Skip to Content

Flipping your strategy in a volatile market


When markets are in turmoil, you can’t rely on business as usual, but that doesn’t mean you should panic. As the housing climate has turned volatile, rest estate marketplace Zillow has been forced to rethink some priorities, while doubling down on others. Zillow president Susan Daimler talks about the importance of a strategy focused on the future, despite layoffs and pullbacks, and how maintaining a clear shared mindset has enabled forward progress in a challenging climate.

“It is one of America’s pastimes, real estate. It always has been.”

— Susan Daimler
About the guest:

Susan Daimler is president of Zillow, the $8-plus billion real estate platform.

About the host:

Bob Safian is the host of Masters of Scale: Rapid Response, and the editor-at-large for Masters of Scale. He’s the founder of The Flux Group, a media, insights, and strategic advisory firm. He was previously editor-in-chief of Fast Company, where he won the National Magazine Award for Magazine of the Year in 2014.

There’s no better lens to look at sudden market gyrations than real estate.

— Bob Safian
Transcript of Masters of Scale: Flipping your strategy in a volatile market

Chapter 1: Real estate, America’s pastime

SUSAN DAIMLER: It has been a ride the last few years. We’re seeing affordability be at the worst it’s been in 15 years.

People want to be on the move, and we’re seeing that post-pandemic. There is more thinking about, “Well, where could I be? And, where else could I live? And, what else can I try?” The dream is that people are more mobile.

It is one of America’s pastimes, real estate. It always has been.

I think one of the areas or the pitfalls is you get too caught up in the now. As you’re prioritizing, you really have to be thinking about: what is the strategy, not just for 2023, but looking forward?

You have these companies who have been just focused on, “Oh my God, it’s raining. How do we not get wet?” When the sun comes out, they’re behind — those are the lessons learned.

BOB SAFIAN: That’s Susan Daimler, president of Zillow, the $8-plus billion real estate platform.

As interest rates have shot up this year, the red hot housing market has abruptly cooled

with mortgage costs jumping and bidding wars evaporating.

I’m Bob Safian, former editor of Fast Company, founder of the Flux Group, and host of Masters of Scale: Rapid Response. I wanted to talk to Susan because there’s no better lens to look at sudden market gyrations than real estate.

Lots of businesses have faced unexpected turnabouts in 2022, but as Susan describes it, those twists have got to be built into your strategy and your approach.

At Zillow, she explains, the emphasis remains on the future — for the company and for its customers. In fact, she argues, slower times are actually great opportunities to improve your offerings, which in Zillow’s case revolves around something they call the Housing Super App.

Susan acknowledges that the company overreached in some areas during the go-go housing boom, but in the big picture, she says, that actually helped Zillow refocus on its mission to make real estate transactions faster, simpler, and more equitable.  

She says that following every market blip is just distracting, for homeowners and for the Zillow team. The key takeaway: that even in a tough economic cycle, there is plenty of progress to be made. 


Chapter 2: Where are we in the real estate cycle?

SAFIAN: I’m Bob Safian, and I’m here with Susan Daimler, the president of Zillow. Susan, thanks for joining us.

DAIMLER: Thanks for having me, Bob. Great to be here. 

SAFIAN: The real estate market has been topsy-turvy the last few years with wild demand spikes for some home markets during COVID, and then suddenly a turnabout, sharp rise in the interest rates, mortgage costs. Your business at Zillow is about real estate, facilitating information and transactions. Can you try to level-set for us where we are in the real estate cycle? Is that even something we can say with confidence anymore because things move so quickly?

DAIMLER: It has been a ride the last few years, just as you said — lots of dynamic changing. The most overused word from the last three years, but we keep running into unprecedented areas that we’ve never seen before. Right now, that’s with mortgage rates that are just rising at a speed that we haven’t seen previously. It feels quite jarring, especially if you’re in the midst of trying to buy a home.

But I think we’re optimistic that next year will at least be a bit more stable. We’ve had lots of ups and downs, and that we’re going to reach at least a place that is a bit more balanced, and people will have a better feeling and security about what is happening at the moment, and that likely will continue for the future.

SAFIAN: The dynamic between buyers and sellers is sort of shifting where the balance of power is in certain ways, right?

DAIMLER: That balance of power is shifting, but the problem is the mortgage rates. A couple years ago, last year, home prices went through the roof and incredible competition for folks trying to buy homes. That was the big problem.

Now, we’re seeing inventory stabilize. We’re seeing pricing stabilize. But now, we’re seeing affordability be at the worst it’s been in 15 years. That is really hampering buyers’ opportunities to get in the market. While there might be a lot less competition and they’re no longer in a bidding war. If you’re looking at a $350,000 home, for example, a 6% mortgage rate versus a 3% mortgage rate means an extra $500 a month that you’re paying. That has become the hurdle of the moment.

Chapter 3: Is now the time to buy real estate?

SAFIAN: I live in Brooklyn, which I understand you do too. As you’re talking here, I’m thinking to myself: now is not a good time for me to be buying a bigger home or looking for a place for my kids or whatever. Is that right, now is the time that you just sit tight? Is that what you’re seeing in your business — that things are just stopping because of this?

DAIMLER: Yeah, certainly not stopping. What we always say about housing is that housing is incredibly durable. People always have to move for various reasons. No matter what happens, let’s say, next year with the housing market, millions of people will in fact move, and millions of people will buy and sell homes. Sometimes that’s dependent on who has to versus who wants to. Maybe you’re in a spot where you’re like, “Oh, that’s interesting, but I’m going to wait and see what happens,” where for other folks, they don’t have that luxury, and they need to move. They need to get a bigger place, or they need to accommodate for an in-law or a new job. So I think it’s really buyer-dependent on that.

It’s also an interesting time to look at rentals. Again, the market balancing has lots of different impacts in there. So you’ll start to see people maybe look for more rental space while they wait to see what happens with the market.

SAFIAN: The obsession and attention on real estate has also turned … One of my colleagues was talking about how Zillow’s become like Instagram; family members who spend time on there as fun or shopping or whatever. There’s been a cultural adjustment with real estate.

DAIMLER: Zillow has become … It is the Instagram. It’s the place to dream. It’s the place to think about what you might want to do, what you can do, what your neighbors are doing. There is a voyeurism about real estate that I think everyone’s always had. Zillow certainly feeds into that.

You’ve got now also all these spoofs; you’ve got Zillow gone wild. Look, there are channels on TV that are 100% dedicated to homes and renovations. It is one of America’s pastimes — real estate. It always has been. Zillow definitely helps with that.

Back to your home search, Bob. It is a great time to really stay on top of the market. It’s what we’re doing at Zillow, we’re keeping our eye on the horizon. We know that there are going to be ebbs and flows in the market, but we’re always going to come out of them. You as a buyer need to think the same way and be ready to pounce. It’s a really great time to be active in the market and understand it and what it is you really want because then when it does come on and it is the right time, that you can really get after it and you can win.

SAFIAN: How do your priorities in running Zillow adjust when the environment shifts like this?

DAIMLER: There are a couple things. We know that we are solving this authentic problem that people have. That authentic problem is it is really challenging regardless of what the market is doing. The market is just another variable on top of what is already a really challenging thing for people to do, which is to move, which is to buy and sell. It is the most expensive thing people do in their entire lives, the most money they’ll ever spend on something. It is highly emotional, and it is in a really fragmented, non-digitized, analog process. That is challenging, and that is what we are trying to solve.

We look at the market; we look at products that are built for specific market dynamics, and we say, “do we still see the need for those?” That was something that customers were clamoring for at a time where they were in bidding wars. Are they still clamoring for that? Is that something that we need to build in the next one year, the next two years, the next three years?

I think one of the areas or the pitfalls is you get too caught up in the now. That’s something Zillow is always doing is building for the future, not for the now. As you’re prioritizing, you really have to be thinking about what is the solution, what is the strategy, not just for 2023, but looking forward because if you’re constantly pivoting to try and adjust to the market, you will spend all your time reprioritizing, all your time really jarring your employees about your strategy, where it’s much easier to ground it and say, “This is where we’re headed. Whatever we’re going into — maybe it’s going to be a rainstorm, maybe it’s going to be a hailstorm, whatever it is — when we come out of it, we need to be best positioned. We feel great about where we are now.”

Chapter 4: The reason for Zillow layoffs

SAFIAN: Several real estate firms have been doing layoffs recently. You guys did some last year. What did you see or experience that others didn’t?

DAIMLER: Our layoffs that were back in November and December were really tied to us closing down our iBuying business.

This is Zillow Offers. This is where Zillow was the first party in buying and selling homes. So we were actually the ones who were putting our capital forth and buying homes, reselling them after renovating them. And it was a business that was just way too risky, way too volatile, and just served too few customers for us. That volatility is really, really difficult as the market is topsy-turvy. And so we feel at this moment really great that we’re not in that anymore. It was a really challenging time, and one of the things we prioritize is making sure our employees know where we’re headed.

I made that comment about how it can be so jarring for employees if you’re constantly trying to chase what’s happening yesterday or what you think is going to happen in two days. That becomes really difficult for employees because their work keeps changing, and you keep saying, “Hey, no, now we need you to look at this. Oh, now we need you to focus on this.” That’s not a great dynamic for employees. You really need to put out that strategy, make sure that they understand the work that they do, why it’s important, how it contributes, and that keeps that very steady productive pace.

Communicating to employees is as challenging as it’s ever been, and the more that you change what you’re communicating to them, the more you hold the company back from moving forward. 

SAFIAN: And the iBuying initiative, you were taking advantage of a particular enthusiasm that was in the marketplace, but you realized that maybe that wasn’t the differentiating characteristic of your business that you wanted for the future. Maybe that wasn’t the risk profile you wanted. I know you have recently partnered with Opendoor to offer that same kind of product, but you are not the ones who are taking the risk on it anymore.

DAIMLER: You got it. And that is the big difference maker. I think we feel really comfortable and confident in our decision to get out of the business ourselves, but one of our beliefs is we want to offer customers as many opportunities and options as we can, and that option to sell your home quickly without having to stage it or paint it or have open houses and know what money you have to buy your next home with certainty, that’s what Zillow offers. We don’t want all the 200 million people a month who come to Zillow not to have that option. And so partnering with Opendoor enables us, Zillow, not to have to be directly in this business that is not for us while still enabling our customers to have that opportunity.

And something we learned from being in it ourselves is that it was a bit narrow. And what I mean by that is, most customers don’t end up doing that. It’s a great option. And for those who don’t, Zillow is able to offer them working with one of our premier agents, getting financing from us. We are able to engage with them on all the other options. And what we’re trying to do with this idea of this Housing Super App is there’s lots of ways to engage in the Zillow ecosystem.

Chapter 5: The dark ages of real estate

SAFIAN: It sounds like it was a hard lesson or maybe a reminder, I guess, about what the core purpose of your business was, right? There was a near term opportunity to make some incremental revenue through the buying and selling process yourselves, and now you’ve realized really your focus is on this Super App. Can you explain that transition and I guess what you see the Super App definition of Zillow being?

DAIMLER: I would say too on that, as you talk about prioritizing how do you know when to move forward? I think a lot of companies would have been frankly scared to just pull out all together. I think one of the temptations is to have a lot of different irons in the fire, and that’s how you make sure you’ve got all your bases covered. And, well, if we leave that flank exposed, what will happen? And so us getting out of it I think shows one of the fundamental things that I love about Zillow, is this confidence in the bigger picture and this confidence in: we can’t be everything to everyone, but we can still offer everything to everyone. There’s a big difference in those two things and with that being so customer led and so customer centric, it really enables you to do something special.

And so the Housing Super App is that — building an ecosystem that is fixing all these terribly fragmented, archaic ways of working in real estate. So a great example is touring. We all want to tour homes before we see them. You want to go touch, you want to go see, you want to go experience.

Right now touring is stuck in the dark ages. It’s a really analog process that involves maybe four different people having multiple phone text conversations just to get you, Bob, and your son and an agent at the same time at a home. It’s all this back and forth. We are on our way to making touring a home just as easy as booking a restaurant reservation with that same click of a button. That amazingly doesn’t exist right now in the housing market. And then when you think about putting that together with other point solutions like financing, meeting an agent, and putting them all together into this one ecosystem to really help customers get through that journey that is so emotional and challenging to get into the home that they love.

SAFIAN: It does sound archaic when you talk about it that way. It really does. It’s like, “Wait, that doesn’t exist? How can that not exist?”

DAIMLER: And same thing, archaic. I mean, you think about if you’ve gotten a mortgage recently, you sit down with a pen in front of 10,000 pieces of paper that you need to sign in person. These pieces of real estate, for a lot of the things that we have moved forward, there are a lot of them that are just still stuck. And so we are looking to unstick those, bring them into the modern age, the digitized age, and then really make this more digital-plus-human-dynamic way of transacting.

SAFIAN: Is part of the theory of the case that if it’s simpler to buy and sell and there are fewer costs and there’s less friction that we’ll all just do it more often?

DAIMLER: Yeah, that is the hope. Real estate is also not inherently equitable. Being a first time home buyer is really challenging, and we are aiming to level that playing field. Everyone deserves that ability to own a home, and we are also leaning into that idea of “yes, if it is easier, if I find the right people to help me through that process, and if I understand all these pieces, yes, it will be easier. I will be more inclined to do it.” And I think we’re seeing now too. People also want to be on the move, and I think that we’re seeing that post-pandemic. There is more thinking about, “Well, where could I be? And, where else could I live? And, what else can I try?” And also as companies become more flexible, I think the dream is that people are more mobile.


Chapter 6: Managing a team during a crisis

SAFIAN: Before the break, we heard Zillow president Susan Daimler talk about the gyrations underway in the housing market and how the company has been adapting. 

Now she talks about the balance between adjusting to market conditions and holding firm to a long-term strategy.  She also talks about the perils of watching every interest rate move made by the Fed, and the advantages of working at a founder-led company.

Plus she shares lessons about the constraints that come with scaling, and how hard problems can bring a team together.

You came to Zillow via an acquisition when your company Buyfolio was acquired by Zillow. You also co-founded SeatGuru in the travel business, and both of those startups began in less than auspicious environments for those sectors — right after 9/11 for SeatGuru, and in the middle of the great recession for Buyfolio. What lessons have you drawn from operating in those challenging times as you faced the challenging moments that Zillow has?

DAIMLER: I think it goes back to that idea of identifying this authentic problem and going to solve it. You can get pretty thrown off if you get caught up in what is happening right now. SeatGuru is a great example of that, where, exactly, it was born at a time where air travel was really struggling, but travel is also durable.

And sure enough, Zillow will follow the same. When you get through those challenging times, people are even more wanting transparency. They’re coming at it from this point of, “How do I understand this better? How do I interact with this industry better?” And if you’re there ready and waiting because you’ve been building and working towards it during these uncertain times, you are so well positioned. You have these companies who have been just focused on, “Oh my God, it’s raining. How do we not get wet?” When the sun comes out, they’re behind — those are the lessons learned, and Zillow is very much on that same path.

SAFIAN: I could see some people being frustrated by being in businesses where you’re so dependent on external factors, and you’re impacted by things that are not in your control. And I’m curious how you deal with that frustration. At the same time, you almost make it sound like it’s an opportunity. If other people get frustrated by that and you don’t, that opens doors for you.

DAIMLER: Yeah, it does. It’s about staying the course and controlling what you can control, and I think if you focus on the controllable, especially in these times, it will really benefit you in the end. And there’s always going to be uncontrollable factors, nut these roller coasters, you got to just ride that. You got to ride the middle line, and there is huge opportunity ,and Zillow is particularly positioned to take advantage of it. We have $3.6 billion in cash. We feel just in a good place to keep investing, and that is a luxury, and that’s an advantage. There’s a ton of pressure testing along the way, but not that jarring jerking the car to the left or to the right. You’ve got to keep going forward.

SAFIAN: There have been a lot of businesses that saw certain kinds of momentum during the pandemic that they kind of assumed, “Oh, this is going to continue forever,” and then it hasn’t necessarily happened that way.

DAIMLER: We refer to it as the rubber band got pulled one way really hard and now we’re snapping back the other way. Hindsight’s always 2020, but we probably all should have seen a lot of this stuff was what was coming.

SAFIAN: And in keeping track of where you are and where the future’s going to be, there’s so much focus on the Fed and what Powell will say or do next. Do you watch that stuff really intently on a day-to-day basis, looking to get an edge or try to ascertain what’s next? Or are there other principles, other data points that you focus on?

DAIMLER: It’s back to: what can you control? We can’t control that stuff. What we can control is the customer experience. What happens when someone comes to our platform? What happens when they work with one of our partner agents? And so we spend the majority of  our time making those experiences better. Of course, we keep track of the housing market and what we think is going to happen, but we really dedicate the majority of our time to, again, that housing super app and improving the overall process.

SAFIAN: But you’re not sitting there refreshing your phone when Powell is … ?

DAIMLER: No, no, no. Definitely not. It is distracting to leadership, to employees, to the strategy.

Chapter 7: Leading in a founder-led company

SAFIAN: You work for a founder, CEO Rich Barton, that can be a great inspiration for a company. Founders often cast a big presence on the rest of the leadership team and the rest of the organization. I’m curious if you have advice about working for a founder at a founder-led business, especially as you’ve been a founder yourself. What’s different about working for a founder versus being a founder?

DAIMLER: We’ve known the founders of Zillow, Rich and Lloyd for a long time, and it is their ethos that brought us here and has kept us here. And I think when Zillow acquired Buyfolio a decade ago, there was no way that we were going to be here a decade later because it was, “We’re entrepreneurs, and we’re founders, and we can’t work at a big company. That doesn’t work.” When we came here, it was 400 employees; we’re now at 6,500, so we have been here through this incredible scale and growth. But what we’ve learned is under the right leadership and with the right founders, that entrepreneurialism continues. It doesn’t stop with the size of the company; it’s built into the ethos of the company.

The beauty of founders is this passion investment for the problem and for the company. And I think if you have the right founders, that’s a pretty special part of the recipe for success.

SAFIAN: Are there different tools to reinforce entrepreneurialism when you’re at thousands versus at hundreds? Or is it a more consistent application of those tools and those approaches not letting those drop?

DAIMLER: That’s a great question. I mean, it’s your whole podcast, right? Everything gets harder at scale. I think it has to be embedded in your culture to make sure it doesn’t drop. And you need to be hiring people at all levels all the time who have that quality and who know that the company values that quality and values failure. And values big swings. Those are the most important things, really having employees feel empowered to take risks. Which is what founders do, right? That is why they become who they are. And that employees feel that same empowerment. And I think some companies don’t accept that. So I think that is something you constantly have to reinforce and even celebrate at some level. It can’t always be about the wins.

Because I think the bigger you get, the more constraints it can feel like the company has, the teams have, the product has. And the key is to really bring in those people who do not feel those constraints and feel empowered to continue to reimagine and sometimes rebuild what’s been done. You really need this combination of legacy-folks who understand the business, remember what worked, what didn’t work, and you’ve got to combine that with these constant new fresh eyes on how we might solve problems.

That’s our favorite thing: when new folks come into the room and pressure test the founders, the leaders, with the simple question of, “Why do we do it this way?” And you’re like, “That’s a great question, and we should talk about that.” So I think that’s how you keep it infused in the culture. But you have to keep an eye on it. You have to nurture it.

SAFIAN: It sounds like it’s as much about recruiting and the humans that you choose as it is the systems that you have once they’re here.

DAIMLER: It is both of those things for sure. The humans are a huge part of it, and the system has to support them. But they have to have that — we call it that — “maverick” quality in them as well. And to be clear, you can’t have all mavericks, because that’s a whole other ball of chaos. But you certainly need to have a good amount of them.

Chapter 8: How do you help your employees manage stress?

SAFIAN: There’s so many, as we’ve talked about, twists and turns that have happened in the business. It can get stressful. How do you handle your stress, particularly over the last couple years where stress has been heavy on all of us?

DAIMLER: Work stress is not a big factor for me. I’m very one foot in front of the other — “How are we going to solve this?” And I’ve been in tech for 20 years; I’ve been at Zillow for 10. Everything’s solvable. I think you just have to identify what it is, and then you put your heads together, and you figure out how to solve it.

I think stress can be really paralyzing, and then it feeds itself. For me, it’s about being action-oriented.

SAFIAN: You kind of like hard problems.

DAIMLER: Yeah, I love hard problems. They keep you on your toes, and it’s how you learn, and every problem you solve as a team, every challenging time you go through is something that you learn and it just builds this deeper, stronger foundation that you have to get stronger off of, right? That just continues to feed on itself.

And as you said, in these stressful times, employees feel that as well. It’s work, and we’re here to control what we can control and do the best job that we can every single day, but it can’t always be perfect, and we have to be okay with that. And our employees have to know that as well, because stressed employees are not productive employees. And we know what makes this stuff go is people who are engaged, productive, happy, they feel supported. And how do you do that? You help people solve their problems.

SAFIAN: So what’s at stake for Zillow right now?

DAIMLER: I mean, we have a pretty hairy problem that we’re trying to solve. The problem’s big, but what is at stake is that if we solve it, we change real estate for the better.

SAFIAN: Well, this has been great. Thank you for doing this. I really appreciate it.

DAIMLER: Yeah, thanks for having me.

Masters of Scale’s mission is to democratize entrepreneurship. Launched in 2017 as a weekly podcast featuring Reid Hoffman, we’re now two weekly podcasts — Masters of Scale with Reid Hoffman, and Masters of Scale: Rapid Response, hosted by Bob Safian — as well as an award-winning daily learning app, a best-selling book, virtual and live events, and more, serving a global community of founders, funders, and leaders looking to innovate at scale.
Sign up for our weekly newsletter