Crain’s New York Business: Tech startups target ‘pet parents’

Paws PR Founder Patricia Jones was interviewed in this article appearing in the April 14, 2014 issue of Crain’s New York Business:

As animal devotion hits an all-time high, entrepreneurs attract digitally savvy animal lovers with new products


It started as a lark.

About three years ago, Matt Meeker was happily working for a venture-capital firm, running an incubator for early-stage technology companies. From time to time, he also would pop into pet stores to see if he could find a special treat for Hugo, his Great Dane. Discouraged by the selection he encountered, Mr. Meeker decided to do some research and see what was available online. To his surprise, he found “literally thousands” of unique products, many of which he thought Hugo would love.

That’s when the idea hit him: Surely there were other dog lovers like him who were willing to pay to provide their pets with a little extra joy. He talked to Henrik Werdelin, a friend and fellow pooch enthusiast, and they decided to start an e-commerce business on the side. They would sell an online subscription service called BarkBox that would curate, package and ship boxes with four to six treats and toys for dogs. Soon after they started their business, they enlisted Carly Strife, another pal and canine lover, to join them.

Health-monitoring gadgets

1.1M—Number of pet dogs and cats in New York City

33%—Approximate percentage of New York City households with dogs or cats as pets

Much to their surprise, demand skyrocketed almost immediately. After about six months, Mr. Meeker decided to leave his job and devote himself full-time to the company. Now the Manhattan-based business has 38 employees, and Mr. Meeker predicts 2014 revenue will be $30 million, up three times from the year before, though the company isn’t profitable yet. “It wasn’t our intention to get big, but we realized we’d found a great opportunity,” he said.

BarkBox is part of a mini-explosion of technology startups in New York focused on pets. Offering everything from devices for remotely monitoring a pooch’s health to social networks for critter owners, these companies, some of which are just a few months old, are taking advantage of two simultaneous trends.

The first is a growing interest in pets, nationally and locally. Americans spent $55.7 billion on their pets in 2013, and that number is likely to hit about $60 billion this year, according to the American Pet Products Association. While regional numbers are hard to come by, “demand is growing in the New York area, too,” said Patricia Jones, founder of Paws PR, a Woodside, Queens-based marketing and public-relations firm that targets products and services for pets.

The second is the increase in technology startups. In fact, thanks to the area’s tech boom, “New York may be the perfect incubator for this type of company,” said Ms. Jones. “As the tech industry has grown, so has its intersection with pet businesses.”

In addition, New York City itself, along with other urban centers attracting professionals, is a particularly promising market. For one thing, there’s a critical mass of potential customers with the discretionary income to buy these products and services. Also, according to Mr. Meeker, most of BarkBox’s customers are women who have delayed marriage and starting a family to get settled in a career.

“Their attitude toward their pets is more like a traditional love for human children,” said Mr. Meeker, who, like many other startup founders, used the term “pet parent” instead of “owner” to describe his customers, as well as himself.

Of course, the fact that pet devotion has reached what may be an all-time high doesn’t guarantee success. Startups must contend with the usual costs of doing business in New York. And there may be a finite demand for fancy gadgets and gizmos for pets.

Those realities haven’t discouraged Mike Maione, a former equities trader. The owner of two Shiba Inus, a breed of small huskies, was crazy about animals. When he was laid off from his job at Banco Espírito Santo in 2012, Mr. Maione started exploring the possibilities. “I felt the pet-services industry was a great place to be,” he said.

Investors pay attention

What he came up with was the idea to create a social network for people with pets, allowing them to share information, photos and ideas, and to find groomers, vets and other providers in their area. Naming it Hi Pancake! after a pooch he used to see in a dog park on weekends, he took his app live about five months ago. It now has about 5,000 users, mostly in New York.

Mr. Maione, who is based in Manhattan, is now working on his revenue-generation strategy. It should include advertising and partnerships with online pet pharmacies and other providers, as well as with pet adoption centers.

Not surprisingly, many startups in this niche have succeeded at attracting money. Mr. Meeker and his colleagues, for example, raised about $6.7 million in two venture-capital funding rounds.

The four co-founders of Manhattan-based FitBark, which sells a device that attaches to a dog’s collar and permits owners to monitor their pet’s health remotely, launched a Kickstarter campaign last July and reached their goal of $35,000 in 27 hours. The product, which can be preordered for $69 and will eventually retail for $99, should start shipping this spring. “The response showed that we’re making something people want,” said co-founder Michael Chiang.

Correction: FitBark launched a Kickstarter campaign last July and reached their goal of $35,000 in 27 hours. The dollar amount was misstated in an earlier version of this article published April 15, 2014.

A version of this article appears in the April 14, 2014, print issue of Crain’s New York Business.

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