WEBVTT - Rich Barton Talks About His Startup Companies 0:00:00.280 --> 0:00:02.480 Masters in Business is brought to you by the American 0:00:02.560 --> 0:00:07.320 Arbitration Association. Business disputes are inevitable, resolve faster with the 0:00:07.320 --> 0:00:12.400 American Arbitration Association, the global leader in alternative dispute resolution 0:00:12.480 --> 0:00:15.920 for over ninety years. Learn more at a d R 0:00:16.320 --> 0:00:25.920 dot org. My special guest today is Richard Barton. He 0:00:26.000 --> 0:00:30.360 has quite the curriculum vita. He is the founder of 0:00:31.240 --> 0:00:40.120 numerous and highly regarded startups, including Expedia, Zillo, and glass Door. 0:00:40.159 --> 0:00:43.280 He is on the board of directors at Netflix, and 0:00:43.360 --> 0:00:47.800 he is a partner at the venture capital firm Benchmark Partners. 0:00:48.000 --> 0:00:51.080 Richard Barton, Welcome to Bloomberg. Thank you very much for 0:00:51.080 --> 0:00:53.600 having me on. So I've been looking forward to chatting 0:00:53.720 --> 0:00:57.160 with you about so many different things. I have to 0:00:57.280 --> 0:01:02.080 start though, there's such a Your background is so start 0:01:02.160 --> 0:01:06.479 up oriented, and yet you graduate Stanford at eighty nine 0:01:06.520 --> 0:01:09.319 with a degree in engineering you end up at Microsoft. 0:01:09.680 --> 0:01:12.520 What was it like working in Microsoft in the midst 0:01:12.520 --> 0:01:16.840 of the nineties when everything was on five? You know 0:01:17.640 --> 0:01:22.160 the power we with which we view Facebook and Google 0:01:23.000 --> 0:01:26.080 and Apple today, Imagine all that power wrapped up into 0:01:26.120 --> 0:01:29.600 one company and one company. That's what Microsoft was with 0:01:29.760 --> 0:01:33.119 one person at the helm, who really was running the show, 0:01:33.280 --> 0:01:36.120 who really was running the show involved deeply. When I 0:01:36.160 --> 0:01:39.039 showed up, there were about three thousand employees, so it 0:01:39.120 --> 0:01:43.720 was relatively relatively small company. Um. Now, tech wasn't as 0:01:43.720 --> 0:01:48.800 pervasive as it is today, but Microsoft was by far 0:01:49.000 --> 0:01:52.920 the most important company in the technology world and basically 0:01:52.920 --> 0:01:55.160 building the future. It was quite exciting that, that's right 0:01:55.200 --> 0:01:59.040 at the process as tech became more pervasive meant that 0:01:59.120 --> 0:02:01.600 a ton of money was flowing into their coffers. And 0:02:02.000 --> 0:02:05.559 before the iPhone there was really nothing ever like Microsoft before. 0:02:05.760 --> 0:02:08.520 That's right, I mean IBM. You could argue em had 0:02:08.520 --> 0:02:11.320 a pretty good position prior to Microsoft, not on the 0:02:11.320 --> 0:02:14.480 consumer side, but never on the business. And it wasn't 0:02:14.480 --> 0:02:16.760 as big a business, right, It was a much smaller business. 0:02:16.800 --> 0:02:21.639 And it was whether we're talking typewriters or mainframes, there 0:02:21.680 --> 0:02:24.520 was still an aspect. It wasn't the dominant technology of 0:02:24.520 --> 0:02:27.040 the day. So so what did you do with Microsoft? 0:02:27.760 --> 0:02:31.280 My first job at Microsoft was product manager of MS 0:02:31.440 --> 0:02:34.760 DOS five. So you're the person I should have been 0:02:34.800 --> 0:02:37.120 sending those nasty letters. Do you even do? Do you 0:02:37.160 --> 0:02:39.200 know what the big feature for MS DOS five? I 0:02:39.440 --> 0:02:42.760 do that much of a geek. Uh was this pre shell? 0:02:42.880 --> 0:02:45.440 Is that what we're talking? Well, there was a shell 0:02:45.600 --> 0:02:48.040 that we have this weird shell. There was no Windows, 0:02:48.760 --> 0:02:51.320 way before there was no Windows. But I feel like 0:02:51.440 --> 0:02:54.360 three one as we're really that's that's Windows three point one, 0:02:54.360 --> 0:02:56.760 which was a couple of years after Horrible that. I 0:02:56.800 --> 0:02:59.440 remember that well, it was a big event. These were 0:02:59.520 --> 0:03:02.760 consumer ending events. And MS DOS five upgrade was the 0:03:02.840 --> 0:03:07.400 first operating system that Microsoft sold at retail as an upgrade, 0:03:07.880 --> 0:03:11.400 and they did it to break the six forty K barrier, 0:03:11.880 --> 0:03:14.880 which they are about five percent of your listeners right 0:03:14.919 --> 0:03:19.560 now that the computer was using and got it. I'm 0:03:19.720 --> 0:03:24.480 m dot sis. And what this enabled was these older 0:03:24.520 --> 0:03:27.760 PCs that were getting obsolete to load up this this 0:03:27.840 --> 0:03:30.000 new upgrade, which was a very hard process to do, 0:03:30.440 --> 0:03:33.320 kind of imagine lifting a house, pouring a new foundation 0:03:33.520 --> 0:03:35.760 and dropping the house back down onto It was hard, 0:03:36.160 --> 0:03:38.800 but it allowed them to run bigger programs faster, and 0:03:38.960 --> 0:03:42.960 people lined up around the block at midnight outside of Egghead, 0:03:42.960 --> 0:03:45.720 So I remember that. I mean, it was nothing like 0:03:45.720 --> 0:03:49.720 when you know the Rolling Stones. Start Me Up was 0:03:49.760 --> 0:03:53.560 the theme song, and it just went utterly crazy. I 0:03:53.640 --> 0:03:58.240 was the lonely Mac guy during that era and actually 0:04:00.200 --> 0:04:03.640 thrilled when when the deal was cut in ninety eight, 0:04:03.720 --> 0:04:08.400 jobs came back and Gates essentially, I think intelligently made 0:04:08.400 --> 0:04:11.560 the bet that hey, if Apples around, we're less of 0:04:11.640 --> 0:04:15.440 a monopoly because look, there's a credible consumer competitor, and 0:04:15.520 --> 0:04:17.480 that's why that deal was made. That investment. Yeah, a 0:04:17.480 --> 0:04:20.520 guy named Greg Maffei who I'm on the board of 0:04:20.520 --> 0:04:23.200 Liberty Interactive as well, and Greg is on my board 0:04:23.320 --> 0:04:26.720 at Zillo. He was my first chairman at Expedia. He's 0:04:26.760 --> 0:04:30.800 the guy that led that investment, uh, for Microsoft and Apple. 0:04:31.080 --> 0:04:33.159 You know, it's too bad Microsoft sold that position. It 0:04:33.160 --> 0:04:35.760 would be worth um quite a large time. I'm told 0:04:35.800 --> 0:04:38.520 they did well. Microsoft. I'm told they were accounting reasons. 0:04:38.560 --> 0:04:41.240 Why once it just starts becoming an outsized portion of 0:04:41.279 --> 0:04:44.360 the balance sheet, it's all right, this is problematic. Let's 0:04:44.400 --> 0:04:46.719 just liquid dated. Not that they needed the money. They've 0:04:46.760 --> 0:04:50.520 been a cash machine from day one. So, so you've 0:04:50.560 --> 0:04:54.440 been a CEO at a public company. What is that 0:04:54.520 --> 0:04:58.440 process like and and why are so many companies reluctant 0:04:58.480 --> 0:05:02.000 to go public these days. I'm one of these guys 0:05:02.040 --> 0:05:04.600 who thinks when you take a company public, you're making 0:05:04.640 --> 0:05:06.920 it to the majors. It's like going from the minors 0:05:06.920 --> 0:05:09.719 to the majors. And you know, I grew up in 0:05:09.720 --> 0:05:12.960 a time when that was the dream. Uh. Plus, your 0:05:13.000 --> 0:05:15.960 backers would like to eventually. And I actually feel a 0:05:15.960 --> 0:05:19.360 responsibility to the people that actually invested in my companies 0:05:19.400 --> 0:05:21.760 and by the way, my employees, who I've paid in 0:05:21.760 --> 0:05:24.640 stock options in part. And so I believe it's my 0:05:24.680 --> 0:05:27.200 responsibility as an entrepreneur to figure out how to get 0:05:27.200 --> 0:05:30.600 a company public so that you know, to reward these people. 0:05:30.640 --> 0:05:34.400 But I also believe it creates optionality. And when you 0:05:34.400 --> 0:05:37.400 have optionality to buy companies with stock, to issue stock, 0:05:37.800 --> 0:05:40.679 and to to raise cash, it gives it creates value. 0:05:40.720 --> 0:05:43.680 Optionality creates value. And so I'm a big fan of 0:05:43.720 --> 0:05:48.240 being public. I also believe that this quarterly reporting stuff 0:05:48.279 --> 0:05:52.599 is great discipline and having auditors in your operation. You know, 0:05:52.680 --> 0:05:54.920 even me as a CEO, I'm happy to have auditors 0:05:54.960 --> 0:05:56.640 and they're just to kind of be digging through and 0:05:56.640 --> 0:05:59.479 looking for stuff. And and now I understand why you've 0:05:59.560 --> 0:06:03.279 been the IT of three successful companies, because you understand 0:06:03.360 --> 0:06:06.719 things that other people seem to just complain about. When 0:06:06.600 --> 0:06:11.240 I when we see companies startups say it's too onerous, 0:06:11.279 --> 0:06:14.880 it's too invasive to go public. What's your response to that. 0:06:15.279 --> 0:06:17.680 I mean, can you imagine Tom Brady in college? Where 0:06:17.760 --> 0:06:21.120 was he in Michigan? I think saying I don't want 0:06:21.160 --> 0:06:26.120 to go pro. You know, you know, it's too much pressure. Everybody. 0:06:26.520 --> 0:06:29.640 They're writing about me. There are people on the radio 0:06:29.760 --> 0:06:32.400 making fun of me and how I played over the week. 0:06:32.480 --> 0:06:35.720 You imagine that anyway, that's kind of the pervasive attitude 0:06:35.800 --> 0:06:40.400 right now. Our vcs, ore vcs encouraging that attitude or 0:06:40.440 --> 0:06:43.039 do they want to go public as much as the 0:06:43.080 --> 0:06:46.839 next well earlier stage vcs absolutely want their companies to 0:06:46.880 --> 0:06:51.480 be public so that they can get liquid their business. Right. 0:06:52.120 --> 0:06:54.760 The the issue is there's been in the world's a 0:06:54.800 --> 0:06:57.600 Washington capital as as you and your listeners well now, 0:06:58.320 --> 0:07:03.600 and there's been a flood money into late stage private investing, okay, 0:07:03.640 --> 0:07:05.800 and those people don't want this IPO problem to go 0:07:05.800 --> 0:07:08.800 away because they're getting to invest that they're getting to 0:07:08.880 --> 0:07:11.400 write hundreds of millions of dollars, if not billions of 0:07:11.440 --> 0:07:14.600 dollars checks and companies like Uber to get into the 0:07:14.600 --> 0:07:18.560 cap table before the public does. And so that flood 0:07:18.600 --> 0:07:22.280 of capital into late stage private has made it easy 0:07:22.400 --> 0:07:25.000 for an entrepreneur to say, uh, I'm not you know, 0:07:25.120 --> 0:07:27.440 I'm not gonna go public. I'm gonna stay private. They're 0:07:27.520 --> 0:07:30.240 letting them cash stock out their founders that in these 0:07:30.320 --> 0:07:33.600 late stage deals they get to sell stock, and so, well, 0:07:33.640 --> 0:07:35.840 what incentive do I have? You know, if the CEO 0:07:36.040 --> 0:07:38.800 is is getting liquid prior to being public, then what 0:07:38.880 --> 0:07:42.080 incentive does the CEO have to actually get public? So 0:07:42.240 --> 0:07:44.520 there's a there are a myriad of problems. I guess 0:07:44.520 --> 0:07:47.920 I would also it could be an interesting conversation depending 0:07:47.960 --> 0:07:50.720 on how you feel about it. But I feel I 0:07:50.760 --> 0:07:55.160 feel that the the the regulatory burden is and the 0:07:55.240 --> 0:07:59.200 legal burden is high. Okay. Now, any one regulation, if 0:07:59.200 --> 0:08:02.880 you looked at it on its own, UM makes sense. Okay, 0:08:02.920 --> 0:08:07.559 any of these regulations, but in totality it is quite crushing. Uh. 0:08:07.600 --> 0:08:10.160 And the lawsuits that that that ensued because of these 0:08:10.200 --> 0:08:14.200 regulations as well, that is quite time consuming. And a 0:08:14.240 --> 0:08:15.920 lot of people look at that and they say, well, 0:08:15.920 --> 0:08:18.120 I'm not gonna be public. Michael Mobison, who I know 0:08:18.160 --> 0:08:21.720 you've had on published paper. He's terrific. He published a 0:08:21.720 --> 0:08:25.720 paper six or eight months ago, Uh, basically saying they're 0:08:25.800 --> 0:08:28.880 they're less than half of the companies. They're less than 0:08:28.920 --> 0:08:31.960 half the number of public companies today as there were 0:08:32.000 --> 0:08:34.240 fifteen years ago. I may I may have that wrong, 0:08:34.280 --> 0:08:40.079 but some okay, Um, we have all the public exactly okay. 0:08:40.160 --> 0:08:45.280 And so they I think that the the industry if 0:08:45.280 --> 0:08:49.760 they're lobbying for more shareholder activism and more ability to 0:08:49.800 --> 0:08:52.800 put people onto boards. Uh. And as as as this 0:08:52.840 --> 0:08:57.840 money floods into activist funds, what they're doing actually is 0:08:57.960 --> 0:09:01.400 kind of killing the golden goose. They're they're driving companies 0:09:01.440 --> 0:09:03.840 out of the out of the public markets. So let's 0:09:03.840 --> 0:09:06.880 talk a little bit about Zello, which I find to 0:09:06.920 --> 0:09:14.120 be absolutely fascinating. First, what inspired this, right, I mean, 0:09:14.160 --> 0:09:16.680 it's a segment too. You're not the only one that 0:09:16.720 --> 0:09:22.240 finds it fascinating. Very We get over one hundred and 0:09:22.240 --> 0:09:26.720 seventy million visitors a month to our portfolio of sites, 0:09:26.800 --> 0:09:31.360 and we we don't only truly a street Easy here 0:09:31.360 --> 0:09:34.320 in New York City, which was a really really great 0:09:34.360 --> 0:09:39.240 acquisition nobody noticed. I mean, you don't have multiple listing 0:09:39.280 --> 0:09:43.240 services in big cities. It's a very closely held thing, 0:09:43.840 --> 0:09:48.480 and they're one of the few entities that track big city. 0:09:48.520 --> 0:09:50.839 I know they started in New York. They did. Then 0:09:50.880 --> 0:09:55.320 they nailed this vertical living, yeah, really did. But they 0:09:55.320 --> 0:09:58.160 had trouble expanding me on New York. Uh, and so 0:09:58.320 --> 0:10:00.280 we met up with them. We got along with um. 0:10:00.360 --> 0:10:02.920 The founders wanted to get some liquidity and we and 0:10:02.960 --> 0:10:04.839 we bought it maybe five years ago to that was 0:10:05.120 --> 0:10:07.800 a really wonderful thing. And there's another brand called Hot 0:10:07.800 --> 0:10:09.920 Pads and Naked Apartments that we own, so we have 0:10:09.960 --> 0:10:14.200 a portfolio of brands. What got it going, however, was 0:10:14.720 --> 0:10:18.680 my personal frustration with not being able. I was shopping 0:10:18.720 --> 0:10:23.320 for a home my family. I just had twins. You 0:10:23.360 --> 0:10:25.800 live where no part of the country. I live in Seattle, Washington, 0:10:27.080 --> 0:10:29.880 lovely part of the from the world, one kid to three, 0:10:30.240 --> 0:10:32.240 and I was shopping my my co founder and I 0:10:32.280 --> 0:10:35.079 were shopping for homes together. We both just left Expedia 0:10:35.960 --> 0:10:41.959 after having a really successful leadership, and so we're looking 0:10:41.960 --> 0:10:45.160 for homes and we can't believe. And this is like 0:10:45.200 --> 0:10:49.960 two thousand four, two five modern era. It's like the 0:10:50.000 --> 0:10:52.760 web has been around for at least ten years at 0:10:52.760 --> 0:10:57.040 this point, and so where's all the information? What where 0:10:57.120 --> 0:10:58.959 is it? It's like it's like it's like it was 0:10:59.040 --> 0:11:01.640 when we started expediing it. It's like, I can't access 0:11:01.720 --> 0:11:03.319 that the information that I want to see prices, I 0:11:03.320 --> 0:11:04.880 want to see schedules. I want to do it myself. 0:11:05.120 --> 0:11:08.160 I want to take control. People want control. I want 0:11:08.160 --> 0:11:11.160 to control. My partner, Lloyd wanted control. And we said, 0:11:11.200 --> 0:11:13.319 all right, well this is broken. You know there's something 0:11:13.320 --> 0:11:15.720 going on here that's broken because this information, if you 0:11:15.760 --> 0:11:18.960 dig hard enough, is available. And so we built spreadsheets, 0:11:19.000 --> 0:11:22.000 We went to the county websites. We started doing dollars 0:11:22.000 --> 0:11:23.920 per square foot. So we're just trying to figure out 0:11:24.000 --> 0:11:27.440 what we should pay for a house. And so Zillo 0:11:27.880 --> 0:11:32.720 was born of this, this frustration and this desire for 0:11:32.800 --> 0:11:35.200 to to be empowered with information. And once we got 0:11:35.280 --> 0:11:36.920 it all together and we figured it out, we're like, well, 0:11:36.920 --> 0:11:39.040 why should you have to be a spreadsheet geek like us, 0:11:39.920 --> 0:11:42.160 uh to be able to get this and we said 0:11:42.320 --> 0:11:44.400 we kind of slapped our heads. We found this estimate. 0:11:44.440 --> 0:11:47.640 We kind of stumbled into this estimate UM. And once 0:11:47.679 --> 0:11:50.560 we stumbled into thet this estimate is an estimated market 0:11:50.640 --> 0:11:53.360 value of every home in the country that we update 0:11:53.679 --> 0:11:56.680 just about every night. UM. We kind of had on 0:11:56.720 --> 0:11:59.640 the whiteboard we had a stock a stock chart. So 0:11:59.679 --> 0:12:01.439 this is this isn't this isn't a time when the 0:12:01.480 --> 0:12:05.199 real estate business was going, you know, the real and 0:12:05.840 --> 0:12:08.800 everybody's most significant asset if they owned a home, was 0:12:08.840 --> 0:12:11.120 their home, and people were wanted to know what their 0:12:11.160 --> 0:12:13.200 home was worth. So they're watching the market, and so 0:12:13.240 --> 0:12:16.079 we thought, well, why shouldn't you track the value of 0:12:16.080 --> 0:12:18.319 a home like you like, like you track your portfolio. 0:12:18.480 --> 0:12:21.200 But you guys pivoted complete letting. His estimate is still 0:12:21.200 --> 0:12:23.680 part of the ZILO. But I would say it's it's 0:12:23.800 --> 0:12:29.040 now probably the least significant daily usage. That a fair 0:12:29.040 --> 0:12:31.200 way to describe it. I would say that is a 0:12:31.200 --> 0:12:33.840 fair way to describe it. It's mostly people who are 0:12:33.840 --> 0:12:36.800 shopping for rentals and mortgages and homes and people who 0:12:36.800 --> 0:12:40.400 are selling those properties. But but we envisioned right from 0:12:40.400 --> 0:12:43.320 the start that this estimate, which was a missing key 0:12:43.360 --> 0:12:46.760 piece of marketplace data, could in fact be at the 0:12:46.880 --> 0:12:50.600 core of a new real estate marketplace, a digital one. 0:12:50.720 --> 0:12:53.520 So the question, I have so many questions about this subject. 0:12:54.240 --> 0:12:58.960 The data that you wanted was clearly in existence, but 0:12:59.080 --> 0:13:02.480 it was control by the National Association of Realtors. I 0:13:02.520 --> 0:13:05.720 believe they're they own the multiple listing service, or they're 0:13:05.720 --> 0:13:09.320 affiliated with it. Not really, actually it's quite separate. In fact, 0:13:09.320 --> 0:13:13.520 there is not even one MLS. There are nine in 0:13:13.520 --> 0:13:16.480 their own by broke regional brokerages generally speaking. But the 0:13:16.559 --> 0:13:19.280 n A R has clearly has influence, and you guys 0:13:19.280 --> 0:13:23.520 eventually tapped into all of that. UM, we eventually got 0:13:23.559 --> 0:13:27.280 all that data. But what we did was we we 0:13:27.320 --> 0:13:29.560 didn't show up to the pot luck with just a fork. 0:13:30.320 --> 0:13:33.080 Dave Linegar, the founder of Remax, is a colorful fellow. 0:13:33.679 --> 0:13:38.760 Uh upbraided me publicly early on by telling me I 0:13:38.760 --> 0:13:40.720 had shown up to the pot luck with just a fork, 0:13:40.720 --> 0:13:43.080 because if I could come into his business and just 0:13:43.200 --> 0:13:46.400 use his data and then get users and then turn 0:13:46.440 --> 0:13:49.360 around and charge charge him for advertising. But that's not 0:13:49.400 --> 0:13:53.400 the case. We brought pot roast and marshmallow jello salad. 0:13:53.760 --> 0:13:56.920 We brought this estimate, and we brought this huge database 0:13:57.040 --> 0:14:00.240 of all homes, not just the small number it's for 0:14:00.280 --> 0:14:03.560 sale right now, but a database of all homes. And 0:14:03.600 --> 0:14:05.800 it was a living one so people could add to it. 0:14:05.840 --> 0:14:09.960 A new data kept coming in and finally, UH the industry, 0:14:10.360 --> 0:14:13.079 in a very complementary way, realized that this data was 0:14:13.160 --> 0:14:16.600 really important to buyers and sellers and agents alike, and 0:14:16.960 --> 0:14:20.760 eventually everybody ended up participating. So the Zilla, I'm not exaggerating. 0:14:20.800 --> 0:14:24.160 The Zillo app is literally on the home screen one. 0:14:24.720 --> 0:14:27.520 Is it screen one? A screen too? No, that is 0:14:27.560 --> 0:14:31.720 screen one. There you go. It's um like Zilo, son 0:14:31.720 --> 0:14:39.200 nos and uh sky something I don't remember it is 0:14:39.440 --> 0:14:44.240 um So let me three of I don't EXPEDI is 0:14:44.280 --> 0:14:47.000 sort of before my time. I know that sounds ridiculous. 0:14:47.360 --> 0:14:50.720 We'll talk about Expedia soon. The three ways I use 0:14:50.800 --> 0:14:56.080 Zillo constantly constantly. First, any time you're driving in a 0:14:56.120 --> 0:14:59.040 neighborhood and you see a nice house or something right, 0:14:59.080 --> 0:15:02.120 and I love to just you know, my mother was 0:15:02.160 --> 0:15:04.520 a real estate agent. We own a couple of homes. 0:15:04.640 --> 0:15:08.480 I'm very much your target real estate junkie audience. So 0:15:08.560 --> 0:15:11.680 outcomes the app. And as long as there's some connectivity, 0:15:11.960 --> 0:15:15.280 UM mobile telecom in United States is an embarrassment, but 0:15:15.320 --> 0:15:17.760 we'll save that for another podcast. Hey, they're all the 0:15:17.800 --> 0:15:21.840 houses that are for sale recently sold, and you could 0:15:21.880 --> 0:15:24.160 you could see the prices and what have you. It's 0:15:24.240 --> 0:15:26.880 really fun to do that on a boat out in 0:15:27.080 --> 0:15:30.920 harbor because you could actually see the houses that you 0:15:31.040 --> 0:15:34.520 can't see from the road, like they're down driveways, behind edges, 0:15:34.840 --> 0:15:38.200 they're invisible. That's a ton of fun. How do you 0:15:38.200 --> 0:15:41.720 find people generally use the app? And what I mean 0:15:41.760 --> 0:15:44.640 by that The obvious is I'm looking for a house. 0:15:44.960 --> 0:15:47.640 What other ways have come up? That might have been 0:15:47.680 --> 0:15:54.680 someone unexpected? H The development people and universities and philanthropies 0:15:54.880 --> 0:15:59.560 use it to target to target people. That's interesting, divorce attorneys, 0:15:59.640 --> 0:16:02.480 I'm I'm kind of joking. Uh. There are so many 0:16:02.600 --> 0:16:07.000 uses for Zilla, both as an entertainment, as as information 0:16:07.160 --> 0:16:11.120 and as entertainment and to inform a shopping process, be 0:16:11.160 --> 0:16:14.320 it a casual shopping process or a or a serious 0:16:14.520 --> 0:16:19.320 shopping process. Not to mention, we're the largest rental site 0:16:19.440 --> 0:16:23.200 network of rental sites now, so you know most most 0:16:23.240 --> 0:16:26.400 of the growth in households right now is going to rentals, 0:16:26.840 --> 0:16:29.080 and so rentals has become quite a big business. Always 0:16:29.080 --> 0:16:32.800 has been UM and mortgage shopping people do. But it 0:16:32.800 --> 0:16:36.240 turns out that our homes are not only where we 0:16:36.360 --> 0:16:39.560 lay our head, they are our entertainment. Look no further 0:16:39.560 --> 0:16:43.400 than HGTV and all these worm shows on they are entertainment. 0:16:43.680 --> 0:16:45.880 We love to track the value of it too, because 0:16:45.880 --> 0:16:48.440 it's for many of us, our our biggest asset. And 0:16:48.480 --> 0:16:52.680 so this this kind of intertwining of emotion and financial importance. 0:16:52.680 --> 0:16:54.240 I kind of view it as a year and a yang. 0:16:54.640 --> 0:16:57.200 This is really quite a sweet spot in consumer products 0:16:57.280 --> 0:16:59.840 that I look for. When you have both emotion and 0:17:00.000 --> 0:17:04.959 financial significance, you have a potential huge idea. So we 0:17:05.040 --> 0:17:07.800 moved a couple of years ago, and we when we 0:17:07.800 --> 0:17:10.200 were selling the previous house, we brought in two different 0:17:10.240 --> 0:17:17.520 real estate agents and we surprisingly received wildly disparate estimates 0:17:17.520 --> 0:17:21.280 from each of them. And again, my mom was real 0:17:21.400 --> 0:17:25.560 estate agent. I grew up with dinner table conversation about 0:17:25.640 --> 0:17:29.439 what terrible people some agents um, what terrible behaviors some 0:17:29.560 --> 0:17:33.760 agents exhibit. I mean that was literally dinner conversation. And 0:17:33.840 --> 0:17:37.880 so when we got these different estimates, I said, let 0:17:37.880 --> 0:17:39.639 me play with Zello a little bit and see what 0:17:39.680 --> 0:17:42.119 I can do. And the first thing I did was 0:17:42.280 --> 0:17:47.040 come up with a I searched for our house number 0:17:47.080 --> 0:17:50.639 of bedrooms. Bathrooms were a kitchen deck proximity to the water. 0:17:50.920 --> 0:17:53.160 I tried to make it as close as humanly possible 0:17:53.200 --> 0:17:56.680 as I could, and then that generated two lists. It 0:17:56.840 --> 0:18:00.679 generated the list of homes that were for sale in 0:18:00.800 --> 0:18:05.159 my neighborhood and surrounding towns within my price point. But 0:18:05.240 --> 0:18:07.960 it also generated a second list of homes that were 0:18:08.080 --> 0:18:11.199 sold with the same characteristics. And so you get these 0:18:11.200 --> 0:18:13.399 two data sets, and then you look at the overlap 0:18:13.800 --> 0:18:16.080 and lo and behold, if you want to sell your 0:18:16.119 --> 0:18:20.199 price at them, the get the maximum return on the 0:18:20.240 --> 0:18:23.240 sale in the fastest amount of time. You could wait 0:18:23.320 --> 0:18:25.760 six months and maybe get another ten or twenty grand. 0:18:26.040 --> 0:18:28.040 But if you want to be right in the sweet spot, 0:18:28.320 --> 0:18:31.160 and we literally sold the house within ten thousand dollars 0:18:31.160 --> 0:18:34.679 of ask in three weeks. And I have to give 0:18:34.720 --> 0:18:37.719 thanks to you, guys, because that would not have happened 0:18:37.720 --> 0:18:40.960 without you, guys. Very that scenario is exactly why we 0:18:41.000 --> 0:18:45.119 built Solo. That's exactly it. You were fully empowered to 0:18:45.240 --> 0:18:47.800 look at all that data yourself in a way that 0:18:47.840 --> 0:18:50.359 you could understand it and didn't exist a few years 0:18:50.520 --> 0:18:52.920 you weren't able to access that information before. That is 0:18:52.960 --> 0:18:56.119 power to the people. I love, love, love that we 0:18:56.200 --> 0:19:00.240 really have this you know, this ethic at this think 0:19:00.280 --> 0:19:04.440 at Zillo and all my companies, where we want to 0:19:04.480 --> 0:19:07.840 empower regular people with data and tools so that they 0:19:07.840 --> 0:19:11.679 can make much better decisions about big, important financial stuff. 0:19:12.000 --> 0:19:14.480 Let's talk a little bit about Expedia, because that's a 0:19:14.520 --> 0:19:21.399 fascinating story. You're working at Microsoft. They are not exactly 0:19:21.560 --> 0:19:25.800 a startup culture by that point. They're they're the eight 0:19:26.160 --> 0:19:30.359 pound guerrilla. How did Expedia come about? I always had 0:19:30.400 --> 0:19:32.680 the itch to have my own thing. I always wanted 0:19:32.680 --> 0:19:34.359 to start my own company, and I was going to 0:19:34.480 --> 0:19:40.800 do it somewhere um and the Internet was just happening. 0:19:41.200 --> 0:19:44.880 The Internet hadn't quite the graphical Web hadn't happened yet 0:19:44.960 --> 0:19:47.560 pre Netscape, so this is pre nat scape. But post 0:19:47.560 --> 0:19:51.400 Prodigy and a O l okay so compy survey, well Prodigy, 0:19:51.400 --> 0:19:55.960 these were the big services, and I was fascinated by them. 0:19:56.240 --> 0:19:59.760 I really thought, Wow, these are empowering, this is something 0:19:59.800 --> 0:20:02.280 some thing interesting is going to happen here, and this 0:20:02.359 --> 0:20:07.040 tool here could lead to some new industrial revolution. I 0:20:07.080 --> 0:20:09.959 was thinking pretty grandly, like what could happen to the 0:20:10.000 --> 0:20:14.440 travel industry? Uh? If people had access to all this data? 0:20:14.520 --> 0:20:16.120 What could happen to real estate? I was even thinking 0:20:16.119 --> 0:20:19.000 about real estate back then. I wrote a plan to 0:20:19.000 --> 0:20:22.200 to have an electronic stockbroker because I like to trade. 0:20:22.320 --> 0:20:26.560 Trade and investor is pre e trade. This is pre 0:20:26.680 --> 0:20:29.600 e trade, but but e trade didn't even exist. But 0:20:29.640 --> 0:20:31.480 I was a Schwab customer, and I was one of 0:20:31.520 --> 0:20:34.920 those Schwab guys that used telebroker. I would trade with 0:20:34.960 --> 0:20:37.160 my finger, you know, on the on the keypad, because 0:20:37.200 --> 0:20:39.200 I don't really want to talk to somebody. I knew 0:20:39.200 --> 0:20:41.560 how to do it myself. I wanted control anyway, So 0:20:41.640 --> 0:20:46.160 I envisioned that this online thing might turn into something 0:20:46.160 --> 0:20:48.960 pretty interesting. I wanted to be an entrepreneur. I was 0:20:49.080 --> 0:20:54.280 especially frustrated as a traveling young businessperson with the interactions 0:20:54.320 --> 0:20:57.879 I was having with my Microsoft corporate travel agent. I 0:20:57.920 --> 0:21:00.320 could someone in house who would book travel for in 0:21:00.480 --> 0:21:03.480 house or working for American Express, but basically assigned to 0:21:03.520 --> 0:21:06.439 the Microsoft account, and I'd call her up. Usually it 0:21:06.480 --> 0:21:07.879 was it was a woman, but there were, you know, 0:21:08.040 --> 0:21:11.879 many different people, and I'd hear the keyboard clicking, you know, 0:21:11.920 --> 0:21:14.800 as I was asking questions and Seattle, then Denver, and 0:21:14.800 --> 0:21:16.600 then I gotta go up to Chicago, back to Seattle, 0:21:16.640 --> 0:21:20.399 and I'd hear these keyboard clicking. I'm like, you know, 0:21:20.600 --> 0:21:22.959 she answered me with one choice, and I'd be like, 0:21:23.000 --> 0:21:24.920 well that it can't be the only choice. You've got 0:21:24.920 --> 0:21:26.480 a screen full of stuff in front of you. So 0:21:26.560 --> 0:21:29.440 I wanted to jump through the phone line, turned the 0:21:29.480 --> 0:21:32.000 screen towards me and take control of myself. Okay, So 0:21:32.440 --> 0:21:35.639 that was the inception of me being going to UH 0:21:35.640 --> 0:21:38.040 to Bill Gates, who I view as my first venture capitalist, 0:21:38.040 --> 0:21:40.480 and Steve Bomber was in the room too, UH and 0:21:40.600 --> 0:21:44.440 pitching the idea for for what became Expedient. So tell 0:21:44.560 --> 0:21:47.800 us about that meeting. That has to be a seminal 0:21:47.880 --> 0:21:51.280 moment in your career. It was. It was not you know, 0:21:51.320 --> 0:21:53.080 I did you realize that at the time, or was 0:21:53.119 --> 0:21:55.720 it like I just gotta get these guys to sign off? No? No, no, 0:21:55.800 --> 0:21:57.760 it felt special to me. I knew I had a 0:21:58.080 --> 0:22:00.440 I knew I had a potential tiger at the tail 0:22:00.560 --> 0:22:04.920 I did, and and I actually wanted to convince them 0:22:04.960 --> 0:22:07.639 to that it wasn't going to really be a software business. 0:22:07.640 --> 0:22:09.239 It was going to be a travel business. And I 0:22:09.280 --> 0:22:12.280 wanted to build a fund me on the outside to 0:22:12.359 --> 0:22:14.520 do my own thing, because at this point Microsoft was 0:22:14.560 --> 0:22:17.080 getting bigger and the stuff I was working on I 0:22:17.119 --> 0:22:19.320 was paid in stock options. But the stuff I was 0:22:19.359 --> 0:22:21.920 working on, you know, it wasn't Windows. At the time, 0:22:22.040 --> 0:22:25.119 and so really it would only matter how windows in office, 0:22:25.160 --> 0:22:29.240 did you know, versus two relative to my compensation. So 0:22:29.280 --> 0:22:31.040 I was thinking, well, if I can do this on 0:22:31.040 --> 0:22:33.040 the outside, if I if I can build a team 0:22:33.040 --> 0:22:34.639 and do really well with this, then I can do 0:22:34.720 --> 0:22:38.440 well too. Anyway, I pitched them on that idea right 0:22:38.480 --> 0:22:40.919