Leap Academy with Ilana Golan - Former Zillow CEO, Spencer Rascoff: Leading Billion-Dollar Startups Through Crises

Episode Date: December 19, 2024

Spencer Rascoff’s career is a masterclass in navigating crises. After co-founding the travel site Hotwire, the 9/11 tragedy devastated the travel industry. Spencer helped steer the company through this crisis, leading to its $685 million sale to Expedia. He then co-founded Zillow, guiding it through the 2008 housing crash and growing it to a $20 billion market cap. His third venture, Pacaso, a luxury vacation home co-ownership platform, launched just before the pandemic. Despite initial fears about shared spaces, the crisis increased demand for second homes, helping Pacaso achieve unicorn status. In this episode, Spencer shares with Ilana his hard-earned insights on navigating the highs and lows of startup life and turning crises into opportunities. Spencer Rascoff is a serial entrepreneur, investor, and business executive best known for co-founding Hotwire, Zillow, and Pacaso. As the founder of 75 & Sunny Ventures, he mentors and invests in startups, aiming to democratize access to business opportunities and innovation. In this episode, Ilana and Spencer will discuss: (00:00) Introduction  (02:03) His Early Exposure to Entrepreneurship (04:13) Building Strong Work Ethic in High School (06:07) Spencer’s Path from Banking to Startups (07:21) Founding Hotwire and the Impact of 9/11 (09:47) The Hard Truths of Building Startups (11:47) What It Takes to Keep Going During a Startup Crisis (13:58) How Zillow’s ‘Zestimate’ Led to Its Explosive Launch (17:52) Balancing Speed and Quality in Product Launches (20:50) Zillow’s Mobile-First Strategy That Won the Market (25:35) How Zillow Thrived During the 2008 Mortgage Crisis (28:40) Leading Zillow with Empathy and Teamwork (32:49) Why Spencer Left Zillow at Its Peak (33:58) The Fast Rise of Pacaso Amid Pandemic Fears (37:29) How Pacaso Is Opening Up to Retail Investors (38:20) Spencer’s Mission to Build Accessible Ventures (41:53) The Secret to His Success Spencer Rascoff is a serial entrepreneur, investor, and business executive best known for co-founding Hotwire, Zillow, and Pacaso. He served as CEO of Zillow, leading the company through the 2008 housing crisis and growing it to 4,500 employees and $3 billion in revenue. In 2015, Spencer co-wrote and published his first book, Zillow Talk: Rewriting the Rules of Real Estate, and in 2017, he was named the Most Powerful Person in Residential Real Estate by the Swanepoel Power 200. As the founder of 75 & Sunny Ventures, he mentors and invests in startups, aiming to democratize access to business opportunities and innovation. Connect with Spencer: Spencer’s Website: www.heylibby.ai/spencerrascoff  Spencer’s LinkedIn: linkedin.com/in/spencerrascoff  Spencer’s Twitter: x.com/spencerrascoff  Leap Academy: Ready to make the LEAP in your career? There is a NEW way for professionals to Advance Their Careers & Make 5-6 figures of EXTRA INCOME in Record Time. Check out our free training today at leapacademy.com/training

Startups are hard. Hang in there everybody. Spencer Raskoff, co-founder and CEO of Zillow until 2019, which during your time grew to over 4,500 employees, 3 billion in revenue, 10 billion in market capitalization. As a kid I watched a lot of entrepreneurship and that was inspiring to me and helped to encourage me in my path to entrepreneurship. You also co-founded Hotwire, which was sold to Expedia for 685 million. Two of my companies, Hotwire, which had a crisis two years in,

and then Zillow had a crisis two years in with the financial crisis. My next company, Picasso, also had this crisis, which was the pandemic. Founders of startups who are listening to this, if you want a simple, safe, stable job, go do something else. That is not what startups are.

Being provocative helps drive virality, and that's certainly one of the ways that Zillow grew. You did allude a little bit to the 2008 crisis. How did you maneuver that? I would say. So today I have a really great episode for you because this person, I've been following him for a long time, Spencer Raskoff, co-founder and we're CEO of Zillow until 2019, which during your time grew to what?

Over 4,500 employees, three billion in revenue, 10 billion in market capitalization, massive. And I think every single person knows Zillow, which is incredible. My daughter uses Zillow for fun. You also co-founded Hotwire, which was sold to Expedia for $685 million in 2003. You've been on boards of TripAdvisor and Palantir and co-founded many ventures recently. We'll talk about, but you come from a family of entrepreneurs.

So take us back in time to Spencer, like the kid, how did you grow up and how did that shape you? I was always interested in entrepreneurship and business. I was the kid that would bake cookies and sell them on my street that would get tracing paper and trace artwork because I wasn't a good artist, but I could trace things and sell those tracings to my parents' friends.

So I was always hustling and trying to create businesses and make money. And I saw a lot of entrepreneurship all around me. My grandfather was a really successful entrepreneur in the apparel space. He had started a clothing company. My dad was a very successful entrepreneur in the apparel space. He had started a clothing company. My dad was a very successful entrepreneur. He started out as an accountant and then he became through a lot of hard work and also some good luck. Ended up starting a business

management company and tour production company that had clients like the Rolling Stones and you too, David Bowie,ul simon pink floyd. Leonard skinner and many many others and so i watched him pivot his. Career many times as the technologies of the music industry changed so when platform shifted from. Eight tracks to records day tracks to tapes to cds to streaming that had profound implications on how his business had to evolve as the concert industry changed he moved more into touring and help pioneer many aspects of the touring industry that we take for granted today like the three sixty tours where producers and promoters buy tours outright from the act and flip the story on who works for whom and sell broad sponsorships for these international tours, et cetera.

So as a kid, I watched a lot of entrepreneurship and that was inspiring to me and helped encourage me and my path to entrepreneurship. When you look at your dad like that, and he's probably worked really, really hard. Did that create that hunger from early age or did that scare you? Like, I don't want to work that hard as crazy as my dad. Like, what did that do as a kid? I've always worked hard. I worked hard when I was a kid. One of my most formative experiences early on was playing chess.

And I was basically a, well, not quite a professional chess player, but I was a very competitive, serious chess player as a kid. I think at age 12, I was the fourth best chess player in the country. I was the captain of our chess team that won middle school championships and were the basically the best middle school chess team in the country.

Basically every weekend I was playing chess tournaments around the country. And you learn a lot from chess as a kid. You learn about the importance of hard work and preparation, of concentration, of just mental focus and mental agility. And ultimately the importance of hard work. So that was my sport, if you will. We can debate whether chess is a sport or not, but to me at. So that was my sport, if you will, we can debate whether chess is a sport or not,

but to me at the time it was a sport and I treated it as such. And then through high school and then beyond, I've always been hardworking. I'm not sure if I got that from my parents or just from intrinsic motivation, but that's always been a personality trait. So you were an overachiever from a very early age.

You showed it in school, student body, president, all of that. Am I right? You were always kind of pushing yourself. Yes, that's my thing. My main high school activities were, I gave up chess by high school, and I was what was called first prefect, which was basically the president of the school

and editor in chief of the high school paper. And high school journalism was also a very formative experience for me. I learned a lot about management, leadership, journalism, attention to detail, time management, working under pressure. These are all things that you learn when you're running what is basically a professional level newspaper, which my high school paper was.

So when you went to college, did you already have in mind that it's going to be entrepreneurship? Because you went to investment banking and that route, was it by definition? Did you just roll into it? How was it, Spencer? I wasn't really sure. I worked so hard in high school that when I got to college, I needed to exhale for a moment. So I don't think I was that focused. I did not know what I was going to do after graduating from college when I started college. But I went into investment banking because I wasn't really sure what else to do and that was a pretty common path back then in the late nineties coming out of my college.

And so I started my career Goldman Sachs I found that I learned a lot in investment banking but. I wasn't totally satisfied I want to do something a little bit more entrepreneurial and closer to the business operations of companies and so I left investment banking after my two-year commitment was complete. I moved to San Francisco. I worked in private equity, which of course buys and sells larger companies. And I enjoyed that. I liked being closer to business operations, but I wanted to be in a smaller, more entrepreneurial environment. And that's how I found my way into startups. So you left a very lucrative, well-paying roles, right?

And Goldman Sachs and private equity, very safe in order to parachute into starting hot wires. So how did that happen? Why did that happen? I was at TPG, Texas Pacific group in the late nineties and TPG was back then one of the largest buyout firms and they still are today. TPG got its start by buying a couple of airlines.

They bought America West Airlines out of bankruptcy. They bought Continental Airlines out of bankruptcy and they sold part of their Continental stake to Northwest. So by the time I got to TPG, they basically controlled three US airlines and one European airline. basically control three us airlines and one European airline and so we set about at TPG thinking through ways that we could leverage our airline relationships and airline ownership to create an online travel company. And so I helped incubate the idea that would become hot wire.

And then once it was more than just an idea, once it became the beginnings of a company, I asked TPG if I could leave and help run it. And so I left with my co-founder, a guy named Carl Peterson. We both left TPG together to start Hotwire as sort of a spinoff of TPG, the private equity firm that we were both working at. That was in 1999.

Things were going very well for the first two years. We raised $75 million from TPG and from the the airlines we became one of the top online travel sites we built a well known brand that even to this day twenty something years later people still talk about and recall. And then september eleventh happened in two thousand one and september eleventh was a huge disaster for the company and for the country and the world. But for the company in particular, it was a near-death experience. We had to do layoffs, we did a down round, we had customers that were stranded all across the world that couldn't travel. After 9-11, we had customers that were scared, we had airline partners that were going out of business. It was a grim time in 2001 to be running an online travel startup. After 9-11 when people did not want to travel.

We were able to turn the company around and by two years later, 2003, we were on a path to go public and we ultimately sold to Expedia for about $700 million. So it was a very successful turnaround, but it was a roller coaster and every startup is Every startup is but I want to take you through that moment because I think people they probably can't really understand What you went through but they can start relating to it because that feels like a disaster When you run a company and you know that you have some piece in this disaster, how do you wake up? How do you take care of yourself, Spencer?

Because I think that scares a lot of people and that's really hard too. I don't think I took care of myself at the time. That was not... There was a long list of priorities and it started with our customers and then our employees and then our investors and then our prospective customers. And at the very bottom of the list is founder health. And that is very hard, very, very hard on founders who are managing their companies during crisis and also on their families.

And unfortunately that's startup life. When things are going okay, or when they're going well, I think there is enough time to prioritize those types of things, but in a crisis, there's just not, and as I said, every startup is a roller coaster, even people would look maybe at Zillow and say, Oh, it's wildly successful. And sure it is, but there were huge ups and downs along the way. And the downs get ignored when people think about the history of these companies. Founders of startups who are listening to this, if you want a simple, safe, stable job,

go do something else. That is not what startups, especially tech startups, or really any startups are. Startups are hard and they will require that you deprioritize yourself and your family, unfortunately, for periods of time. It doesn't have to be all the time. It's not sustainable for it to be all the time,

but for periods of time during the evolution of your company. I think you're right because Spencer, one of the things that we see all the time is that when people are going through these near death experiences, they quit. You didn't quit on Hotwire, you continued, but I think there's some areas where you're like,

I'm suffocating. So how do you go through this? I think there's some areas where you're like, I'm suffocating. So how do you go through this? I think there's some founders who think of their company as an extension of themselves. And so failure is not really an option. Some companies in that category still fail nonetheless. And then there are other founders that view every startup that they do as a learning experience. But by the way, it's quite clear in pitches which category founders fall into. I've been pitched founders of a second or third startup, for example, and I'll say,

well, tell me what happened to your first startup. And they'll say, oh, well, it failed because of XYZ. And I'll ask a couple probing questions. And in their description, they're clearly too blase about their prior company's failure. I want to see from them that it weighed on them, that they cared deeply, that they gave it their all. So that's a turnoff if people shrug their shoulders about past failures. In terms of, of how we persisted at Hotwire, I think it helps, frankly,

when the world is falling apart all around you because it's not quite as lonely. So we were in a category of online travel that the whole thing was a bit of a mess, right? And so it didn't feel that personal. It wasn't like, oh, we made a mistake and therefore our company is failing. I think that would be a lot harder. Zillow I managed through a very similar set of circumstances in 2008 through the financial crisis. And similarly, the mortgage meltdown and the foreclosure crisis was affecting the whole country, the whole world, but certainly our industry of real estate.

And so we were not alone. And I think that helped quite a bit because this wasn't of our own making, this was macro, and now we have to fight through it as best we can. That makes sense. I don't know if that makes it a lot less scary, but maybe a little less lonely.

Well said, that's a good description. So you recover from 9-11, you sell it to Expedia, and you spent some time in Expedia. Why then start Zillow? How did that form? And I think there's also some people that also left Zillow. Can you share a little bit of that story? I joined Expedia in 2003 and left in 2005. I wanted to be at a size company where I felt I could make more of a difference and where

there was a ton of innovation happening that I could be a part of. And so I basically wanted to be back at a startup again. And so I left Expedia and I reached out, I as the co-founder of Hotwire that had recently sold to Expedia, I reached out to the co-founders of Expedia, who had recently left Expedia, and we joined up and spent a couple months brainstorming startup ideas. All three of us were shopping for homes at that time.

I was buying my first home. We were pregnant with our first child, and it felt like the right time to buy a house. I was surprised. Here we are in 2005. The Internet is more than 10 years old. Yet the state of websites for shopping for home was pretty terrible. And we started messing around with doing mashups of Google Maps with Craigslist listings with listings from MLS data with county data that we could glean from King County, which is the county that Seattle is in.

And, you know, it became clear that although there were plenty of websites out there, there were no real estate sites that prioritized the consumer. Everything back then prioritized the real estate agent. And we thought that was backwards, that we could build something that part has the consumer experience rather than the agent experience and so that was the genesis of zillow. And the product inside was rather than focusing on what's for sale which many other real estate websites do why don't we try to answer a different question which is what's my house worth. where this estimate came from and this estimate is Zillow's opinion of what every home's value is. And so figuring out that first version of this estimate was what we then took another couple months to launch and we launched in 2006. I forget what month but when we launched Zillow we had a million visitors on our first day. We had four million visitors in our first month. It was one of the fastest launches of any consumer product.

And that's because the voyeurism and virality of seeing what people's houses are worth is so significant of being able to Zillow all your friends and see what your ex-girlfriend's house is worth and what your parents' house is worth and what your boss' house is worth and what your podcast interviewer's house is worth. All of that is super fun and a little creepy, but you know, creepy is not necessarily bad because being provocative helps drive virality. And that's certainly one of the ways that Zillow grew. Did you realize that what you're creating will go so viral or was it an experiment and feels more

like you created your own luck to some extent? We did not know that it would grow so big so quickly. We hoped. I think when we started to know was a couple weeks before launch, when there was a good product in test and we were able to start using it, and we could see and the employees I think there were probably 20 or so employees at the time. We could see the addictive nature of being able to zoom over a neighborhood with a God's

eye view and see the price of every home. And so we hoped at that point, but it actually, you know, although we had a very fast start, what really catapulted Zillow was mobile. And that wasn't until a couple of years later with the creation of the smartphone and the GPS enabled smartphones and the creation of the app store. I definitely want to go there. I want to go into two things that I think are fascinating for our listeners, because first of all, there's this notion, at least in the Silicon Valley world,

get out as fast as you can, get out scrappy, etc. But when you get out very scrappy, there needs to be a little bit more baking in order to get to the millions that you've seen. So first of all, how do you balance between the MVP or the minimal viable product versus going with something that is good enough for it to really go viral? It's a great question and I teach a course on entrepreneurship at Harvard to undergrads and we spend a whole week on this exact question.

So I'll try to answer it briefly, more briefly than I do when I teach it. There's an adage which I do subscribe to which is that if you're not somewhat embarrassed by the first version of your product then you waited too long to ship it. So in general you just want to get something out there and start learning and that's what building an MVP is all about. There are some exceptions where it makes sense to slow things down in order to have a more fully formed MVP. One is in categories where you can't have it be just okay. And this is things like blood testing, for example, right? Like, you can't have a high degree of inaccuracy.

Another though is if there's just like a really obvious product feature that's really important for the launch. So in the case of Zillow, I made the very unpopular decision to delay the launch by, I want to say it was maybe a month or two. And this was, by the way, after it took us almost six months to come up with the idea, and then six months to build it. So about a year that this team had been eating ramen noodles, and not collecting salary, and not being able to tell

friends or family what we were working on and everyone kind of wondering why did you leave Expedia etc. So to delay that by an extra two to three months was a lot and the extra feature that I slowed things down to include was to allow homeowners to claim their home and edit their home facts because I knew that people were going to see this to claim their home and edit their home facts. Because I knew that people were going to see this estimate of their home and they were going to have an opinion about it and the opinion probably wouldn't be so great. And so we want to give them something to do. And the something to do is that they can actually impact it by saying, no, no, no, hold on.

I have three bedrooms, not two bedrooms. Or I have 3000 square feet, not 2000 square feet. Because a lot of the inaccuracies of those early estimates were because of incorrect property data that we got from public record information. So we slowed things down to build that feature where people could claim and edit their home. And I think that was a worthwhile delay.

And so I use that as an example. There are many products out there where perhaps there's one or two features that just delaying for a little longer might make sense, even though in general you wanna get your products out there where perhaps there's one or two features that just delaying for a little longer might make sense, even though in general you want to get your MVP out there as quickly as you can. Got it. So now you are literally jumping on the wagon of mobile, which I think is something really, really interesting because as we know, some companies completely missed the boat. First of all, how did you realize that you need to be

mobile first? And you changed everything. You changed Zillow completely to be mobile. The iPhone had been out for a year and everybody had one or everyone at our company had one, but there were no apps on the early iPhone. It's hard to imagine that today, but the only apps on the first iPhones were the Apple apps. So you had mail, you had text, you had calendar, you had stocks, you had weather, and that was about it. Calculator, and that was it. There were no apps. And I remember sitting at my desk and watching Steve Jobs at WWDC, the World Wide Developer Conference of Apple, announcing that they were gonna create an app store

and they were gonna let third party developers, people like Zillow, build apps that people could then download in the app store. And I was floored, I stood up from my desk, I ran over to my co-founder and said, we need to pivot the whole company to mobile, this is gonna change everything, because this is when you want Zillow,

is when you're untethered from your desk. It's when you're driving around looking at houses. It's when you're walking around a neighborhood. It's when you're at a cocktail party at someone's house. That's when you want Zillow is not when you're at your desk. It's when you're away from your desk. And so if this can work on a smartphone through an app, oh my God, by the end of the week, we had changed the name of the company from Zillow.com to just Zillow,

because dot com really denotes a website. And I felt strongly that we were not a website anymore. We were a service, which is going to be mobile first. I had announced to the company that every product and design meeting had to start with mobile screenshots. And anyone that showed desktop screenshots before mobile screenshots, the meeting would just be ended right at that moment. I think I only had to do that once or twice where I would just walk out of a meeting and declare the meeting over and people learned pretty quick that we were going to be a mobile

first company. And within a couple of months, we had the first version of the Zillow iPhone app out and I was right. We have three things that were special. Number one, as I already said, the consumer wanted to use our app on mobile. Number two, we had much less competition on mobile than on desktop, because the real estate brokerage companies that had decent websites that we competed with, they were nowhere on mobile. So it was a much better competitive landscape for us.

And number three, you sort of alluded to this, we actually monetized on mobile in So it was a much better competitive landscape for us. And number three, you sort of alluded to this, we actually monetized on mobile in a way that most other companies didn't. So if you think of Facebook, for example, when they went public, half of their usage was on mobile and they had never run an ad on mobile before. And that's why the Facebook IPO was such a debacle because it was unclear how they were going to monetize on mobile. And with a small screen on mobile, there's less real estate, no pun intended to pop up ads or whatever. And so a lot of advertising models monetize very badly on mobile. Well Zillow monetizes much better on mobile because of click to call.

So when I'm looking at a home on my iPhone or Android, I can now click and call or click to text. And so it generates more leads and more highly qualified leads than desktop where you can't click to call. So not only do we have a better product that consumers like that had a less competitive landscape, we made more money from mobile usage than desktop usage. And that was a really rare thing for a startup

or for any tech company to have at that time. So if I'm hearing you correctly, it sounds like you're basically relentless on understanding your audience avatar. You understand that they're not going to be on desktop. They will be roaming around. They will be driving and you're relentless on trying to understand what do they need when they are driving around, they are looking for homes and together with being very attentive to what's coming.

So it sounds like it's that constantly being relentless about what is really needed versus what I'm building. Absolutely, so at Zillow we use the word persona. Beth the buyer, Susan the seller, Harriet the homeowner, Alan the agent, those are the most important personas at Zillow we use the word persona. Beth the buyer, Susan the seller, Harriet the homeowner, Alan the agent. Those are the most important personas at Zillow. And if you walk the halls of Zillow, well, I guess you can't do that anymore because it's a remote company now. But when I was CEO, it was an office company.

If you walked the halls back then, you would see posters of these personas and you'd hear employees talking about, oh, Beth wants this feature or Rachel the renter wants that feature, or we should build this for Susan. So yes, understanding your consumer and your professional personas and building for them is critically important. And that's exactly how we ran Zilla. You did allude a little bit to the 2008 crisis. How did you maneuver that?

It was hard, not easily. I wrote a blog post in 2007 that's probably out there on the web still somewhere on Zillow's blog. The headline was, the tidal wave is coming. And it was quite easy for us to see in our data that we were going to have a foreclosure crisis. You could see the increasing number of late payments and mortgage delinquencies and the increasing number of short sales and the reduction in homeowners' equity. So you could sort of see it in 2007.

I wish I had had the foresight to play some giant short trade on mortgage-backed securities, you know, and then maybe I would have been in the movie, the big short, but I did not. But anyway, so we saw that in 2007, when 2008 happened and the mortgage meltdown happened, we right-sized the company. Unfortunately, we did layoffs. We went from about 200 people to about 150. We refocused the company.

We closed down some initiatives. We tightened the belt. We worked harder and smarter. We increased the level of communication with our employees to make sure they stayed motivated and focused. We became more metrics focused. We just became a better run company in order to make it through that recession.

What I learned from it all was to increase the level of communication with employees and to see the silver lining because there definitely was a silver lining for us at Zillow. The silver linings were that the industry, the real estate agents, brokerages and MLSs, were willing to experiment with new things more during that downturn. They cut back advertising on newspapers so that they could lower their spend and when the coast started to become more clear and the dust settled and the clouds lifted, they were more willing to so that they could lower their spend. And when the coast started to become more clear and the dust settled and the clouds lifted,

they were more willing to spend more on online advertising like Zillow, online lead generation than they were before. So it accelerated the pace of the migration from offline real estate advertising to online real estate advertising, which Zillow benefited from. It increased the industry's willingness to syndicate listings to sites like Zillow. And it turned increased the industry's willingness to syndicate listings to sites

like Zillow. And it turned out it was very similar to 2001 with online travel. 2001 after 9-11 accelerated the pace with which consumers shifted their behavior from offline to online purchases. It accelerated the embrace of hotels and airlines of online distribution. So it sucked. I'm not glad that it happened, these two downturns, but in some weird way, it actually made both those companies more successful, even though it was a really challenging time to manage through.

First of all, you as a company or as an individual, there is a little bit that you get a little more creative when things are hard, right? So you have to figure things out and that creates more efficiencies. And we saw it, we'll go into the pandemic later, but we saw it in the pandemic, how much innovation actually happened in the pandemic

because it kind of accelerated a lot of the things that people didn't necessarily adopt until they had to. I still wanna go into Zillow for a second because you at some point become CEO and you've played a lot of different roles which I think is also a big part of when you need to be number one it really helps when you understand you have a very broad look at different things. How did you become CEO Spencer? What would you say to someone else that wants to get on a fast path. Show when we started the company i was cmo marketing officer my co founder was ceo and then i think it was about a year into the company's history basically once we raise the series and look like we were

probably gonna make it then he step back and became chair of the board and I became CEO. And then I was CEO for I think 10 or 11 or 12 years. And then when I retired from that, he stepped back in from chair to move back to CEO for a couple of years. And he just stepped down and one of my former colleagues is CEO. So it's quite helpful for a CEO to have played many roles for a while there for that first year. I was the CMO, I was the CFO, I was the COO,

I was head of industry relations. I sort of had lots of jobs just as I did at Hotwire. I think the benefit of that is you have a lot more empathy for your direct reports and you become more well-rounded because you have a broader perspective on things. And I think that helps you make better decisions and helps you manage and motivate your team better. So you knew from the get-go that you'll take the CEO role or?

No, not necessarily. Well, it was sort of implied when we started the company. I don't think it was explicit. My co-founder had taken Expedia public previously and didn't feel the need or want to run another company at that point in time or take it public. So the plan all along was essentially, once we got on a good path and it looked like things were gonna be okay,

then he would move into that role and I would step into the CEO role. So that was the expectation. It wasn't explicit, it was sort of implicit and that's how it played out. How did you feel about the difference between being CEO and all the rest? Because it is different being sort of the buck stops here and most of the decisions need to be channeled, although there's boards and stuff, but still. I tend to lead by consensus and view the role of the CEO as more of a coach than a boss.

So I don't really feel like it takes on that much more responsibility or stress. It's more the CEO is the air traffic control. That's trying to get everybody to work together, keep them motivated and coordinate from different parts of the organization. So I never really felt like, wow, now heavy weighs the crown. You're the CEO and all eyes on you or whatever. I think if I managed that way, then maybe I would have felt that way, but that wasn't really how I managed. I tried to be a consensus builder and managed it as a team rather than giving

directives. What about when things are really, really hard or scary or you need to lay off? Do you still have the same or does it still weigh on the CEO a little more than others? It does weigh a little more, but like, I mean, I remember the meeting in 2008 where we did layoffs, it sucked. Uh, I lost sleep over it. It was brutal, but frankly, I'm pretty sure that my direct reports felt equally

crappy about it and had all the same stress because as I say, the way I manage was, Hey, we're all running this company together. My title might be CEO and your title might be CTO and your title might be CMO, but we're a leadership team together. So we all should feel responsibility for things. So yes, I think it's a little bit more as CEO, but I'm not sure it's that different, at least the way we ran the company there. See, I just did it. I just said subconsciously the way we ran the company,

not the way I ran the company. Yeah, I heard that. So you grew it to incredible market size. And then at some point, I think 2019, if I'm not wrong, you decide to leave. First of all, why? And we're gonna talk a little bit about all the great things that you're doing now, Spencer.

So about five years earlier, maybe four years earlier, when I was still CEO of Zillow, I moved from Seattle to Los Angeles. I'd been in Seattle for about 15 years, and I wanted to be in Los Angeles because my parents were there, my wife's parents were there, and we needed to move closer to home where we both grew up, which is Los Angeles. So for several years, for three or four years, I was commuting from LA to Seattle every single week.

That was hard. That was very exhausting. And so by 2019, I started the company. I'd taken it public. I'd got its profitability. I got it to 20 billion market cap. I had launched these new businesses and felt like I accomplished everything I hoped to accomplish there and I was tired of commuting. So it seemed like a good time to retire from that role. So that's why I stepped down in 2019. And it was a seamless transition because my co-founder, who had been chairman all that time, just stepped in as CEO. So easy, squeezy.

And then there's pandemic for you. Yeah, I didn't predict that. You know, I stayed on the board for about a year and then started starting new companies at that point. And once I started starting new companies, it didn't really make sense for me to stay on the board of Zillow. The pandemic, I was gone from Zillow

by the time that was in full swing. So I can't really speak to how Zillow managed through it. You've heard now two of my companies, Hotwire, which had a crisis two years in, and then Zillow had a crisis two You've heard now two of my companies, Hotwire, which had a crisis two years in and then Zillow had a crisis two years in with the financial crisis. My next company, Picasso, also had this crisis, which was the pandemic. So we started Picasso right before the pandemic and Picasso is co-ownership of luxury vacation homes, like a net jets for vacation homes.

And the idea for Picasso is that people co-own the home with other families that they don't necessarily know. So when the pandemic happened, I said, oh my God, it's happening again for a third time because are people really gonna be willing? I mean, just remember how people were afraid of germs back then. We weren't even accepting packages.

You'd leave your groceries at your front door or at the garage for six hours or your Amazon packages in order to let the cooties wash away. So are people really going to own a house together with strangers? Like, Oh my God, you know, people are never going to accept that health risk. So I was pretty worried about the impact that very worried that that would have on Picasso. It turned out that the pandemic and the quarantine was very good for Picasso. Again, silver lining, just like Hotwire had just like Zillow had the silver lining was demand for second homes went through the roof when people started working from home and people wanted a place to get away from their primary residence. So Picasso

had a rocket ship start. It was the fastest company to become a unicorn. We raised over 200 million dollars of venture capital. We sold tons and tons of these vacation homes. And then the next crisis that we faced was mortgage rates that skyrocketed. So within a six-month period, mortgage rates went from about 2% up to 10%. Nobody's ever seen that type of increase in mortgage rates. And that had a huge chilling effect on interest in second homes. And so here we are again, I kind of made it through the quarantine issue, but facing yet another crisis in my company's history.

And Picasso had to manage through that. We closed some markets, we downsized the company, we refocused, we tightened the belt. We did all the things that we did at Hotwire and Zillow. And now here we are as we record this in late 2024, Picasso is on the upswing and we've sold about a billion dollars of these vacation homes.

We've got thousands of very happy owners. We're in over 40 markets in four countries and Picasso is by no means out of the woods entirely, but feels a lot better today than it did a couple years ago. That's incredible adaptability. And if I'm not mistaken, you're also taking outside investors into Picasso. That's right. So Picasso is doing something pretty cutting edge right now. We're doing what's called a reg A offering or a regulation a offering, which is a round that retail investors, individual people are able to invest in. And the reason we're doing this is it's

very consistent with our mission. What Picasso tries to do is democratize access to second homes to something that is typically only available to very wealthy people. And private venture funded companies are also typically not available to retail investors. They typically have to wait until these companies go public. The SEC created something called reg A as part of the jobs act about 10 years ago, which lets private companies raise capital in this way. So we publish our results with the sec, just like a public company would. We sell shares to the public, just like a public company would, but the shares don't trade on an exchange just yet, not until the companies go public. So that's what Picasso is in the midst of.

We just launched this last week in early October of 2024. And it's an exciting cutting edge way to allow individual people to invest in a private venture funded startup. Don't let the VCs have all the fun. Exactly, which is usually closed. So that's very exciting. And I think you're involved with a few other things.

What is your mission now? And I want you to tell a little bit about these things, but how do you see your mission now? When I left Zill tell a little bit about these things, but how do you see your mission now? When I left Zillow, I started something called 75 and Sunny Ventures, which is my family office venture fund. And what we do is we start companies. So it's basically a personal startup studio.

I've started seven companies in the last couple of years through this. Picasso is the largest and best known and the most late stage of them. Of the seven companies, three of them are former Zillow teams, teams that we used to work together. Three of the seven are in PropTech or in the real estate tech space, four are not.

The common theme across most of them is democratizing access to something that only a small portion of people have access to. So Picasso is all about helping people own a second home that might not otherwise be able to, or might not be able to afford such a nice second home, and they're doing it through co-ownership. Libby, or heylibby.ai is one of my startups, and heylibby.ai is an AI sales receptionist

for small businesses. So, big companies have artificial intelligence responders. Like if you call United Airlines or you go to American Airlines website, you'll interact with basically an AI chat bot and talk with, I wanna change my flight or can you issue me a refund or whatever. So big companies have that, but small businesses don't. And so what heylibby.ai does is it creates

for any small business, whether you're a plumber and electrician, a housekeeper, a wedding photographer, a spa operator, hairdresser, et cetera, it lets you create your own AI sales receptionist that will do triage with your customers when they're reaching out to you for different things. So that's that business. It's a former team from Zillow.

We've raised a couple million dollars of venture capital and it's an early stage startup. And then I won't go through all seven. Don't worry. But just to tell you about one other, for example, a company called Q, which is QUE. UE is one of my startups that lets people track what to watch and figure out what streaming services, different TV shows or films are available on. So it's sort of like a social TV guide and it's solving the problem of figuring out what to watch because streaming has become so fragmented that it's very hard to know what's where or what you're watching where.

It used to be easy when you could look in the paper and see the TV listings now Now it's too fragmented. And so we've built a social layer on top of a TV guide essentially. So that's what Q does. We have millions of downloads. We've raised a couple million dollars of venture capital. It sounds like you're basically having fun

and still creating an impact. That's what I'm hearing basically. You asked a good question, which is what motivates me or what's the common thread here? The common thread is I'm trying basically. You asked a good question which is what motivates me or what's the common thread here? The common thread is I'm trying to build products that I want to exist in the world and I'm trying to do them with founding teams that want my mentorship and counsel. So for each of these seven companies I'm not the CEO, I'm the chairperson, I'm the founder and I motivate them and I mentor them and it's just an extension of how I led Edzillo. In that case I was the founder and I motivate them and I mentor them.

And it's just an extension of how I led Edzillo. And in that case, I was the CEO and I was leading my direct reports. And in this case, it's just across seven different companies but I exist to help them achieve their full potential. And that's what motivates me and what I spend my time doing. And that's brilliant because mentorship at this level of somebody that builds such mega

things, it is really remarkable. So I just love that. Based on everything you've done, what would be an advice to yourself or to our listeners that maybe they want more for themselves, maybe they don't exactly know what, but they know that there's more out there. They're just not sure what it is, how to get there, how to maximize their potential. What would be some of the advice? I would say be curious, go deep on things. I'll give you a quick example. I teach a course. One of the things I do is I teach this course on entrepreneurship, I think I mentioned,

and one of my students told me that she just became super obsessed as an undergrad in college, became obsessed with packaging with Amazon. She's like, how come this Amazon package has these airbags in it and how come this one comes in an envelope and this one comes in a box? And how does Amazon make these decisions? She went super deep on this and listened to podcasts, watched YouTube videos, started interviewing experts on the topic, went super deep, kept all these notes, crazy, beautiful mind, like yarn on a whiteboard kind of thing, trying to learn everything she could about this. And coming out the other end from that has emerged a couple startup

ideas that she might go start companies or maybe she'll go work at one of these companies. And so most people are curious about something and they just sort of shrug their shoulders, but she decided to go super deep and learn. The second piece of advice I would say is to surround yourself with great people who are really smart and motivated and make you better. And that's been the key to success in my whole career, because every one of these successes that I've been involved in has been a team effort. that's been the key to success in my whole career, because every one of these successes that I've been involved in has been a team effort.

So you need to be able to attract people that you can motivate and that motivate you, and put yourself in situations where you'll be interacting with those types of people that will bring out the best in you and allow you to create and build. To me, that is so important because there's also a lot of negativity. There's a lot of naysayers.

There's a lot of, I mean, if you want to surround yourself with things that will crash you, that's easy to do. I think it's harder to find the people that will actually lift you, mentor you, tell you the truth when you need to hear the truth, all of that. And that's incredible. And I think the curiosity is an incredible tip because you're right, people just move on. They see something, but instead of going deep, you want to be obsessed with whatever it is in order to take it to the next level,

which is amazing to hear. Spencer, this was so inspiring. Thank you for sharing all your experience. Been following you for a long time and it's just been so great to hear the story in real life. I appreciate it and thank you for having me and startups are hard. Hang in there everybody.