Houzz 2015

Tue 29 September 2015 Written by Evi
Evi

Houzz on Track to Generate a Billion USD in Revenue

Written by Evi

 

Do you have a killer mobile app idea? Mobile app billionaires Alon Cohen and Adi Tatarko found themselves in just such a situation and as a result, they put their heads together to create one of 2015's most successful apps, Houzz. Launched in 2009, Houzz has been named as number 11 in CNBC's Disruptor 50 and is on track to generate a billion dollars in revenue over the next 5 years.

A Simple Idea Takes Shape

The Houzz co-founders were, at the time, looking to redecorate their home and began going about it the same way people have for decades – cutting out photos from home renovation catalogues to make a home decoration inspiration file. They hit upon the idea of automating this with a website, and adding in collaboration features. Soon, subscribers were using Houzz to trade and discuss millions of home decoration images and ideas.

Houzz Goes Mobile

Each year, Houzz sought and secured an increasing amount of funding - $2 million in 2010, around $12 million in 2011, $35 million in 2012 and $165 million in 2013. Not content with just being a popular website, the Houzz founders saw the great opportunity in native mobile apps, first releasing an iPad version of Houzz in 2010. An Android version appeared in 2012. The simplicity and power of Houzz’s mobile apps has fueled its great success, and it now sits as one of the latest startups heading for a $1-billion valuation.

A Model for Success

Houzz already boasts over 25 million monthly subscribers, 90% of whom are homeowners. In addition, over 600,000 architects, designers, contractors and other home professionals make their products and services available through the app. It's a one-stop shop for home design where professionals build their brands, collaborate on projects and reach millions of homeowners. Top manufacturers such as Hamilton Beach, Black and Decker and Viking are able to connect directly with consumers in the market for their products. In return, Houzz receives a 15% commission on sales, allowing them to generate a robust income stream.

Seizing an Opportunity

Houzz is but one example of mobile app entrepreneurs seeing a need and seizing on the opportunity to create something of value that fills a void, or creates a solution consumers have been searching for.

Successful app creations have come from those who understood people want greater convenience, a chance to replace more traditional methods with high tech, a way to increase productivity, have an enhanced user experience, and enjoy unique forms of entertainment.