I agree with the OP that "it's put up or shut up time for Data Science teams. When the business depends on our work for revenue growth, success is expected. Failure is fatal." Zillow's CEO blamed the Data Science team for the failure of a mission-critical business unit and fired 25% of all employees. The stock lost a third of its market cap in a few days. When revenue growth depends on an ML/AI system, failure is indeed fatal.
However, I disagree with the OP's diagnosis.
The initiative failed because to a close approximation the only homeowners who would routinely accept Zillow's offers were those whose homes could not fetch anywhere near as much via traditional sales channels. Everyone else would rather sell their home via conventional listing. Zillow gave homeowners a free put option: Whenever Zillow's offer was above market, the homeowner would take it; otherwise the homeowner could freely ignore it. The incentives were strongly stacked against Zillow from day one.
Zillow unwittingly launched what I would describe as a seller's market for lemons. Naturally, Zillow ended up buying... a lot of lemons.
However, I disagree with the OP's diagnosis.
The initiative failed because to a close approximation the only homeowners who would routinely accept Zillow's offers were those whose homes could not fetch anywhere near as much via traditional sales channels. Everyone else would rather sell their home via conventional listing. Zillow gave homeowners a free put option: Whenever Zillow's offer was above market, the homeowner would take it; otherwise the homeowner could freely ignore it. The incentives were strongly stacked against Zillow from day one.
Zillow unwittingly launched what I would describe as a seller's market for lemons. Naturally, Zillow ended up buying... a lot of lemons.