Zillow's New Path Forward

The culture here is and has always been figure out what the customer needs or wants, figure out a way to help them get it, and then the rest will take care of itself.

Ben Thompson: And I think it’s fair to characterize a lot of your 2010s as a bit of casting around figuring out what direction, what worked, what was defensible, what wasn’t. You end up with this model of you can contact an agent, and that agent is generally on the buying side. Who is the customer in that transaction then? Is it the customer or the viewer or the buyer or is it the agents that are just looking for someone that’s looking for a house?

Jeremy Wacksman: It’s a great question because I think any two-sided marketplace has to know who their primary persona is and for us it’s the consumer. The customer is a consumer, and we’re explicit about that in our language internally. We have alliterative names for all of our personas, and we have personas on the demand side: the buyer, the seller, the renter, the homeowner. But we also have personas on the supplier side, on the professional side. We have agents, team leads, loan officers.

But for us, the sorting of the stack is really clear, we build for the consumer customer. The marketplace works when we can create win-win experiences and that was the great thing about our initial ads business model was a high-intent customer, buyer, or seller, raising their hand was what an advertiser really wanted, and the more we could do to help empower, educate that consumer, that buyer the higher intent that lead was for the advertiser who was buying them.

So just to make sure, the way it works is a customer, you have agents who bid on a geographic area and then you distribute the customer requests based on who bid the most and disperse it based on those lines. Is that a fair sort of summary of how it works at a high level?

JW: Yes. That’s a good summary of the ads business model which we are moving away from, which we can talk about as part of the Super App strategy.

We will for sure.

JW: But the historical ads-based or market-based advertising model is a set of advertisers, who they make their living in a set of neighborhoods or zip codes, and so they target their advertising, their visibility to buyers and sellers in those zip codes, and when buyers want to take a tour or want to ask a question about a listing they get connected with one of those advertisers who’s paying for that opportunity and wants to make that marriage between that buyer and that agent happen, and ultimately help that person buy a house, that’s how that works, you’re right.

What we found was there is a smaller set of professional agents, usually teams of agents, who had built technology and operations capabilities to actually handle Internet consumers who want an answer quickly. Or, who might want an answer over text message rather than over the phone, or have staff to help with questions in off hours, and all those things that we all — when we press buttons on our phone we expect instant response, but that was new to the real estate industry a decade ago.

So helping those teams build those capabilities, or find the teams that had done the building of those capabilities and can satisfy a modern Internet consumer was a big part of our focus. And you’re right, that led us to really honing in on a set of agents and agent partners that can provide good customer service to customers who ask.