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Originally published April 20, 2014 at 12:01 AM | Page modified April 21, 2014 at 1:06 PM

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Entrepreneur Rich Barton a believer in power to the consumer

Rich Barton has repeatedly succeeded with Internet startups that provide consumers information previously held close by business insiders.


The New York Times

Rich Barton

Age: 46

Education: Bachelor’s degree in general engineering: industrial economics from Stanford University

Early career: Founded Expedia as a unit within Microsoft in 1994; was chief executive officer of Expedia from its spinoff as a public company in 1999 through 2003.

Co-founder: Zillow; Glassdoor.com; Trover.

Board member: Netflix, Avvo, others.

Source: Zillow

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Entrepreneurs are lucky to have one big score. Rich Barton has had a string of them, by repeatedly asking the same simple question: What piece of marketplace information do people crave and do not have?

But the information they provide has often provoked anxiety among professionals in the categories his sites serve.

Nearly 20 years ago, back in the Web’s Cambrian period, Barton cut into the business of travel agents by giving consumers a way to see airline ticket prices with Expedia, the online travel agency he founded inside Microsoft. With Zillow, he rattled real-estate agents by showing the market values of homes. And Glassdoor, a top employment site, revealed employee satisfaction, salaries and other workplace data, making some executives squirm.

Barton’s successes have not brought him the multibillion-dollar returns of the latest tech sensations, or the name recognition of some of tech’s leaders. But by producing and investing in a series of successful startups, Barton, 46, has managed to accomplish something few others have done.

“You can name people who are richer than Rich, but you can’t name very many people who have his track record,” said Nick Hanauer, a Seattle venture capitalist who was an early investor in Amazon and a close friend of Barton’s. “You will find very few people in this country who have as many times created something from nothing.”

Barton, a tanned and athletic Stanford graduate, can make the formula for success seem simple. He is a staunch believer in the opportunities afforded by giving consumers access to data, including Yelp-like reviews and prices, that did not exist before or were closely guarded by professionals.

In conversation, he blends business buzzwords like “transparency” and “opacity” with the language of liberation movements, using the slogan “power to the people” to describe the philosophy behind many of his businesses.

“If we’re doing things for regular folks that make their lives better and save them money and give them transparency, we’re on the side of the angels,” he said.

In 2007, for example, Barton was brainstorming ideas for a new company with Robert Hohman, a former colleague from Expedia, when the two began discussing how Barton had once inadvertently left the raw results of an Expedia employee survey that detailed workplace satisfaction on a printer at the office.

That led to a thought experiment: What if the results had gotten out?

Giving out info

In that case, the Expedia survey did not get out; Barton’s assistant grabbed the document before anyone else. But Hohman and Barton decided it would not have been a bad thing if it had. While employee data, including salaries and workplace, are often hoarded by a tight circle of executives and officials in human-resources departments, the men believed the information would help the public make better career choices.

Not too long after, the two started Glassdoor. The company site makes it easy for current and former employees of a firm to review the good and bad of working there, rate its leadership and reveal compensation information — all valuable information to job seekers and entertaining reading for the merely curious.

The site now has more than 22 million members and has raised nearly $93 million. It plans to eventually go public, said Hohman, the company’s chief executive.

Not all of Barton’s ideas have panned out. King of the Web, a startup he co-founded that ran a social-media game, which included cash prizes, never found a good way to make money, for example.

Still, he has enjoyed a series of big paydays. Barton declined to discuss his net worth, but his shares in Zillow alone, where he remains executive chairman, are worth more than $400 million.

Despite his success, he has managed to maintain a relatively low profile. While he sits on the board of Netflix and has a role as a venture partner with Benchmark Capital, a prominent venture-capital firm, Barton is not as well-known as some members of tech’s “it” crowd.

In part that is a conscious decision, as Barton has decided to live in Seattle to keep some distance from the hubbub of Silicon Valley.

“Personally, I like living here better,” said Barton, sitting in a restaurant near his office in downtown Seattle. “People do other things. I can go to a soccer game, and I’m not standing with the co-founder of this and a venture capitalist at that.”

Barton arrived in Seattle in the 1990s to work at Microsoft and wrote the original business plan for Expedia at Microsoft in 1994. Eventually, he yearned for more freedom when the company balked at spending large amounts on advertising.

He persuaded Microsoft to spin out Expedia into an independent company in 1999. It was acquired by IAC in 2003 and became a stand-alone company again two years later. It is now a $9 billion company.

Expedia alum

Nearly all the companies he has co-founded, and most of the ones he has invested in, were started with fellow Expedia alumni.

Most of his investments are also built around the idea of giving consumers information. RealSelf, for example, gives people a way to review liposuction and other procedures, along with the doctors who perform them, while Avvo helps them find reputable lawyers.

But he does not just help the companies he invests in ask the right question. He often gets involved in advising on the operations, too, according to people who know him.

“There are a lot of VC’s that talk about the whole lot of value they will end up adding, then it turns out they don’t have operating experiences or currency,” said Erik Blachford, a venture capitalist and former Expedia executive. “In Rich’s case, it’s true.”

Crucial counsel

Tom Seery, the chief executive of RealSelf, said Barton’s counsel was crucial early in RealSelf’s life when it was sued by a company, Lifestyle Lift, that markets a type of face-lift.

Lifestyle Lift accused RealSelf of trademark infringement, though Seery viewed it as an effort to stifle criticism of Lifestyle Lift’s procedure on the site. The companies reached a settlement in 2008.

“It was incredibly disruptive, a horrifyingly bad thing for an early-stage company,” Seery said of the lawsuit.

Barton was calm about the matter, though, reasoning that fighting the suit could only enhance RealSelf’s integrity in the eyes of its users and earn it a spate of publicity. Barton was correct, Seery said.

Barton says his startups are able to make money by selling advertising to real-estate agents, plastic surgeons and professionals in other markets only because they attract an audience with desirable information.

“We live in fear and awe of consumers,” he said. “The only reason professionals answer our phone calls is because they know consumers are there.”



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