Spencer Rascoff needs no introduction. As the kingpin of residential real estate, he co-founded Zillow, Hotwire, dot.LA, Pacaso, and 75 & Sunny, among others.
I’m insanely grateful Spencer took the time to come on this episode of The Byron Lazine Podcast, where we discussed everything from his early days as an entrepreneur to his current ventures. Tune in to our full conversation:
The Zillow Years
Spencer was CEO of Zillow for over a decade. During this time, Zillow went public, acquired 17 companies, and built a corporate culture that Spencer remains proud of to this day.
There are agents who love Zillow, and others who remain adamant about hating it. One thing is certain: Zillow completely changed the real estate industry. In the full episode, you’ll hear what Spencer said about pushback Zillow got from agents, what the transaction process is still missing, and why Zillow leaned into memes, being dubbed as ‘real estate porn,’ and SNL’s Zillow skit.
Of course, I had to find out what Spencer predicts Zillow’s plan is for the short term. So I asked:
Will Zillow start buying brokerages in the next 10 years?
While Zillow has made it clear they are currently focused on maximizing lead conversion and attaching services for mortgage and escrow, Spencer doesn’t think they need to start buying brokerages.
“They are a virtual brokerage with Premier Agent, and they get to cream skim their split…without actually operating a brokerage.”
Spencer Rascoff’s GOAT Record
When Spencer left Zillow, he immediately got to work on brainstorming a startup with Austin Allison.
The result is a GOAT record.
Together, Spencer and Austin founded Pacaso, the fastest company to ever meet unicorn status with a value of over $1 billion. The company makes buying a second home accessible with co-ownership of property LLCs. Together, co-owners have 100% ownership of the home, while Pacaso vets each owner, handles sales details, and takes care of scheduling, utilities, and property management. Think timeshare, but instead of it being a liability, it’s an asset.
Like every innovative startup that aims to change an industry, Pacaso is meeting some resistance. Fortunately, Spencer has experience in dealing with opposition.
“Every great innovation has had resistance of some kind or another.”
Out of the 35 markets Pacaso is currently operating in, one or two are against the idea of single properties being owned by multiple parties. Spencer only sees the positives for these communities: when a second home sits empty, there are fewer people in restaurants and out in the community. Co-ownership means there will be people at the home more often than not, which adds to the local dynamic.
Advice from an Angel Investor
Along with Pacaso, Spencer is an angel investor with his venture fund and investment company 75 & Sunny. Of the 500 pitches his team sees each year, Spencer reviews around 250…so it’s safe to say he has some great advice. I asked him,
How can you be a great entrepreneur?
“Solve a problem. Find a problem in your life and try to solve it. The difference between a tinkerer and a great entrepreneur is someone who finds a big problem to solve.”
Spender shared that one of the most common things he sees as an investor is that people pitch features, not companies. Which led me to my next question:
How do you know the difference between a feature and a company?
“A good rule of thumb is to try to back into…is there a path to $25-$100 million of revenue?”
There are plenty of good ideas that can (and should) be pursued, but as far as raising money, venture capitalists are only willing to invest in companies that will drive venture returns.
If you are an entrepreneur thinking about your next project, be sure to listen to the end of the podcast, when Spencer goes into more detail about solving problems, going with your gut, and taking companies to the next level.
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