Houzz, A House Renovation Company Entering Indian Market

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Adi Tatarko, in 1995 met her husband in a bus who later became the co-founder of Houzz. It is a $4 million home renovation and design company who has ambitions higher than the sky, globally!

In 2017, Houzz announced a partnership with Times Bridge which happens to be an investment arm of The Times Group, to expand its footprint in India. If this works, it will turn into a great opportunity for both the teams.

The idea for Houzz emerged sometime during the three years when Tatarko and Cohen were struggling to get their house in Palo Alto renovated. Months later, they scanned through magazines and books looking for pictures that could match their vision and they found a design. They then had to search for the right products and professionals to turn their dream house into a reality. Each and every effort made gave them no results. Even though it was disappointing and frustrating, they were quick to spot the hidden opportunity.

Their first users were 20 parents from the school that their kids attended and a few architects and designers from the Bay Area. Tatarko was working at an investment firm back then and was juggling the demands of work and home, managing two young children. Cohen was leading teams of developers at eBay. The early days gave the couple the time to focus on building a great product and user experience, stacking this work onto their full-time jobs as it was very easy for them to lose work-life balance, and their kids would often notice it. "We sat down as a family and figured out together how we could make things right. Now, we have regular check-ins to assess where we are and adjust as needs change both at work and at home," says Tatarko.

Both quit their jobs but also realized that more was money needed to flow into Houzz if it had to be expanded. They to put in their personal money as the idea of approaching venture capitalists was dropped for the time being. Instead the couple focused on the quality of the services being offered on Houzz and continued bootstrapping in favour of providing jittery homeowners with exactly what they wanted so they could build their dream homes.

Such moralizing became one of the major reason of their success so far.

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Tatarko feels proud about the fact that bootstrapping ended up being one of the best things that happened to Houzz. She says by the time they decided that they should turn Houzz into a company, they already had a product that many people used and loved using, they didn't realize that what they were doing was bootstrapping but it enabled them to take their time and build the company from the ground up the right way.

But not every feature they created was perfect. "For a long time, I asked Alon to kill the 'Buzz' section and to launch an 'Ask A Question' section on Houzz instead. He delayed it for a long time as he was working on other site functionalities," says Tatarko. Alon was the only developer for Houzz at the time. When he eventually flipped the switch on "Ask A Question," Houzz immediately saw hundreds of questions every day from homeowners accompanied by responses from professionals.

She remembers taking calls to the office from people asking where the 'Add to Cart' button was on their site, or whether they could ship a freestanding bathtub they saw in a photo to their home. People saw the green tags they had on photos with product information, but still had to go to many different places to purchase the products they liked. This burgeoning demand from the fast-expanding community led the couple to introduce a home products marketplace in October 2014.

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The beta version of the Houzz Marketplace was launched in the U.S. which closed the loop for people and became their one-stop solution where they could get everything they needed to renovate their home in a single place.
Meanwhile, the money was being put up into Houzz by investors which begun in July 2010 with a $2 million investment. By 2014, Houzz had closed a $165 million Series D round led by Sequoia Capital which valued the company at $2.3 billion. Houzz also raised a $400 million Series E round of funding nudging the valuation up to roughly $4 billion. Funding and revenue, it led to expansion. "The third phase of Houzz would be establishing the infrastructure to be a global company and the beginning of monetization. We expanded beyond our small office in Palo Alto to other locations, including our first international office in London," says Tatarko.

While the deal with Times Bridge was only announced recently, Houzz's footprint in India is still a bit older. A million customers and more than 50,000 service providers signed up from India on Houzz even before it took birth in the country. Indians were using the international site to build their brands and collaborate with clients, connect with homeowners on a global level.

This comes at a time when the Indian home design and decor market is poised to grow from $13 billion in 2010 to over $45 billion by the end of this year. The boom in the residential real estate industry over the last few decades has given impetus to the home decor market. Also driving the growth of this sector is an increased consciousness among homeowners about stylish interiors coupled with the means to actualize that desire. According to National Council of Applied Economic Research, it is estimated that the size of India's new middle class will run as high as 11.38 million by 2025-26.

When it comes to Indian market competitiveness, it already dominates the online interior design and furnishing space globally and is quick in embracing new technologies to enhance the user experience, something Indian startups lack at the moment. "Designs from across Asia are some of the most popular and in-demand styles among the global Houzz community," says Tatarko. "People are eager to learn from, buy from as well as hire talented Indian professionals. We're excited to make Indian design and talent even more accessible to Houzz users around the world."

Although few Indian start-ups like Lenskart and Caratlane have invested in Augmented Reality to offer users enhanced experience, the home remodelling and design market in India is slow in adopting newer technologies.

Each market has unique challenges which is why their focus is on tailoring the experience and building their community in the right way which is based on the needs of the industry in India. Localizing their platform and building their local content and community is the approach they have taken in every market where they have launched which includes the United States. Says Tatarko.

While in the personal life, whenever the parents get time off, they spend it as a weekend away together or just spend quality time at home. They are particularly fond of holidaying in Tel Aviv for its great food, beach, nightlife, culture, architecture and people.

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