Zillow.com
With Zestimate, people can see how much any house is worth.
- Real-estate website Zillow launched in February 2006.
- The day it launched, the Zestimate feature - which allows you to see a price estimate for a specific home - drew about 1 million people to the site.
- Today, Zillow is worth $7 billion and has a contest going to see who can best improve the Zestimate algorithm.
Real-estate website Zillow launched in beta in February 2006. Six hours later, the site crashed because it couldn't handle the amount of traffic it was getting.
The draw? An unprecedented feature called the "Zestimate," an estimate of how much a specific house is worth.
On an episode of Business Insider's podcast, "Success! How I Did It," Zillow's CEO, Spencer Rascoff, told Business Insider US editor-in-chief Alyson Shontell that Zillow attracted about a million visitors within the first day. (The timeline on Zillow's website says "more than one million visitors in the first three days.")
Listen to the full episode here, or listen later with the buttons below:
Most of the traffic came from the slew of media coverage. Rascoff told Shontell reporters couldn't wait to Zillow the price of their homes, which made them excited to write about the startup's launch:
"We briefed [reporters], under embargo, and they were Zillowing their house and they were Zillowing the houses they grew up in on the test site.
"Then, the day we launched, there was this huge media explosion, and it brought the site down. So the good of this huge amount of traffic was, well, we launched with a bang, but about six hours later, the website crashed and was down for about four or five hours before we could scramble to get it back up."
Amy Bohutinsky, COO at Zillow Group, tweeted that Walter Mossberg's Wall Street Journal article on the Zestimate was what ultimately caused the traffic overload and the crash.
Rascoff told Business Insider, "It's so cool and so innovative to say, 'Oh, my god, I can grab my kid's school roster and I can Zillow everybody at my kid's school and see what everyone's house is worth, see what everyone paid for the home.' That was just, like, this, 'Oh, my god' kind of thing that launched the company in 2006."
Rascoff also explained how the Zestimate came to be. He told Business Insider:
"We said: 'OK, let's try to figure out what every house in the country is worth. Great. OK. How do we do that? Well I know - let's call Stan,' and literally we called Dr. Stan Humphries, who was running analytics and personalization at Expedia, and we called him up and we said, 'Stan, we finally figured out what we want to do. We want to figure out what every house in the country is worth, and we want you to be the person who helps us do that.'
"And he said, 'Well, I don't know anything about real estate.' And we say: 'It's OK, this is not about real estate. This is a math problem. It has nothing to do with real estate.'
"And we went about the task of assembling all this data from county sources. So most of this information - bed, bath, square footage, tax assessment, sale history - is available in county courthouses, but we had to go acquire it, digitize it, and then build the data layer, the Zestimate, that sits on top of that."
Today, Zillow is worth upwards of $7 billion.
The Zestimate has been a recent point of controversy - in May 2017, homeowners sued Zillow, saying that the Zestimate undervalued their homes and made them harder to sell, according to Reuters. In August, Reuters reported that Zillow won the dismissal of the lawsuit.
A contest is currently underway for a $1 million "Zillow Prize," which will be given to the person or team who can best improve the Zestimate algorithm.