From the threshold of one great thing, how startup dog walking Wag fell and collapsed - Photo 1.
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From the threshold of a great thing, dog walking startup Wag has "slipped" and collapsed like


In January 2018, startup Wag was on the verge of becoming the Next Big Thing of the tech world.

In January, the startup founders took their dogs for a walk, announcing that they had raised a $ 300 million investment from the SoftBank's Vision Fund – the world's largest technology investor with a $ 93 billion fund being directed. to creating a global network.

Wag's business model is similar to Uber's for walking dogs: they connect pet owners with Wag's dog walkers – who work as independent contractors. An idea that seems humorous but a really serious business model.

Wag soon became famous thanks to the use of services by celebrities like Mariah Carey.

The startup quickly appealed to celebrities like singer Mariah Carey and actor Olivia Munn, who was also an investor. By the time the agreement was reached with SoftBank, Wag had expanded its operations to 100 cities in the United States. With SoftBank's backing and the appointment of a veteran CEO to the leadership position, Wag looks like he is on his way to becoming a global leader in pet care.

More than a year and a half later, SoftBank and Wag were in a state of disappointment. According to a CNN Business interview with 17 former employees here, during that time, the startup underwent countless layoffs, changes in leadership, and closed its service center at Hollywood Hills – the birthplace of Wag. Most of these interviews are conducted on anonymous terms because of non-disclosure agreements and fear of retaliation.

According to data provided by research firm Second Measures, Wag's dizzying growth momentum has declined while Rover, its main competitor, continues to increase both in sales and is ahead of Wag. More significantly, while Wag started out as a walking dog startup, Rover was born four years earlier as a dog boarding company – a more expensive and less frequent need for for pet owners.

Both became direct rivals only when they began to expand the services they provided. This year, Rover began expanding its service activities to cats.

According to Prime Unicorn Index data, after the agreement with SoftBank, Wag's value soared to more than $ 600 million. Not only that, Wag also won a larger market share than Rover. In the first quarter of 2018, they held nearly 23% of the market share. Now, however, their market share has dropped to just 16% while their rival Rover has risen.

From the threshold of one great thing, how startup dog walking Wag has slipped and collapsed - Photo 2.

Wag's footsteps further show the challenges that startups face when burning money in exchange for rapid growth according to the demand-driven business model that is flourishing in many different industries. It raises a bigger concern about SoftBank's strategy of pumping huge amounts of money to startups under this model. Two of the largest investments of SoftBank, Uber and WeWork are losing the attractiveness in the eyes of investors in the market.

"The senior management team (at Wag) has left the company and product and does not have a good understanding of the strategy needed for it in the long term."Eric Weinman, who used to be responsible for analyzing reports, strategies and analyzing growth and user concerns from August 2018 to July 2019 at Wag, said.Wag has never shown a coherent way to measure success and failure. "

Uber for dogs

In the process of recovering from the recession 10 years ago, entrepreneurs rushed to build a range of customized service applications they could think of – from groceries and food delivery to repairs. fingernails at home, or taking laundry, cleaning the house, hitchhiking … So why not have a dog walking service?

From the threshold of one great thing, how startup dog walking Wag fell and collapsed - Photo 3.

That's what led Jonathan Viner towards founding Wag, when his younger brother Josh wanted a dog but was too busy to take care of it. Jonathan said on his podcast channel: "Josh is really excited to have the opportunity to build an app like a button on a dog phone. He thought that, if I had such a problem, many, many other people who wanted to own a dog would have the same problem.. "

With Wag, the two brothers aim for dog owners so they can approach local dog walkers at any time.

Dog owners can request a locked kennel from Wag so the dog walker can enter the house on his own with a simple lock code to take the dog for a walk of 30 minutes or 60 minutes, or 20 minute. A walk for a dog within 30 minutes will cost about 20 USD.

From the threshold of one great thing, how startup dog walking Wag has slipped and collapsed - Photo 4.

Based on the popularity of the animals on social networks, Wag uses his social media platform to post compelling photos of dogs walking, to attract users and even Dog owner.

Stripped dogs – a pet startup problem

Like other demand-driven startups, Wag also faces issues of their competencies and the ability to train them. But above all, Wag has another important challenge: the unpredictability of dogs and how they react to strangers as they take them for a walk.

From the threshold of one great thing, how startup dog walking Wag fell and fell apart - Photo 5.

More important is the case of dogs being lost or even dying while being cared for by Wag (the same thing happens with rival Rover). Although Wag thinks these incidents are "rare", as they expanded, the problem occurred more often as a result.

According to a former employee, initially when the group was only working around the laptops in the Viner brothers' house in Los Angeles, every time a dog slipped and fled from the walker, the group would have to give up everything to find those dogs.

Just as many startups are aiming for rapid growth at all costs, the company culture also faces unexpected problems. For example, the company had almost no personnel in charge until it was almost time to reach an agreement with SoftBank. The two former employees said that their income is not consistent, sometimes managers earn less than their peers or even subordinates.

And when they started to expand, things got even more cluttered.

From the threshold of one great thing, how startup dog walking Wag has slipped and collapsed - Photo 6.

Winnie the dog died when Wag care and the owner of Winnie accused Wag sought to use money to conceal the case.

A former employee interviewed said: "We are unable to handle the workload, we are not properly trained, nor are we expected when incidents occur. The more customers we have, the more incidents occur."

Incidents include stray dogs, injuries or even worse. Customer service operators are responsible for calling regional stores with "Hope someone sees the dog", but it was not revealed that Wag's staff called. A former employee said:"You would have to say "my friend's dog is lost and we're looking for it". "

A new leader and a new headquarters

That forced SoftBank to appoint a veteran in the tech village, Hilary Schneider, as the CEO of this messy startup. Only 6 months after the new CEO was appointed, the Viner brothers left and launched a new investment fund. Earlier this year, the two brothers launched a motorcycle startup called Wheels. Co-founder Jason Meltzer continued to stay at Wag, but at the time of a CNN interview, he said he was no longer working here.

From the threshold of one great thing, how startup dog walking Wag fell and collapsed - Photo 7.

Hillary Schneider, who was appointed SoftBank's CEO at Wag.

The founders and the first employees left one after another, and Ms. Schneider began appointing a new leadership team in the Bay Area, where she now lives. Now, the company's headquarters is moved to Mountain View, near Silicon Valley and an office in San Francisco, leaving its operations in Los Angeles, which used to be the heart and soul of the startup. Moving operations out of her original headquarters, Ms. Schneider was seen by many employees as leaving the company.

Moreover, the customer care department in this area started to be phased out. While a number of people are traveling to the Philippines to train and train people there, the company announces the opening of a customer care center in Phoenix, Arizona and gives "opportunities" to everyone who works there – but the company does not pay the accommodation or guarantee transfer fee.

Just a few months after opening the center in Phoenix, Wag began eliminating employees in the customer service department in Los Angeles. By early 2019, Wag had completely closed its office in Hollyhood Hills, relocated its customer service division to Arizona.

From the threshold of one great thing, how startup dog walking Wag has slipped and collapsed - Photo 8.

Shortly after the appointment of Wag's new CEO, Wag's office and operations in Los Angeles, where the start-up startup was almost gone.

According to the California Department of Employment Development filings, at least 92 employees were laid off this year in Los Angeles – primarily for activists, dog guide coordinators and marketing departments.

After all, the momentum of growth has not stopped

The classic philosophy for fast-growing startups is to receive large investments to spend on marketing to expand quickly, but according to three former employees, Ms. Schneider cuts down on marketing costs after receiving them. mission. But according to another source, the basic reason for this reduction is to manage cash flow due to difficulties in speeding up development after receiving an investment from SoftBank.

Some former employees said that Ms. Schneider did not care or even worry about real growth measures.

According to a former employee, the company's number of new users and customers began to decline from the fall of 2018, but became more pronounced in early 2019. Second Measures data shows the company's sales. decreased by nearly 12% in the second quarter of 2019 compared to a year earlier.

From the threshold of one great thing, how startup dog walking Wag has slipped and collapsed - Photo 9.

A series of hours-long meetings between Ms. Schneider and a reliable team of employees has been going on for months without finding a clear solution to improve sales. Even a former employee said that Ms. Schneider did not care and did not understand the ideas being presented to her, such as acquiring more to grow the size, or increasing the discount, … and finally a Some had to leave the meeting in frustration.

But perhaps the clearest evidence that the startup's ambition is at a dead end is that Wag's dream of reaching global markets has yet to materialize.

Meanwhile, at the time SoftBank invested in, SoftBank Vision Fund manager Jeffrey Housenbold saw Wag as "The smart leader in the fast growing global market for pet care services"Since receiving SoftBank 's investment, Wag has expanded to 10 new cities, all in the US.

In response to a long list of questions asked by CNN Business, Wag's spokesman said: "Their senior executives strongly agree with Wag's direction, in using a data-driven approach to guide the company's strategy and growth, while also improving the customer experience.. "

The company also said it is expanding its product package, optimizing the experience and providing "New opportunities to expand"including hardware and through"strategic cooperation relationships. "

Refer to CNN Business



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