When Rich Barton was at Microsoft, he pulled off something that, despite government and investor pressure over the years, never happens. He spun out a company. That company, Expedia, which Barton founded in 1996, later went public with Barton as CEO. In 2003 Barry Diller’s USA Interactive acquired it for $3.6 billion.
Since then Barton has co-founded real estate data company Zillow and job search startup Glassdoor, and he’s invested in a handful of others. He also sits on the boards of eight companies, including Netflix. In large part, the companies Barton is involved in hew to a simple yet powerful idea: connecting people to information previously unavailable to them. Wired Business sat down with Barton in San Francisco’s South Park to talk power to the people, Google Glass, Microsoft, what the hell happened with the Qwikster debacle, and why picking fights with entrenched industries is a marketer’s dream.
Barton: I was at Microsoft at the time, and was theorizing about how the coming web would change industries and empower people. Essentially, how would people be empowered by connecting computers to information they heretofore did not have access to.
It was giving consumers access to information and databases that they knew existed because they either saw or heard professionals over the phone clacking away on a keyboard accessing that information. I remember I wanted to jump through the phone and look at the screen myself, turn it towards me and just take control. And I knew that I would spend more time and do a better job searching than this person who was doing something on my behalf, and who really didn’t know my preferences but was just trying to approximate them.
That was the inspiration, frustration. And at that time, it seemed pretty obvious to me that the travel industry, real estate industry, jobs, financial services and healthcare would each be transformed by super-empowered individuals. It was at that point I founded Expedia inside Microsoft.
WIRED: You worked for Steve Ballmer at the time. Was he keen on getting into the travel business?
Barton: When I went into to talk to him I made him this travel agent card. Basically, I took my card and put a picture of him on it. I gave it to him and said, ‘Steve do you want to be the largest travel agency in the world?’
WIRED: What was his response?
Barton: Nooooooo! (Barton bellows with his best, gravelly-voiced Ballmer impersonation.) But he kept the travel agent card because a little bit of my hair was coming over the top, so he had some hair.
WIRED: As Expedia grew inside Microsoft everyone had to make a decision about what to do with it. How did that go down?
Barton: Steve and Bill Gates supported us spinning out, and it was quite a feat to pull off. It hadn’t happened before and it hasn’t happened since.
Barton: Microsoft doesn’t divest things. One of its great strengths, and possibly a great weakness, is it has a monolithic strategic world, nothing isn’t strategic, everything fits the grand plan. When I founded Expedia and pitched it to Bill and Steve, I actually said, ‘This may not be part of the grand plan. We’re going to be the biggest seller of travel in the world. It doesn’t sound like software to me, so let’s do it on the outside.’ And Bill said, ‘No let’s start it inside Microsoft. And if it wants to be free we’ll consider it.’ Those guys were great, they really supported it.
WIRED: Except when you asked Ballmer for $100 million in marketing funds right? What did he say then?
WIRED: How has your notion of power to the people evolved since 1999 when Expedia was spun out, and now that the smartphone has taken center stage?
Barton: Oh my god. The proliferation of connections to the cloud, to the internet, has meant that more and more of this data can be with us more and more of the time. I just got fitted for Google Glass, which is pretty geeky and fun. But take the Zillow/real estate information case. It was great to have it on the PC. I could see what the Zestimates of all the homes were. I could see what was for sale, what was for rent, maybe apply for a mortgage. Then the smartphone came along and the iPad came along. It’s not just a little better, it’s ridiculously better. Because I am driving around with my GPS-enabled smartphone and I am getting all this information as I am in it. Zillow has been super-accelerated by mobile, now it’s really a mobile business.
Now Google Glass comes along and takes it to a whole other level. Imagine now I don’t even have to pull out my smartphone as I am walking around a neighborhood, I go into Zillow mode (he taps the side of his normal glasses), and I look around and see that that place sold last year for $3 million – are you kidding me? And maybe there are pictures of the inside. I walking around, and I have the god view.
WIRED: Are you going to develop a Zillow app for Google Glass?
Barton: Totally, for sure. It’s early days for it, but we love the bleeding edge. Am I going to wear Glass right now? I don’t think so. But I am going to play with it, and my development team is going to play with it. That’s for sure.
WIRED: What are you looking at next?
Barton: I have a pretty full dance card, and my wife has made me promise that I won’t start anything else. But I am always looking at things. Financial services is really interesting to me. Home security and home monitoring is really interesting to me.
I am pretty intrigued by the sensor stuff and healthcare. I have a startup that is roughly in healthcare, on the edges of it. It’s called RealSelf.com. It’s also a “power to the people” play. It’s kind of TripAdvisor for cosmetic procedures. It’s become really popular. It’s serious; it’s basically women talking to other women and physicians about their hopes, fears and realities of liposuction or Botox or breast augmentation or whatever it is.
I know healthcare is going to be big. I like to play in the discretionary stuff where consumers make rational decisions because they are paying for it. But in the non-discretionary stuff I haven’t done anything because it doesn’t make any sense to me yet, but there will be something there.
WIRED: You are chairman of several of your companies, but you don’t act as CEO, which allows you to move between your portfolio companies. How does that work, and what does it teach you?
Barton: I am able to go where I am needed, and where I am interested. I do lots or reviews and coaching. I end up putting people from my companies together a lot and strengthening these crosswise relations so they can share. I find inside of a big company like Microsoft people’s willingness to work across groups with their peers is so low. But outside, when you have separate companies doing interesting things getting the digital marketing person together from four different companies is easy. They are hungry to talk to other people. And it is because there is no internal political competitive threat. There is no boss thinking, I don’t want my people talking to them because they might steal them – or whatever. Big company cooperation works way better at small companies. So I do a lot of that.
WIRED: You sit on the Netflix board. After screwing the pooch with Qwikster, Netflix seems to be roaring back on track. What did people underestimate about Netflix in the Qwikster aftermath?
Barton: I always thought they would figure it out. I felt bad that I didn’t. I was probably the most marketing oriented person on the board. I should have been, ‘guys we’re maybe pushing it a little too fast here.’ And so I kind of beat my own self up. But Reed (Hastings) beats himself up plenty. The great thing about Netflix is that it behaves like a startup. I love that board, because they actually take big swings and make decisions today that are for ten years out. They are decisions that maybe Wall Street is not going to like. That’s the way that companies should be behave, and too few companies do behave. I love that.
WIRED: Glassdoor, which you co-founded just about five years ago, seems to be on the same trajectory as Zillow. And in the same way that the real estate industry panicked when you guys showed up, the jobs market is equally uncomfortable with the information Glassdoor users make public about their employers. Do you just like to pick fights?
Barton: Yes, there is a lot of resistance, and I love that. Find me a provocative topic, and I’ll show you something you don’t have to spend a lot of marketing dollars to launch. People like to be provoked, and if you are provoking with information that is on the side of the angels, on the side of the consumer, the louder the industry reacts. And they just can’t win. It’s the greatest way to market, pick a fight with somebody who can’t win.