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Designing a new home or workspace can be challenging and expensive. Yet one start-up is on a mission to change that, and its founders say they've been profitable from day one.
"I think everyone really wants to love their home, but a lot of people don't feel like they are at a place in their life where they can actually have access to an interior designer," said Noa Santos.
Santos and his friend Will Nathan are the co-founders of Homepolish.com, which they say makes the luxury of having a personal interior designer attainable on any budget.
Watch Santos and Nathan model their 60-second pitch to a panel with home design experts Ryan Serhant, Nest Seekers International's vice president and managing director and a co-star on Bravo's "Million Dollar Listing New York;" Colin Cowie, luxury design consultant and celebrity wedding planner; and Paul Hsiao, general partner at Canvas Venture Fund. The segment was hosted by Mandy Drury.
CNBC viewers also got a chance to vote during the segment. Did Santos and Nathan pitch a perfect finish, or did the panelists and viewers suggest a remodel? Click the video above to see the results!
Santos, a native Hawaiian, grew up clipping pages of Better Homes and Gardens. After school he began working at an interior design firm, but he felt the industry had become more about maximizing profits than creativity. As a result, Santos launched his own design practice where he met client Nathan, a coder for BuzzFeed and former investment banker who had just purchased an apartment in New York.
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"As a new homeowner I had big dreams, I knew what I liked, but I didn't know where to find it and where to put it," Nathan told CNBC.
He said he enjoyed working with Santos to get the home he wanted for what was a fair price.
"We decided that more people deserve to have this experience," Nathan said. Santos, just 24 at the time, and Nathan, 29, then teamed up to create Homepolish.
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The design duo told CNBC they used proceeds from their first design project to pay for incidental start-up costs, working out of their (very well-decorated) living rooms. Nathan coded the site and handled the finances, while Santos managed the designers and clientele.
Homepolish skips commissions and product markups and instead charges customers a flat fee for a one-hour consultation at the client's home.
Junior designers cost $50 and senior designers cost $80 for the one-hour consultation. If customers choose to move forward, they continue working with their designer for an hourly fee. The rate for junior designers is $100/hour and senior designers are $130/hour. Both require a minimum of five hours.
During the segment, panelist Ryan Serhant asked how the founders planned to incentivize talented designers with the Homepolish model while the rest of the market makes the majority of its income on markups.
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"Homepolish gives emerging designers a platform and a way to really get their name out there. For the more established designers, for our price points and charging an hourly rate, it actually is competitive in the market," Santos responded.
The start-up has 20 employees in house and clients work with more than 130 designers nationwide, including its co-founder and trained interior designer, Santos.
Although many other design firms exist, the founders told CNBC they do not believe they compete with a particular firm.
"We compete with an obsolete business model that has caused the industry to be more focused on big budgets and profits rather than the transformative effects of great design," said the founders.
Homepolish has designed more than 1,000 spaces since last year including offices, pop-up shops, brownstones, studio apartments, hair salons, and mansions. The founders told us they are eagerly awaiting their first spaceship commission (they are serious).
Although the team would not disclose specific numbers, they did tell CNBC they are on target to multiply their revenue by 1,000 percent from last year. In 2012, Homepolish grew 700 percent.
Based in New York City, the start-up has not raised any venture capital and has been profitable since the start. Homepolish designers are available in over eight cities including New York, San Francisco, L.A. and Chicago.
--By CNBC's Joanna Weinstein with additional reporting by Erin Barry and Kelly Lin
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