Speaker 1: Masters in Business is brought to you by the American
Speaker 1: Arbitration Association. Business disputes are inevitable, resolve faster with the
Speaker 1: American Arbitration Association, the global leader in alternative dispute resolution
Speaker 1: for over ninety years. Learn more at a d R
Speaker 1: dot org. My special guest today is Richard Barton. He
Speaker 1: has quite the curriculum vita. He is the founder of
Speaker 1: numerous and highly regarded startups, including Expedia, Zillo, and glass Door.
Speaker 1: He is on the board of directors at Netflix, and
Speaker 1: he is a partner at the venture capital firm Benchmark Partners.
Speaker 1: Richard Barton, Welcome to Bloomberg. Thank you very much for
Speaker 1: having me on. So I've been looking forward to chatting
Speaker 1: with you about so many different things. I have to
Speaker 1: start though, there's such a Your background is so start
Speaker 1: up oriented, and yet you graduate Stanford at eighty nine
Speaker 1: with a degree in engineering you end up at Microsoft.
Speaker 1: What was it like working in Microsoft in the midst
Speaker 1: of the nineties when everything was on five? You know
Speaker 1: the power we with which we view Facebook and Google
Speaker 1: and Apple today, Imagine all that power wrapped up into
Speaker 1: one company and one company. That's what Microsoft was with
Speaker 1: one person at the helm, who really was running the show,
Speaker 1: who really was running the show involved deeply. When I
Speaker 1: showed up, there were about three thousand employees, so it
Speaker 1: was relatively relatively small company. Um. Now, tech wasn't as
Speaker 1: pervasive as it is today, but Microsoft was by far
Speaker 1: the most important company in the technology world and basically
Speaker 1: building the future. It was quite exciting that, that's right
Speaker 1: at the process as tech became more pervasive meant that
Speaker 1: a ton of money was flowing into their coffers. And
Speaker 1: before the iPhone there was really nothing ever like Microsoft before.
Speaker 1: That's right, I mean IBM. You could argue em had
Speaker 1: a pretty good position prior to Microsoft, not on the
Speaker 1: consumer side, but never on the business. And it wasn't
Speaker 1: as big a business, right, It was a much smaller business.
Speaker 1: And it was whether we're talking typewriters or mainframes, there
Speaker 1: was still an aspect. It wasn't the dominant technology of
Speaker 1: the day. So so what did you do with Microsoft?
Speaker 1: My first job at Microsoft was product manager of MS
Speaker 1: DOS five. So you're the person I should have been
Speaker 1: sending those nasty letters. Do you even do? Do you
Speaker 1: know what the big feature for MS DOS five? I
Speaker 1: do that much of a geek. Uh was this pre shell?
Speaker 1: Is that what we're talking? Well, there was a shell
Speaker 1: that we have this weird shell. There was no Windows,
Speaker 1: way before there was no Windows. But I feel like
Speaker 1: three one as we're really that's that's Windows three point one,
Speaker 1: which was a couple of years after Horrible that. I
Speaker 1: remember that well, it was a big event. These were
Speaker 1: consumer ending events. And MS DOS five upgrade was the
Speaker 1: first operating system that Microsoft sold at retail as an upgrade,
Speaker 1: and they did it to break the six forty K barrier,
Speaker 1: which they are about five percent of your listeners right
Speaker 1: now that the computer was using and got it. I'm
Speaker 1: m dot sis. And what this enabled was these older
Speaker 1: PCs that were getting obsolete to load up this this
Speaker 1: new upgrade, which was a very hard process to do,
Speaker 1: kind of imagine lifting a house, pouring a new foundation
Speaker 1: and dropping the house back down onto It was hard,
Speaker 1: but it allowed them to run bigger programs faster, and
Speaker 1: people lined up around the block at midnight outside of Egghead,
Speaker 1: So I remember that. I mean, it was nothing like
Speaker 1: when you know the Rolling Stones. Start Me Up was
Speaker 1: the theme song, and it just went utterly crazy. I
Speaker 1: was the lonely Mac guy during that era and actually
Speaker 1: thrilled when when the deal was cut in ninety eight,
Speaker 1: jobs came back and Gates essentially, I think intelligently made
Speaker 1: the bet that hey, if Apples around, we're less of
Speaker 1: a monopoly because look, there's a credible consumer competitor, and
Speaker 1: that's why that deal was made. That investment. Yeah, a
Speaker 1: guy named Greg Maffei who I'm on the board of
Speaker 1: Liberty Interactive as well, and Greg is on my board
Speaker 1: at Zillo. He was my first chairman at Expedia. He's
Speaker 1: the guy that led that investment, uh, for Microsoft and Apple.
Speaker 1: You know, it's too bad Microsoft sold that position. It
Speaker 1: would be worth um quite a large time. I'm told
Speaker 1: they did well. Microsoft. I'm told they were accounting reasons.
Speaker 1: Why once it just starts becoming an outsized portion of
Speaker 1: the balance sheet, it's all right, this is problematic. Let's
Speaker 1: just liquid dated. Not that they needed the money. They've
Speaker 1: been a cash machine from day one. So, so you've
Speaker 1: been a CEO at a public company. What is that
Speaker 1: process like and and why are so many companies reluctant
Speaker 1: to go public these days. I'm one of these guys
Speaker 1: who thinks when you take a company public, you're making
Speaker 1: it to the majors. It's like going from the minors
Speaker 1: to the majors. And you know, I grew up in
Speaker 1: a time when that was the dream. Uh. Plus, your
Speaker 1: backers would like to eventually. And I actually feel a
Speaker 1: responsibility to the people that actually invested in my companies
Speaker 1: and by the way, my employees, who I've paid in
Speaker 1: stock options in part. And so I believe it's my
Speaker 1: responsibility as an entrepreneur to figure out how to get
Speaker 1: a company public so that you know, to reward these people.
Speaker 1: But I also believe it creates optionality. And when you
Speaker 1: have optionality to buy companies with stock, to issue stock,
Speaker 1: and to to raise cash, it gives it creates value.
Speaker 1: Optionality creates value. And so I'm a big fan of
Speaker 1: being public. I also believe that this quarterly reporting stuff
Speaker 1: is great discipline and having auditors in your operation. You know,
Speaker 1: even me as a CEO, I'm happy to have auditors
Speaker 1: and they're just to kind of be digging through and
Speaker 1: looking for stuff. And and now I understand why you've
Speaker 1: been the IT of three successful companies, because you understand
Speaker 1: things that other people seem to just complain about. When
Speaker 1: I when we see companies startups say it's too onerous,
Speaker 1: it's too invasive to go public. What's your response to that.
Speaker 1: I mean, can you imagine Tom Brady in college? Where
Speaker 1: was he in Michigan? I think saying I don't want
Speaker 1: to go pro. You know, you know, it's too much pressure. Everybody.
Speaker 1: They're writing about me. There are people on the radio
Speaker 1: making fun of me and how I played over the week.
Speaker 1: You imagine that anyway, that's kind of the pervasive attitude
Speaker 1: right now. Our vcs, ore vcs encouraging that attitude or
Speaker 1: do they want to go public as much as the
Speaker 1: next well earlier stage vcs absolutely want their companies to
Speaker 1: be public so that they can get liquid their business. Right.
Speaker 1: The the issue is there's been in the world's a
Speaker 1: Washington capital as as you and your listeners well now,
Speaker 1: and there's been a flood money into late stage private investing, okay,
Speaker 1: and those people don't want this IPO problem to go
Speaker 1: away because they're getting to invest that they're getting to
Speaker 1: write hundreds of millions of dollars, if not billions of
Speaker 1: dollars checks and companies like Uber to get into the
Speaker 1: cap table before the public does. And so that flood
Speaker 1: of capital into late stage private has made it easy
Speaker 1: for an entrepreneur to say, uh, I'm not you know,
Speaker 1: I'm not gonna go public. I'm gonna stay private. They're
Speaker 1: letting them cash stock out their founders that in these
Speaker 1: late stage deals they get to sell stock, and so, well,
Speaker 1: what incentive do I have? You know, if the CEO
Speaker 1: is is getting liquid prior to being public, then what
Speaker 1: incentive does the CEO have to actually get public? So
Speaker 1: there's a there are a myriad of problems. I guess
Speaker 1: I would also it could be an interesting conversation depending
Speaker 1: on how you feel about it. But I feel I
Speaker 1: feel that the the the regulatory burden is and the
Speaker 1: legal burden is high. Okay. Now, any one regulation, if
Speaker 1: you looked at it on its own, UM makes sense. Okay,
Speaker 1: any of these regulations, but in totality it is quite crushing. Uh.
Speaker 1: And the lawsuits that that that ensued because of these
Speaker 1: regulations as well, that is quite time consuming. And a
Speaker 1: lot of people look at that and they say, well,
Speaker 1: I'm not gonna be public. Michael Mobison, who I know
Speaker 1: you've had on published paper. He's terrific. He published a
Speaker 1: paper six or eight months ago, Uh, basically saying they're
Speaker 1: they're less than half of the companies. They're less than
Speaker 1: half the number of public companies today as there were
Speaker 1: fifteen years ago. I may I may have that wrong,
Speaker 1: but some okay, Um, we have all the public exactly okay.
Speaker 1: And so they I think that the the industry if
Speaker 1: they're lobbying for more shareholder activism and more ability to
Speaker 1: put people onto boards. Uh. And as as as this
Speaker 1: money floods into activist funds, what they're doing actually is
Speaker 1: kind of killing the golden goose. They're they're driving companies
Speaker 1: out of the out of the public markets. So let's
Speaker 1: talk a little bit about Zello, which I find to
Speaker 1: be absolutely fascinating. First, what inspired this, right, I mean,
Speaker 1: it's a segment too. You're not the only one that
Speaker 1: finds it fascinating. Very We get over one hundred and
Speaker 1: seventy million visitors a month to our portfolio of sites,
Speaker 1: and we we don't only truly a street Easy here
Speaker 1: in New York City, which was a really really great
Speaker 1: acquisition nobody noticed. I mean, you don't have multiple listing
Speaker 1: services in big cities. It's a very closely held thing,
Speaker 1: and they're one of the few entities that track big city.
Speaker 1: I know they started in New York. They did. Then
Speaker 1: they nailed this vertical living, yeah, really did. But they
Speaker 1: had trouble expanding me on New York. Uh, and so
Speaker 1: we met up with them. We got along with um.
Speaker 1: The founders wanted to get some liquidity and we and
Speaker 1: we bought it maybe five years ago to that was
Speaker 1: a really wonderful thing. And there's another brand called Hot
Speaker 1: Pads and Naked Apartments that we own, so we have
Speaker 1: a portfolio of brands. What got it going, however, was
Speaker 1: my personal frustration with not being able. I was shopping
Speaker 1: for a home my family. I just had twins. You
Speaker 1: live where no part of the country. I live in Seattle, Washington,
Speaker 1: lovely part of the from the world, one kid to three,
Speaker 1: and I was shopping my my co founder and I
Speaker 1: were shopping for homes together. We both just left Expedia
Speaker 1: after having a really successful leadership, and so we're looking
Speaker 1: for homes and we can't believe. And this is like
Speaker 1: two thousand four, two five modern era. It's like the
Speaker 1: web has been around for at least ten years at
Speaker 1: this point, and so where's all the information? What where
Speaker 1: is it? It's like it's like it's like it was
Speaker 1: when we started expediing it. It's like, I can't access
Speaker 1: that the information that I want to see prices, I
Speaker 1: want to see schedules. I want to do it myself.
Speaker 1: I want to take control. People want control. I want
Speaker 1: to control. My partner, Lloyd wanted control. And we said,
Speaker 1: all right, well this is broken. You know there's something
Speaker 1: going on here that's broken because this information, if you
Speaker 1: dig hard enough, is available. And so we built spreadsheets,
Speaker 1: We went to the county websites. We started doing dollars
Speaker 1: per square foot. So we're just trying to figure out
Speaker 1: what we should pay for a house. And so Zillo
Speaker 1: was born of this, this frustration and this desire for
Speaker 1: to to be empowered with information. And once we got
Speaker 1: it all together and we figured it out, we're like, well,
Speaker 1: why should you have to be a spreadsheet geek like us,
Speaker 1: uh to be able to get this and we said
Speaker 1: we kind of slapped our heads. We found this estimate.
Speaker 1: We kind of stumbled into this estimate UM. And once
Speaker 1: we stumbled into thet this estimate is an estimated market
Speaker 1: value of every home in the country that we update
Speaker 1: just about every night. UM. We kind of had on
Speaker 1: the whiteboard we had a stock a stock chart. So
Speaker 1: this is this isn't this isn't a time when the
Speaker 1: real estate business was going, you know, the real and
Speaker 1: everybody's most significant asset if they owned a home, was
Speaker 1: their home, and people were wanted to know what their
Speaker 1: home was worth. So they're watching the market, and so
Speaker 1: we thought, well, why shouldn't you track the value of
Speaker 1: a home like you like, like you track your portfolio.
Speaker 1: But you guys pivoted complete letting. His estimate is still
Speaker 1: part of the ZILO. But I would say it's it's
Speaker 1: now probably the least significant daily usage. That a fair
Speaker 1: way to describe it. I would say that is a
Speaker 1: fair way to describe it. It's mostly people who are
Speaker 1: shopping for rentals and mortgages and homes and people who
Speaker 1: are selling those properties. But but we envisioned right from
Speaker 1: the start that this estimate, which was a missing key
Speaker 1: piece of marketplace data, could in fact be at the
Speaker 1: core of a new real estate marketplace, a digital one.
Speaker 1: So the question, I have so many questions about this subject.
Speaker 1: The data that you wanted was clearly in existence, but
Speaker 1: it was control by the National Association of Realtors. I
Speaker 1: believe they're they own the multiple listing service, or they're
Speaker 1: affiliated with it. Not really, actually it's quite separate. In fact,
Speaker 1: there is not even one MLS. There are nine in
Speaker 1: their own by broke regional brokerages generally speaking. But the
Speaker 1: n A R has clearly has influence, and you guys
Speaker 1: eventually tapped into all of that. UM, we eventually got
Speaker 1: all that data. But what we did was we we
Speaker 1: didn't show up to the pot luck with just a fork.
Speaker 1: Dave Linegar, the founder of Remax, is a colorful fellow.
Speaker 1: Uh upbraided me publicly early on by telling me I
Speaker 1: had shown up to the pot luck with just a fork,
Speaker 1: because if I could come into his business and just
Speaker 1: use his data and then get users and then turn
Speaker 1: around and charge charge him for advertising. But that's not
Speaker 1: the case. We brought pot roast and marshmallow jello salad.
Speaker 1: We brought this estimate, and we brought this huge database
Speaker 1: of all homes, not just the small number it's for
Speaker 1: sale right now, but a database of all homes. And
Speaker 1: it was a living one so people could add to it.
Speaker 1: A new data kept coming in and finally, UH the industry,
Speaker 1: in a very complementary way, realized that this data was
Speaker 1: really important to buyers and sellers and agents alike, and
Speaker 1: eventually everybody ended up participating. So the Zilla, I'm not exaggerating.
Speaker 1: The Zillo app is literally on the home screen one.
Speaker 1: Is it screen one? A screen too? No, that is
Speaker 1: screen one. There you go. It's um like Zilo, son
Speaker 1: nos and uh sky something I don't remember it is
Speaker 1: um So let me three of I don't EXPEDI is
Speaker 1: sort of before my time. I know that sounds ridiculous.
Speaker 1: We'll talk about Expedia soon. The three ways I use
Speaker 1: Zillo constantly constantly. First, any time you're driving in a
Speaker 1: neighborhood and you see a nice house or something right,
Speaker 1: and I love to just you know, my mother was
Speaker 1: a real estate agent. We own a couple of homes.
Speaker 1: I'm very much your target real estate junkie audience. So
Speaker 1: outcomes the app. And as long as there's some connectivity,
Speaker 1: UM mobile telecom in United States is an embarrassment, but
Speaker 1: we'll save that for another podcast. Hey, they're all the
Speaker 1: houses that are for sale recently sold, and you could
Speaker 1: you could see the prices and what have you. It's
Speaker 1: really fun to do that on a boat out in
Speaker 1: harbor because you could actually see the houses that you
Speaker 1: can't see from the road, like they're down driveways, behind edges,
Speaker 1: they're invisible. That's a ton of fun. How do you
Speaker 1: find people generally use the app? And what I mean
Speaker 1: by that The obvious is I'm looking for a house.
Speaker 1: What other ways have come up? That might have been
Speaker 1: someone unexpected? H The development people and universities and philanthropies
Speaker 1: use it to target to target people. That's interesting, divorce attorneys,
Speaker 1: I'm I'm kind of joking. Uh. There are so many
Speaker 1: uses for Zilla, both as an entertainment, as as information
Speaker 1: and as entertainment and to inform a shopping process, be
Speaker 1: it a casual shopping process or a or a serious
Speaker 1: shopping process. Not to mention, we're the largest rental site
Speaker 1: network of rental sites now, so you know most most
Speaker 1: of the growth in households right now is going to rentals,
Speaker 1: and so rentals has become quite a big business. Always
Speaker 1: has been UM and mortgage shopping people do. But it
Speaker 1: turns out that our homes are not only where we
Speaker 1: lay our head, they are our entertainment. Look no further
Speaker 1: than HGTV and all these worm shows on they are entertainment.
Speaker 1: We love to track the value of it too, because
Speaker 1: it's for many of us, our our biggest asset. And
Speaker 1: so this this kind of intertwining of emotion and financial importance.
Speaker 1: I kind of view it as a year and a yang.
Speaker 1: This is really quite a sweet spot in consumer products
Speaker 1: that I look for. When you have both emotion and
Speaker 1: financial significance, you have a potential huge idea. So we
Speaker 1: moved a couple of years ago, and we when we
Speaker 1: were selling the previous house, we brought in two different
Speaker 1: real estate agents and we surprisingly received wildly disparate estimates
Speaker 1: from each of them. And again, my mom was real
Speaker 1: estate agent. I grew up with dinner table conversation about
Speaker 1: what terrible people some agents um, what terrible behaviors some
Speaker 1: agents exhibit. I mean that was literally dinner conversation. And
Speaker 1: so when we got these different estimates, I said, let
Speaker 1: me play with Zello a little bit and see what
Speaker 1: I can do. And the first thing I did was
Speaker 1: come up with a I searched for our house number
Speaker 1: of bedrooms. Bathrooms were a kitchen deck proximity to the water.
Speaker 1: I tried to make it as close as humanly possible
Speaker 1: as I could, and then that generated two lists. It
Speaker 1: generated the list of homes that were for sale in
Speaker 1: my neighborhood and surrounding towns within my price point. But
Speaker 1: it also generated a second list of homes that were
Speaker 1: sold with the same characteristics. And so you get these
Speaker 1: two data sets, and then you look at the overlap
Speaker 1: and lo and behold, if you want to sell your
Speaker 1: price at them, the get the maximum return on the
Speaker 1: sale in the fastest amount of time. You could wait
Speaker 1: six months and maybe get another ten or twenty grand.
Speaker 1: But if you want to be right in the sweet spot,
Speaker 1: and we literally sold the house within ten thousand dollars
Speaker 1: of ask in three weeks. And I have to give
Speaker 1: thanks to you, guys, because that would not have happened
Speaker 1: without you, guys. Very that scenario is exactly why we
Speaker 1: built Solo. That's exactly it. You were fully empowered to
Speaker 1: look at all that data yourself in a way that
Speaker 1: you could understand it and didn't exist a few years
Speaker 1: you weren't able to access that information before. That is
Speaker 1: power to the people. I love, love, love that we
Speaker 1: really have this you know, this ethic at this think
Speaker 1: at Zillo and all my companies, where we want to
Speaker 1: empower regular people with data and tools so that they
Speaker 1: can make much better decisions about big, important financial stuff.
Speaker 1: Let's talk a little bit about Expedia, because that's a
Speaker 1: fascinating story. You're working at Microsoft. They are not exactly
Speaker 1: a startup culture by that point. They're they're the eight
Speaker 1: pound guerrilla. How did Expedia come about? I always had
Speaker 1: the itch to have my own thing. I always wanted
Speaker 1: to start my own company, and I was going to
Speaker 1: do it somewhere um and the Internet was just happening.
Speaker 1: The Internet hadn't quite the graphical Web hadn't happened yet
Speaker 1: pre Netscape, so this is pre nat scape. But post
Speaker 1: Prodigy and a O l okay so compy survey, well Prodigy,
Speaker 1: these were the big services, and I was fascinated by them.
Speaker 1: I really thought, Wow, these are empowering, this is something
Speaker 1: some thing interesting is going to happen here, and this
Speaker 1: tool here could lead to some new industrial revolution. I
Speaker 1: was thinking pretty grandly, like what could happen to the
Speaker 1: travel industry? Uh? If people had access to all this data?
Speaker 1: What could happen to real estate? I was even thinking
Speaker 1: about real estate back then. I wrote a plan to
Speaker 1: to have an electronic stockbroker because I like to trade.
Speaker 1: Trade and investor is pre e trade. This is pre
Speaker 1: e trade, but but e trade didn't even exist. But
Speaker 1: I was a Schwab customer, and I was one of
Speaker 1: those Schwab guys that used telebroker. I would trade with
Speaker 1: my finger, you know, on the on the keypad, because
Speaker 1: I don't really want to talk to somebody. I knew
Speaker 1: how to do it myself. I wanted control anyway, So
Speaker 1: I envisioned that this online thing might turn into something
Speaker 1: pretty interesting. I wanted to be an entrepreneur. I was
Speaker 1: especially frustrated as a traveling young businessperson with the interactions
Speaker 1: I was having with my Microsoft corporate travel agent. I
Speaker 1: could someone in house who would book travel for in
Speaker 1: house or working for American Express, but basically assigned to
Speaker 1: the Microsoft account, and I'd call her up. Usually it
Speaker 1: was it was a woman, but there were, you know,
Speaker 1: many different people, and I'd hear the keyboard clicking, you know,
Speaker 1: as I was asking questions and Seattle, then Denver, and
Speaker 1: then I gotta go up to Chicago, back to Seattle,
Speaker 1: and I'd hear these keyboard clicking. I'm like, you know,
Speaker 1: she answered me with one choice, and I'd be like,
Speaker 1: well that it can't be the only choice. You've got
Speaker 1: a screen full of stuff in front of you. So
Speaker 1: I wanted to jump through the phone line, turned the
Speaker 1: screen towards me and take control of myself. Okay, So
Speaker 1: that was the inception of me being going to UH
Speaker 1: to Bill Gates, who I view as my first venture capitalist,
Speaker 1: and Steve Bomber was in the room too, UH and
Speaker 1: pitching the idea for for what became Expedient. So tell
Speaker 1: us about that meeting. That has to be a seminal
Speaker 1: moment in your career. It was. It was not you know,
Speaker 1: I did you realize that at the time, or was
Speaker 1: it like I just gotta get these guys to sign off? No? No, no,
Speaker 1: it felt special to me. I knew I had a
Speaker 1: I knew I had a potential tiger at the tail
Speaker 1: I did, and and I actually wanted to convince them
Speaker 1: to that it wasn't going to really be a software business.
Speaker 1: It was going to be a travel business. And I
Speaker 1: wanted to build a fund me on the outside to
Speaker 1: do my own thing, because at this point Microsoft was
Speaker 1: getting bigger and the stuff I was working on I
Speaker 1: was paid in stock options. But the stuff I was
Speaker 1: working on, you know, it wasn't Windows. At the time,
Speaker 1: and so really it would only matter how windows in office,
Speaker 1: did you know, versus two relative to my compensation. So
Speaker 1: I was thinking, well, if I can do this on
Speaker 1: the outside, if I if I can build a team
Speaker 1: and do really well with this, then I can do
Speaker 1: well too. Anyway, I pitched them on that idea right
Speaker 1: from the start. But Bill laughed and he said, who
Speaker 1: are you going to hire? We don't do that, but look,
Speaker 1: grow it internally and if it, you know, if it
Speaker 1: needs to be independent from Microsoft, will take a look.
Speaker 1: Did he give you a budget to build this out?
Speaker 1: Or yeah, it's a budget and some headcount. And I
Speaker 1: was able to hire the most entrepreneurial people at Microsoft,
Speaker 1: which was the place to be if you were intact,
Speaker 1: like the only place to be. So I got really
Speaker 1: great people, established a network of incredible people who were
Speaker 1: entrepreneurially minded, because I said, come to Expedia, we're gonna
Speaker 1: build this thing. We're gonna be the largest seller travel
Speaker 1: in the world. We're building a new travel marketplace, and
Speaker 1: we're gonna spin out if it's good. Okay, we're gonna
Speaker 1: spin out of Microsoft. And so I got really incredible
Speaker 1: people to Bill and Steve's credit. I was working for
Speaker 1: Balmer when we when we spun out to their credit.
Speaker 1: I went to Steve and I asked him for one
Speaker 1: hundred million dollars to spend on marketing on Expedia. And
Speaker 1: he laughed, like he have you met Steve. He's a
Speaker 1: I haven't met him, but I've heard him laugh. He's
Speaker 1: like he's aggressive and he's big and he makes noise.
Speaker 1: And he did. He laughed and got kind of red
Speaker 1: in the face that we're not gonna do that. And
Speaker 1: I said, well, Steve, but YEA anchored him at a
Speaker 1: hundred million. I wanted a hundred million, and I said it,
Speaker 1: but I need a hundred million on any tv ods.
Speaker 1: This thing could be huge. We're half the size of
Speaker 1: the number one guy right now, but we need we
Speaker 1: need this jet fuel. We got a better prod sucked.
Speaker 1: We got to do it. He said no, and I said,
Speaker 1: the public markets will do it. It's pets, pet food,
Speaker 1: dot com, food com. Everything got funded and I said, look,
Speaker 1: let's spin it out. Let's take the public. We don't
Speaker 1: have to sell much of the company. We got a
Speaker 1: hundred million dollars and we'll give it a shot. And
Speaker 1: to Steve's credit and Bill's credit. They said, alright, let's
Speaker 1: do an hr experiment. Let's let's try to do this thing.
Speaker 1: And so I took a hundred and fifty people out
Speaker 1: of the hottest company in the world to work out
Speaker 1: where they already had stocks, already had stock, the hottest
Speaker 1: company in the world at the highest point of the
Speaker 1: stock had ever achieved and would ever achieve even for
Speaker 1: the next seventeen years. Okay, uh. And these adventurous people,
Speaker 1: these courageous people, they came out of Microsoft with me
Speaker 1: and we took Expedia public and within a year we
Speaker 1: were twice the size of the number two guy. Wow,
Speaker 1: that's fantastic. And Expedia still is a free standing company,
Speaker 1: still publicly, probably traded dollar market cap, doing extremely well,
Speaker 1: one of the two kind of globally dominant players in
Speaker 1: the online travel So how do you look at this
Speaker 1: as your baby which is now off on its own,
Speaker 1: and what's your involvement with pride? It's like the kid
Speaker 1: that went to college and now he's married and he's
Speaker 1: got a happy family and the family is growing up.
Speaker 1: I really, you know, it makes me really proud to
Speaker 1: to to see what Barry Diller and dark Kasra Shah
Speaker 1: he the current CEO have done since I left. I'm
Speaker 1: really impressed. Was it difficult to to turn over the
Speaker 1: keys to the kingdom that easily? Like some there are
Speaker 1: some entrepreneurs who have a hard time passing the reins?
Speaker 1: Did did you have any issues with that? I mean,
Speaker 1: of course there was some. I had some issues, But
Speaker 1: my personality is a little bit more. Um. You know,
Speaker 1: I don't need to own and control and do everything.
Speaker 1: And I like to think and do about I like
Speaker 1: to think about a lot of things. I have a
Speaker 1: diverse set of interests. And when Barry Diller bought it
Speaker 1: from the Republic for three four years and Barry Dillar
Speaker 1: bought us out at a really nice price, is interactive?
Speaker 1: This is? This was I a c H. I see
Speaker 1: it was known as USA Interactive at the time. Um,
Speaker 1: they bought Expedia at a nice price. Um, that seemed
Speaker 1: like a good time for me to to go think
Speaker 1: about doing other things. Let's talk a little bit about
Speaker 1: glass Door. In two thousand and seven, you found the
Speaker 1: company which helps people find jobs, understand the salary and
Speaker 1: compensation they're getting, and gives folks a better sense of
Speaker 1: what what they should be getting for their role. In
Speaker 1: the marketplace. Is that a fair assessment? That's right. I
Speaker 1: actually co founded it with a guy named Bob Holman
Speaker 1: who worked for me at Expedia. He was a development manager.
Speaker 1: Most all of my companies that I'm involved with, I've
Speaker 1: co founded with people who worked for me at Expedia
Speaker 1: and Zillo as well. So your co founder, I found
Speaker 1: an Expedia, um, you know, inside of Microsoft. And I
Speaker 1: co founded Zillo with an Expedia guy and a Microsoft guy,
Speaker 1: a guy went to college with. And then I did
Speaker 1: the same with glass Door, and I've done it with
Speaker 1: a few others as well anyway, But to glass Door,
Speaker 1: uh so, yes. The idea with glass Door is not
Speaker 1: too dissimilar from Expedia and Zillo, and that is to
Speaker 1: turn on the lights in the room to get people
Speaker 1: information they didn't have before and specifically, what is it
Speaker 1: really like to work there? Do people who work there
Speaker 1: approve of the CEO and leadership? What do people make?
Speaker 1: What do they really make? What are their what are
Speaker 1: their real salaries and job titles in ten years? Um?
Speaker 1: How do you ensure the integrity of that information? How
Speaker 1: do you make sure so there's a site rate? My professor,
Speaker 1: there are other educator related and you know, it's really
Speaker 1: easy for one I rate student to skew everything. How
Speaker 1: do you avoid that happening when people are rating either
Speaker 1: CEO or a business. Door. So this information has turned
Speaker 1: out to be really intriguing to people. We get twenty
Speaker 1: or thirty million people a month now that come to
Speaker 1: glass Door, and it's become one of the largest job
Speaker 1: sites in the world. It's really it's really good, and
Speaker 1: it's gotten there because the information is good. The information
Speaker 1: is good because we work really hard to ensure that
Speaker 1: the people who are leaving reviews actually work or worked
Speaker 1: at the company. And you can validate that we cantronically.
Speaker 1: We can do that with email addresses, and we can
Speaker 1: do that why with and forth communications, So we work
Speaker 1: really hard to make sure they're legit. Secondly, anything that's
Speaker 1: too strident to use his profanity or people's names or
Speaker 1: as personal we just don't. We just don't post. Okay,
Speaker 1: so we should have a chat with Jack Dorsey at
Speaker 1: Twitter and maybe you could get them straightened out. You know,
Speaker 1: it would be interesting. We might you know, we might
Speaker 1: have a different president if that anyway. Uh So we
Speaker 1: we clipped the tails. Basically, anything that that is too
Speaker 1: stride in one way or another. We clipped clip. That's
Speaker 1: part of the We did that part of the curve.
Speaker 1: And I would also contend trip Advisor was something we
Speaker 1: owned it expedient. We learned a lot from trip Advisor
Speaker 1: with people leaving anonymous reviews about hotels right uh, And
Speaker 1: I would say over time that trip Advisor, YELP, glass
Speaker 1: door reviews on Amazon have actually taught consumers to uh,
Speaker 1: to kind of tune out the noise. Anyway, when something
Speaker 1: looks promotional, they think, oh, that's promotional that person, or
Speaker 1: when something looks like they have an act to grind,
Speaker 1: you know, people intuitively say, all right, well that person
Speaker 1: is a disgruntled ex employee and and that's going on.
Speaker 1: And so we as humans are tuning up to kind
Speaker 1: of clip to kind of clip the tails too. So
Speaker 1: what's turned out is that the the information is really accurate.
Speaker 1: We have information on over seven thousand companies around the world.
Speaker 1: We have tens of millions of pieces of data and reviews.
Speaker 1: When when you work at a place I don't know Bloomberg,
Speaker 1: go on to glass door, read the reviews, look at
Speaker 1: the salaries, see what people think of the ceo. UH
Speaker 1: and you're gonna read that and you're gonna say, yeah,
Speaker 1: that's that sounds right to fascinating thing is if you're
Speaker 1: a obviously someone who's just starting with someone who's very senior,
Speaker 1: those are really specific salary pricing. But in the middle
Speaker 1: of it, a lot of people have no idea what
Speaker 1: is the standard salary at least in their part of
Speaker 1: the country. I know they vary from city to city.
Speaker 1: And it's kind of fascinating clicking around and looking at stuff.
Speaker 1: And how about and how about gender splits. I mean,
Speaker 1: we we have all this data, we know the we
Speaker 1: know the gender of the people with salaries, and we've
Speaker 1: been able to uncover gender paid disparities. Really, yes, it's
Speaker 1: really it's really interesting. But what's the takeaway from that? Then? Uh,
Speaker 1: the takeaway it's it's difficult really to get a handle
Speaker 1: on the gender stuff because even if stuff looks equal,
Speaker 1: you don't really know how quickly a promotional path has
Speaker 1: had under what promotional opportunities. A lot of nuance there,
Speaker 1: there's a lot there is a lot of nuance. But
Speaker 1: generally speaking, uh, women have been paid less than men
Speaker 1: for the same role. That is a that is a
Speaker 1: conclusion that we come to um. Interestingly, investment managers use
Speaker 1: glass door quite a bit. Oh really, yeah, I have
Speaker 1: I know several hedge fund guys and investment managers that
Speaker 1: use glass door to figure out what's going on at
Speaker 1: the companies they're investing. Are they spreading the wealth around?
Speaker 1: They must be really doing really well and that may
Speaker 1: not have showed up yet in the official doctor. What
Speaker 1: do people think of the CEO? You know, that's quite fast.
Speaker 1: Let's talk a little bit about Netflix. So you join
Speaker 1: the board win when it was private? Come on, I've
Speaker 1: been on that board for really, I can't remember the
Speaker 1: year fifteen years at least I remember when they first launched,
Speaker 1: and the kids listening aren't gonna remember that. They used
Speaker 1: to mail DVDs through the US postal. And the first
Speaker 1: time I heard about it's like, why do I want
Speaker 1: to wait for dv eased to show up in the mail?
Speaker 1: And then it's like, oh wait, I don't have to
Speaker 1: go to Blockbuster and there's always two or three in transit.
Speaker 1: Oh that makes a lot of sense. And once they
Speaker 1: moved to all digital, and it was clear that was
Speaker 1: the goal eventually to go all digital, there was no
Speaker 1: looking back. What was that process like, okay, well, I
Speaker 1: had the same reaction unit. So there weren't many web
Speaker 1: guys back when I went to when I joined the
Speaker 1: board of Netflix, and I was one of them. I
Speaker 1: was running Expedia and by the way, how did you
Speaker 1: get the invite? Okay, So there were many of us,
Speaker 1: and and we read Hastings, who has incredible CEO of Netflix,
Speaker 1: you know, running an incredible leadership team over there. He
Speaker 1: and I had a mutual friend and investor, a guy
Speaker 1: named Jay Hog, who is the founding partner of TCV
Speaker 1: Technology Crossover Ventures. He's a really well regarded historical figure
Speaker 1: in in technology, isn't it. He is not well known public,
Speaker 1: low key legend, low key legend. I sit on a
Speaker 1: few board with him, and I learned. I learned every
Speaker 1: time I'm in a room with him. I really think
Speaker 1: he's outstanding. He knew both of us, both Read and me,
Speaker 1: and Reid was looking to build out his board, getting
Speaker 1: ready to go public, and so Read and I had
Speaker 1: dinner and I said, I gotta admit, like this, this
Speaker 1: seems like there's an end of the road here. Like
Speaker 1: the DVD thing, the form factor, it's gonna go with
Speaker 1: the services. Cool I grant you that, but the form
Speaker 1: factor is gonna go away. Read You're gonna hit the wall.
Speaker 1: And then what's the future. How are we ever going
Speaker 1: to get any value out of this thing? It's gonna die?
Speaker 1: Um And he's like, he said, did you see the
Speaker 1: name of the We didn't name it DVD by mail flicks,
Speaker 1: Rich named it Netflix. And I'm like, okay, well that's okay,
Speaker 1: good point, good point. But how are you gonna how
Speaker 1: are you going to cross the chasm? How are you
Speaker 1: going to get over the wall? You know that, you
Speaker 1: know that chasm is there? And he said, I don't know,
Speaker 1: He said, I don't know. We we It could be downloads,
Speaker 1: it could be streaming. Who knows. We really don't know.
Speaker 1: But here's what I do know that if we can
Speaker 1: build up a big enough subscriber base before the chasm
Speaker 1: is upon us, then we'll be in an incredibly good
Speaker 1: position to cross the chasm with our subscriber base into
Speaker 1: the new world, whatever that new world. That's some serious
Speaker 1: long ball. Right before he even launches the I p
Speaker 1: O for mailing DVDs, he's thinking, eventually, we have to
Speaker 1: be digital. He is truly a long long ball player.
Speaker 1: He is a visionary, long term guy. Um, there are
Speaker 1: very few people that can do this. You've had a
Speaker 1: lot on your show. Jeff Bezos is another one who
Speaker 1: twenty years ago he's thinking yeah, yeah, eventually. Granted we
Speaker 1: talked about Amazon Cloud service. That probably wasn't in his
Speaker 1: original plan of hey, we have all these service let's
Speaker 1: use him for something. But it was clear that he
Speaker 1: had an idea about just not competing with retailers, just
Speaker 1: completely bypassing them, being the right, right entire by the way,
Speaker 1: I just got Alexa the echo delivered yesterday from from
Speaker 1: Amazon Prime Day. Um, you know I didn't want to
Speaker 1: experiment with it a two bucks but at yeah, okay,
Speaker 1: let me try it. And you could see I just
Speaker 1: opened the box, you could. I already can see how
Speaker 1: if this thing continues to develop the way it does. Um,
Speaker 1: this is another monster, another and you have to stop
Speaker 1: and worry. Wonder how did Apple blow this with Siri?
Speaker 1: I mean they were really way out of It's not
Speaker 1: over yet. It's not over yet, but but well, Siria
Speaker 1: has to get a lot that Amazon, right, Siria has
Speaker 1: to get a lot better. And what subtle and interesting
Speaker 1: is just how important response time is in using and
Speaker 1: using these things and using these voice intelligent agents. Uh.
Speaker 1: Sirius was okay, but not many people used it when
Speaker 1: it first came out because it just, you know, it
Speaker 1: just didn't respond very quickly, and you had to be
Speaker 1: you had to be near a network that actually worked.
Speaker 1: And in the United States, that's an iffy proposition on
Speaker 1: in mobile. But if you're at home, if you're at
Speaker 1: home and there's a dedicated device that all it does
Speaker 1: is listen for you to say its name so that
Speaker 1: it can respond really, really quickly, all of a sudden
Speaker 1: people started using it. And you know, when you're busy
Speaker 1: with your hands in the kitchen and you want to
Speaker 1: set a timer, are you going to reach for your
Speaker 1: iPhone to set the timer with four or five clicks?
Speaker 1: Are you going to say, Alexa, set timer for thirteen
Speaker 1: minutes and it and it just works. I'm you know,
Speaker 1: I know Jeff a little bit. We're both in Seattle, Um.
Speaker 1: You know, he is really the most impressive business guy
Speaker 1: of the kind of of the new millennium. I mean
Speaker 1: just so so so we've mentioned a couple of CEOs
Speaker 1: we've made and read Hastings and Jeff Bezos what other
Speaker 1: CEOs impress you and what characteristics do you think define
Speaker 1: an outstanding CEO in the modern era. Well, because I'm
Speaker 1: a startup oriented person, I tend to be focused on
Speaker 1: the founder CEOs. I believe that the found the great
Speaker 1: the greatest CEOs tend to be the founder CEOs. I think, Um,
Speaker 1: there are terrific professional management CEOs that come in later,
Speaker 1: there's no question, but a professional CEO never quite has
Speaker 1: the credibility of the founder. Isn't usually isn't able to
Speaker 1: to think really long term and and and carry the
Speaker 1: employee base in the investor base along for a the
Speaker 1: long ride and say, hey, we're going to invest billions
Speaker 1: of dollars in producing our own streaming content even though
Speaker 1: we've never done that before. Come along, I'm gonna hold
Speaker 1: your hand, and you're gonna hold my hand, and we're
Speaker 1: gonna get through this because on the other side it's glorious.
Speaker 1: But in the intervening six or seven years, the P
Speaker 1: and L and the cash flow is going to be ugly. Okay, Really,
Speaker 1: founders have license to do that, uh, And afterwards it's
Speaker 1: it's a little bit harder. Uh. There are lots of
Speaker 1: bad founder CEO s too, for sure, But I think
Speaker 1: the the true Grates in my mind, like Bill Gates
Speaker 1: and Steve Jobs and Jeff Bezos and Read Hastings. Um,
Speaker 1: what do you think of Zuckerberg at Facebook? Zuckerberg, He's
Speaker 1: He's amazing. He's really an incredible andreason said. He is
Speaker 1: just a human learning machine and just is constantly observed
Speaker 1: if there's something to be learned in any environment. He's
Speaker 1: just a sponge knowledge. He's a sponging you know what.
Speaker 1: Young Bill Bill Gates is still that way really, but
Speaker 1: young Bill Gates was was exactly the same, no kidding.
Speaker 1: It's just cons instantly hard learning about everything, not just
Speaker 1: the stuff you think that they ought to be learning
Speaker 1: about based on their businesses, but wanting to know everything.
Speaker 1: We have been speaking with Rich Barton. He is the
Speaker 1: co founder of Zillo and glass Door and the founder
Speaker 1: of Expedia and numerous other entities. Be sure and check
Speaker 1: out my daily column. It's at Bloomberg View dot com.
Speaker 1: You can follow me on Twitter at Rid Halts. We
Speaker 1: love your comments, feedback and suggestions right to us at
Speaker 1: m IB podcast at Bloomberg dot net. I'm very Rid Halts.
Speaker 1: You're listening to masters and business on Bloomberg Radio. If
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Speaker 1: In fact, nearly fifty of our cases settled prior to hearings.
Speaker 1: A d r dot org resolve faster. Welcome to the podcast, Briche.
Speaker 1: Thank you so much for doing this. I am I've
Speaker 1: I've said I'm a giant fan of Zillo, and as
Speaker 1: I started researching who you are and what you've done,
Speaker 1: I'm like, oh, I know that company. Oh wait, I
Speaker 1: know that company. Oh wait, I know who those like?
Speaker 1: Oh I I how did I not know who this
Speaker 1: person was many many years ago. All the things that
Speaker 1: you're involved in are some of my favorite and most
Speaker 1: regularly used technologies, So that that's pretty interesting. You've had
Speaker 1: quite a fascinating career in Seattle. Can we say Seattle
Speaker 1: is rapidly gaining on Silicon Valley? Is that a fair statement.
Speaker 1: By the way, you're the second person I've had from
Speaker 1: Silicon Valley from I'm sorry, from Seattle, the first being
Speaker 1: Nick Hannahur all right, Nick, my friend. Yeah, Seattle is
Speaker 1: a boomtown. Boomtown, sixty two cranes, leading city in the US.
Speaker 1: I just had that graphics three day. Clearly does the
Speaker 1: cranes everywhere. This is because the flywheel, the tech flywheel
Speaker 1: is spinning and it's just get the snowball is rolling
Speaker 1: left and nobody cared. No, well no, I mean there's
Speaker 1: a lot of boeing still there, Okay, but the headquarters
Speaker 1: left and nobody cared. I mean it started with you know, Microsoft,
Speaker 1: probably Microsoft was this incredible gravitational force for tech talent
Speaker 1: from around the world, sucking it in and as micros
Speaker 1: as is, that talent kind of scattered. It started all
Speaker 1: kinds of New Spain, Expedia. So Amazon especially I think
Speaker 1: is driving uh the the new is the new magnet
Speaker 1: for talent coming into town. The new HQ downtown is
Speaker 1: supposed to be spectacular. Well, it's multiple buildings. I mean,
Speaker 1: I would say five or six of those cranes are Amazon,
Speaker 1: and they've they've revived a whole part of town. Um,
Speaker 1: it's it's truly, it's truly phenomenal. I guess I would
Speaker 1: add that the University of Washington is an incredible university,
Speaker 1: and most especially the computer science department, where I actually
Speaker 1: gave the commencement this year, which is quite good fun.
Speaker 1: We get a lot of computer scientists, engineers out of
Speaker 1: out of you dub It is a top five program
Speaker 1: in the country. And so this this mix of you know,
Speaker 1: education and talent and money and and it being a
Speaker 1: terrific place to live, means that Seattle is really rising rapidly.
Speaker 1: Now is it gaining on Silicon Valley. No, that snowball
Speaker 1: is probably you know, it's even bigger, and that thing
Speaker 1: is still rolling to I spent I spent about half
Speaker 1: my business time down in Silicon Valley as well, And
Speaker 1: it's just it's about so. We were justin in Silicon
Speaker 1: Valley earlier this year. My last trip to Seattle, I
Speaker 1: spoke at you dubbed in the Finance department, which was
Speaker 1: really kind of fascinating. Um, And I was spoke at
Speaker 1: the Treasury department of Microsoft who showed me the most
Speaker 1: amazing thing on the wall behind them. They flip a
Speaker 1: panel and it spins around and there's a white phone
Speaker 1: on a shelf. It all it is a white fie.
Speaker 1: What's the white phone? Oh, that's the bad phone that
Speaker 1: Bill used to call. And they literally showed me a
Speaker 1: guy who's got a keyboard. Who's the guy who handles
Speaker 1: the Microsoft stock repurchase program for new option issuance to
Speaker 1: new employees. And they also, long before Apple, they had
Speaker 1: a massive stock repurchase program. And I jokingly said, what
Speaker 1: it has a keyboard with like one key just to
Speaker 1: buy thing on it. It was a joke, and they
Speaker 1: someone pulled out a keyboard that they had given him.
Speaker 1: It was. It was pretty hilarious. The Microsoft was another building,
Speaker 1: the Treasury department. There, it's thirty people in the running
Speaker 1: a hundred billion dollars. It's an incredible amount of I
Speaker 1: think at the time it was eighty nine billion. It's
Speaker 1: close to a hundred now or if it's not past it.
Speaker 1: That campus was astonishing for people who have never been there.
Speaker 1: It's like the size of any four colleges combined. And
Speaker 1: none of the buildings are in numerical order. It's not
Speaker 1: like one to three. So you even have this, it's
Speaker 1: even bigger than you imagine coast. You can't just extrapolate
Speaker 1: one five. Wait, what is building one seven? We've just
Speaker 1: been building eight. The highlight of that trip was visiting
Speaker 1: the Microsoft Office office. Will you walk into the room
Speaker 1: and it's into the building and it's Microsoft. The logo
Speaker 1: Microsoft Office on the wall behind you, and it's like, so,
Speaker 1: what's in this building? She points to the logo this
Speaker 1: is the office office, which was hilarious to me. But
Speaker 1: they were dead. So what was it like watching that
Speaker 1: get built out? Because in the early nineties it was small.
Speaker 1: We were small, I mean small relatively speaking, but as
Speaker 1: opposed to what is it like? I knew all the buildings, right,
Speaker 1: and I knew a lot of like not everybody, but
Speaker 1: most of the people in Seattle by the time you left,
Speaker 1: By the time I left, I left in I couldn't
Speaker 1: possibly know everyone. Watching it get built was um, you know,
Speaker 1: it was miraculous. It really was. And it's a testament
Speaker 1: to Bill Gates. I'm a big believer in the Jim
Speaker 1: Collins be hag carry audacious goal uh and Bill Gates
Speaker 1: put forth one of the great begs. You know, a
Speaker 1: computer on every desk and in every home running Microsoft software.
Speaker 1: So the knock on Ballmer. And I want to ask
Speaker 1: you if this is fair, is that he wasn't a
Speaker 1: b hag guy. He didn't have these audacious goals. They
Speaker 1: were really a series of small goals as opposed to
Speaker 1: throw in the hail. Mary. Well, you know, a great
Speaker 1: bee hag needs a great field general and a great
Speaker 1: operator to you can't, you can't. You don't just magically
Speaker 1: get to your b hag because you have it, even
Speaker 1: though I believe to a certain extent they are self fulfilling,
Speaker 1: but you need operationally to get there. And I don't
Speaker 1: know that I've encountered anyone better than Balmer from an
Speaker 1: operational person as a field general. But what about as
Speaker 1: a CEO? As a CEO, you know, as that's what
Speaker 1: I mean. As a CEO, he grew, I mean he grew,
Speaker 1: He grew the company. The company grew quite nicely under
Speaker 1: his uh you under his leadership. Um My guess is
Speaker 1: that that Bill probably stepped back a little too much,
Speaker 1: uh in providing that visionary overlay kind of pointing to
Speaker 1: the mountain in the distance when Steve took over. And um,
Speaker 1: and that's it is. And and so it's hard to
Speaker 1: know how to step back, okay, and so you know
Speaker 1: there were there were some issues, but overall, I mean
Speaker 1: Microsoft's a company in very good shape. Yeah, no doubt
Speaker 1: about it. There are no courses at Harvard Business School
Speaker 1: that's say, by the way, when you build what was
Speaker 1: then the biggest company in the world, here's how to
Speaker 1: ease back a little bit. I don't think that's a
Speaker 1: that's in the manual. You know, so even though it
Speaker 1: should be so you you you referenced um what it
Speaker 1: was like, meaning read Hastings and working with um. Netflix.
Speaker 1: Amazon theoretically is the big competitor to Netflix. Is are
Speaker 1: they perceived that way or are they Yeah, they're really
Speaker 1: a real retailer, and video isn't what they do. You know,
Speaker 1: the Amazons are doing quite well, uh with their prime
Speaker 1: video and they appear to be really serious about it.
Speaker 1: They're getting good content, they're getting good viewers. Uh. My
Speaker 1: personal opinion, uh is roomful, lots of players in the space. Well,
Speaker 1: it's it's even better than that from my perspective. And
Speaker 1: I would say this is probably reads perspective as well.
Speaker 1: And that is O T T over the top. So
Speaker 1: Internet TV, the more Internet TV there is, the more
Speaker 1: Internet TV there is Okay, So this is a pie
Speaker 1: that just keeps getting bigger as more and better content
Speaker 1: is available on the Internet and on your on your smartphone.
Speaker 1: And what's really happening is that time is being taken
Speaker 1: from other things you were doing, whether whether you were
Speaker 1: watching traditional linear TV or whether you were doing something else. Uh,
Speaker 1: and that time is moving at a really rapid pace
Speaker 1: to internet television viewing. Um. Netflix is great. You know.
Speaker 1: One of reads great geniuses is focus and clarity and
Speaker 1: long term and not getting distracted. The company has never
Speaker 1: done an acquisition, is that true? Never done an acquisition.
Speaker 1: That's amazing. I had no idea, and I'm the kind
Speaker 1: of guy that always has new ideas. I'm like, what
Speaker 1: about sports? What about music? What about video games? And
Speaker 1: reads like yeah, well we're gonna keep our eye on
Speaker 1: the ball. Rich, thank you, we thought about that and
Speaker 1: we're going to keep all right on the ball. Their
Speaker 1: original content is great. Yeh. Master of None is fabulous.
Speaker 1: This run of stand up specials that they've been paying
Speaker 1: people boatloads of money to do. The Chappelle one is justice,
Speaker 1: It's genius. That was just unbelievable. Um, things you see
Speaker 1: stranger things, no that's a good one. You should see it.
Speaker 1: If I have any complaints about Netflix, and I really
Speaker 1: don't have a lot. That they fixed their connectivity issues,
Speaker 1: they fixed their bandwidth problems, that there's a ton of
Speaker 1: stuff that they worked out. The original contents is great.
Speaker 1: I find the old organization on the website so much
Speaker 1: better than the current organization. As an app on a TV,
Speaker 1: it's not easy to find something when you're looking for it,
Speaker 1: or God forbid, you say, I don't know what I
Speaker 1: want to watch tonight, but let's chill with Let's Netflix
Speaker 1: and chill. But really watch Netflix, not Netflix until, by
Speaker 1: the way, tell him whatever genius in the PR department
Speaker 1: came up with that phrase spectacular. I think it was
Speaker 1: an emergent, that it was emerging. But I do think
Speaker 1: it was emerging the company grabbed onto it. I would
Speaker 1: love to find out that that was some evil marketing
Speaker 1: genius sort of fed that out. That would just bemo
Speaker 1: Kelly Bennett. Hey, Kelly, where did that really come from?
Speaker 1: If they're smart, they'll never admit it. Oh no, that
Speaker 1: was purely But but if you just say, let's love
Speaker 1: for something, it's a different it's a different form factor.
Speaker 1: You're totally. You're a different distance from the screen when
Speaker 1: you're on your couch, you have a different control mechanism,
Speaker 1: and so tons and tons of i Q and sweat
Speaker 1: has gone into trying to anticipate what you might like
Speaker 1: to watch next and putting that in front of you
Speaker 1: rather than being a hunt for you know, a search
Speaker 1: and find paradigm on a big screen at twelve feet
Speaker 1: does not work very well. And so what what the
Speaker 1: designers are trying to in the in the coders are
Speaker 1: trying to do is use really really smart software to
Speaker 1: anticipate what you might want and put it there and uh,
Speaker 1: you know, it's it's it's actually quite we do quite well.
Speaker 1: It may not feel it to an old uh you know,
Speaker 1: search and find type paradigm person who's used to it
Speaker 1: on their laptop. It's it's different when you have a keyboard.
Speaker 1: You find stuff more easily, No, for sure. And I
Speaker 1: would make the same complaint about Amazon's interface for it.
Speaker 1: And by the way, it's not just me as a
Speaker 1: fifty five year old, I've heard similar discussions amongst um
Speaker 1: younger niece's nephews, millennial co workers. There is a holy
Speaker 1: grail of how can you combine both so that we're
Speaker 1: making suggestions of things that based on your your previous
Speaker 1: viewing history, we can figure out you want, but also
Speaker 1: make it easy for what in the mood for Let's
Speaker 1: find a way to do that, and that should be
Speaker 1: a voice based intelligent interaction in the future, and it
Speaker 1: eventually will you know, the advantage you mentioned, um how
Speaker 1: Echo is an emergent technology, the advantage with Alexa, Hey
Speaker 1: find me something good to watch on on Amazon Prime.
Speaker 1: That's a monstrous thing. It's not there yet, but at
Speaker 1: one day in the future. Um. Somebody just said, if
Speaker 1: you extrapolate what Amazon is doing twenty years into the future,
Speaker 1: their a monopoly at that point and someone's gonna have
Speaker 1: to break them up, which coming from Microsoft, that has
Speaker 1: to be an interesting Yeah. I lived through that d
Speaker 1: J thing. It was really rough. It's not you know,
Speaker 1: no fun, it's no fun, um, you know. And I
Speaker 1: think it is inevitable as companies get really really huge,
Speaker 1: and I think Jeff is probably well aware of that
Speaker 1: and is trying to do everything he can to um,
Speaker 1: you know, to delay that as long as possible and
Speaker 1: to play within the rules. But eventually the tall poppy
Speaker 1: gets chopped down you have to say to say the list,
Speaker 1: you know, my fantasy or my imagination. I should say,
Speaker 1: in the ninety nineties, when there were a number of
Speaker 1: small tech companies that I was kicking the tires on
Speaker 1: and a number of new ideas going around, I pictured
Speaker 1: every venture meeting having the founders come in giving their pitch,
Speaker 1: explaining the technology, explaining the market, explaining they have to
Speaker 1: what they need to do to capture critical mass, and
Speaker 1: then someone saying, what prevents my acrosoft from building this
Speaker 1: into Windows? And if you didn't have the right answer
Speaker 1: to that, thanks for coming by. I mean it was
Speaker 1: pretty much that until really combination of d J slowed
Speaker 1: Microsoft down a few years, and then the web exploded
Speaker 1: and that question went away. It's like, well, no, they
Speaker 1: can build it into Windows, but we're gonna be on
Speaker 1: the web. We're gonna be on any platform. There's a
Speaker 1: new question now, though. Let's hear it Amazon, right, what's
Speaker 1: going to prevent Amazon from Amazon cast a shadow every
Speaker 1: all directions now and a long one in all directions,
Speaker 1: which doesn't seem physically possible. But so the metaphor breaks down.
Speaker 1: But that is the question being asked by venture capitalist
Speaker 1: they're doing devices, They're they're obviously dominating retail. And I
Speaker 1: read recently that something like of all searches take place
Speaker 1: within Amazon, well maybe overall, but even even higher percentage
Speaker 1: of uh commercial searches, which are the valuable ones that
Speaker 1: results deeper center. More of commercial searches happen, Uh happened
Speaker 1: to Amazon? Um? You know Amazon is Uh, Yeah, they're
Speaker 1: They're They're everywhere. Who else is in Seattle? That that's
Speaker 1: of note? Who else should we be aware of as
Speaker 1: a up and coming company? Because I know there are
Speaker 1: a few companies out there. Concur is there. Um, I
Speaker 1: don't know if that's up and coming, but that's it's
Speaker 1: been around a while. Um. Back to the Amazon thing
Speaker 1: for a second. It may not be obvious, but they're
Speaker 1: they're really the major force in enterprise software as well
Speaker 1: now because of a WS and because pretty much most
Speaker 1: computing is moving into the cloud, into a remote cloud. UM.
Speaker 1: The whole software enterprise software stack, which is not my forte.
Speaker 1: I do consumer internet marketplaces, um, but the whole enterprise
Speaker 1: software stack is moving out of these premise based systems
Speaker 1: as sold by Oracle and other you know, more like
Speaker 1: IBM one, but they're also moving to the cloud as well. Okay, well,
Speaker 1: here's the thing. Amazon is the cloud, and Amazon keeps
Speaker 1: adding more and more functionality. Embet it as a service
Speaker 1: within the cloud, and it's taking over chunk by chunk,
Speaker 1: is taking over these enterprise software categories. You know, Oracle
Speaker 1: as a pretty big database business. Amazon has a really
Speaker 1: big database business that's a little bit lower end, but
Speaker 1: is eating eating the big database. Really has no idea
Speaker 1: and it can. It's going to be the same for
Speaker 1: you know, HR software for sales software. I mean, it's
Speaker 1: a legitimate competitor to salesforce type I think, you know,
Speaker 1: I don't know that one specifically. I haven't sat in
Speaker 1: on a pitch on that, but it certainly wouldn't surprise me.
Speaker 1: And and I bring it up because that's part of
Speaker 1: the shadow that overhangs any kind of venture pitch, right see.
Speaker 1: I see it from the other end of the market spectrum,
Speaker 1: which is it used to be if you wanted to
Speaker 1: set up a company, well you had to hire a CTO,
Speaker 1: and you had to get a bunch of service and
Speaker 1: you get a bunch of web designs. You had to
Speaker 1: do all this startup stuff, which twenty years ago cost
Speaker 1: million dollars and today again to quote and Rees and
Speaker 1: it's you know, the total cost is the founders laptops
Speaker 1: and their access to Amazon. Absolutely, and it's pretty similar
Speaker 1: to what we were talking about with your with Ridholts
Speaker 1: Wealth Management right where schwab or more fidelity, Uh is
Speaker 1: a WS for you you can have a turnkey exactly.
Speaker 1: That Times article was great. It is it really, that
Speaker 1: is what a WS is and that is what a
Speaker 1: a w S is going to grow into. Stuff like that.
Speaker 1: It's pretty it's pretty interesting. So other companies in Seattle.
Speaker 1: There's a really hot data one called Tableau. It's interesting. Um,
Speaker 1: you know, there's a history that F five was there.
Speaker 1: There's a histor long history of um, you know, biomedical
Speaker 1: stuff coming out of Seattle. M jen Lee Hood is there.
Speaker 1: So it's a really rich kind of biotech and medical
Speaker 1: community and that is a going to be a big
Speaker 1: growth area. UM. It's becoming known as cloud City though
Speaker 1: you know cloud City because of AWS and because of
Speaker 1: the Microsoft Azure which is Microsoft Cloud is also there
Speaker 1: is also there. Uh, there are all of these new
Speaker 1: cloud based enterprise software companies and cloud based tech companies
Speaker 1: that are growing up in Seattle. I would say that's
Speaker 1: probably the most exciting area of tech growth in Seattle.
Speaker 1: Not an area that I personally participate in. I like
Speaker 1: to build brands, but it's interesting. So you have people
Speaker 1: who are working in Amazon with people working in Microsoft.
Speaker 1: They get the startup bitch, sometimes with the blessing of
Speaker 1: the company, sometimes without. They go out and do what
Speaker 1: they want to do. And that was the other question
Speaker 1: is what vcs are up there or do all the
Speaker 1: big vcs have a branch up there? Now? Both basically
Speaker 1: we have some. We have some native Seattle venture capitalists
Speaker 1: are that are that are good. It's not as broader,
Speaker 1: as deep or as experienced a venture community, but companies
Speaker 1: like Madrona and Ignition and Mavarn these are in Seattle.
Speaker 1: Uh is Ingnitial, Ignition a combinator or is that a
Speaker 1: straight up These straight up VC A lot of cloud stuff.
Speaker 1: They do X X largely X Microsoft guys UM and
Speaker 1: they've they've done pretty well. I would say when I
Speaker 1: raise money for my startups, when I have done that,
Speaker 1: I generally I look to Seattle vcs, but because of
Speaker 1: my connections in Silicon Valley, I tend to take my
Speaker 1: A rounds from Silicon Valley. I find that especially in
Speaker 1: consumer internet, software space and media, the Valley is a
Speaker 1: much deeper, richer, more experienced ecosystem. Uh so I can
Speaker 1: learn a lot more from from from the Valley. So so,
Speaker 1: what are the next startups we're going to see coming
Speaker 1: out of rich Bond? You know, I'm not actively looking
Speaker 1: for him. I'm pretty busy. I have eight or nine boards. Um,
Speaker 1: I really enjoy being a coach and I have some
Speaker 1: terrific players that I'm coaching and I really take pride
Speaker 1: in in in watching them succeed and hit hit singles,
Speaker 1: doubles and an occasional home run. Um, I enjoy that
Speaker 1: scratch that itch or does it if you if you
Speaker 1: ignore it long enough, does it does it start up again? Um?
Speaker 1: It's there, It's certainly there. But I'm moving into a
Speaker 1: phase of my life where there are a lot of
Speaker 1: other things I like to do, and so I'm not
Speaker 1: actively looking for new startups that said they come along. Um.
Speaker 1: You know, I recently joined the board of Artsy here
Speaker 1: in New York City, which is why I'm why I'm
Speaker 1: here Arts Arts. Yeah, it's going to be the the
Speaker 1: digital marketplace for fine art secondary market for fine arts.
Speaker 1: I just wrote a column somewhere. Was it Bloomberg or
Speaker 1: somewhere else? Probably there was. Just just the other day,
Speaker 1: we just raised a fifty million dollar d round I
Speaker 1: invested as an angel investor years ago. It's a marketplace build.
Speaker 1: I love marketplace builds. It's a power to the people play.
Speaker 1: You know, the art market worldwide is we estimate three trillion.
Speaker 1: There's three trillion of art stock, fine art stock on
Speaker 1: walls and in warehouses and in museums all over the world.
Speaker 1: But that's a really fat head, long tail distribution. You
Speaker 1: have a thousand grand Master's painting, and that's a trillion
Speaker 1: or a couple of trillions, probably not quite a trillion.
Speaker 1: There aren't as many. It doesn't go quite as deep
Speaker 1: as you think it does. There aren't. There aren't as many.
Speaker 1: There aren't that many hundred million dollar plus value value
Speaker 1: works out there. But but you lots of your point
Speaker 1: is taken, yes, but the bulk of the transactions in
Speaker 1: the art mark in the fine art markets have been
Speaker 1: between five thousand and fifty thousand dollars of the three trillion.
Speaker 1: Just grant that to me for a secure forty four
Speaker 1: billion dollars of art trade a year. Really decent chunk
Speaker 1: of money. Okay, it's a big chunk of money, but
Speaker 1: it's a percent a percent and a half of the
Speaker 1: art stock. I know of no other business where that
Speaker 1: asset based business where that lower percentage of the of
Speaker 1: the stock trades value changes hands every year. Housing, for instance,
Speaker 1: about fifteen six of the housing stock turns over every year.
Speaker 1: Automo that global or just in the US. In the US.
Speaker 1: But and let's call that two hundred trillion in total
Speaker 1: assets something. I think it's a hundred in land and
Speaker 1: a hundred in improvement on those lines. Automobiles. I don't
Speaker 1: know the exact numbers, but my guess is of the
Speaker 1: automobile stock trades every year or is purchased in the
Speaker 1: primary market. Leasing is so big three years, its okay.
Speaker 1: So if it's three years, it's even more, it's okay.
Speaker 1: Uh so uh At one, I see real opportunity to
Speaker 1: create a marketplace where that's that stagnant pool can start moving.
Speaker 1: We can bring we can bring some motion to the water.
Speaker 1: And there's been no real marketplace for these things to
Speaker 1: to trade hands. It just hasn't really existed. There's been
Speaker 1: no way to do it. So I kind of view
Speaker 1: it as our artsy as Airbnb for art, Airbnb for art,
Speaker 1: or really more Etsy for art. Well Carter, the CEO,
Speaker 1: likes to say Uber for art. Um I would say
Speaker 1: more air, but I guess the analogy for Airbnbs for
Speaker 1: me is that there's all this fallow, dark inventory over
Speaker 1: the world, and I'm gonna light it up. We're gonna
Speaker 1: light that up, and we're gonna bring it into the light.
Speaker 1: The museums are the are the Marriott's and Hilton's and
Speaker 1: all the individual homes that are availed from rents is
Speaker 1: everybody below the grand masters that may or may not
Speaker 1: want to sell a painting and I'm gonna collect. My
Speaker 1: wife is a collector. We have a lot of contemporary
Speaker 1: pieces in that price range, and we never sell pieces
Speaker 1: even though we'd like to, because there's really no way
Speaker 1: to do it. How do you do it? There? They
Speaker 1: are A horrible article is about, I mean really good
Speaker 1: articles about how horrible it is if you purchase something
Speaker 1: from UM an art dealer. They pretty much control that artist,
Speaker 1: control that market if you want to sell it. If
Speaker 1: you don't go through them, they're very really upset at you,
Speaker 1: and it's like, Okay, that's it. No more x y
Speaker 1: Z artist for you. Wait, I bought this, You're now
Speaker 1: out of the process. But apparently not is a little
Speaker 1: mini monopoly in that space. So you guys are gonna
Speaker 1: break that. Well, we're gonna bring We're gonna bring empowerment
Speaker 1: and light and liquidity to to a market that's been
Speaker 1: a little stagnant. And here's the thing, here's the good
Speaker 1: news for art dealers and artists, uh, is that when
Speaker 1: you bring liquidity and you get motion, and you get movement,
Speaker 1: it grows. That billion out of the three trillion is
Speaker 1: going to go to that one percent of the market
Speaker 1: that's trading is going to go to two. Then it's
Speaker 1: going to go to five, then it's going to go
Speaker 1: to fift end. And so what happens to the overall market,
Speaker 1: it's a multiple. It's an into your multiple of the
Speaker 1: size it is today. And so everybody's actually going to win,
Speaker 1: especially artists, collectors, anybody, the dealers, every everybody's gonna win.
Speaker 1: Everybody's gonna win. An arts he is going to be
Speaker 1: the marketplace that that enables that. So I see it
Speaker 1: as a really big opportunity. The mission The kind of
Speaker 1: mission of the company from the founder Carter is to
Speaker 1: make art as ubiquitous as music. Mhm. That's fascinating, although
Speaker 1: music is less ubiquitous than it used to be. M
Speaker 1: you think, um no, but you know it's hard because
Speaker 1: I'm old school and I still buy CDs and then
Speaker 1: I immediately get the Amazon download, so I have both.
Speaker 1: I don't stand why I'm gonna pay ten dollars for
Speaker 1: digital without the CDC for the stereo. I want the
Speaker 1: actual Try asking your new Alexa to play Jack Johnson,
Speaker 1: to say, hey, Alex, Alexa played Jack Johnson or whatever
Speaker 1: it is. And what happens? You try it? Okay, I
Speaker 1: literally just just it? Does it? Okay? Barry? It does
Speaker 1: it instantly? It does it instantly. Did you get the
Speaker 1: one with the good the big one? Okay, you got
Speaker 1: the big one? Good? By the way, that was the better.
Speaker 1: The forty nine dollars reduced to thirty nine didn't make
Speaker 1: sense to me, but one seventy nine to eighty nine
Speaker 1: that made more sense. So the speaker is not great,
Speaker 1: even in the big one. It's not awesome. Okay, my
Speaker 1: son knows that I have in my house. I was
Speaker 1: gonna say way better, way better. Do they work? But
Speaker 1: here's what here's what happened. Now, here's what happened. Here's
Speaker 1: what happens in my kitchen in Seattle in the morning
Speaker 1: with my three kids. Okay, we have the fancy son Nos.
Speaker 1: We got the app for sons to control Sanos. It's
Speaker 1: literally next to Zillo. Okay, I'm not exaggerating. I'm literally right.
Speaker 1: I'm exactly the same way. Let me get that picture.
Speaker 1: I gotta get a picture of that. That's so funny.
Speaker 1: That is literally with Starbucks, fit Bit and Uber on
Speaker 1: the home page. I'm gonna get you in the photo too,
Speaker 1: all right, got it? Okay, here's the thing what my
Speaker 1: kids do and my wife, which drives me batty. It's
Speaker 1: a little too hard to open the Sonos up really
Speaker 1: select whatever music services. What they do. They say, Alexa
Speaker 1: play the new Drake and that's it. And it does.
Speaker 1: And they don't care that the quality is crappy. It's
Speaker 1: sitting in the corner of the kitchen. They don't care.
Speaker 1: The quality good listening to drink it's good And I'm like,
Speaker 1: what are you doing? Why are you doing? That just
Speaker 1: works with Sonos now yet, well, not that I've seen
Speaker 1: I've been watching for and I was I thought it
Speaker 1: was on the list of skills. And if you could say,
Speaker 1: Alexa play x y Z and son. Nos, now you're
Speaker 1: really talking about I've been I've been like on Twitter
Speaker 1: asking that question for quite some time with the people
Speaker 1: in charge, and it ain't. It ain't million yet. You know,
Speaker 1: I think that's an eventuality. It should be. It should be.
Speaker 1: So I only have you for another ten fifteen minutes.
Speaker 1: Let me get to some of my um favorite questions.
Speaker 1: Let's start with what's the most important thing that people
Speaker 1: don't know about your background? I was the ice cream
Speaker 1: Man when I was a kid. I drove the ice
Speaker 1: cream truck, the good you a truck, the white truck
Speaker 1: was it was it was the blue blue skybar, Blue
Speaker 1: sky bar anyway, it was increaching in New Canyon, New Canty, Connecticut.
Speaker 1: It was. It was not a Was that a summer job?
Speaker 1: Summer job? I drove it one summer. A great way
Speaker 1: to meet young girls. I'm sure, um, what else I know?
Speaker 1: That's no, that's a winner, driving the ice cream Man, right,
Speaker 1: Nobody everybody likes the ice cream Man. Next time you buy,
Speaker 1: Alexa asked him to play the Van Halen song. Ice
Speaker 1: cream Man, ice cream Man? Um early mentors. Who were
Speaker 1: some of your early mentors? Um, my early mentors. Uh,
Speaker 1: I've always been interested in stocks. Actually. Um My dad
Speaker 1: was one of these guys that subscribe to Value Line.
Speaker 1: He was he was a corporate executive, but his dad
Speaker 1: had been a Wall Street had been a bond salesman actually,
Speaker 1: and some my dad subscribed to Value Line. And I
Speaker 1: remember pouring over Value Line with my dad as I
Speaker 1: was learning how to do stocks and learning about pe ratios.
Speaker 1: I remember buying abbed Labs when I was a kid,
Speaker 1: as well as Sony the Walkman had just come out,
Speaker 1: and I'm like, Sony's gonna kill it. That was a
Speaker 1: bad one. Last was a good one. I see when
Speaker 1: the iPod came out, I had that same phot about Apple. Oh,
Speaker 1: this is the Sony Walkman for the digital era. And
Speaker 1: when I cut my teeth on Value Line and I
Speaker 1: remember thinking, why isn't this updated instantly? Why am I
Speaker 1: getting pages? And then was already there They scratched that itch. Yeah,
Speaker 1: that's amazing. Um My dad, my dad was. Yeah, my
Speaker 1: dad was was like a great one for me. Um,
Speaker 1: you know, I'm really lucky to have had exposure to
Speaker 1: some some of the greats, really Steve Bomber. But you know,
Speaker 1: Bill taught me a lot. And Steve has taught me
Speaker 1: a lot about about about passion and storytelling. Uh. Bill
Speaker 1: has taught me a lot of a long term vision. Um.
Speaker 1: I'm really lucky I have had the pleasure of working
Speaker 1: with a couple of the best venture capitalists I think
Speaker 1: of all time, who I kind of view as my mentors. Obviously,
Speaker 1: Well Jhog we talked about TCV, you know. Uh, he's
Speaker 1: around our age, you know, maybe closer to your age
Speaker 1: than my age, maybe a little older. Um. He's a calm, experienced,
Speaker 1: level headed, well informed. Um. He's the guy that can
Speaker 1: ask the really hard question in the really non threatening way.
Speaker 1: I've learned learned that from him, and and that is
Speaker 1: a good skill. Bill Gurley at Benchmark Capital. Bill is
Speaker 1: you know, perhaps the most successful, well known venture cat,
Speaker 1: well well published. You know, Bill, he we were supposed
Speaker 1: to do a show and he unfortunately had a family
Speaker 1: emergency and were rescheduled for September or so. Should really
Speaker 1: he's excited. He's going to be great on here, and
Speaker 1: and he is quite an intellectual finance guy. I mean,
Speaker 1: he really is. But what and what I've learned from him?
Speaker 1: He was an analyst before he was a venture capitalist. Um,
Speaker 1: and what I've learned from him, I guess he's really
Speaker 1: He's taught me how to think uh competitive strategy, you know,
Speaker 1: in the Michael Porter sense. He's really an unbelievable strategic thinker.
Speaker 1: And he has helped me figure out how to break
Speaker 1: down product situations, businesses, industries and look at it through
Speaker 1: a competitive advantage from a competitive advantage perspective, and where
Speaker 1: are the moats? Where's the value created? Um? And ultimately
Speaker 1: how it all ultimately comes down to a DCF you
Speaker 1: UM had had these mentors, who was the person that,
Speaker 1: as a business person, most influenced the way you build
Speaker 1: and manage companies? All of those guys have helped me.
Speaker 1: I'd say Greg Mafas helped me quite a bit too
Speaker 1: with financial engineering, and Barry Diller he's quite quite a
Speaker 1: financial engineer. By the way, You've given me a list
Speaker 1: of a year's worth of future podcasts. You know theyre
Speaker 1: in there. They'd all be great. Um. You know, I
Speaker 1: think my business ethos is probably an amalgamation of a
Speaker 1: lot of these folks. My most my my my most
Speaker 1: recent job had been Microsoft, and so that's the culture
Speaker 1: I knew. And when we started an expedia and spun
Speaker 1: it out, I knew what I wanted to bring from
Speaker 1: the Microsoft culture and what I wanted to leave behind,
Speaker 1: what I wanted a little short elbow. Back in the
Speaker 1: day it was there. There was a it was very aggressive,
Speaker 1: challenging environment. Uh. That wasn't for everybody, and turn a
Speaker 1: lot of turn some people off. Uh. And the engineer
Speaker 1: was God eight and everybody else was a supplicant. Not
Speaker 1: a bad approach if you're building technology, it can absolutely work.
Speaker 1: But my opinion is that that building companies for the
Speaker 1: long term requires all the spokes on the wheel to
Speaker 1: be tightened to the same to the same pressure, more
Speaker 1: of a team effort, in other words, so that the
Speaker 1: wheel rolls true. Otherwise the wheel kind of bumps along
Speaker 1: and you have problems, and companies that are too lopsided
Speaker 1: culturally they all end up with problems. Uh. And so
Speaker 1: so you know, kind of having a no assholes policy
Speaker 1: and a respect you know, a respectful culture that's challenging
Speaker 1: and competitive, but not to the exclusion of you know,
Speaker 1: being respectful I share your philosophy, and and it's always
Speaker 1: difficult to tactfully explain to somebody why they're not a
Speaker 1: good fit for that reason. But it's really important, it's
Speaker 1: really important. All Right, this may be my single favorite question,
Speaker 1: or at least reader's favorite questions. Tell us about some
Speaker 1: of your favorite books. Okay, uh, yeah, I love this
Speaker 1: part of your your interview is people. I get emails
Speaker 1: all the time. I'm always looking for a new book
Speaker 1: to read. Yeah, don't forget to ask that question. Yeah,
Speaker 1: so I told you I'm not a big business book reader.
Speaker 1: I live business. When I'm in bed at night reading,
Speaker 1: I'm not. I don't. I don't want to read about
Speaker 1: my life. I want to escape. I tend to want
Speaker 1: to escape. Um, I read a lot. I mainly read fiction. Really,
Speaker 1: that's fascinating. And I would say that my passion category
Speaker 1: of fiction is probably science fiction both not surprisingly. What
Speaker 1: have you read recently that you really like? Well, I really,
Speaker 1: I really love Neil Stevenson. Who's the Seattle guy. He
Speaker 1: wrote snow Crash. You know that was that's William Gibson.
Speaker 1: William Gibson. That's right, I love snow Crash. Was was
Speaker 1: Neil Stevenson's kind of breakthrough work from fifteen or twenty
Speaker 1: years ago where he envisioned the internet. He envisioned um.
Speaker 1: He called it the metaverse. Uh, snow Crash is a
Speaker 1: real winner. In fact, Mark Andreeson and Your show refrosched
Speaker 1: it too, but snow Crash again but he neil. Recently
Speaker 1: we published a book called seven Eves. Somebody else referenced.
Speaker 1: Maybe it's Chris Anderson somebody else reference Okay, Uh, seven
Speaker 1: Eaves is just off the hook. Now. It's dense, uh,
Speaker 1: and it's a little technical, but it's approachable by anybody. Um.
Speaker 1: But the conceits the setup for seven Eaves is a agent,
Speaker 1: and unseen agent of some kind hits our moon and
Speaker 1: breaks it into seven pieces just kind of like you know, crumbles,
Speaker 1: just doesn't crumble, just kind of breaks apart. And they
Speaker 1: all kind of are moving together, and they're still orbiting
Speaker 1: the Earth. And everybody's worried at first, and they're like, oh, well,
Speaker 1: you know, gravitational centers about the same. It's orbiting the Earth.
Speaker 1: It's all good. Um, nothing bad is going to happen, right. Well,
Speaker 1: then the pieces start to bump into each other, okay,
Speaker 1: and little pieces break off, and the more collisions cause
Speaker 1: more collisions, and of course we know what happens that
Speaker 1: the bits of the Moon start falling into the Earth,
Speaker 1: and it becomes apparent to the smart people on Earth
Speaker 1: that the Earth is gonna end. And so they knew
Speaker 1: exactly how long it was going to take because they
Speaker 1: did the statistical models. And now it's a race to
Speaker 1: get as much stuff up into as much of humanity
Speaker 1: up into space before the Earth dies. And that's the
Speaker 1: kind of set up for this wonderful, this, this wonderful
Speaker 1: to add to the list. Sure, he also wrote Cryptanomicon,
Speaker 1: That's the one I was thinking, which completely is prescient
Speaker 1: around the whole cryptocurrency thing that's going on right now
Speaker 1: and is a is a very dense work that I'm
Speaker 1: that my fifteen year old son is working his way
Speaker 1: through right now. He's kind of a geeky kid. Um.
Speaker 1: But it it tells a terrific kind of Alan touring
Speaker 1: age story, a World War two story, and stashing Nazi
Speaker 1: stolen gold in Japanese islands and ties that somehow into
Speaker 1: what's happening with cryptocurrency today. That's interesting. Um, I know,
Speaker 1: we only have a few minutes left. I got to
Speaker 1: do the I have to do the last three questions. Oh,
Speaker 1: so let me do the last two questions then. Um,
Speaker 1: what sort of advice would you give to a millennial
Speaker 1: or someone just beginning their career? Interesting question, absolutely, someone
Speaker 1: interested in technology and or digital Take big swings. Take
Speaker 1: that goes back to take swings, the big Harry carry audiations,
Speaker 1: Dream big, Dream big. It's just as easy to swing
Speaker 1: for the fences that as it is the bunt right.
Speaker 1: You're at bat, Take big swings, especially young people. You
Speaker 1: you you're at a point in your lives that, whether
Speaker 1: or not you know it, you're at your most risk. Loving.
Speaker 1: Don't have kids, you don't have family, hopeful a ton
Speaker 1: of dad. Hopefully you don't have a ton of a
Speaker 1: ton of dad. Um, you know, take big swings. Hang
Speaker 1: around the hoop as well. Find the hoop, find where
Speaker 1: you think the next big thing is, and go hang
Speaker 1: around that hoop. The way to score points is to
Speaker 1: hang around the hoop. That's the best way. And our
Speaker 1: final question, what is it that you know about out
Speaker 1: venture capital technology startups today that you wish you knew
Speaker 1: back in? Um? I think that, uh, you know, I
Speaker 1: kind of I think about it as an investing question.
Speaker 1: Actually is okay, And you know, the mistakes I made,
Speaker 1: the mistakes I've made investing are all the follow of
Speaker 1: the ticker mistakes. Okay, they're all the d D mistakes
Speaker 1: where we feel like we need to do something. I'm
Speaker 1: watching the ticker, and I wish i'd known back then.
Speaker 1: I kind of logically knew that you just got to
Speaker 1: pick a few stocks and hold them forever. And I
Speaker 1: knew that I'd read you know, I'd read about Buffett
Speaker 1: for sure, like that Carol Loomis book on tap Dancy
Speaker 1: to Work is a great book. So I logically knew
Speaker 1: all this stuff. I watched my dad. But the truth is,
Speaker 1: human nature doesn't let us really do those things. But
Speaker 1: but I wish I had really known that the Amazon
Speaker 1: stock that I had pre I p o that I
Speaker 1: should have just helped. Okay, um, But that long term
Speaker 1: calm orientation is the same thing I wish i'd i'd
Speaker 1: really known about starting businesses too. I mean, that is
Speaker 1: the most important things, to have that long term vision
Speaker 1: and stick to it. It's that big dream that attracts
Speaker 1: the best people to you, and you know, stay on target.
Speaker 1: We have been speaking with Rich Barton. He is the
Speaker 1: founder of Expedia, co founder of Zillo, glass Door, and
Speaker 1: numerous other startups. If you have enjoyed this conversation, be
Speaker 1: sure and look up an inch or down an inch
Speaker 1: at any of the other hundred and fifty or so
Speaker 1: such conversations we've had over the past three years. You
Speaker 1: can find us on Apple, iTunes, SoundCloud, Overcast, and we're
Speaker 1: adding a few other technologies, so by the time you
Speaker 1: hear this, you might be listening to it on on
Speaker 1: something else. We love your comments, feedback and suggestions right
Speaker 1: to us at m IB podcast at Bloomberg dot net.
Speaker 1: I would be remiss if I did not thank the
Speaker 1: wonderful team that helps put these podcasts together. Taylor Riggs
Speaker 1: is my producer in the recording studio today is Charlie Valmer.
Speaker 1: Medina Parwana is our audio engineer. Mike Batnick is my
Speaker 1: head of research. I'm Barry Ridults Human listening to Masters
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