It makes sense that the company was eyeing making products in-house: exclusivity sells, and there are higher margins from selling your own goods versus a third-party retailer. Home improvement platform Houzz lays off 180, reportedly gears up for public listing In addition, it also offers a marketplace that sells products like glass blown lights or convertible sofa beds. Houzz sells services to help with home improvement projects by connecting users to products from third-party retailers as well as services from architects, designers, or contractors. But this move comes as startups react to the pandemic and historical market lows through layoffs and pivots. Growth initiatives flip (and most certainly flop) in startups all the time. “As a result of this process, we have made the difficult decision to discontinue our investment in Private Label at this time.”Īs a result of the decision, Houzz laid off 10 people across three locations, the UK, Germany, and China. “At Houzz, we continually review our strategic investments, such as Private Label, to ensure that they are aligned to the current needs of our business and optimized for our continued growth,” the company said in a statement to TechCrunch. Excessive spend and bets on supply chain processes are always a risk, especially during a time of uncertainty. It could also put the company at odds with all of those parties, as the coronavirus pandemic clogs up business processes around the world.Ī manufacturing arm also takes a good chunk of capital and requires heavy upfront costs on equipment, space, contractors, and more.
If Houzz were to start creating its own furniture, it would have to rely on suppliers, designers, manufacturers and a slew of other process-orientated jobs.
The plan, a pilot program called Private Label, was still in progress within the company, but given current market conditions, Houzz has set aside its hopes of getting into the manufacturing space. Houzz, the home decorating startup backed by Sequoia Capital, has scrapped a plan that would have seen the company design and sell its own houseware.