Intro To An IRO: Raymond “RJ” Jones, Zillow Group, Inc.
Raymond “RJ” Jones is Vice President, Investor Relations for Zillow Group, Inc. based in Seattle, Washington. He is primarily responsible for managing relationships with existing institutional shareholders and targeting new investors. In his role, RJ regularly presents the Zillow Group story to investor, industry and consumer audiences. He also provides actionable insights on market trends and technologies to Zillow Group's business leadership to enhance their strategic decision making. Further, RJ represents Zillow Group's corporate relations efforts on issues connected to housing and real estate involving veterans, active duty military personnel, and their families.
Prior to joining Zillow Group, RJ was chief marketing officer and partner with Kosmos Funds, a Seattle-based alternative investment manager, where he led the capital raising efforts for the startup venture. Previously, he worked as a buy- and sell-side investment analyst covering consumer and retail equities for Ragen Mackenzie of Wells Fargo Investments. He also previously ran investor relations for Nordstrom. RJ was part of the spinout team that created the boutique investment bank, Delafield Hambrecht, formed by the management group of WR Hambrecht's Seattle office, where he led the sell-side consumer equity research efforts of the firm, which included notable coverage of Netflix.
1. What are your top priorities and biggest challenges?
One of my top priorities is to ensure accurate valuation of Zillow Group shares while reducing volatility. That consists of ensuring investors have sufficient information to properly build a valuation model that drives to the assessment they'll make about pricing and investing in our company.
The next priority for us is building a strategic and diverse shareholder base that is supportive of the company's long-term mission, strategy, and objectives. One of the biggest challenges is aligning management expectations internally with investors’ expectations externally. I spend a lot of time thinking about how we can drive towards harmony for investors to better understand the company. Strong IR teams are able to effectively communicate company expectations and strategy in a way that is clear and understandable to all external stakeholders, especially those that are or could be strategic long-term shareholders.
Another challenge is engaging with shareholders in a way that gets them to focus on the long term. Frequently, their incentives are achieved through short-term performance whereas the company’s incentives are much more aligned around longer-term goals. It is important that you identify and engage with the right investors that understand and support the company’s long-term vision.
The last thing is driving innovation into the investor relations practice. We’re constantly strategizing how we can be leaders in advancing best-practice IR by utilizing social media, perception studies, and buy-side engagement through value-added interactions to improve our IR outreach.
2. How have you seen the role and expectations of the IRO evolve in the past few years?
I’ve been in my role for five years, and I’d say it’s gone through an evolution of sorts based on the changing perception of Investor Relations from the Street. IR is now a multi-disciplinary role. You must be an extension of the investor from the outside in, as well as an extension of the management team from the inside out, which is formidable. Strong IROs know everything about the company, its products, and the industry and understand any implications from multiple angles, especially financial and strategic.
Additionally, you have to demonstrate a solid understanding of the business model, be able to explain how the company is differentiated, and how you are going to win. You have to know what's going on in the industry that may affect the company as well as stay up-to-date on the competitive landscape. An intimate knowledge of capital markets is important because you have to understand the pressures investors are experiencing. Essentially, you've got to be in a position where you are a proxy for the leadership of your company, whether it's the CEO or the CFO, as there will be many circumstances where you're going to be the company spokesperson and will be susceptible to a high level of scrutiny. IR is a role that comes with a lot of pressure and you have to be ready for it no matter what. You are responsible for presenting the most valuable point of view that is representative of the company and its strategy at any point in time.
Technology also has been a contributing factor that has changed the IR profession, as it has opened up and increased the speed of access to, and distribution of, information. As an IRO, you have to be incredibly competent in dealing with a rapidly evolving environment such that you’re not shaken by change.
3. How can the IRO best engage the investment community?
The best way to engage with investors is face-to-face. Be where the investors are, whether it’s inviting them to your headquarters, visiting their offices, or attending bank-sponsored conferences. Go where the investors are so you can get as much exposure to the decision makers as possible.
While investors are not shy to share their opinions, there is tremendous value in soliciting anonymous feedback. During our conference calls, we're using an audience-engagement technology called Slido which allows investors and analysts to anonymously pose questions to be answered on the live call. The questions are voted on by attendees and management answers the ones voted of most interest. We’ve also initiated our own online perception study to gather insight from investors on what they believe we are doing right and what we can do better. The findings are extremely valuable and help to shape our messaging and outreach strategies to better align management and investor expectations.
Another more traditional way to engage investors is by working with corporate access teams to collect verbal feedback from their clients after NDRs or conferences. We typically provide two or three questions that are important to us, but also take into account questions that they typically ask of buy-side clients. Getting that feedback based on those interactions is really important to us.
4. What is one important initiative that you’ve championed or experience that you’ve had as an IRO?
I'm going to highlight two, the first being innovation in Investor Relations, and the second in the creation of a market intelligence function at Zillow Group.
We pride ourselves on being an innovative company in every way and we are not afraid to experiment with new technologies. We always ask ourselves what we could do differently that would drive more transparency or set new precedents in access, especially as it comes to technology and leveraging social media. We aim to drive more engagement via social media in a way that could open up access to many types of investors that may not have had access to the company previously. Our use of Slido for earnings calls is a good example. Investors that may have never asked a question by dialing into the call, for whatever reason, now have a chance to do so anonymously. Anything that we can do that sets a new precedent that may help other IR practitioners is worth pursuing. We really like to be innovative in a way that is helpful to the industry, our company, and the IR profession at large.
A second initiative was the creation of Zillow Group’s market intelligence function. I had the opportunity to create a small team accessible to our company that is focused on gathering external information that can be useful to leadership, product teams, and industry teams. Often times, it's knowing what is being done outside of the company that can be interesting and informative, and helps us make great decisions. Building a team to address this has been exciting, and it's a function that has become much more dynamic as we spend time with it and establish protocol that gives great insights and is helpful to the company overall. It's been an exciting initiative and I'm privileged to be able to do that.
5. What resources do you rely on to stay up to date on the capital markets?
The top resource is relationships with our largest shareholders. They're very accomplished at assessing, monitoring and dealing with changes or new developments in the capital markets, especially those that may impact us. We're in a fortunate circumstance to have a shareholder base that wants to stay committed to the longer term mission and strategy of the company.
We also use a lot of tools that support our IR initiatives. We leverage the Nasdaq IR Insight® platform for research and headline alerts on the company, as well as what's going on in the industry. It’s important for us to closely track companies that are significant to us and our interactions with investors as I tell the story about how Zillow Group is developing over time. The great thing about having so much information on investors is that we get to know prospective new shareholders. We also leverage NASDAQ IR Insight’s research sources as well. Sell-side research, analyst commentary, and related news are all relevant pieces of information.
It’s also important for us to know what's going on with industry bellwethers, like Facebook, Google, etc. What are they doing to change the world? How could that impact us? Vice versa. Overall, it’s a combination of technology such as Nasdaq IR Insight and personal interactions that help us to stay up to date on the capital markets and industry trends.
6. What advice do you have for the next generation of IRO?
Investor relations is a constantly evolving function. To be successful, you must be agile and proficient in multiple disciplines. I can tell you, when I made the jump to the IR side, that I did not think I would be in a role where I was doing so much writing and message development. I've found that you need to have a combination of capital markets experience, understanding of corporate finance and evaluation, knowledge of the company and the operating sphere, familiarity with products and sales, and then ultimately a strong communications skillset. It's this intersection of expertise that I believe the IROs of the future, the ones that are going to make the biggest impact, are going to need to master. That said, the value of IR continues to grow and it’s an exciting time to be in the profession.
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