DogVacay is winning the pet boarding space by putting barks and smiles above dollars

By Michael Carney , written on August 14, 2014

From The News Desk

People love their pets. Obsessively. As if they were human children. Really, really, really love them.

It’s a simple observation that has helped turn DogVacay into a massive and rapidly growing business. The three-year-old Santa Monica-based dog and pet boarding startup recently crossed more than 500,000 nights delivered across 3,000 cities in the US and Canada, and now features more than 15,000 hosts.

The key to DogVacay’s growth has been its relentless focus on service, according to founder and CEO Aaron Hirschhorn. It’s why only 15 percent of host applicants are accepted onto the platform and why more than 50 percent of DogVacay’s headquarters staff works in customer care. The company also offers 24/7 support and insurance, things that have become table stakes in today’s on-demand economy, but which nevertheless speak to the service-oriented approach.

“People always talk about us as a marketplace company – we’re not, we’re a services company,” he says. “We happen to have marketplace dynamics, like local supply and demand, but the supply isn’t interchangeable. With Uber you want the closest driver. With grocery delivery you want whoever’s closest and cheapest. For our customers, this is an emotional decision.”

Whatever Hirschhorn is doing appears to be working, as DogVacay’s net promoter score, a measure of a user’s likelihood of recommending a product or service to a friend, is an off the charts 93 out of 100. The company’s app also has a 4.96 star App Store rating.

Today, DogVacay updated its iOS app with a mix of utility and entertainment features that will go a long way toward keeping that approval rating high. On the utility side, the app now features Vet Finder, which allows pet owners and hosts to locate the nearest veterinarians and animal hospitals. Also included is Symptom Checker, which is like a WebMD for dogs. Users can also now access Tips & Tricks around dog training and wellness, and browse FAQs about the DogVacay service.

On the more lighthearted side, a new photo capture and personalization feature called VacayCam invites users to embellish their photos with stickers, frames, text, and sound. The in-app camera can also be set to emit a sound, like a bark, meow, or squeaky toy to capture the pet’s attention. It sounds trivial, but users have already taken and uploaded more than 1 million photos in the company’s app.

“The reason we spent some time working on this feature is that it’s one of the main ways that guests and hosts interact with the company and with our technology,” Hirschhorn says. “We’ve gotten a ton of feedback over the years that said, ‘It would be fun to do more with our photos.’ We took inspiration from several of our top hosts who were already doing this sort of thing through other apps. And we think that people will use this not just when they’re boarding through DogVacay but in their everyday lives. It gives us a fun way to engage our owners.”

It’s not all fun and games. VacayCam also integrates with the above-mentioned Vet Finder and allows users to send photos – hopefully without the stickers – of a pet’s injury to a vet for preliminary diagnosis.

Early on, investors and outside observers were concerned that DogVacay would be disintermediated by hosts and pet owners booking directly outside the service. But that has proven not to be an issue according to Hirschhorn, who describes the repeat booking rate as “really strong.” He adds, “We continue to add more and more new customers, but our repeat to new customer ratio continues to rise.”

DogVacay has competition, including from local kennels and from other startups taking a similar approach to pet boarding, the largest of which is Seattle’s Rover. But while Hirschhorn believes his business is an order of magnitude larger than Rover’s, it’s the status quo of family, friends, and neighbors that he’s most directly competing with.

“There is $6 billion per year being spent on pet sitting and everyone in the industry still has micro-market share,” Hirschhorn says. “The biggest boarding company in the market is PetSmart. They have 200 locations and we’re approaching them in terms of dog nights. We’re focused on having the best hosts and adding value in every transaction through things like insurance, support, and our mobile app. Someone wouldn’t take a 10 day trip that they otherwise wouldn’t because DogVacay is so easy, but they’ll add a two day trip.”

The biggest challenge facing DogVacay would seem to be delivering such great service at scale. Mobile apps and photo stickers are easy to roll out to hundreds of thousands or millions of consumers simultaneously, but ensuring that thousands of independent contractor hosts represent the brand well at all times is a more difficult proposition. Hirschhorn and his 65 person team have shown themselves up to the challenge thus far, but it will get exponentially more difficult as the business continues to grow.

DogVacay has raised $22 million to date from investors that include Benchmark, DAG Ventures, Sherpa Ventures, Foundation Capital, First Round Capital, Andreessen Horowitz*, Science, and other angels. The company is not yet profitable, but has seen revenue grow 200 percent year-over-year and remains in a “good cash position,” according to Hirschhorn.

With word of mouth still the largest driver of new customer signups, DogVacay’s focus on service appears to be working. The company is operating in a similar online-to-offline realm as the likes of Uber, AirBnB, and others, but where most have focused on ruthless efficiency, DogVacay is winning by putting smiles and barks above all else.

  • Disclosure: Andreessen Horowitz partners Marc Andreessen, Jeff Jordan, and Chris Dixon are investors in Pando.