Pando

With rabid overseas demand, home design favorite Houzz looks to triple its international reach in 2015

By Michael Carney , written on December 19, 2014

From The News Desk

After getting a taste of international operation in 2014, Houzz is going back for a second helping in 2015. With overseas outposts currently in the UK, Australia, Germany, and France, the home remodeling and design community will expand its footprint into a total of 15 non-US markets in the first half of 2015 with its sights firmly set on covering all of Europe and much of Asia as soon as possible.

“We’re discovered that we have a strong demand for our platform all around the world,” says Houzz co-founder and CEO Adi Tatarko. “We completed our annual home renovation and decorating trends survey – which is only in English – and got more than 200,000 respondents. The result was that Houzz is being used in 197 countries around the world. So we want to be everywhere eventually.”

Houzz is choosing we’re to expand next based on two things, Tatarko says: 1. How much help is available from local communities; and 2. Interest from the global community in getting access to specific professionals, product, and design ideas from a given market.

As was the case in Houzz’s earliest days when it was confined to select regions of the US, the goal today remains to remove barriers between homeowners and design inspiration, and subsequently the professionals to execute those ideas. In the six years since its founding, Houzz has grown to 25 million monthly unique users – more than double its 2013 year-end total – 90 percent of which are homeowners. The company has doubled its international community since launching its first overseas market in early 2014. Collectively, this community has posted more than 5 million retina-quality images of professionally-designed home interiors and exteriors.

Houzz also supports over 600,000 active home improvement professionals, a remarkable 35 percent of which now come from outside the US. And as the platform has grown, the number of cross border engagements between professionals and community members has increased dramatically.

“Over a third of all our referral traffic comes from Houzz,” said Brett Robinson of COS Design in Melbourne, Australia. “We currently have a project from Houzz in America with inquiries coming from as far and wide as Greece, Lithuania, and China. Our company’s global reach has only become possible through Houzz.”

Much of Houzz’s success can be traced back to its mastery of the “three C’s”: Community, Content, and Commerce. The company launched as a personal passion project of Tatarko and her husband Alon Cohen who, like many founders, were simply looking to scratch their own itch – in this case, how to find the right design and the right professionals for a home renovation.

Houzz now has 400 global employees, a number which increased roughly three-fold in 2014. Twenty percent of these employees today are based outside the US. But despite the company’s massive success, finding and hiring the best people at scale continues to be Houzz’s biggest challenge, according to Tatarko – who still insists on interviewing each new hire herself. As the company continues to expand its international reach, this headcount and the difficulty of leading these recruiting efforts will surely rise with it.

“Localization is really important. People want that connection, also they also want to feel integrated into the global platform,” Tatarko says. “We are committed to facilitating the global design language and that means we need to take our time and do things the Houzz way, the right way. And that means it’s really all about the people.”

A key piece of this puzzle is to translate Houzz in their the local language, but also to have company representatives on the ground in local communities interacting with professionals and home owners. Houzz has already been translate into German and French, including both the community content and Houzz’s own editorial content. Localization can also mean things like recognizing that in Australia, Christmas happens in the Summer, so any design inspiration needs to reflect this seasonal reality.

Houzz monetizes its US community in three specific ways, all of which are resonating well and which were driven by organic community demand, according to Tatarko. The company has yet to extend these monetization efforts overseas, but will likely do so in the coming year as individual markets mature.

The first channel to launch in the US was brand advertising and, after years of inbound interest, today Houzz works with nearly all of the largest brands in the category. Second, again by popular demand, the company launched a professional marketplace in 2012, allowing pro’s to highlight and customize their online image to better engage with community members.

Finally, and most recently, Houzz has added commerce, and now carries more than 1 million products from over 1,000 vendors. This initiative was inspired by years of unsolicited emails and phone calls from community members requesting to purchase items contained in design photos posted on Houzz. With the demand obviously there, Tatarko and her team realized that they could remove friction from the design process for both consumers and professionals by making the transaction process easier.

“We are seeing a tremendous success – we’re blessed to be very healthy on the financial side,” Tatarko says. “But, the reason it’s working so well is because followed most important rule – we always focus on building the best user experience possible for everyone in our community and making the best product possible.”

International expansion is a complicated and resource intensive task that has sunk many promising businesses. (In fact, Pando dedicated an entire content series to the subject of going global last summer.) But Houzz has thus far demonstrated that it’s up to the task. It doesn’t hurt that the company already has active users and organic demand for localization in every country it enters. It also doesn’t hurt that it has raised $214 million in venture capital, including a $165 million Series D round in October. Houzz’s business may be firing on all cylinders, but planting your flag around the world is a costly endeavor. The rewards, however, woud appear to justify the pain.

“Now that we have more knowledge and more ability to grow our team, things are expanding faster and more efficiently overseas than they did in the US,” Tatarko says. “But it’s so important that we always follow our community. They’re setting the pace; they’re creating the demand.”

[Image via Bagnato Architects, Houzz]