Zillow.com’s founder Rich Barton used the analogy of the explosion of verticals to the storming of the Bastille and the strong desire for consumers to take control of the decisions in their lives, especially those with big financial implications.
The visionary talked about his three pitches to Bill Gates and Steve Ballmer in the 1990s when he was a Windows product manager at Microsoft. He went 1 for 3 on his pitches, including a grand slam with his travel vertical idea, Expedia, which was spun off from Microsoft in 1999. Within a year of being spun out, Expedia surpassed Travelocity as the largest seller of travel online or offline and today maintains that position. Expedia is now responsible for US$20 billion in travel bookings.
The other two pitches that Microsoft passed on were Barton’s idea for a stock tracking/trading service and, conveniently, a real estate vertical idea, which obviously now is his focus at Zillow. Barton joked that Gates’ response to the online vertical concepts in the early 1990s was that they were the “dumbest three ideas” he’d ever heard.
So, Barton knows a little bit about the vertical space and as an investor in a variety of up and coming verticals talked about the need for improvement in other core verticals including mortgages, legal and employment. Mortgages is an area that Barton describes as simply not working right now and consumers want a new way.
Within the past few weeks Zillow launched a Mortgage area on its site and thus far it has generated roughly 19,500 anonymous loan requests, which have prompted 59,500 loan quotes. Unlike other models that require mortgage providers to pay for those mortgage leads and that identify the person requesting a quote, Zillow provides the platform for free to meet the needs of both consumers and businesses.
A strong believer in the power of “free,” Barton, who claims Zillow spends no money on advertising, provided these takeaways on the vertical/digital media space:
- Consumers crave information and power.
- If it can be known it will be known — by all.
- If it can be rated it will be rated.
- If it can be free it will be free.
- There can be no vertical market without community.
- The digital media business model will rule.
A firm believer in the media business model, of which local is a strong component, Barton believes the age of verticals is just beginning and foresees a huge opportunity for both those Bastille storming-like consumers and businesses alike to benefit.