Emyoli Blog

Houzz 2015

Tue 29 September 2015

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.

 

 

 

Snapchat

Tue 08 September 2015

 

 

Snapchat: from 0 to 1.5 Million active users in less than a year!

Written by Evi

 

You have an itch. You have a great idea for the next huge app and until you actually go out and build it, put it in the hands of actual users, there is no telling what will happen. How do apps go from 0 users to over 1.5 million active users in less than 1 year? What kind of a valuation is given to 1.5 million users? (hint: the answer is in the last paragraph). This is the inspiring story of Snapchat.

 

What prompts Mitch Lasky, a partner in Benchmark Capital, and one of the most influential venture capital figures, to claim that Snapchat “can become one of the most important mobile companies in the world?"

 

It starts with a moment of inspiration. In 2011, Evan Spiegel & Bobby Murphy, Snapchat’s co-founders, were schoolmates in Stanford. One of their friends, Reggie Brown, reportedly stormed into Spiegel’s dorm room and blurted something similar to “I wish there was an app to send disappearing photos.” That night they set out to find a developer. Brown claims two candidates declined; regardless, they settled on Murphy, who had just graduated.

 

Spiegel and Murphy did not have it all mapped out. They did not have a business model, did not identify “revenue streams” or “monetization” strategies. They just felt this is a “multi-million-dollar” idea and went about to explore if people will like it.

 

And they did. But not immediately. They started first with a website-based service, which was pretty lackluster. Then, they switched to a smartphone-app, and that proved to be a key.

 

decision in the right direction. Still, even when venture capitalists saw the app, many wondered why anyone would want to send a disappearing photo.

 

The turning point was when Spiegel’s mother had told her niece about the app, and the niece’s Orange County high school had quickly embraced Snapchat on their school-distributed iPads, since Facebook was banned.

 

And then, it exploded!!!

 

It did because Snapchat created a way for teens to share photos freely—without the ramifications of other social services like Facebook. And the social aspect of the app made it viral. And so, when a moment of inspiration is followed by a cool and hip product that is easy to use, it is a matter of putting it in the hands of those who adore it and manage the expansion and evolution to stay one step ahead of the competition.

 

I promised to tell you what is Snapchat valued. Here goes. During its last round of financing (12/2014), Snapchat raised $480 million with a valuation of $10 billion.  Investment discussions from earlier this year with Alibaba Group Holding Ltd are talking about a valuation of $15 to $20 billion !