Houzz

History

Houzz co-founders Adi Tatarko and Alon Cohen launched the site in February 2009 as a result of their own remodeling project. In addition to finding it difficult to communicate their vision for their home, the founders found it difficult to find the right professionals for their project. What started as a side project to help with Tatarko and Cohen's own home remodel soon spread by word-of-mouth and they began to receive emails from homeowners and home professionals outside the San Francisco Bay Area asking them to open more categories on Houzz and expand to other areas. Houzz became a company in the fall of 2010. In November 2010, Houzz released an app for the iPad. The Android version of the app was released in December 2012. By August 2013, the iPhone/iPad apps had been downloaded millions of times and the website featured millions of images. In January 2014, Houzz announced that it had opened offices and hired local managers in the UK, Germany and Australia to accelerate its global expansion; 35% of the company's site traffic already came from outside the U.S. In December 2014, Houzz announced its expansion to the rest of Europe and into Asia, starting with Japan, given the demand for its platform and the success of its first international launches. As of July 2015, a localized Houzz platform was available in UK, Australia, Germany, France, Russia, Japan, Italy and Spain. By the end of 2015, Houzz was also live in Sweden and Denmark and cited over 35 million monthly unique users and over one million active home professionals including contractors, designers, architects, etc. Houzz launched its first national advertising campaign in August 2015.

In April 2016, Houzz launched localized platforms and apps for both Ireland and Singapore and said it had more than 40 million monthly unique users worldwide. It launched a localized experience for New Zealand in May 2016 and for India in November 2016.

Community

Houzz started as a side project, with twenty parents from Adi and Alon’s kid’s school, and a few architects and designers from the Bay Area as its first users. “The site has become the biggest residential remodeling community online, and has grown to this point entirely through word of mouth.” As of December 2015, this community had grown to over 35 million monthly unique users and over 1 million active home professionals globally. Houzz has focused on the needs of homeowners and home professionals and “on fostering a community among them.”

Business Model

Houzz has a home products marketplace where it collects a 15% commission from sellers on transactions. Houzz also has a premium subscription service for home professionals, and brands advertise on the platform.

Houzz Pro+ Subscription

In January 2013, Houzz announced the launch of its Pro+ platform for professionals in a select number of metro areas in the U.S. While listings for professionals are free, the optional “Pro+ program gives professionals additional visibility in their local area and allows them to highlight their work to attract new customers for an annual subscription.” In March 2013, Houzz announced that it had expanded the service from 12 markets in the U.S. to 425 new markets in the U.S. and Canada and launched new Pro+ Dashboard analytics tools. The metrics dashboard gives professionals “additional insight into how their photos are doing on the site and includes real-time data about the total number of photo impressions, the number of clicks on them, click-through rates and add rates (how many people saved a photo to their Houzz ‘ideabooks’).” In July 2015, Houzz announced the rollout of Houzz Pro+ to its first market outside of North America in the UK.

Home Products Marketplace

Houzz launched the beta of its home products marketplace in October 2014. The Marketplace allows users to buy products directly on the Houzz site. The service launched with over one million products from “a large variety of sellers.” Houzz does not handle shipments or inventories but has its own customer service team “to make sure that users of the Houzz marketplace get the best possible shopping experiences and have an advocate if anything goes wrong.” Houzz collects a 15% commission from merchants that sell on the site. "Since Houzz announced the beta launch of its home products marketplace in fall 2014, the platform has grown to more than five million products and over 10,000 merchants."

Product & Technology

“The Houzz product is made up of five interconnected parts” inclusive of photos, products, find a pro, ideabooks (editorial) and community advice.

In July 2013, Houzz introduced the Real Cost Finder, an interactive tool that helps users plan home renovations and total costs. The tool is based on data collected from the Houzz community. In February 2014, Houzz launched Site Designer, a free website building and publishing tool for home professionals. Websites are connected to a pro’s Houzz profile, “which allow them to easily pull in their images, reviews and other information from their existing profiles.” In May 2015, Houzz introduced Houzz TV to empower homeowners through video content. “My Houzz” was the company’s first video series and featured Ashton Kutcher as he renovated his mother’s basement in the first episode. In November 2015, Houzz introduced its app for Apple TV. In December 2015, Houzz introduced Sketch, a feature that lets users upload their own photos or choose any from the platform to add products from the Houzz Marketplace. Users can also draw on photos or add stickers and text, as well as collaborate with others on their ideas simultaneously. Houzz introduced Sketch for Android in January 2016. In February 2016, Houzz introduced View in My Room within its app for iOS and Android that lets users virtually place products from the Houzz Marketplace in their homes before buying. In March 2016, Houzz announced that it had opened its Commerce API to third party partners, with Shopify as a first point of integration, to make it easier for merchants to sell and manage their inventory on Houzz. In September 2016, Houzz launched Visual Match, a new visual recognition tool that "uses deep learning technology to analyze more than 11 million home photos on Houzz. Furniture and decor that looks similar to the six million products on the Houzz Marketplace is then surfaced for users to browse (and hopefully buy)."

Industry Partnerships

In June 2014, Houzz entered a strategic partnership with The American Institute of Architect (AIA). In 2015, the American Society of Interior Designers (ASID) partnered with Houzz “to increase public awareness on the impact and value of interior designers.” In January 2016, The National Association of Home Builders (NAHB) and Houzz announced a strategic alliance to “help NAHB members use Houzz’s technology and marketing capabilities to connect with a community of 35 million users interested in building or renovating their homes.”

Research

In February 2012, Houzz launched its "Houzz & Home Survey," an annual survey of residential remodeling, building and decorating activity among Houzz users. The 2012 survey had nearly 30,000 respondents in the U.S. The 2015 survey had nearly 260,000 respondents globally (170,000 in the U.S.). The 2015 study found that nearly two-thirds of Houzz users in the U.S. completed a remodeling or redecorating project in 2014.

In February 2015, Houzz introduced the Houzz Barometer, a quarterly index that “tracks confidence in the home renovation market among industry professionals.” The inaugural study found that the majority of professionals were bullish about 2015. The Q4 2015 Renovation Barometer, released in January 2016, found continued confidence in”year-over-year and quarter-over-quarter gains in business activity.”

Funding

In September 2010, Tatarko and Cohen secured $2 million in first-round funding and began hiring a staff for their office in Palo Alto. The round was led by Oren Zeev, from Orens Capital who joined Houzz's Board of Directors. In 2011, Houzz secured $11.6 million in a Series B round led by Sequoia Capital and other investors. Alfred Lin, a VC at Sequoia and former senior executive at Zappos, joined Houzz’s board of directors. In 2013, Houzz announced a Series C of $35 million led by NEA and GGV capital, with participation by Sequoia Capital, Comcast Ventures, KPCB and David Sacks. In 2014, Houzz announced it had closed a $165 million financing round, led by Sequoia with participation from existing investors Oren Zeev, New Enterprise Associates (NEA), GGV Capital and Kleiner Perkins Caufield & Byers (KPCB), as well as new participants DST Global and T. Rowe Price.

Home design photo database

As of December 2014, there were millions of images of home interiors and exteriors on Houzz. Homeowners browse photos by room, style and location, and bookmark photos in personal collections the site calls “ideabooks.” Images had been added to ideabooks hundreds of millions of times. Users can click on an image to learn more about the designer, ask a question, and learn about products tagged in the photos.

As of August 2015, there were more than 7 million high-quality photos of interiors, exteriors and gardens. Houzz had more than 11 million home photos on its platform by September 2016.

Editorial content

An editorial staff in Palo Alto and contributors write daily design articles for the Houzz homepage and newsletters. Content is tailored to each country where Houzz has launched a localized platform. For example, in Australia the “tailored experience is designed to overcome problems such as seeing northern hemisphere Winter Christmas ideas, during Australia’s Summer time; or reading American terms such as ‘countertop’ instead of ‘benchtop’.”

Professional directory

Houzz has a directory of home improvement professionals who use the site to connect with homeowners. Many professionals use the site to showcase their work and reach new customers.

Reception

CNN named Houzz App of the Week, calling it "The Wikipedia of interior and exterior design sites".  The magazine Real Simple called Houzz "the online equivalent of clipping décor images from magazines". Bloomberg Businessweek called Houzz "An online antidote to the housing bust." Architectural Digest wrote, "This app will stoke your imagination."  TechCrunch wrote, "Houzz appears to be a decent idea that's been executed well."  The Mercury News wrote, "You'll find ... ideas for your swipe file there that you and your architect can both contribute to and comment on." The Wall Street Journal said “Houzz is ... a well of inspiration at the tip of your swiping fingers" and asserted that the app is one of the few nongame apps on iOS that have a 5 star rating. TIME included the Houzz App in its 2014 list of "essential software every iPad owner should download." In 2015, Fast Company named Houzz to its "Most Innovative Companies List" for being "a one-stop design shop" and noted that "unlike many tech companies that try to lather on unnatural business models, Houzz is so strong because its revenue streams grew out of customer demand." Also in 2015, CNBC named Houzz to its 2015 Disruptor 50 List, noting that "Pros use the Houzz platform to build their brands, collaborate on projects and connect with homeowners. Consumers love the site because they can click on thousands of different ideas for remodeling and renovating their homes and research and hire professionals. Houzz's online marketplace lets customers buy the furniture and home accessories they see, rather than having to toggle over to individual retailers and manufacturers." Houzz was named to CNBC's Disruptor 50 List again in 2016.

Awards

In May 2016, Houzz won "Best App" at Google's inaugural Play Awards. "User experience and high star ratings" were among the factors considered by Google's panel.

Controversy

In October 2015, Houzz settled a lawsuit to, "to resolve allegations that the company violated California privacy laws by recording incoming and outgoing telephone calls without notifying all parties on the call that they were being recorded".