Step into the time machine
In studying the current and forecasting the future, we have to look to the past. We often talk about the current trends of real estate search, but spend little time in retrospect. We thought we would take a look at two of the real estate search giants’ past.
Zillow was founded in January 2005 with a $32 million investment from
Benchmark Capital and Technology Crossover Ventures and launched in 2006 with another $25 million from PAR Capital Management. In 2007, Zillow saw another $30 million in investment from Legg Mason bringing the current total to $87 million. This month, Zillow filed for their $52 million IPO after more than a year of rumors of its coming.
Trulia was also founded in 2005 but for a significantly lower investment with Sarofim Fayez and Kevin Hartz investing $2.1 million in September then Accel Partners, Sarofim Fayez and Thorner Ventures adding $5.7 million to the pot. In 2007, Accel Partners and Sarofim Fayez invested again this time with Sequoia Capital for a combined $10 million and another round by the same partners in 2008 for $15 million with Trulia’s coffers totaling $32.8 million in investments.
Original missions of Zillow and Trulia
There is a lot of noise online about how Zillow and Trulia have gone back on their promise to innovate and that they’ve sold out. One reason is that they both marketed to an early adaptive consumer which is typically into DIY and against “the establishment” (read: Realtors). But did they really go back on their word?
“Zillow began a little over a year ago with a few people in an office, dreaming about how the web might be used to empower everyday people to take more control of the scary, frustrating, and exciting process of buying and selling a home. We experimented with several different ideas early on, but, after talking with many consumers and agents, we landed on the ambitious goal of trying to place a value, what we cleverly call a “Zestimate,” on every house in the country and making this freely and anonymously available to anyone — kind of a “Kelley Blue Book” for homes.”
CEO Rich Barton continues, “Finally, I’d like to make a comment on our business model, which I’ve found helps divine [sic] motives. Zillow.com will make revenues from advertisements on the site. We will always be crystal clear about what is content and what is advertising, just like any respectable content provider, and our advertising will not define our content. However, the beauty of “Web 2.0” is that the content actually does define the advertising. The more relevant the advertising is to what is being done on the page, the more useful it is to consumers. So, we will strive for a high degree of relevance with the advertisements we display. I suppose this makes us a media company, but one that has software development in its bones. We see the process for buying and selling homes as dying for a software productivity application, one that incorporates a huge amount of information, but one that’s goal is to empower people to make better decisions.”
So in summary, Zillow aimed to offer real estate search supported by ads.
From Trulia’s first blog post:
“At Trulia, our objective is to build the leading real estate search engine,” said CEO Pete Flint.
Consumers are performing online real estate searches in record numbers and are more empowered and happier with their experiences than ever before. That said, we think there are many things in the real estate transaction that the Internet will never change. The overwhelming majority of home buyers will still visit open houses and work with agents to give them expert advice, information and help on what is often for many of us the biggest financial decision we will ever make. Everyone at Trulia is excited about helping consumers, agents and brokers to navigate the world of online real estate.”
So Trulia believed the internet could help with real estate search but the transaction would still rely on agents.
These CEOs have issued a variety of opinions since these first blog posts, some quite harsh against Realtors, others with different mission statements but it is interesting to take a step back in the time machine to what was originally said.
Tell us in comments how you feel either of these companies have remained the same, evolved, strayed, OR adjusted since their original statements blogged by their CEOs in 2006.
AG is not affiliated with Zillow or Trulia, nor can we independently verify whether these statements have been edited retroactively. Quotes above are as they appear on their respective websites today.