Careers at Houzz
Houzz’s mission is to deliver the best technology, user experience, and products for home remodeling and design.
In 2009 Adi Tatarko and her spouse Alon Cohen purchased a 1950s ranch house in Palo Alto, CA. They planned to renovate it and were enthusiastic about giving it a facelift. However, they eventually found the process to be highly frustrating. They had stacks of home improvement magazines, but still had difficulty finding resources that could help them establish a vision for the home. They also had a hard time finding the best professionals to carry out such a vision, despite referrals from friends.
The two decided to create a website that could enable homeowners in the same predicament as themselves to share advice, find useful resources such as product information, and locate the names of trusted local professionals. They shared their idea with about 20 fellow residents (primarily parents of their kids‘ school friends), who were enthusiastic about it. They also reached out to neighborhood home design professionals such as architects and designers, who were also excited.
The two developed the website and launched it. Within a short matter of time they gained an avid audience. They started receiving requests from remodeling professionals such as kitchen contractors and designers to add more categories to the site. They also began receiving questions and comments from homeowners and professionals outside the Bay Area, demonstrating the site’s wide reach. All of these indicators encouraged the two to quit their jobs in 2010 and start a full-time company, Houzz.
The company was able to obtain much funding based on its initial success. In 2010 it raised $2 million in a Series A round. In 2011 it raised $11.6 million in a Series B round led by Sequoia Capital. In 2013 it raised $35 million in a round led by GGV Capital and New Enterprise Associates. By that year the site had grown into a community of over 40 million active homeowners, and over one million home renovation professionals in 60 categories. Houzz has now expanded to Europe, Asia, and Australia.
Benefits at Houzz
Business model of Houzz
Houzz has a multi-sided market business model, with various interdependent customer segments. Its customer groups include the following:
- Homeowners – People who seek home improvement professionals, products, and resources.
- Home Improvement Professionals – Design and construction professionals who want to promote their services to homeowners and purchase products.
- Home Product Sellers – Businesses that want to sell products to homeowners and home improvement professionals.
Houzz offers three primary value propositions: accessibility, convenience, and brand/status.
The company creates accessibility by providing a database of home improvement professionals for homeowners to evaluate. The selection includes a wide variety of roles, ranging from architects to designers to contractors. Homeowners can easily contact them when they are interested in obtaining their services. Houzz also increases accessibility for pros by giving them a dedicated consumer audience, enabling them to showcase their work, and allowing them to exchange ideas.
The company offers convenience by gathering a wide range of home improvement resources in a single channel. Its website includes product information, design ideas, photos of completed remodels, renovation tips, DIY tutorials, house tours, professional reviews, industry-focused articles, and recent trends. Moreover, visitors can purchase items they see directly from the site.
The company has established a powerful brand because of its popularity. It claims to have the largest residential design database globally. The site has over one million professionals and reaches over 40 million homeowners from numerous countries.
Houzz’s main channel for homeowners is its website. Its main channel for home improvement professionals and home product producers is its direct sales team. The company promotes its offering through social media and television advertising.
Houzz’s customer relationship is primarily of a self-service nature. Customers utilize the service through the website while having limited interaction with employees. The site includes a “Support” section with answers to frequently asked questions. That said, there is a community component in the form of a forum where users can obtain advice from peers and a personal assistance component in the form of e-mail support.
Houzz’s business model entails maintaining a common platform between three parties: homeowners, home improvement professionals, and home product sellers. The platform includes its website and its set of mobile apps.
Houzz maintains the Houzz Affiliation Badges program. Through the initiative, it enables professionals in its database to highlight their affiliations with organizations involved in the home design and remodeling industry. Specifically, the professionals can add a “badge” to their profile in the database showcasing the connection. The badge also serves to promote the partner organizations, which typically offer advocacy and support for the pros; they include the following:
- The American Institute of Architects (AIA)
- American Society of Interior Designers (ASID)
- American Society of Landscape Architects (ASLA)
- The Association of Pool and Spa Professionals
- British Association of Landscape Industries
- Design Institute of Australia
- Landscape Association of NSW and ACT (LNA)
- National Association of the Remodeling Industry (NARI)
- National Kitchen & Bath Association (NKBA)
- The Society of British and International Design
- Builder’s Association of the Twin Cities (BATC)
- Dallas Builder’s Association
- Greater Atlanta Home Builders Association
- Home Builders Association (HBA) of Alabama
- Home Builders Association of Greater Cincinnati (HBA Cincinnati)
- Home Builders & Remodelers Association of Central Connecticut
- Auburn University CADC
- Kansas State University
- New York School of Interior Design (NYSID)
- Rhode Island School of Design (RISD)
- Rebuilding Together
- Public Architecture
Houzz’s main resources are its human resources, who include the technology employees it uses to update its platform, the sales/marketing staff used to sell and promote the service, and the customer service staff used to provide support. As a relatively new start-up it has relied heavily on funding from outside parties, raising $213.6 million from 17 companies as of October 2014.
Houzz has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing expenses, a fixed cost. Other major drivers are in the areas of transaction expenses and customer support/operations, also fixed costs.
Houzz has three revenue streams:
Transaction Fees – The company charges product sellers a 15% commission to list their offerings in the website’s “Houzz Marketplace” for homeowners and professionals.
Subscription Revenues – Home improvement professionals can be listed in the database for free; however, the company offers a Pro+ program through which they can receive additional benefits (heightened visibility in search results, more creative opportunities to highlight work) for an annual subscription fee. Subscription rates can be obtained by contacting Houzz’s sales staff.
Advertising Revenues – The company charges third parties such as national retailers and product manufacturers a fee to advertise their offerings on the website and in its mobile apps. Current advertisers include Lowe’s, Kohler, SubZero, and Behr.
info: Adi earned a degree in International Studies at the Hebrew University in Jerusalem. She previously served as an advisor at Commonwealth Financial and as a Co-Founder of PROmis Software, a small technology services firm.
info: Alon earned a Bachelor’s degree in Computer Science and Mathematics and an MBA from Tel Aviv University. He previously served as a Senior Director of Engineering at eBay and as a Co-Founder of PROmis Software with his wife.
info: Thomas previously served as Chief Executive Officer of Bubbly, a mobile social media firm, and as General Manager of the Mobile Business division at BEA Systems. Prior to those roles, he participated in the launch of five different companies.
info: Liza earned a B.A. in Rhetoric at the University of California, Berkeley and an MBA at the Kellogg Graduate School of Management. She previously served as the VP of Marketing of Gigya and the Senior Director of QuinStreet.
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