Home
remodeling, one of the biggest industries in the
country, is being transformed by the Internet with a
push from a fast-growing startup in Silicon Valley.
Until
recently, a homeowner thinking about remodeling would
have checked out books from the library, read some
design magazines, asked friends for advice and tried to
find help on the Web.
But
in January, 14 million people turned instead to Houzz, a
small Palo Alto, Calif., company that has grabbed the
$300 billion remodeling industry by the tail and is
changing the way homeowners connect with design
professionals and figure out how they want to improve
their homes. And it’s taking off just as the housing
market is rebounding and giving homeowners more equity
to play with.
It’s
the latest example of the way the Internet has disrupted
an entire industry, having already transformed
everything from publishing to entertainment. But this is
with a twist: Rather than hurting established players in
the remodeling business, sites like Houzz are likely to
benefit them by bringing them more business more
efficiently.
"Houzz
has had a huge impact in the residential design
community," said Mark Demerly, an Indianapolis
architect and recently chairman of the American
Institute of Architects’ custom residential network.
"We ask our clients to seek out things on it they
like and that inspire them."
Created
four years ago by Alon Cohen and Adi Tatarko, who were
remodeling their Palo Alto home, the home-improvement
site quickly caught on across the U.S. and in Canada.
"Clipping
things out of design magazines seemed so
antiquated," Cohen recently recalled. "Today
everything is online. We thought, ‘There’s got to be
a better way to do this.’ "
Houzz’s
iPad and iPhone apps have been downloaded 6 million
times. It has 14 million visitors a month — up from
1.3 million downloads and 4 million visitors a year ago
— who pore over 1.2 million images of remodeling
projects with links to 188,000 architects, designers and
other professionals. In a little more than two years, it
has drawn $48.6 million in three rounds of venture
funding.
The
revenue comes from advertising by national brands and a
professional subscription package launched a few months
ago.
Now
competition is emerging. Last month, the Seattle-based
home-valuation site Zillow introduced Zillow Digs, a
similar service. Zillow spokeswoman Cynthia Nowak said
it’s "a huge market," citing a study that
found that nearly 25 percent of recent homeowners
completed a kitchen or bathroom remodeling project last
year.
The
new Zillow Digs iPad app includes cost estimates for
many remodeling projects and links to more than 20,000
home improvement professionals and more than 30,000
photos. It’s too new to have any user metrics, but
Zillow’s home-valuation site has 46 million monthly
visitors.
"The
world is changing as far as design goes," said Nan
Walz, an Alamo, Calif., interior decorator for two
decades.
Walz
says she tells clients to go to Houzz and start a
library of projects and ideas they like there. "We
can save you money and save me the time trying to guess
what they love. People really are enjoying the whole
process."
"It’s
addictive, though — be careful," said Nicole
Strauss, an orthopedic surgeon who is using it to get
ideas for remodeling rooms in her San Francisco home.
"You can spend hours perusing that website."
Houzz
and Digs give design and remodeling professionals a
place to show off their work. Homeowners can find
products, designers and remodeling projects they like,
saving photos to share with family, friends and their
architect or designer. They can also network with other
homeowners for remodeling tips.
Houzz
has made "quite a splash in a few short
years," said Kermit Baker, director of the
Remodeling Futures Program at the Joint Center for
Housing Studies at Harvard University. "It’s not
clear there’s anything revolutionary in any individual
piece of it. What they seem to have done better than
anyone else so far is really integrate all this
stuff."
Tech
professional David Hew used Houzz to exchange ideas with
architect Eugene Sakai when he remodeled his home in Los
Altos, Calif., partly to get ready for the arrival of a
baby. "It was monumentally useful to use Houzz
rather than cut and paste and bookmark things and use a
ton of bulky books," Hew said. "Everybody I
talk to that does a remodel spends close to 10 hours a
week on that thing, just flipping through those
pages."
"It’s
really a nice community," Sakai said. "It’s
very active and a great way for even a person on a
budget to get a fair amount of advice."
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When
eBay executive Daniela Mielke bought a ranch-style home
on eight acres in Half Moon Bay, Calif., she began
browsing the Internet for ideas.
"I
don’t remember how I found Houzz — probably through
a Google search — and then I just started surfing
around. It’s very nice and has a very serendipitous
way of searching and seeing things. I would often go
there without a specific thing in mind, just browsing
around. I saw this picture of a kitchen I really
liked."
She
called the architect, Mark English of San Francisco, and
hired him over the phone. Now she has a red, glossy
Italian kitchen with hardwood floors, a high ceiling and
some appliances she researched on Houzz.
For
some the site is taking the place of magazines and
books. "I send all of my clients to Houzz, if they
haven’t been there already," said Mary Jo
Fiorella, a Castro Valley, Calif., designer. "In
the past, they would buy magazines and search through
books for ideas to show me things they liked. Now we
have a virtual place to share ideas with each
other."