Zillow was just a two-year-old startup when its industry came tumbling down around it.
Launched in 2006, the company initially served as a tool to tell people how much their homes were worth. “People were like ‘Oh my gosh, look how much money I’m making… on paper,’” recalled Amy Bohutinsky, now the company’s COO.
Then in 2008 Zillow, abruptly, became a company that told people how little their houses were worth.
“We fell into the largest housing recession of our entire lifetimes and all of a sudden we’re sitting there going, ‘We have a product that tells people how much money their home is worth and it’s really pissing people off,’” Bohutinsky told the crowd at Fortune’sMPW Next Gen Summit in Laguna Niguel, Calif., on Tuesday.
It wasn’t that the company hadn’t seen the crash coming. Zillow CEO Spencer Rascoff now points to early blog posts the company wrote talking about the frothy markets. But it did change the business. There was still a crisis, there were still layoffs, and Zillow’s future was in jeopardy.
It was a pivotal moment for the startup, says Bohutinsky, and it was forced to rethink its products. “We said, ‘We’re sitting on this data with information on every home in America, and we have the opportunity to start telling people the truth,’” she said. Even if it wasn’t “what they wanted to hear.”
As a response, the company doubled down on predictive sciences, and devoted more resources not just toward how much money their investments were losing, but also on “what’s really going on with the housing market,” she says.
Eventually the company reemerged on the other side of the crisis, with perhaps a stronger model than before. Says Bohutinsky: “We built a brand on that transparency and truthfulness.”