Zillow CEO Rich Barton: ‘The Real Pain Is Probably Coming’
Zillow — which held $3.4 billion in cash and investments at the end of 2022 — is well prepared to weather any storm, including the banking fallout, Barton said in a new interview on Thursday.
The writing on the wall is clear: we’re in for some rocky economic times, Zillow CEO Rich Barton predicted in a new interview published Thursday.
But among his warnings of further disruption in the housing market, Barton’s forecast comes with a silver lining: financial opportunity.
“I actually love a storm,” Barton told the website GeekWire in a wide-ranging interview that also touched on the health of Zillow as a company, the decision to shutter the iBuying platform Zillow Offers and his own early career. “Warren Buffett likes to say: you don’t know who’s swimming naked until the tide goes out. A lot of people (are) swimming naked right now, getting exposed.”
Barton said Zillow — which held $3.4 billion in cash and investments at the end of 2022 and boasts nearly 200 million monthly visitors to its websites — is well prepared to weather any storm, including the banking fallout spurred along by the failures of Silicon Valley Bank and Signature that are still unfolding now.
“A lot of cruft is getting washed out to sea,” he told GeekWire, referring not only to the banking whiplash but also interest rates reaching 20-year highs and layoffs across all sectors of the economy. “And if you’re an organization or a company that is wearing a bathing suit and a wetsuit, you’re all good. And that’s kind of how I feel right now.”
“I’m really feeling better than I’ve felt in a long time right now,” Barton added.
Zillow reported fourth quarter revenues of $435 million, beating most analysts’ estimates and trimming its net losses to $72 million.
The company posted revenue 19 percent lower than the fourth quarter of 2021 — the same quarter in which the company ended its nascent iBuying venture Zillow Offers, before the iBuying sector began to buckle under the weight of heightened interest rates that caused Zillow competitor Redfin to shutter its iBuyer RedfinNow nearly a year later.
“We were ahead, luckily, of what’s happened in the housing market this year,” Barton said. “I feel pretty good about that decision.”
For the economy at large, Barton said he thinks recent layoffs in the tech sector — which include 10,000 eliminated positions at Facebook parent Meta — signals that the real hard times are still to come.
“The real pain is probably coming,” he said. “All organizations should be prepared for that.”
Barton said he relishes the opportunity to lead during tough times, looking back at his career in tech that has included co-founding the travel giant Expedia, the company reviews site Glassdoor and the travel photography website Trover.
“The stuff that I really love the most is when I’m deep in the trenches in a crisis situation with a team of people I love and we’re doing something important,” he said.
Barton drew a comparison to the “swing” pulled off by the University of Washington’s men’s crew team in the 1936 Olympics — who narrowly defeated Germany and Italy though the odds were stacked against them to bring home a gold medal — to describe the feeling of successfully leading a business through choppy waters.
“It just feels like magic and it feels effortless and you feel euphoric,” he told GeekWire.
Speaking of his work mentoring young entrepreneurs, Bartson said he tries to act as a “ballast weight” during good times and bad.
“You know, this too shall pass. We will get through this,” he tells his mentees. “Do the right thing, communicate clearly, don’t hide anything, get it out there, get the right people around you, and you will make it through.”
The most effective leaders are happiest during tough times, according to Barton.
“I actually think in stormy weather, it’s when leaders are the happiest,” he said. “It’s when the value of what we do as leaders is high.”