 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 U.S. and Canada, and they watch dogs in their own home instead of a kennel. Dog Vacay is, um, they like to call themselves like the Airbnb of animal care, essentially. This business came out of a problem that my family had, 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 $1,400 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, my friend canceled on me. Do you have any spots left for tonight? And I said, oh 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 100 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 Vacay's unique business concept proved to be a challenge to effectively market. I talked to a lot of people and got a lot of shrugs. Good luck, sounds nice, 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 U.S., which is more than there are kids. And the pet services industry is about $15 billion and nobody has even 1% market share. Some people got it and we were able to piece together some investors. We had probably committed about $600,000 from various angels, I mean just 25, $50,000 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 raised a million dollars and there's no demand. Like no one's using it. So now the whole thing pivoted to, okay, well we solved 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 one. 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 thing started to take off, where we had enough people across paid and direct channels, PR, where people were using it and then the word of mouth kicked in. We discovered Dog Vacay through a friend who really liked the reputation and he encouraged me to check it out and we did and 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 Vacay apart is its focus on building relationships between pet owners and pet sitters. While the sharing economy model is becoming increasingly popular, Dog Vacay 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 over the last few years with services like Uber and Lyft. People are 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 they kind of got to piggyback on that success a little bit. A lot of my friends are actually working for Uber, for Lyft, for Postmates and all these shared economy services and I trust them and that's the face of the new economy that's going on. Something clicked when it was the very, very early days of collaborative consumption. I mean, the very early days of the sharing economy. As this business was scaling and as I started to see those things, we're like, hey, there's a simple model here. We onboard 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 with their animals. So how do you put your service out there and make it feel trustworthy? It's one thing if you're going to go and stay at somebody's house and go, if something goes wrong you can handle it. It's your animal. It's your pet. And it's open to a lot of people. How do you build a trust with the consumer in that situation? It wasn't like you just filled out a profile and were 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 Vacay is proven to be a viable business. In order to become a major player in the pet care industry and compete with big brands like Petco and PetSmart, Dog Vacay has to expand its services. While Dog Vacay 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, they introduced a day-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 and other things that they can do to really make this a more robust business. Dog Vacay is in, at best, the beginning of the second inning. We've booked millions of nights to date, but that needs to be in the tens and hundreds of millions. 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. They have to do a lot more to actually hit that. If they want to beat Petco, they have to tackle Petco on all fronts.