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Zillow Inc (Z)’s CEO on LinkedIn Corp (LNKD) and How to Avoid “Tech Company Cancer”

Linkedin CorporationThe Fool is exploring Seattle. Today, CEO Spencer Rascoff introduces us to Zillow Inc (NASDAQ:Z), telling us how the online home and real estate marketplace works, what he considers its greatest strengths, and what investors should know about it.

What other tech companies does a tech company look up to? Spencer explains his admiration for LinkedIn Corp (NYSE:LNKD) and how he plans to follow the social networker’s lead to longevity. He also has a tip for investors looking to evaluate tech managers they’re unable to meet face-to-face.

Austin Smith: You guys, obviously a younger tech company in the spectrum of tech companies. Are there tech companies out there that you really feel just get it? They’re operationally excellent, very relevant, sticking around, keeping the creative juices going, that you guys admire?

Spencer Rascoff: I deeply admire LinkedIn Corp (NYSE:LNKD). This is a 10-year-old company that, as a user and an investor in LinkedIn Corp (NYSE:LNKD), and as a friend to some of the management team there, I feel like LinkedIn Corp (NYSE:LNKD) is executing at as high a level as they’ve ever been executing, in terms of the pace of product development, the pace of innovation, the internal culture.

It just is a company that seems to be firing on all cylinders, and it’s 10 years old. We’re seven or eight years old. This is a dangerous time at a tech company. Years 5 to 15 are where most tech companies lose their way. It’s where the original management team tends to churn out, especially a couple of years post-IPO, and it’s where companies settle into mediocrity and start accepting mediocrity.

That can be very cancerous to an organization. Credit to LinkedIn Corp (NYSE:LNKD) for that not having happened to them. I try to follow their lead.

Smith: How do you avoid that “tech company cancer”?

Rascoff: I think the biggest thing is I try to lead by example, by staying passionate and full of energy, and trying to convey that sense of energy and enthusiasm for the product to the whole management team and to the whole company. You try big things, and you fail fast. We try to do that at Zillow Inc (NASDAQ:Z).

Yesterday, for example, I decided with the team to kill a feature that we were really excited about. A pretty small feature; we were really excited about this feature six months ago, when we shipped it, but it’s not getting the usage that we wanted yet. The data proves it. OK, let’s pull the plug. Let’s get rid of that feature and move on.

That’s a hard thing for companies to do, to self-edit, and it’s very important to keep the pace of innovation alive.

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