Verticalization of Pinterest, Reddit, Facebook

Inventing new UIs and UXs on the internet is hard. 

But every once in a while, companies develop and entirely new experience that immediately captures the love of users. The facebook news feed, the leaderboards of Reddit, or the pin board layout of Pinterest are all great examples. As I read this post yesterday, about Houzz raising a massive round, I couldn't help but think it looked similar to Pinterest, which also raised a massive round of it's own not so long ago, however both companies took very different approaches to the unicorn club

Houzz feels like a vertically focused Pinterst board with some tools to help you act on your inspiration. That's it. Pretty simple. But pretty powerful. 

What's amazing is that Houzz raised at a valuation that is almost half of what Pinterest raised at. Pretty incredible to think that they peeled off a single vertical, really nailed it, and built a very large business in a short amount of time. 

It's a great reminder that you can build incredible value with a vertical play.

I think part the reason why vertical plays can be valuable is that you can build specific tools tailored to that vertical. For example, it's easier to build a lead generation funnel on a single vertical than a lead generation funnel for everything that on Pinterest. Furthermore, I think a single vertical has a better chance of building a really strong community. 

I think Hacker News and Product Hunt were great examples of vertically focused r/reddits. Furthermore, there are many companies that have copied Pinterest for a specific verticals, and don't even get me started on the number of sites that have been inspired by the newsfeed for sports, politics, etc. 

For me, the important take away is not to discount vertically focused companies or ideas. Often times, really knowledgable founders, such as those from Houzz, Product Hunt or Hacker News, see an opportunity in a very large and neglected market and can build a great business with tools specifically tailored to that industry. 



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6 responses
Thinking about it this way is really interesting. "What's amazing is that Houzz raised at a valuation that is almost half of what Pinterest raised at. Pretty incredible to think that they peeled off a single vertical, really nailed it, and built a very large business in a short amount of time." My first thought was that raising at half of Pinterest was bad (bigger = better, eh?) but in fact that's kind of amazing. One vertical done really well has built incredible value. And the revenue picture is much clearer for Houzz, as well.
Yep, exactly. Pinterest probably covers hundreds if not thousands of categories, and is only 2X the value of Houzz. Pretty amazing.
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