little to the table. In the mean time, strong competitors have already adopted the Zillow model and have a head start. A rapidly growing segment of their business is on mobile phones, and they have found it easier to monetize mobile than the web.
In case you have not noticed, Zillow has done six acquisitions of late. Rascoff said they have all been in "adjacent spaces" and they have worked hard to keep the existing management teams in place. They have sold the acquisition by telling the target firm it can do what it does better with Zillow, where it will have access to more resources. They have also used stock options to align the interests of management teams with shareholders.
When asked about his leadership style, Rascoff said he was there to serve his direct reports and help them be successful. He sees himself as a "player coach," and noted the higher up in the organization you are, the less you are responsible for actually doing things!
When asked what advice he would give recent college graduates, he suggested students look at people who are 10 to 15 years into their career and ask if you want to live like they do! Also, keep in mind that in a high growth company you are likely to have more opportunities for career development. If a company is not growing, there are fewer opportunities and you tend to get pigeon-holed in a particular role.
If he had to do it over again, what is one thing he would have done differently at Zillow? Communicate more with brokers. Zillow was an outsider and the industry was suspicious of the company, giving the most negative interpretation of the moves it saw Zillow making. Only later did Zillow figure out how its actions were being interpreted by agents. Today, the lines of communication are much better and brokers are forthcoming with suggestions for improvements.
Spencer Rascoff gave a fascinating presentation on Zillow and his career leading up to its founding. He also provided excellent career advice to the many students in the audience. The final speaker for this year in the Albers Executive Speaker Series is SU alum Leo Hindery, Managing Partner of Intermedia Partners. Hindery has a long career in the cable TV industry and is visiting from New York City on May 28th. See you there!