But after chatting with Zeev and the people at some of his portfolio companies for a few weeks, it started to sink in that he’s is a very different breed from the average angel or VC. So frankly, it was a very easy decision.” And I believe that Adi is one of the best CEOs in tech today. I don't see any competitors or new trends that can slow Houzz down at this point.
Houzz valuation professional#
“The category is huge, and Houzz is the only company providing an end-to-end solution for home renovation and design where people can get inspired, find a professional and shop. We’re huge fans of Houzz (we’re also investors and former advisors) and look forward to very big things from Houzz and IvyMark."I believe this is only the beginning for Houzz,” he says. We have really enjoyed being part of IvyMark’s journey, and we’re proud to have them in the Guild. They worked with the team through multiple business models and several rounds of financing. Having great, supportive investors who cover your back even at the toughest points and through pivots always helps…Tal Barnoach of Disruptive and Rami Beracha of Pitango in Israel invested early, invested significantly, and gave the team unwavering support. The Israeli startup eco-system continues to evolve positively to create powerful combinations like this. With Gigi in Israel and with Pete and James in Silicon Valley, about 1/3 of our investments are with Israeli Founders. This connectivity was important for this acquisition, and is part of the NFX story as well. Houzz and IvyMark are both US based companies with Israeli founders, Israeli investors, and part of their development team in Israel.
Liking each other can be the difference in keeping it together and enjoying the ride enough to keep going. Ups and downs and pivots and financings and mistakes take their toll over the years. It helps if you fundamentally like your co-founder. When we look at companies we always ask ourselves - is there a good founder-market fit? 4 - Founder Compatibility And it starts with a genuine fit between the founder and the market they’re serving. This caused word of mouth growth, high customer retention and solid decision making by the team.
You could see it and feel it immediately. Given the mutual respect and understanding they had with the customers, and their commitment to the positive impact on their customers’ business, a deep sense of customer loyalty formed in the first 4 weeks. Lee and Alex were embraced immediately and vocally by their customers, the interior designer community. Undoubtedly, Network Effects is the second greatest predictor of success we see in early stage companies. (Very similar to Zillow’s acquisition of DotLoop and PremierAgent as Pete Flint discusses here). This acquisition will help them build a direct network effect. Until now, Houzz has achieved a scale effect and a two sided marketplace network effect. This Ivymark acquisition moves Houzz into more of a market network by adding the SaaS component of the Market Network model. Network effects are the main defensibility for startups and in IvyMark’s case, its Market-Network network effect secured its defensibility which we believe led to the acquisition. Houzz and others needed to move quickly or the valuation of IvyMark was going to start increasing 5X-10X per year. 2 - Network EffectsĪs IvyMark got bigger, the value of its Market Network was increasing geometrically. We often say that speed is the number one success factor in a startup - the IvyMark story definitely follows this truth. That speed continued with rapid iteration on every element of the business and is a key part of the IvyMark success. On the same day, they also started testing the concept with customers to verify the market demand, using only mockups and ads, before writing any code. They made their decision that day to pivot again, and had a V 1.0 of the product built three weeks later.
After identifying their most active customer cohort, they came up with a new plan in three days that included a “ Market Network ” network effect. After we invested, we looked at their data with them, and just four days later, the team realized their second business was working a bit, but would never be significant. IvyMark was the third pivot for this team. Photo: Tory WilliamsĪs an investor in IvyMark, we wanted to share six quick, behind the scenes lessons from IvyMark’s Acquisition by Houzz that founders would be wise to learn from and adopt.