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Reinventing the unicorn in the home improvement industry - Houzz
- Sep 19, 2018 -

Houzz is a global decoration design platform launched in the United States, with 40 million monthly active users and 45% of network traffic coming from outside the United States. The naked figures are more alert to the Internet home improvement company. It is not the Internet + is a false proposition, but it does not touch the lifeline. Optimizing the product according to the real needs of the user is the correct solution.

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On June 8, the US media Fortune announced that Houzz had just completed a $400 million Series E round of financing with a valuation of $4 billion. As an undisputed unicorn company, Houzz was the first community platform for Alon Cohen and Adi Tatarko to go online because of the confusion in their home decoration. It was just a Pet Project, more as a personal preference and need than for profit. .


Unintentionally, it was launched in February 2009. The earliest customers were only 20 parents of Alon and Adi, and local house decoration professionals. However, word of mouth, other local owners and professionals continue to send mail, they asked for more projects on the line, and open to the San Francisco Bay Area.


Online customers are growing, and the $2 million investor Oren Zeev has also become a catalyst. In the fall of 2010, Houzz became a formal company. Adi Tatarko resigned from the work of financial executives, and Alon Cohen also focused on this, using the experience of eBay's senior engineers to build the Houzz platform.


Cohen wonders why the $300 billion home improvement industry lacks a platform similar to eBay's ability to interface buyers and sellers' needs? The Hozz he envisioned should be like this: Professionals can upload high-resolution photos of their designs and tag the pictures with detailed descriptions. The owner ("Houzzer") can ask questions about the pictures: What brand and color is that? paint? What material is that countertop? Who made the wash basin? Ideabook allows users to save images in an inhaled way, as well as edit content and weekly newsletters and blogs. The content is the core of Houzz's original product.


Out of curiosity, the author registered a Houzz account himself, hoping to understand the difference between this unicorn company's products and domestic products.


First, after registration, there will be a list of pictures asking the user to select the current needs, or specific aspects of attention, hardcover, soft, landscape design or interior decoration. Secondly, choose the style you like. There are dozens of subdivision options in the Houzz list, from modern style, classical style, Hollywood style, oriental charm to youth room design, minimal space design or red decoration, lighting, etc. Shown as a picture, vivid and intuitive.


In this way, before the user officially uses the software, the user asks through the software page to passively force the user to think about their own needs, help the user to sort out their own needs and preferences, and also facilitate the platform to screen users.

After entering the homepage of the platform, the top is the Home Products Marketplace. This is the fastest growing project of Houzz. Users can choose the products they like. After entering, they can add favorites and join ideabooks, and fill in their preferences. In March of this year, the newly launched AR product View in My Room can adapt the product to its own space and intuitively feel. The far right side of the picture is the effect of the author experimenting with the luminaire, which is more intuitive than the 2D picture and can be Fit the size.

Below the list of products is the entrance to find professionals (Find Pros), which are subdivided into bathroom decoration, kitchen decoration, garden landscape design, etc., and each sub-project will first allow users to answer 7 questions briefly, such as asking All your bathrooms are decorated, some are renovated or new ones, or some parts are replaced, specifically whether the sink or the wall, the house is a villa, apartment or loft, is currently preparing for the budget period or has to hire people to work, when to start, In addition, there are any special requirements, can you leave contact information.


The problem is straightforward and simpler, rather than the all-inclusive, semi-packaged, hard-and-professional wording, which is easy for users to understand. In addition, a one-minute survey can improve the accuracy of the customer acquisition rate, which can be more targeted for professionals. Communicate with the owner more effectively and more efficiently; for the owner, it is a process of sorting out the needs of the owner and a channel for contacting the decorator.


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In addition to the home page, it also includes Photos, Shop, Find a Pro, and Latest entrances, depending on your needs.


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In addition to style classification and inspiration, Photo is the entrance to the home product store (Shop). The photos are categorized so that there are more styles to match the choices, from tabs to online stores to choose the items you like. Each tag can be linked to more information, such as uploaders, professionals, quotes, and similar products.


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Find a Pro is also refined into an architect, designer or construction company or general contractor or interior designer.


Latest includes a community forum where participants can share, comment, and exchange videos and images. In addition, Houzz TV, which mainly updates the short film produced by Houzz, invites domestic stars to make a secret decoration for the family, which is an unexpected surprise. This way, the advertising is actually combined with the reality show, which is easy to be accepted and easy to spread.


As a platform for image-based portals, Houzz continuously optimizes the user's experience in image editing, personal design, and communication. The sketch recommended by the home page allows users to freely describe and add their own ideas and designs to help non-professionals participate in the design. And communicate your ideas better with professionals.


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Honestly, as a regular user, such a product would allow me to look for the right things or the help of a professional when I need to decorate or simply decorate at home.


In general, the characteristics of Houzz online products are summarized as follows:


1, the picture is the entrance, build a platform covering the product market, professionals, community forums and other services. “There are five companies under the same roof”, and Houzz covers media, user input, referrals, discussion forums, and e-commerce. Users can solve all home improvement needs in one app, which makes Houzz occupy more market space.


2, the operation is simple, each function is only added more options, placed in a conspicuous position, is a kind of "remind" consumption. Large supermarkets such as Wal-Mart put the fresh food in the innermost part of the supermarket to increase the consumption of consumers along the line of goods. The label of Houzz pictures and the links of similar products will increase the user's “remind” consumption.


3, profit link. Houzz can promote professionals to obtain effective customers, provide professional products and services, so professionals will pay for advertising costs; Second, the e-commerce platform, the merchants who settle in should be given to Houzz according to 15% of the turnover, which is also Houzz is currently the fastest growing segment of earnings. But for the owners, the Houzz platform is completely free, which is better for online drainage.


4, the picture database. The entire image database has become the portal of all traffic and expands on its own. First, users upload images, so the platform absorbs various style types. Secondly, attract new users with pictures, let users change from active search to passive browsing, and eliminate blind spots for customers; Finally, the platform conducts big data analysis based on user preferences, providing more targeted information to professionals.


Every time Tatarko is interviewed by the media, I always emphasize that I think it is very important to listen to the opinions of both parties and create a product for the user. "You are not creating it for investors, you are not trying to make it look more beautiful." "You are created for real people, you need to listen to their voices."


Taking products as the core and optimizing products according to users' needs is the principle that Houzz insists. Houzz has completed five rounds of financing. Every time the new business is deployed, its primary job is to optimize products.


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The Houzz product upgrade information provided in the table has a feature, all products are focused on helping owners or professionals, businesses, so that buyers and sellers can get what they need on the Houzz platform.


After receiving the first round of financing in September 2010, Houzz hired top engineers from Google, PayPal (EBAY) and Yahoo. In November, Houzz's iPad app went live.


In 2011, Houzz completed a $11.6 million Series B round of financing, led by Sequoia Capital.


At the end of 2012, after the iOS version of the software was downloaded more than 5 million times, the Android system went live.


In January 2013, Houzz completed a $35 million Series C round of financing, led by NEA and GGV Capital, and Sequoia Capital and Comcast Ventures, KPCB and David Sacks. Then, in the 12 urban areas of the United States, the new product "Pro+" was launched. This is a paid item for professionals, so that it has more visibility in the local area and highlights its work. In essence, Houzz charges advertising fees. After the pilot was successful, it expanded to 425 new markets in the US and Canada, and launched Pro+ Dashboard (Pro+ Dashboard), which is used to obtain real-time data, clicks, click-through rate and addition rate of uploaded photos. People optimize their marketing and brand building.


In July, the Real Cost Finder, an interactive tool that helps users plan home renovations and total costs, was launched. The tool is based on data collected from the Houzz community to help customers make decisions.


In 2014, Houzz completed a $165 million Series D financing, led by Sequoia Capital and existing shareholder Oren Zeev, NEA, GGV Capital and KPCB's original investment institutions, DST Global and T. Rowe Price.


In February, the website designer (Site Designer) was launched and offered to professionals for website construction and distribution.


In the same year, the Garden Web, a gardening and family consulting website, was acquired. The Houzz content is further involved in the new field – gardening.


In 2015, Houzz launched a new feature sketch, where users can add any product to any photo and seek to communicate with professionals.


In March 2016, Houzz Open API cooperated with third parties and cooperated with Shopify to make it easier for merchants on the platform to sell and manage their own inventory. In December, they cooperated with ShipStation to meet the logistics and transportation needs of the merchants.


In March 2017, the AR product View in My Room was launched. Houzz selected 300,000 most popular items (SKUs), such as coffee tables, lights, etc., and created 3D models for them.


“All products are placed under a free roof”, which is the evaluation of Houzz by the industry. The website platform for the core content is now with 40 million active users per month, which is a real product attraction. A customer with real needs.


Product upgrade is the foundation, and the user population is increasing. In 2014, 35% of the website traffic came from outside the United States. From this year, Houzz began its global expansion. The target country realizes the localization operation of the website. The local staff performs background editing management, incorporating local architectural styles and decoration habits, such as the design of basements and small spaces in the UK, the Peranakan family style label in Singapore, and the local architectural style in India. By the end of 2016, Houzz had entered the localization platform in the UK, Australia, France, Germany, Russia, Japan, Italy, Spain, Sweden, Denmark, Ireland, Singapore and India. The overseas traffic has increased to 45%.


From Houzz's globalization strategy, it can be seen that although overseas users have formed an influential community in the local area, Houzz has never stopped here. Every new geography layout always absorbs local cultural and architectural elements. It has won praise from more users.


Although the culture and home decoration needs of the United States are different from those of China, the business ideas of the company are always worthy of reference from the world's peers. Currently, Houzz has not set up a localization platform in China. On the one hand, it is due to the difference between Chinese culture and its existing products. On the other hand, China has not yet formed a user base and an influential community that the Houzz platform frequently uses. This is actually inspired by Internet technology companies trying to transform or do something in the home improvement industry.

1, the particularity of Chinese culture and architectural style makes the market relatively independent, but the Internet after the 80s and 90s of the original generation of the Internet became the main consumer, with similar product demand.


2. The initial stage of the Internet company is based on traffic wins. Sufficient online traffic brings stable passenger flow to offline products and services. For example, Houzz forms a closed loop from picture-style, creative-attracting new users-uploading pictures, and Cut in commodity trading and decoration services in this most closed-loop picture link. Home improvement is a low-frequency transaction for individual companies and practitioners, but the home improvement market is huge. Learning Houzz to create a high-frequency customer source, to win precision customers with excellent products, domestic Internet companies can also improve the market-oriented operation of the home improvement industry.


3, demand can be integrated, specialization requires manufacturing companies to focus on core products, but for Internet technology companies, its most important products are platforms and technologies, product technology to enable traditional industries, integration of traditional industrial chain links In order to make the transaction more transparent. Houzz integrates home improvement and home products on the same platform to meet the needs of all levels of people.


Although the national conditions are different, the industry's invisible rules are not the same, but as long as the Internet platform focuses on the needs of buyers and sellers for product and technological innovation, it will certainly resound.