![]() ![]() In late September Houzz unveiled a test of its big-league revenue play: a marketplace in which consumers can click to buy whatever bathtubs, sofas or other delights they see on the site. A bit more money trickles in via paid listings for big manufacturers and retailers, such as Kohler and Ikea. One handy source of cash has been the annual listing fees-typically $2,500 to $4,000-paid by several thousand architects and designers for extra visibility in Houzz's regional directories. With just over 300 people on its payroll Houzz has largely covered costs to date without rushing into an aggressive moneymaking strategy. So far investors have been eager to bankroll Houzz on the expectation that the site's huge consumer base is bound to pay off somehow. They see things that everyone else misses." "They unpack issues in a way that people in the industry have never unpacked them. "We like founders who build companies to solve problems in their own lives, even if they aren't experts in the field," says Alfred Lin, a Sequoia Capital partner who began funding Houzz in 2011. Even today Houzz avoids talking up trophy homes in favor of showing people ideas that feel right for their own neighborhoods. ![]() Houzz's first client was Tatarko herself, trying to get ideas for remodeling their four-bedroom ranch house in Palo Alto, Calif. To the founders' professed astonishment, their combined stake of nearly a third of the company puts their combined net worth meaningfully north of $500 million. design and decor market, now value the company at more than $2 billion. Venture investors, betting that Houzz will capture big chunks of the $300 billion U.S. Each month Houzz draws more than 25 million visitors to its endlessly shoppable photo galleries, more traffic than retailing giants such as Nordstrom, Gap and Staples enjoy. If you're a homeowner looking for dreamy new ideas for your kitchen remodel or if you're a designer wanting to drum up business, Houzz may well be your happy place. Just five years after starting Houzz at their kitchen table, the two Israeli immigrants have produced one of the top 200 Web properties in the U.S. He's mum on the topic, letting her talk while spearing some falafel with his plastic fork. We don't come from privileged backgrounds." The chief executive officer of Houzz is doing her best to dodge any discussion of the economic gains that she and her husband, Alon Cohen, have created with their home design website. "We're not typical founders," says Adi Tatarko, poking at a paper-plate lunch of diced tomatoes and cucumbers. ![]()
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