Rich Barton Talks About His Startup Companies

**Barry Ritholtz** (0:00)
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My special guest today is Richard Barton. He has quite the curriculum vitae. He is the founder of numerous and highly regarded startups, including Expedia, Zillow, and Glassdoor. He is on the Board of Directors at Netflix, and he is a partner at the venture capital firm Benchmark Partners, Richard Barton. Welcome to Bloomberg.

**Rich Barton** (0:50)
Thank you very much for having me on, Barry.

**Barry Ritholtz** (0:51)
So, I've been looking forward to chatting with you about so many different things.
I have to start, though. There's such a, your background is so startup oriented, and yet you graduate Stanford in 89 with a degree in engineering. You end up at Microsoft. What was it like working in Microsoft in the midst of the 1990s when everything was on fire?

**Rich Barton** (1:16)
You know, the power with which we view Facebook and Google and Apple today, imagine all that power wrapped up into one company.

**Barry Ritholtz** (1:27)
One company?

**Rich Barton** (1:28)
That's what Microsoft was.

**Barry Ritholtz** (1:29)
With one person at the helm who really was running the show.

**Rich Barton** (1:33)
Who really was running the show, involved deeply. When I showed up, there were about 3,000 employees, so it was a relatively small company.
Now tech wasn't as pervasive as it is today, but Microsoft was by far the most important company in the technology world, and basically building the future. It was quite exciting.

**Barry Ritholtz** (1:54)
That's right. The process as tech became more pervasive meant that a ton of money was flowing into their coffers. And before the iPhone, there was really nothing ever like Microsoft before.

**Rich Barton** (2:05)
That's right. I mean, IBM, you could argue IBM had a pretty good position prior to Microsoft.

**Barry Ritholtz** (2:10)
Not on the consumer side, though.

**Rich Barton** (2:12)
But never on the consumer side.

**Barry Ritholtz** (2:13)
Really on the business side.

**Rich Barton** (2:14)
And it wasn't as big a business.

**Barry Ritholtz** (2:15)
Right, it was a much smaller business, and it was, whether we're talking typewriters or mainframes, there was still an aspect that wasn't the dominant technology of the day. So what did you do at Microsoft?

**Rich Barton** (2:27)
My first job at Microsoft was product manager of MS DOS 5

**Barry Ritholtz** (2:32)
So you're the person I should have been sending those nasty letters to.

**Rich Barton** (2:36)
Do you know what the big feature for MS DOS 5 was? Are you that much of a geek?

**Barry Ritholtz** (2:41)
Was this pre-shell? Is that what we're talking about?

**Rich Barton** (2:44)
Well, there was a shell, do we have this weird shell? There was no Windows.

**Barry Ritholtz** (2:48)
Oh, way before Windows.

**Rich Barton** (2:49)
Okay, there was no Windows.

**Barry Ritholtz** (2:50)
So like 3.1 is where really Windows?

**Rich Barton** (2:53)
Windows 3.1, which was a couple years after I...

**Barry Ritholtz** (2:55)
That's horrible that I remember that.

**Rich Barton** (2:57)
It was a big event. These were consumer branding events. And MS DOS 5 upgrade was the first operating system that Microsoft sold at retail as an upgrade.
And they did it to break the 640K barrier, which there are about 5% of your listeners right now who are gonna know what that means.

**Barry Ritholtz** (3:15)
The operating RAM that the computer was using and suddenly...

**Rich Barton** (3:19)
Imem.sys.
And what this enabled was these older PCs that were getting obsolete to load up this new upgrade, which was a very hard process to do. Kind of imagine lifting a house, pouring a new foundation in and dropping the house back down onto, it was hard. But it allowed them to run bigger programs faster and people lined up around the block at midnight outside of egghead software to get the upgrade.

**Barry Ritholtz** (3:44)
I remember that. I mean, it was nothing like Windows 95, which the Rolling Stones' Start Me Up was the theme song and it just went utterly crazy.
I was the lonely Mac guy during that era and actually thrilled when the deal was cut in 98, Jobs came back and Gates essentially, I think intelligently, made the bet that, hey, if Apple is around, we're less of a monopoly, because look, there's a credible consumer competitor. And that's why that deal was made.

**Rich Barton** (4:16)
Made that investment. Yeah, a guy named Greg Maffei, who I'm on the Board of Liberty Interactive as well, and Greg is on my board at Zillow. He was my first chairman at Expedia. He's the guy that led that investment for Microsoft and Apple. You know, it's too bad Microsoft sold that position. It would be worth quite a large amount of money, but they did well. Microsoft did very well.