Home Improvement is a huge category, $300 billion big. When you combine the retail products and myriad service providers together you have vertical that makes up a respectable chunk of the U.S. consumer economy. When it comes to the web and the creativity of this huge commerce engine, it still seems a little ho-hum when it comes to new media. Sure there have been a few cool apps that allow you to put furniture in virtual rooms to get an idea of what that 401K busting kitchen is going to look like, which is usually nothing like you expected.There are any number of ways to find a service professional. It would seem Angie’s List has remained the stalwart in all of the pre millennia start-ups that popped up with the mission of placing themselves somewhere in front of the cash flow. I remember doing some work with Improvenet back in the early days when everyone was trying to build the latest “Vortal”. I checked it out in preparation for this post and looks as if it’s a house clearly in need of a complete flip.
Stand in line at any retailer and look at the impulse magazine rack. It’s as if an entire publishing empire built up around the idea of home ownership, design and maintenance. When you think of building a business model around delivering that kind of content it can be a bit overwhelming. All homes may require the same basic items and maintenance but that’s where it ends. Southern Living is obviously a completely different animal than coastal living but then again coastal living has the gulf, the left and right coasts. You get the point. It becomes something with a very long tail. What is consistent and common to all of it is imagery. Zillow proved that you could actually build the foundation of a business model on the fact that people love to look at photos of pretty homes and that the common thread of curiosity around the value would be something that could sustain a steady flow of eyeballs.
So what do you do if you decide to build a new business model based on that same concept for the home improvement vertical? You know it has to be something more than creating yet another magazine app for the iPad that will sit on the shelf next to Martha Stewart. But what? There are a couple of companies that have launched new resources that approach it in a way that I think will be a winning model. A silicon valley based start-up called Houzz and of course, Zillow. Both have launched products that are kind of like Pinterest on steroids. The timing couldn’t be better for an aggressive push given the outlook for a continuing improvement in the real estate market. One sign is a plan by Home Depot to hire 80K seasonal employees, up from 70K last year.
Houzz is a 4-year-old start-up based out of Palo Alto. They very recently received a $35 million dollar series C round of investment from Sequoia Partners (they also have a stake in Trulia). The company boasts traffic of over 12 million page views a month. With a database of 1 million plus photos, end users of the site create a profile. If they have a project in mind they search the site for examples of projects that match their design ideas and save the images to an “idea book”. Once you’ve created an idea book you have the option of collaborating with others on the ideas, printing it, or you can get an embed code to add it to your own site. It would appear that in order to get a price based on your idea book you will have to interact with a professional. Houzz just announced the Houzz Pro platform. Contractors, designers et al will pay a fee to have their portfolio added in a specific market which is being rolled out in select cities. Houzz is available on the web, iPhone and iPad.
The Digs interface uses a very clean, more Pinterest like approach with registered users creating “Boards”. The site has been populated with photos that according to a recent Geekwire article have been acquired over the last 6 months of working with photographers, designers and contractors who were brought in as consultants. What makes the Digs approach more interesting is the use of Zillow’s estimating algorithms being applied to the cost of individual items that will allow a user to generate an estimate for their final remodeling project. Photos already include an estimated cost and come with a breakdown of labor and material. Each photo has already been curated and tagged. The photos carry two icons, one representing how many times a photo has been included on a board and the other linking to comments made other Digs users. Each photo also includes the contact information for a designer or industry professional that can be contacted for more information. Digs is currently available on the web and iPad.
In another GeekWire article the folks at Houzz seemed to have their undies in a bit of twist claiming that Zillow knocked off their product and then went on to claim that it validates the concept. Investors usually ask how a start-up would handle things if a larger competitor with better resources came along. I doubt the competitive analysis part of their business plan was blank.
It’s all about execution and I think the concept is a winner.