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Houzz

For being a one-stop design shop.

Houzz

Design porn is fun until you try redesigning your own home—and realize you have no idea whether you can afford that granite countertop and if you can find a contractor who won’t scam you out of your entire budget. That’s the fragmented, time-sucking conundrum that Adi Tatarko and her husband faced in 2009, during their home renovation. And that’s why they started Houzz, a visually driven platform where consumers can find trusted home renovators, professional designers, and even shop by photos of their dream bathrooms or kitchens. In six years, it has a passionate audience of 25 million active monthly users and seemingly endless opportunities to shape the $300 billion global design and decor market to its taste.

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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. Any of its more than 60 types of design professionals—from general contractors to landscape architects, many of whose small businesses are growing overnight thanks to the site—can pay, starting from a few hundred dollars per month, for premium listings. (All professionals get reviewed by users.) Big-brand advertising is limited to retailers and manufacturers like DWR and Kohler. “User experience is our number-one priority, so you’ll never see ads for cars or fast food,” says CEO Tatarko (her husband, Alon Cohen, is president). In the fall of 2014, the startup began dabbling in e-commerce. “We were getting phone calls that people wanted to get everything they saw in-house. They were like, ‘Can I give you my credit card and ship it?’” she says. Now its users can purchase that reclaimed-wood dining table or soapstone countertop they saw while perusing—and Houzz takes home a healthy 15% commission.

How Houzz monetizes its 25 million monthly users:

  1. Sells premium listing spots to design pros.
  2. Accepts ads only from home and decor brands.
  3. Takes a 15% commission from e-commerce.

Illustrations: Marco Goran Romano

[Photo: Andrew Snow, Courtesy of Houzz]

About the author

Danielle Sacks is an award-winning journalist and a former senior writer at Fast Company magazine. She's chronicled some of the most provocative people in business, with seven cover stories that included profiles on J.Crew's Jenna Lyons, Malcolm Gladwell, and Chelsea Clinton.

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