their kids’ school. “Pretty quickly, things took on a life of their own, and we started getting e-mails” from designers and architects, Cohen says. “A kitchen designer in San Francisco said, ‘You guys need a category for kitchen designers,’ and a guy in Chicago said, ‘Hey, can we open a metro for Chicago so it’s not only San Francisco?’”
Tatarko and Cohen realized they’d hit on a huge opportunity. Home improvement is a $600 billion business in the United States, if you count both design services and physical goods. But there was no eBay-like meeting place where buyers and sellers in the home renovation market could find each other.
In the summer of 2010, the couple decided to quit their day jobs, raise some money, and pursue Houzz full-time. Lead investor Oren Zeev, an independent venture capitalist, assembled a group of entrepreneurs who put $2 million in Series A money into the startup. The company has since gone on to raise an additional $46 million, with marquee firms like Sequoia Capital, Kleiner Perkins Caufield & Byers, and New Enterprise Associates coming on board in the second and third rounds. (Cohen says famed Sequoia partner Michael Moritz decided to invest two hours after the firm’s first meeting with the company. I’ve talked with other investors in Silicon Valley who are bitter they haven’t been able to get a piece of Houzz.)
Today, most of Houzz’s 150 employees work from a sunny, ultra-modern startup space on Palo Alto’s University Avenue, the startup’s fourth office in three years. There’s also a sales outpost in Irvine, CA. Houzz makes money by selling ads to national brands like Kohler, Nest, and Subzero. Architects, contractors, landscapers, and other professionals can get their photo sets featured on Houzz for free, but there’s also a subscription program called Houzz Pro+ that lets them “pay for increased exposure and additional tools such as analytics—how their photos are performing and things of that nature,” Cohen says.
The exposure must be working—more than 300,000 remodeling and design professionals have signed up to be featured on Houzz, in 60 categories, from roofers to home-theater installers. Cohen says the photos are like a gateway drug to the harder stuff: the discussion groups where users can ask professionals, or one another, for advice; the catalog; and finally the directory of design professionals. “A lot of people will say, ‘When I started I thought it was just great to look at the photos, then I realized I could search for products, then I realized the power of the community, and then I found my designer or contractor.’ You see that evolution.”
It’s a little unfair of me to imply that only 1-percenters can act on the ideas they get from Houzz. Many of the items bearing jiggly green price tags are available for under $500, and Cohen notes that there are some easy ways to transform spaces on a small budget, like painting them. “You might see a lot of photos that look really good, but a lot of that stuff is from Ikea,” he says. “You don’t have to live in a $10 million home to learn from what you see.”
Still, part of Houzz’s ongoing appeal is that it stokes materialistic yearnings we know can never be quite fulfilled. There aren’t any people in Houzz’s photos. I think that’s because we’re supposed to imagine ourselves inhabiting these spaces. Seeing the actual homeowners would intrude on the fantasy.
The best description of Houzz I’ve seen comes from Fortune writer Colleen Leahey. “If Angie’s List and Pinterest had an Architectural Digest-obsessed child, Houzz would be it,” she wrote this May. As I browse the app, I feel like that child, too.
Here’s a video from Houzz showing how home-design professionals use the service.
Professional Stories from Houzz on Vimeo.
