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DogVacay is the Airbnb of animal care - Small Empires S. 3 Ep. 6

2015-09-15
dog vacay is a company that connects pet owners with pet sitters through an online platform the Santa Monica based startup is using shared economy principles to change the way we care for our dogs by offering a new alternative to kennels but can this new business make it in the large pet care market we're a network of over 20,000 dog sitters who we call hosts across the US and Canada and they watch dogs in their own home instead of a kennel dog vacay ISM the elected was to call themselves like the air B&B of animal care essentially this business came out of a problem that my family and in 2011 we took an East Coast Swing and left our two dogs rocky and Rambo in a kennel here in Los Angeles we came back to a fourteen hundred dollar bill more than our entire vacation and rocky was hiding under my desk for three days so it began for us this period of a little bit of soul-searching and also market searching to see is there a better alternative and why doesn't it exist so we started out as the first dog sitters we put up a listing on Yelp called Aaron's dog boarding nothing happened for a couple months and then I got a phone call out of the blue and this girl said oh my god and my friend canceled on me do you have any spots left for tonight and I said no yeah let me check the calendar one spot left you know come on by so we watched her dog and she wrote a glowing five-star review and then this business out of our own home took off so over the course of eight months we made $35,000 in cash watching over a hundred different dogs so how do we take this cozy home dog boarding experience where we learned a lot and we made money and had a great time and extend that to everyone else in the country with a clear opportunity the founders faced the task of getting investors and customers interested but in the beginning dog faked his unique business concept proved to be a challenge to effectively market I talked to a lot of people and got a lot of like shrugs you know good luck sounds nice it's really cute that you watch dogs in your home sounds like you're really passionate you know in the business community the concept itself probably seemed a little bit outside the normal wheelhouse of what people were interested in at the time it's a dog business and that's not as sexy or cool probably as a social networking app or something like that there's 83 million dogs in the US which is more than there are kids and the pets services industry is about 15 billion dollars and nobody has even one percent market share some people got it and we were able to piece together some investors and we had probably committed about 600,000 from various angles I mean just twenty-five fifty thousand dollar checks and first round capital came in it was really exciting but the reality was at that point we launched the product we have pet sitters we raise a million dollars and there's no demand like no one's using it so now the whole thing pivoted to okay well we solve the funding problem we sort of solved the supply problem how do we figure out how to drive demand you're talking about a very sacred relationship for people their relationship with their animals it's like their family member or loved ones so how do you get somebody comfortable with the idea of letting them give their dog to a stranger essentially because that's key to making the whole thing run the single best thing that we did is we invested in PR you got to get the information out there so we did a pretty good job of creating some early buzz but then what we did is we started focusing on the stories in the community using that to sort of push it out to local consumer press this is where the things are going to take off where we had enough people across paid and direct channels PR what people were using it and then the word-of-mouth kicked in and we did service dog vacate through a friend you really like the reputation and he encouraged me to check it out and we did and you know here we are you know the very familiar expression that you'll never work a day in your life if you do something that you love I definitely love dogs enough that it feels that way to me this is the group that actually makes our business they go above and beyond and because of that the early experiences were so good they were all five-star reviews and that's when the business really took off what sets dog vaycay apart is it's focused on building relationships between pet owners and pet sitters while the sharing economy model is becoming increasingly popular dog beyke looks to not just build a business but create a community it's kind of like taking advantage of the whole movement we've seen in the last few years with services like uber and lyft people getting a lot more comfortable with connecting with other people out there through their phone through other devices and kind of having these transactions where there kind of got to piggyback on that success a little bit a lot of my friends are actually working for uber for lyft or post mates and all the shared economy services and I trust them and that's the face of the new economy that's that's going on something clicked at when it was the very very early days of collaborative consumption I mean very early days of the sharing economy as this business was scaling and as I started to see those things were like hey there's a simple model here we on board the hosts we train them we give them insurance we do the quality control we do the booking and then it's a scalable model that's a very personal relationship people have it they're animals so how do you put your service out there and make it feel trustworthy it's one thing if you're gonna go and stay at Sammy's house and you like it but something goes wrong you can handle it get your animal it's your pet you know it's a love limb to a lot of people how do you build the trust with a consumer in that situation it wasn't like you just filled out a profile and we're a dog-sitter we actually interviewed you we looked at your reviews on Google and Yelp and we made sure you were good we are a community and the community provides a service and it's very different because now it's not just about a match and a couple tools it's about ongoing support and ongoing relationship building with a growing community of dog owners and sitters dog vaycay has proven to be a viable business but in order to become a major player in the pet care industry and compete with big brands like Petco and Petsmart dog vaycay has to expand its services well dog Vicky on its own is a great one trick pony it seems a little bit small to survive long term we are arguably the largest quote-unquote kennel in the world but that still puts us at a very very small scale they're looking to expand it to other things I mean I introduced a de sitter service this year which is actually very very smart and to really take advantage of that whole sector there's things like grooming and dog walking other things that they can do to really make this a more robust business dog vacay is in at best beginning of the second inning we've booked millions of nights to date but that needs to be in a 10 hundreds of million so now that they've got that one million threshold crossed it's a you know how do they go beyond that they say they want to be the biggest pet brand in the world if you do a lot more to actually hit that if they want to beat Petco they have to tackle Peck the one off Frost but Hancock
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