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Why did we decide to cover the pet industry? Well, it’s no secret that in recent years, our pets (especially dogs) have become more than just an extension of our family, but part of our actual family.

This growing bond has brought innovation and a boom in products and services catered to our four-legged family members, and we wanted to tell the stories of not only our best friends but of the people driving this industry forward.

There’s never been a better time to enter the pet market!

Our Main Story

Chewy might be the pet industry’s biggest success story, In 2017 Ryan Cohen (the founder) sold Chewy to PetSmart for a whopping $3.35 Billion.

But before the billions, there was a clear vision:

At 15 Ryan was already collecting fees off referrals to various e-commerce sites, it was clear early on that he had an entrepreneurial drive. Fast forward to college, where Ryan met his Chewy cofounder Michael Day. They met in an online chat room about web design and computer programming and immediately hit it off. Initially, they discussed starting an online jewelry store. They bought the inventory and set everything up, however a week before they were due to launch Ryan had an epiphany as he was buying food for his dog at the local pet store. He realized he didn’t care about jewelry but he did care (as most people do) deeply about his dog and the food he feeds him.

He wanted to give consumers the local pet store experience with the convenience of online shopping.

He went back to Michael with this newfound revelation who did not need much convincing. The entrepreneurial pair wasn’t afraid to follow their gut and make a hard pivot - they sold all the jewelry, built a new website, found distribution, and managed to partner with third-party logistical companies. All within 3 months.

In June 2011, Chewy launched!

Ryan knew they had to be customer obsessed. His vision was to deliver the type of in-touch, personalized service you get at your local pet store, at scale. He recognized the importance of the human element in a world where digital had fast become the norm. He decided to add small things like handwritten thank you notes, hand-painted pet portraits, and eventually a massive 3000-person call center that answers customer calls in seconds.

Everyone kept asking him - “how will you compete with Amazon?” But Ryan saw the success other startups had in specific product categories such as Zappos (shoes) and Wayfair (furniture) and knew they could do something similar in the pet space.

Ryan decided to launch Chewy from Florida, at the time a very unpopular idea.

They approached many VC firms but they all turned them down, partially because they couldn’t see how they could scale from Florida. He found it difficult to attract both capital and talent, everyone kept telling him that the unit economics simply won’t work. However, being a crafty entrepreneur that thrives off challenges Ryan managed to make this low-margin business profitable, raise a ton of cash, and attract top talent to the team, all while staying in the Sunshine State.

Ironically, the fact that candidates would not respond to them ended up working in their favor. The ones that did respond truly believed in the mission of the company. They were enthusiastic about joining Chewy and helping it grow. People relocated from all over the country and joined them in Florida. Ryan knew it was a tremendous sacrifice and he never took it lightly.

He pitched Larry Cheng at Volition Capital who asked Ryan “Who’s going to take this company to $100 million in sales?” to which Ryan confidently replied “Me". He didn’t invest. Six months later, they beat their sales projections, and this time, Larry, impressed with their progress, decided to write a check for $15 million.

After two years of building Chewy, and taking well over 100 VC meetings that went nowhere, they finally found someone who believed not only in the company but in the team as well.

Ryan was hyper-focused on scaling rapidly.

Although they launched fast and scaled even faster, in true startup fashion, everything that could go wrong, did. From hiring difficulties to scanner guns not working, Wi-Fi or warehouse management system going down, etc… They were having major warehouse issues. Raising that money allowed them to bring stocking and shipping in-house and develop the right systems and technology that was needed for a company of their size.

After that, the company rapidly raised over $200 million in funding and there was no stopping them.

Strap-in, this rocketship is on fire 🚀 

• 2014, sales hit $205 million

• 2015 sales doubled to $423 million

• 2016 sales doubled again to $901 million

• 2017, they were doing $2 billion in sales and were responsible for 51% of all online pet sales

In April 2017, Cohen and Day sold Chewy in an-all cash deal for $3.35 billion. This was the largest e-commerce acquisition in history at the time.

A year later Ryan left the company.

In June of 2019, PetSmart spun Chewy off into a publicly traded company at a valuation near $9 billion, close to three times the sale price only two years before.

What’s Happening

• Stranger Things - Millie Bobby Brown’s Florence by Mills brand is introducing a full pet apparel and accessories collection. A deal with Kanine Group subsidiary, Kanine Pets World Limited was negotiated by Brown’s global licensing partner, IMG.

• Looking for a CBO?- PetMed Express is looking to hire their first-ever CBO (Chief Barketing Officer) the company will be accepting applications until May 21st. One lucky canine will be selected to fill the role. To enter, pet parents must post a 30-second Instagram Reel of their dog with the hashtag #PetMedsCBO2023. If your pup gets the job, you’ll get $10k and some other cool perks.

• Kids are out, pets are in - According to the American Pet Products Association, 70% of American households own a pet—most often a dog or cat. While the number of children in U.S. households has declined in the last 20 years and is currently at 40%.

• Will your pup eat insects? - YNsect just raised 160 million Euros for its B2B2C startup. Farmed bugs, such as mealworms, are ground down to produce proteins for aquaculture, livestock, fertilizers, and pet food, but will pet parents take the bait? Time will tell.

• Pet insurance is big business - NAPHIA just released their report on the North American pet health insurance sector which grew by 23.5%.

• Ramen for dogs? - An instant noodle for dogs has become an instant success in South Korea after it launched there two years ago.

Biz 101

We have had some great feedback so far and decided to expand our services and offer relationship advice on The Woof as well… KIDDIN’! Putting this unparalleled sense of humor to the side for a second, starting and running a business is incredibly difficult, both physically and mentally. While your pet can be there when you need to vent or just want a cuddle, you may have considered (or are considering) bringing a partner for the ride. Here are some considerations to help you with the decision-making:

• This is a relationship - Henry Ford said “Coming together is a beginning, staying together is progress, and working together is success”. Reading between the lines, the key bit here is around the different stages of the partnership and hence the time it takes to build it. Treat your choice of a business partner as entering a long-term relationship. Choose someone you can work with, celebrate things with, and someone you can have difficult conversations with. Don’t take this lightly - this could be the most important decision as you get your business off the ground.

• It’s ok (and actually, a very good idea) to formalize things - There is something a bit awkward about formalizing a relationship via a written agreement. Well, the business world is dynamic. Some things might be successful and some not. Therefore, take the time, at the early stages to document what happens in different situations. What happens if one of you wants out? If you sell the business? who gets what? etc etc. You won’t be able to cover all eventualities but having some framework will make sure you approach tough decisions with structure and mutual respect. As difficult as it is, removing the ambiguity will help preserve a friendship longer.

• Generalist and specialist - In the early days, there is a pretty good chance each of you will do a little bit of everything. Makes sense as there is SO much to do. As the business scales and/or time passes, you may find that each of you likes to do certain things or that each of you is better at certain things. That’s perfectly normal and you should embrace it. It’s an efficient use of time and resources (which frankly, for small businesses, are limited). Don’t shy away from this. The key here is to communicate, agree on who does what and keep each other informed while you continue to grow the business.

Before we close this week’s section, a final quote that applies to us and our pets altogether, this one comes from the big daddy himself, Charlie Darwin, “It is the long history of humankind (and animal kind too) that those who learned to collaborate and improvise most effectively have prevailed”.

Share-Worthy

• World’s Oldest Dog Turns 31 - Bobi, a Portuguese livestock guardian dog has just been awarded the Guinness World Record for the oldest dog at 31. Happy Birthday, Bobi!

• How do you catcall a cat? - A French team of scientists found that cats best respond to a combination of visual and vocal cues in order to get their attention.

• Cat Confessional - Watch as this photographer gets these cats to “confess their sins”

• You've never seen cat eyes like these before.

• Laser treatments for your pets? South Korea just unveiled its first-of-a-kind skin clinic for pets. The posh new spot named La Peau Claire offers pets with skin problems laser treatment.

• Unpresidential - Misneach, Ireland’s top dog recently crossed paths with Joe Biden, and Let’s just say we almost had a geopolitical disaster on our hands.

• Slippers… but for hamsters - These were just voted as the cutest slippers in existence(yes, by us) but, I mean c’mon, check these puppies out. Are they functional? Probably not, but man are they cute.

• When you are clearly outmatched - This pup realized he was clearly outgunned in this street fight.

Community Pics

If you want your pet (dogs, cats, hamsters, baby dragons, etc) featured, send us a picture with their name, age, breed, and a 1-2 sentence story to [email protected] and we’ll do our best to feature your pet.

Meet Louie: A beautiful Turkish Angora cat who was rescued when he was 6 months old in Cincinnati, Ohio. He recently celebrated his 9th birthday in his new home in Colorado. He loves pets, any kind of fish snack, and his dog companion Fuji which he has lived with for the past 2 years.

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Finally, why did the kangaroo stop drinking coffee? Because it made him too jumpy!

We crack ourselves up!!

See you next week!

The Woof is a weekly newsletter covering the pet industry.