Zillow IBuyer Collapse
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A story about how Zillow's attempt to compete with OpenDoor in the house-flipping business failed dramatically.
"Zillow came out and said they're shutting down their iBuyer business, which is where they would give you an instant offer on your home. Their algorithm would calculate and give you a price - no broker, no staging your house, no 3 months of showings. You could sell your home today.
They stole this idea from OpenDoor, who was built to do exactly this instantaneous home sales. Zillow saw OpenDoor growing in value, and after OpenDoor went public, Zillow created their own in-house competitor a couple years ago.
But it didn't work. They just announced they lost $500 million this quarter, they're laying off 25% of their staff, and they have 7,000 homes they need to unload because they're getting out of this business.
The ironic part is we're in this group chat where for the last year our friends have been promoting Zillow as a great buy. I bought like $50-100,000 worth of it, and everybody in the group is down big - somewhere between 30-40% on this investment."
Shaan Puri
Host of MFM
Shaan Puri is the Chairman and Co-Founder of The Milk Road. He previously worked at Twitch as a Senior Director of Product, Mobile Gaming, and Emerging Markets. He also attended Duke University.