For many homeowners, remodeling is an absolute nightmare. From choosing the perfect kitchen countertops to finding a reliable contractor to build an addition, remodeling is a complex series of stressful decisions that often involves hours of poring over reviews online and hoping the designers and workers hired can help the homeowners realize their vision. Before the process even begins, homeowners must decide on an overall theme or aesthetic for their space, and with so many options available, narrowing it down and finding the right contractors for the job is a challenge that can feel overwhelming.
Adi Tatarko and her husband, Alon Cohen, experienced this frustration firsthand in 2006 when a series of false starts, expensive mistakes, and miscommunications between themselves and their contractors left what was supposed to be their family dream home in Palo Alto unfinished. “It became miserable,” Tatarko says. “After a long process and a lot of time and money that we couldn’t afford, we ended up with plans that we didn’t like, and we had to throw it away and start all over again.”
They began to wonder if there could be an easier way to connect talented designers and professionals with homeowners like themselves looking for the perfect match to execute their ideal designs. The couple chatted about their struggle to transform their old ranch house with their friends and neighbors and discovered this is a widespread problem.
Rather than pouring more time and money into more failed efforts, Adi and Alon decided to build a solution. They pooled their expertise and created a platform where homeowners seeking a fresh look for their homes can find the professionals capable of completing their projects within their budget. The couple soon discovered that contractors, designers, remodelers, and builders often face the opposite problem experienced by homeowners; finding customers in need of their services. These professionals could also benefit from a platform where they can find a vast number of clients ready to put them to work. The concept for Houzz, which today is worth over $4 billion, was born.
Adi and Alon are not the typical suburban couple. They are both experienced tech professionals, and both hail from Israel, one of the world’s up-and-coming technology hubs. As immigrant entrepreneurs, they consider themselves regular people who had a big idea; “We are not typical founders. We are simple people. We don’t come from privileged backgrounds,” says Adi. When the couple met on a tour bus in Thailand, Adi was working on her degree in International Studies at the Hebrew University of Jerusalem. They married a few years later and moved to the U.S. in 2000, where they purchased their fixer-upper Silicon Valley home.
Adi credits her mindset and much of her success to Israel’s willingness to embrace women as leaders and game-changers, citing Golda Meir, Israel’s former Prime Minister, during a talk she gave at the 2017 Israeli American Council National Conference. She hopes that soon the U.S. will reach the same level of acceptance for female leaders but is content with being the CEO of the most valuable woman-founded U.S. company. Before she founded Houzz, she helped start a Hebrew language school to bring Palo Alto’s Israeli community together. Her heritage holds an important place in her life, and she enjoys sharing her native culture with her U.S. connections.
Following in Her Family’s Footsteps
Despite coming from a family line of entrepreneurs – her mother started a real estate business and her grandmother, a Holocaust survivor, became a fashion designer in Israel – Adi’s original plan was never to start a business of her own. Throughout her career and once she started building Houzz, her family served as inspiration: “I never thought I would follow in their footsteps,” Tatarko says, “yet I was inspired by how they grew their careers while managing their families, and I learned that having both a career and children was possible.” Houzz began as a side project she and her husband did for fun while she juggled a career at an investment firm and took care of their three sons. The fact that they were able to gradually build a fantastic platform with no rush while they continued their other jobs let them work out kinks and bugs before an official launch, avoiding many of the pitfalls of a brand-new, untested website. By the time the site launched in 2009, it was good to go, but with ample room for growth and improvements as the business evolved.
“Envision Everything”: A User-Friendly, Visual Platform
Houzz’s main draw for users is its user-friendly, all-in-one platform that connects homeowners and professionals within a single space. It relies heavily on photos and visuals, like the recently launched 3D tool that helps users visualize changes to their homes and imagine how new décor or fixtures would look in their real-world rooms. Houzz is consummately multipurpose, attracting users who are just browsing to daydream as well as those looking to remodel or redecorate their home. As of October 2018, the site had over 40 million users, with over 25 million unique monthly visitors. Over 1.5 million local professionals and over 20,000 vendors sell their services and products on Houzz, which they showcase using over 16 million photos.
Consumers are visual creatures, and the popularity of sites like Instagram and Pinterest are evidence that being able to see the components of their projects produces more satisfying results. “Both professionals and homeowners said that they love the fact that they get all the data attached to the photos that we have, … but they wanted also to sync the tags and be able to purchase these products that they see, the materials that they see, right away from Houzz,” says Tatarko. By integrating all this data and allowing customers to purchase directly from the site, Houzz saves users time and boosts profitability for itself and its partner contractors and professionals.
For Houzz, 3D modeling has become a major earner. Those who use the tool, according to Tatarko, are 11 times more likely to make a purchase from the site. The augmented reality tool, called View in My Room 3D, lets shoppers see how a fixture or style would look within their home in real time at any angle, using their laptop or smartphone’s cameras. Users can see how different styles compare to what they already have and help customers decide if the look they picture in their head is really the right choice for their space. “View in My Room 3D is basically an ability to use your mobile device to empower you and envision everything,” Tatarko said in an interview with CNBC. “Since we introduced that tool last year, we had over 2 million people that used it in order to make decisions for their home remodeling and design.” Houzz users tend to prioritize aesthetics over price when it comes to remodeling and decorating their homes. This is, in part, credited to the site’s visual features that allow users to choose their ideal style, and then make purchases from the same platform.
A “Unicorn” Startup with Limitless Potential
Houzz is considered a “unicorn” startup by financial experts like CNN money in that it is valued at over $1 billion. However, Houzz is unique in that it is one of the just 1 in 10 of these companies that was founded by a woman. It is considered a “disruptive” e-commerce player because it is revolutionizing how an entire industry conducts business. Part of the reason remodeling and redecorating a home is so stressful is that the process is decentralized, disjointed, and, often, offline. Customers are unable to make the best choices for their project because they are unaware of all the options. “When we started as the first homeowners, we realized we have a big problem, and then we looked at the industry as a whole and oh, my god, this was such a fragmented, offline, but huge industry that was waiting for the right technology to come and bring it online,” Adi told “Mad Money” host, Jim Cramer. Houzz offers that technology on a global scale, bringing homeowners and professionals in 15 countries together in a mutually beneficial online space. Remodeling and home decorating are a massive $1.2 trillion industry and harnessing that potential on a single platform has had powerful results.
Supporting Workers and Creating Jobs
Houzz’s system goes both ways. Not only does it help homeowners bring their project from concept to completion; it also allows professionals to showcase and sell their services and products on a platform where they are guaranteed a massive audience of over 40 million registered users. Contractors, decorators, and other professionals often struggle to get the word out about their business, relying on Google reviews and word of mouth. Houzz saves them from having to perform as much in-house marketing and allows them to reach customers who are actively looking for someone to do their project. The numbers speak for themselves. In 2018, professionals selling their services on Houzz saw an average revenue increase of about 7-12% over 2017. Houzz itself is a massive job creator and employs over 1,500 people. It is a tremendous asset to the economy and empowers both its own employees and the professionals who sell services on the site.
Adi Tatarko’s story is one of many examples of an immigrant bringing fresh perspectives from another country and putting them to work in the United States. Her background was preparing her for entrepreneurship long before she even realized it, and she and her husband’s side project became a big idea that revolutionized an industry and changed the way fixer-uppers become dream homes forever.
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