By Colleen Leahey, reporter
FORTUNE -- Adi Tatarko planned big things for her Silicon Valley ranch-style house. But making them a reality proved an expensive -- and miserable -- experience. Tatarko's friends described similar frustrations while renovating their homes, so she and her husband Alon Cohen began developing what would eventually become startup Houzz. Cohen understood the mutual need between buyers and sellers on eBay.com, where he was a senior director of engineering, and wondered why the $300 billion home improvement industry lacked a similar platform.
He took a note from Hollywood while dreaming up the design: "In a movie about the future, what would a product that solved this problem look like?" If Angie's List and Pinterest had an Architectural Digest-obsessed child, Houzz would be it. Professionals upload high-resolution shots of their designs, tag the images with detailed descriptions, and "Houzzers" can ask questions about the picture: What brand and color paint is that? What material is that countertop? Who manufactures that sink faucet? Ideabooks allow users to save images in an inspiration-board manner, and there's also editorial content, with a weekly newsletter and blog.
Word-of-Internet took off, and Houzz's initial users began sending the site to friends. With no marketing strategy -- or budget -- Tatarko knew they had hit a sweet spot when a parent of her son's friend called. "My sister in Oregon just told me she found this great site, you have to check it out!" It was Houzz. Tatarko left her job as an executive at a boutique investment firm to work on the startup full time.
A year after launch, the couple met venture capitalist Oren Zeev. Petrified that an investor would come and "ruin everything," Tatarko cautiously listened to his pitch. His laissez-faire attitude ("You don't want to monetize, don't monetize. Do whatever you want to do. It's your thing.") eased her mind; Houzz raised $2 million that fall.
As the company's user base expanded, he joined full-time in October 2010 and hired top-notch engineers from Google (GOOG), PayPal (EBAY), and Yahoo (YHOO). They focused on simplifying the user experience, improving the website, and developing an iPad app (the Apple product launched earlier that year). Cohen's interest in scalable platforms, where the core code remains unchanged no matter the device, roots itself in watching eBay's API, which he helped build in 2001, grow so rapidly; he built Houzz in a similar manner, allowing a more seamless transition from desktop to mobile device. Professionals began getting business from homeowners outside of their local communities: One Houzzer paid for a five-person landscape firm based in Newport Beach, Ca., to work on his home in Dubai.
Tatarko remained hesitant about new investors; did she really want to invite more strangers into her digital home? Zeev pushed, and "we just said fine, let's pick the five best firms out there. No presentations, I'm not doing the Sand Hill Road thing." Zeev sent out five emails; Mike Morritz and Alfred Lin from Sequoia answered first. Tatarko grilled them on their interest in and commitment to Houzz, as well as their ability to lean back and let her run the company based on their vision. As the former COO/CFO of Zappos, Lin knew a thing or two about building a healthy company culture. "It was a done deal. We had to cancel the other meetings," Tatarko says.
In January, Houzz closed a $35 million round, which included Yammer founder David Sacks and Kleiner Perkins Caufield Byers's Mary Meeker, bringing its total funding to $48.6 million. In the past year, unique users increased by 4 million to 14 million, the number of professionals is up 49,000 to 200,000 and the Houzz Apple app has been downloaded 8 million times. It also launched a Pro+ platform for professionals, whose subscriber base has grown 350% since January. The subscription service allows professionals to geotarget Houzzers to market to in specific areas; it's a pay-per-city model. (Houzz also generates revenue through advertising.)
Lin was attracted to Houzz's disruption of an old industry, with little information about best service and pricing. "The community brings transparency to home improvement." Meeker discovered the site more organically: "I've got a house. I like decorating. Someone sent me a link to the site, and I was a fan," she says. As she learned more about Houzz's founders, she was hooked. "Betting on a husband/wife team can be tricky." Referring to Tatarko and Cohen's complementary skills -- her financial acumen and his engineering background -- Meeker says, "This team seems very different, very special."
The founders are obsessive Houzz users not because it's their product, but because they are still remodeling their home. "Working together is way easier than remodeling together," Cohen laughs. Their team finished a survey of 100,000 Houzz users in March, and they're using the data to improve the recommendation engine with an algorithm that understands style, not just preference. "Everything we do, is to give back to our community."
Apple figured prominently in the Queen of the Net's 2013 presentation of industry trends.
FORTUNE -- If you don't have 23 minutes to watch the video of Mary Meeker's state-of-the-Internet report at AllThingsD 2013 -- or if you just want a chance to study more closely slides that she showed for an average of 14 seconds each -- here are the 10 that pertained to Apple (AAPL).
They covered everything from the MOREPhilip Elmer-DeWitt - May 30, 2013 7:20 AM ET
There is still lots of room to grow in mobile, says one of the world's top Internet analysts in her annual report.
FORTUNE -- Mary Meeker's annual Internet Trends report is a little like Cokie Roberts's Monday morning appearances on NPR -- a litany of points of unsurprising conventional wisdom.
That doesn't make it valueless: Like Roberts's weekly reports, Meeker's annual presentations put a lot of disparate information in context and offer MOREDan Mitchell, contributor - May 30, 2013 6:48 AM ET
Microsoft's post-PC dilemma couldn't be clearer in Mary Meeker's latest slide show
FORTUNE -- Kleiner Perkins' Mary ("Queen of the Net") Meeker gave her annual Internet Trends presentation at Stanford University Monday night, and as always her slide deck is a trove of cleverly presented data.
The chart above builds on the work of Asymco's Horace Dediu to show the rise and fall of what for decades seemed the unassailable duopoly of MOREPhilip Elmer-DeWitt - Dec 4, 2012 7:53 AM ET
Also: Rumors of an Xbox gaming tablet; Mary Meeker says Android growing 6x faster than iPhone.
Apple said to be exploring switch from Intel for Mac [BLOOMBERG]
While Apple is now committed to Intel in computers and is unlikely to switch in the next few years, some engineers say a shift to its own designs is inevitable as the features of mobile devices and PCs become more similar, two people said. Any change MOREJP Mangalindan, Writer - Nov 7, 2012 5:30 AM ET
Apple sells 5 million iPhone 5 units during week one; why it's hip to be Square.
Fortune launches new daily app for the iPad [FORTUNE]
Beginning with the current issue, iPad users can experience Fortune soup-to-nuts in a dashboard on their tablets. The magazine content is interspersed with daily news and analysis in an easy-to-swipe news app. It's the best of Fortune in a mix of free and paid content.
We have insightful daily commentary from bloggers MOREJP Mangalindan, Writer - Sep 24, 2012 12:55 PM ET
Fortune's curated selection of newsworthy tech stories from the last 24 hours. Sign up to get the round-up delivered to you every day.
"You don't want to build it generically and then throw it over the fence." -- Google Mobile Chief Andy Rubin on Android (All Things D)
* An indepth look at Android 4.0, a.k.a. Ice Cream Sandwich, courtesy of This is my next. Among the numerous tweaks, expect a new clean, futuristic look MOREJP Mangalindan, Writer - Oct 19, 2011 10:34 AM ET
Every day, the Fortune staff spends hours poring over tech stories, posts, and reviews from all over the Web to keep tabs on the companies that matter. We've assembled the day's most newsworthy bits below.
"The PC industry's inability to significantly innovate, and its overreliance on a business model predicated on driving volume through price declines, are finally impacting the industry's ability to induce new replacement cycles." -- Gartner Research director George MOREJP Mangalindan, Writer - Nov 30, 2010 6:00 AM ET
The investment bank has seen the future and it looks a lot like the iPhone
Apple's (AAPL) iPhone was the hero of an hour-long conference-call seminar on The Mobile Internet presented Tuesday by Morgan Stanley.
The report was intended to be a follow-up to Mary Meeker's 1995 "The Internet Report," which became known as "the bible" of the dot-com boom.
Graphics like the one at right charting the rapid growth of the iPhone/iPod MOREPhilip Elmer-DeWitt - Dec 16, 2009 6:23 AM ET
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