BARK: Matt Meeker AI transcript and summary - episode of podcast How I Built This with Guy Raz

Go to PodExtra AI's episode page (BARK: Matt Meeker) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.

Go to PodExtra AI's podcast page (How I Built This with Guy Raz) to view the AI-processed content of all episodes of this podcast.

How I Built This with Guy Raz episodes list: view full AI transcripts and summaries of this podcast on the blog

Episode: BARK: Matt Meeker

Author: Guy Raz | Wondery
Duration: 01:06:09

Episode Shownotes

When Matt Meeker started sharing a Brooklyn apartment with a Great Dane, he didn’t know it would inspire him to launch a multi-million dollar company. But, disappointed by what pet stores offered for big dogs like his, Matt co-founded BARK, a subscription service for dogs of all sizes. After launching

in 2012, the brand expanded to include food, furnishings, and luxury charter flights, where dogs roam free about the cabin. Along the way, Matt applied critical lessons from his past startups, including a failed text-messaging company, and the social platform Meetup.This episode was produced by Devan Schwartz with music composed by Ramtin Arablouei. This episode was edited by Neva Grant, with research by Olivia Rockeman. Our audio engineers were Patrick Murray and Maggie Luthar. You can follow HIBT on Twitter & Instagram and sign up for Guy's free newsletter at guyraz.com.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Summary

In this episode, Matt Meeker shares the journey of co-founding BARK, a subscription service for dog products inspired by his Great Dane, Hugo. Launched in 2012, BARK expanded from dog toys to various pet products, reflecting themes of innovation and resilience in entrepreneurship. Meeker discusses mistakes from previous ventures, such as excessive capital leading to poor decisions, and emphasizes the importance of community engagement. The conversation delves into the company's growth, navigating challenges during the pandemic, and commitment to profitability, culminating in BARK's aspirations for future expansion and success.

Go to PodExtra AI's episode page (BARK: Matt Meeker) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.

Full Transcript

00:00:00 Speaker_04
Wondery Plus subscribers can listen to how I built this early and ad-free right now. Join Wondery Plus in the Wondery app or on Apple Podcasts. This episode is brought to you by American Express.

00:00:13 Speaker_04
Business owners like you can understand the importance of having the right tools to pursue your passions. Tools like the American Express Business Platinum Card, the card that works just as hard as you do.

00:00:26 Speaker_04
With its world-class business and travel benefits, you can get more for your business wherever it takes you. The Amex Business Platinum Card offers a flexible spending limit that adapts with your business.

00:00:38 Speaker_04
Plus, access to over $1,000 annually in business and travel value. And with the ability to earn 1.5 times membership reward points on select purchases, you can take your business to the next level.

00:00:52 Speaker_04
See how the Amex Business Platinum Card gives business owners like you the tools and rewards to do more of what you love. Not all purchases will be approved. Enrollment required. Terms and points cap apply.

00:01:06 Speaker_04
Learn more at americanexpress.com slash Amex business. Are you ready to unleash the power of AI across your business but worry that won't integrate with your existing technology?

00:01:17 Speaker_04
The path from gen AI pilots to real world deployments is often filled with roadblocks such as barriers to free data flow. But But what if you could deploy AI models anywhere?

00:01:27 Speaker_04
Well, that's the power of IBM Watson X. Whether your data lives in the cloud or on-premises, Watson X can help you deploy AI models across any environment. When your AI works wherever you need it, you can take your business wherever it needs to go.

00:01:43 Speaker_04
Learn more at IBM.com slash Watson X. Audible's best of 2024 picks are here! Discover the year's top audiobooks, podcasts, and originals in all your favorite genres.

00:01:58 Speaker_04
From memoirs and sci-fi to mysteries and thrillers, from romance and well-being to fiction, Audible's carefully curated list in every category is the best way to hear 2024's best of the year in audio entertainment.

00:02:12 Speaker_04
like an almost unbelievably star-studded production of George Orwell's 1984, which both honors and invigorates the terrifying classic. It's one of the best original dramatizations we've ever heard.

00:02:26 Speaker_04
Or check out romance that hits the spot, like Emily Henry's Funny Story. You can also find heartfelt memoirs, like Supreme Court Justice Katonji Brown Jackson's Lovely One, and listen to the year's best fiction, like The Women by Kristen Hanna,

00:02:40 Speaker_04
and Percival Everett's brilliantly subversive James. Right now, I'm listening to Prophet Song by Paul Lynch. Audible, there's more to imagine when you listen. Go to audible.com slash built and discover all the year's best waiting for you.

00:03:04 Speaker_04
You've got a big task ahead of you because, you know, this is a business that you launched at the end of 2011. There was massive rapid growth. You know, you saw it go public.

00:03:18 Speaker_04
I'm sure this is, you know, not fun to be reminded of, but still was and is not profitable.

00:03:24 Speaker_00
So that year, ending March 31st, we burned $194 million. And if we had done that for the next 12 months, that would have been it. We're done. We're gone.

00:03:37 Speaker_00
So the immediate challenge is do everything possible to keep this thing alive and floating and don't die.

00:03:54 Speaker_04
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

00:04:06 Speaker_04
I'm Guy Raz, and on the show today, how a great Dane named Hugo became the inspiration for Bark, a subscription business that sells toys, treats, and even airplane rides for dogs.

00:04:22 Speaker_04
It might surprise you to learn that Americans spend more on their pets than they do on cosmetics and footwear combined. In 2023, we spent almost $150 billion on pets, and that's just in the U.S.

00:04:39 Speaker_04
The opportunity is so big that one company is now offering luxury flights for you and your dog. A standard one-way ticket from New York to LA runs around $6,000. And the seats are going fast. That business is called Bark Air.

00:04:58 Speaker_04
It's part of a larger company called Bark. That brand was co-founded in 2012 by a guy named Matt Meeker. At the time, Matt was frustrated by the lack of dog toys for large dogs—in his case, a Great Dane named Hugo.

00:05:15 Speaker_04
So Bark began as a dog toy subscription box, which eventually morphed into all kinds of dog products—food, treats, furniture, and now chartered flights.

00:05:27 Speaker_04
Before Bark, Matt and a partner launched an idea back in 1999 that was way ahead of its time—a credit card-sized device that could essentially send and receive text messages.

00:05:40 Speaker_04
The business flopped after about 18 months, but it taught Matt an important lesson about what not to do when starting a business—a lesson he would definitely apply when he co-founded his next business called Meetup. and we'll get there.

00:05:54 Speaker_04
But for now, Matt Meeker grew up in the 1970s and 80s in the small town of Mason City, Iowa.

00:06:01 Speaker_04
He spent a few years in the Navy and then studied finance and marketing at the University of Minnesota, where one of his classes made a huge impression on him.

00:06:11 Speaker_00
And I walk into a class that was called Marketing Communications, and the professor was a visiting professor from the London School of Economics. First words out of his mouth, he said, who in here knows what the internet is?

00:06:25 Speaker_00
And he got zero hands out of maybe 35, 40 of us, nothing. And he said, from now on, this class is internet 101. It's not marketing communications. If you don't want to take that class, that's fine, but that's what we'll be doing this quarter.

00:06:40 Speaker_00
And I didn't know what he was saying. I liked him. Just, I liked the person and it was the most eyeopening experience ever. Instantly you knew he, he was talking about something important and big and that the world was about to change.

00:06:56 Speaker_04
And I mean, clearly that was a pivotal experience for you because I guess when you graduated, you wound up applying for a job at a digital ad agency in New York called iTraffic. And that was just probably, I mean, 1997.

00:07:13 Speaker_04
doing that kind of work, right? I mean, you were just at the cusp of a revolution. So there was probably a lot of action there.

00:07:21 Speaker_00
A lot of action. And by the time I got there, they had signed Disney as a client. And it was just booming. It felt like new things got invented in the world every day.

00:07:34 Speaker_00
And we were on the front lines of learning about those and then incorporating them into our work instantly.

00:07:40 Speaker_04
And this was really the sort of the beginning of the dot com But I guess this company that you were with, iTraffic, it got acquired before all that happened and probably got acquired for quite a bit of money.

00:07:54 Speaker_00
We did. We were acquired by agency.com in December of 1999. And it was a great learning for me. This was the first time anyone had talked to me about ownership or equity of the company you work for. And everyone there had equity.

00:08:13 Speaker_00
My piece of that ended up being $30,000. And to me, that was fantastic. Yeah, it was all the money in the world. It was great.

00:08:22 Speaker_04
Yeah, you got a $30,000 payout for just, you know, working there for like, what, two years or something, a little less than two years.

00:08:28 Speaker_01
Yeah.

00:08:29 Speaker_04
So when that happened, you know, you're like, what, 26, 27 at that point, I guess you you start to think about maybe starting your own thing.

00:08:41 Speaker_00
I did. I knew my time was up and I was looking for the next thing to do and I came across this couple who had a bold ambitious idea. at a time where the whole world had big, bold, ambitious ideas. And who was his couple and what was their idea?

00:09:00 Speaker_00
Shimon and Robin Newstein. And they had a concept where what they wanted to do was, it sounds silly today, but they wanted to put mobile devices in everyone's hands and create a text messaging channel that connected everyone in the U.S.

00:09:20 Speaker_00
Actually, the network that we were using to send the messages was the existing paging network. So we were sending text messages through the paging network, very low cost, into these devices that were the size, the form factor of a credit card.

00:09:37 Speaker_00
And the credit card had an LCD screen built into it. Imagine going into your wallet today, taking out your credit card and reading a text message on it. That's what it was.

00:09:47 Speaker_04
Amazing. I mean, now you've got better options. But yeah, I mean, in 2000, that was like, that could be life changing. What happened at that company? Because obviously that device did not come out. And it's, you know, not a story that I've heard of.

00:10:03 Speaker_04
So what happened?

00:10:04 Speaker_00
I believe in starting the company, we made every mistake that you could make in starting a company. And for me, I believe that starts with having access to way too much capital leads to some bad decisions.

00:10:19 Speaker_00
And we had a COO who was a C-level executive at Citibank. And we brought him over. Wow. We brought over the CMO from AT&T to be our CMO. So you guys are paying big salaries. Absolutely. As a startup does.

00:10:38 Speaker_00
So you have very talented people who are bringing, you know, imagine you're running marketing for AT&T one day and the next day you're trying to start something, you're bringing that approach.

00:10:48 Speaker_00
And it meant we spent a lot of days in conference rooms talking about PowerPoints. And when we got stuck on things, We hired consulting firms to help solve those. Yeah. So it was just wonderful people who were not meant for that stage.

00:11:06 Speaker_00
So we took a good idea and didn't didn't do it well. And probably burned the cash. Yes.

00:11:11 Speaker_04
Like more than $10 million. I would guess more like 30. Wow. And it wasn't you or not. I mean, you were, of course, brought on to the team, but you were not the guy who was kind of seeking out the financing. I mean, but you were part of this project.

00:11:26 Speaker_04
And OK, and that fizzles out. And so what I mean, and I guess this is probably this probably takes you through 9-11 in New York City, right? I mean, you were probably in the city at that time.

00:11:38 Speaker_00
I was and for me, I didn't know what to do. So I kept coming into our office and I kept working on this problem and trying to start this company that everyone had given up on. And I'm meeting with Shimon, the founder.

00:11:57 Speaker_00
At the same time, Scott, who is the founder of iTraffic, he was also coming off of a failed startup attempt. And we have a bunch of ideas and more and more we're hanging out, we're walking around the city. Like you said, it's post 9-11.

00:12:14 Speaker_00
One of the most striking things in the city then was people actually cared about each other. Yeah, yeah. And you'd walk down the street and people would say, how are you? And they meant it, they wanted an answer. And it really hit us.

00:12:30 Speaker_00
So we had a collection of things we could do, ideas we could start. But the one we kept coming back to was what ultimately became Meetup.

00:12:41 Speaker_00
And one of the inspirational moments for it was, boy, when all these strangers come together and they actually talk, they really talk and they listen to each other, there's some serious power in that. So this is interesting.

00:12:59 Speaker_04
This is your friend Scott. And Scott Hefferman, I think is his last name? Hefferman, yep. Hefferman, okay. And because you guys come up with this idea after 9-11, like, let's create these sort of a way for people to meet up.

00:13:13 Speaker_04
But did you feel like you must have felt like people weren't meeting up? in real life.

00:13:18 Speaker_00
Much worse today than it was in 2000. For sure, for sure. And then, of course, all the side effects of that, the health effects, the mental health.

00:13:44 Speaker_00
So we we wanted to create a construct that made it safe for people to come back together and have healthier communities and be closer to their neighbors.

00:13:53 Speaker_04
And how would they be organized? Like what like how it was it was it wasn't going to be a dating service. Right. It was going to be like just gather. But I'm assuming around shared interests. Around shared interest. Yes.

00:14:05 Speaker_04
So first of all, how did you find somebody to help you kind of do the tech side of this?

00:14:14 Speaker_00
It was March of 2002. We put an ad on Craigslist. It was very obnoxious saying interviews are next week. We were looking for a co-founder CTO. If you're not here in New York City next week, then you can't be interviewed and that's it.

00:14:31 Speaker_00
Within 24 hours, we had 450 applicants. We chose 60. We did 8 a.m. to 8 p.m. one-hour interviews, Monday through Friday the following weeks, interviewed 60 people. And we came out with our co-founder, Peter Kamali.

00:14:48 Speaker_04
And what about financing? I mean, again, at this time, it wasn't cheap to start an internet company.

00:14:55 Speaker_00
It was not. And Scott and I both felt like we had just learned the lesson that too much capital is a bad thing. And so we swung the pendulum way to the other side and said, how about zero? How about we raise zero dollars?

00:15:12 Speaker_00
But to your point, it's hard to rent an office or hire people or really do much of anything with zero. And you didn't have any cash at the time. Very little, very little.

00:15:23 Speaker_00
So we ended up raising an angel round of $250,000 and largely from Scott's network. So many lessons in that for me as well. First, I asked my parents to invest. They wouldn't do it.

00:15:39 Speaker_00
And so I invested $10,000 for them because I said they would regret it if they didn't do it. But then you get to the end, and I'm sure it's a familiar story for founders. You get a lot of commitment saying, I'm in, I'm in, I'm in.

00:15:53 Speaker_00
But getting that signed document and getting that check is another thing. And so hurting the cats was a challenge. So what we did.

00:16:02 Speaker_00
It was the exact moment where the iPod came out and we sent notes to all of them and we said, hey, Matt's gonna come up and pick up your paperwork and your check.

00:16:15 Speaker_00
If you hand it to him today, he's gonna hand you back an iPod pre-populated with a thousand songs on it. So I went over to the Apple store in Soho, I bought like eight of those. We loaded them up and I traded iPods for checks.

00:16:28 Speaker_04
So you raise the money, the initial money you need. And, you know, with that money, the idea was to start presumably just to start in New York City, right? It's just to see what you could do in the city.

00:16:38 Speaker_00
No, it was everywhere. Oh, wow. Which probably went as well as that sounds like it would go. You've got a computer in New York City making decisions of how things should go in Moscow.

00:16:52 Speaker_00
We started with a couple hundred topics, and then we would tell people, it's 7 p.m. at that Starbucks.

00:17:00 Speaker_04
And how did you get the word—I mean, actually, initially, who did you think, you know, would sort of gather together?

00:17:08 Speaker_00
What were their interests? So the people who were more disenfranchised and in the shadows were the ones who really grasped onto it initially. So it was witches and pagans and vampires and vampire hunters.

00:17:23 Speaker_00
These real fringe groups, and then technology-oriented groups around Python, coding language, things like that.

00:17:31 Speaker_04
I mean, was it hard to get people to kind of trust in it in 2002, 2003? Like, was it just because people were, I think, you know, wary about meeting strangers through the Internet?

00:17:44 Speaker_00
It was very difficult and we would go stalk the local meetups in New York and there was a common behavior. Worldwide what we would see is about half of the people who RSVP'd would actually show up. Right.

00:18:02 Speaker_00
And we would go and we'd sit across the street and sort of watch. And you had this common thing where people would walk by wherever the venue was and sort of slow down and look in the window and keep walking slowly but looking.

00:18:15 Speaker_00
And then they would either go up and they'd circle back and then come in or they'd run. So they had seen what they needed to see and they made their choice. But it was a new activity and they didn't know what to make of it. Yeah.

00:18:29 Speaker_04
But then, I mean, something pretty significant would happen that would help you guys gain traction, which is that in 2003, Howard Dean announced he was going to run for president. He was the governor of Vermont at the time.

00:18:44 Speaker_04
And I mean, this is in the days when politicians were like starting to tap into the power of the Internet. Right. And it seems like pretty early on, I guess some of his people saw the potential in Meetup, right?

00:18:58 Speaker_00
Yeah. In February of 2003, a young guy on our team very boldly called the governor's mansion in Vermont and said, well, I have a proposal for you.

00:19:11 Speaker_00
And that turned into a meeting with Governor Dean and Joe Trippi, his campaign manager, at which they said,

00:19:19 Speaker_00
I intend to run for president and I don't have a lot of money but I can promise you this from now until the day I get out of the race I will end every speech I give with join your local Howard Dean meetup.

00:19:32 Speaker_00
At that point no one knew who Howard Dean was outside of Vermont. He ended up racing to the head of the Democrat

00:19:41 Speaker_00
nomination yeah in 2004 yeah he was a big deal and so by March of of 2003 there was a good-sized venue on the Lower East Side in New York and he showed up and they were opening the windows and there was a huge crowd on the street and about 500 people inside Wow just to hear him speak and

00:20:01 Speaker_00
That was the moment we said, like, we did this. And he knew we did it. We did it together. And that catapulted him to the point where every other campaign, Wesley Clark, John Kerry, all of them. Start using it.

00:20:16 Speaker_00
Came to us and said, can you do for us what you've done for Governor Dean, please?

00:20:20 Speaker_04
And so presumably they weren't paying for it, right? But there was a business model, like you had to pay a membership fee or something to use it or to post.

00:20:29 Speaker_00
We were scrambling for a business model in the early days and so the initial idea for a business model was this will be great for all the businesses.

00:20:39 Speaker_00
What we'll do is we'll direct traffic into these local businesses and they will pay us for sending foot traffic into their business. So, as an example, we sent a group of about 30 people into a Barnes & Noble in Union Square in New York.

00:20:56 Speaker_00
And then our smart plan was to call Barnes & Noble the next day and say, see all those people last night? We can do that every day for you if you just pay us. And we called them and we said that, and they said, that was you, don't ever do it again.

00:21:12 Speaker_00
They weren't ready for it. And so we learned something there, but we really tried everything we could and we were cobbling it together and making a little bit of money. But it took us probably four years to get to the subscription service.

00:21:28 Speaker_04
Um, I guess at a certain point, from what I understand, I mean, it got, you know, it was starting to get, you know, pretty, pretty stable.

00:21:37 Speaker_04
And I guess around 40 to 50 people now on staff, and you left in 2008, you decided that you didn't want to be part of it anymore. Can you kind of explain your thinking around that?

00:21:50 Speaker_04
Because, I mean, you know, it seemed like it was just starting to hit its stride.

00:21:55 Speaker_00
Yeah, it was doing very well. Growing quickly, profitable, supportive investors on board, everything looking very good and 10 million plus active members worldwide every month. Oh wow.

00:22:10 Speaker_00
At that point, I kind of took a look at it and looked at myself and said, if I had said to myself at the beginning, this is where we would get to, would I be happy with it? And I Absolutely. This, this would have been a great outcome right here.

00:22:24 Speaker_00
And the other part was. I was feeling very overwhelmed by the size and the size of the team and thinking 45 people, this is enormous. And I think, oh, wow, they're all depending on us to keep this afloat.

00:22:38 Speaker_00
Um, so it became an overwhelming thought to me and, uh, and I decided to opt out for those reasons. So what did you do? I ran a marathon, spent a summer training for that. I was trying to find what's next and I was struggling with that.

00:22:59 Speaker_00
Sort of looking for that next lightning strike and feeling frustrated by it.

00:23:04 Speaker_04
Yeah. Were you like financially, I'm assuming you hadn't made any money yet, right? Because I mean, Meetup was not, it wasn't acquired, it wasn't sold or anything or had you?

00:23:16 Speaker_00
No, it wasn't acquired or sold. I had taken a little bit of secondary money off the table and had enough to sustain me for a bit.

00:23:25 Speaker_04
And this is going to factor into the next chapter in your life. You adopt a dog.

00:23:29 Speaker_00
Yes. In June of 2010, I adopted Hugo. Right. A little Great Dane. A little Great Dane. No, I think a big Great Dane. How big was Hugo? Well, when I got him, he was 10 pounds. He grew to be 140 pounds. Wow.

00:23:45 Speaker_04
That's a human. Yes. That's not a dog. Yeah. So, all right. So, and having a Great Dane, and did you live in an apartment or presumably live in an apartment in New York, right?

00:23:55 Speaker_00
Yep.

00:23:56 Speaker_04
Sure did. And a great Dane is like a roommate, roommate not paying rent.

00:24:00 Speaker_00
Yes. Took a lot of space and took a lot of food, a lot of medical care.

00:24:06 Speaker_04
Tell me how Hugo kind of starts to affect your life and the way you're thinking about a problem that eventually you want to solve.

00:24:14 Speaker_00
Mainly, I became obsessed with Hugo, and I loved him more and more and more. He was my first child. And so I fell into the mode of, I want to make him happy.

00:24:27 Speaker_00
And there was a local little pet store right around the corner from my apartment, and they would hand me a bully stick and charge me $12 for it. And I'd take that home and give it to him.

00:24:39 Speaker_00
And if I'm honest, Hugo was probably thrilled with that setup, but it wasn't connecting for me. I was just disappointed with the offerings and tried the local pet codes and pet smarts as well. It was all the same.

00:24:55 Speaker_00
And you felt like everything was made for smaller dogs? Absolutely. Even the food, it took us a while to find the right food for him and everything was difficult to find the right thing for a Great Dane.

00:25:09 Speaker_04
And I guess, I mean, how does it kind of lead you to start thinking about, well, maybe there's something I could do about this?

00:25:15 Speaker_00
Well, it took a bit of time and there was another intersection that happened. So in April of 2011, I went to a conference called Summit Series. I had never heard of it before. It was up and coming, but this year they were doing it on a cruise ship.

00:25:34 Speaker_00
And so it was three days at sea. I was cheap, so I bought the cheap ticket, and what that meant was you got paired with a roommate who you didn't know, and that gentleman was Henrik Werdelin, who's my co-founder in Bark.

00:25:50 Speaker_04
Wow, and he was just, he happened to be your roommate there. Okay, keep going.

00:25:54 Speaker_00
And what happened was we had three days at sea getting to know each other and talking about our philosophies. We had both gone through startups in the early 2000s where we raised too much money and flamed out.

00:26:06 Speaker_00
We had a lot of shared experiences and ideas about how do you do this. So after summit we would get together every friday afternoon for beers and talk about possibilities and ideas. And at that time one of the hot startups in new york was birchbox.

00:26:26 Speaker_00
Yes. And so we were looking at that.

00:26:28 Speaker_04
Subscription service.

00:26:29 Speaker_00
Yes subscription service sending samples of different beauty products. And we were looking at that and saying, wow, what if we did that for dogs?

00:26:37 Speaker_00
And we sent samples of food and toys and treats and things that were appropriate for the different size of dog. And Henrik came up with an absolutely terrible name. He's Danish, so we forgive it. But he called it Doggy Baggy, which was just awful.

00:26:59 Speaker_00
We said goodbye for that Friday afternoon and on Saturday morning I woke up to a mocked up designed homepage of a site that he put together overnight and he said I really like this and when I got the visual of it I thought Well, that's interesting.

00:27:18 Speaker_00
And I had my phone. I took that image and I put it as the lock screen on my phone. And nearly everyone I would come across, I'd show them and I'd say, what do you think of this? And they'd usually say, oh, that's cool.

00:27:32 Speaker_00
When it's live, let me know and I'll buy it.

00:27:34 Speaker_04
And there was nothing at that time in 2011, 2012. There was no dog subscription box. There must have been.

00:27:41 Speaker_00
No, not at all. Wow. But nothing had been designed or built. So again, this is an image on my phone with now a Square account attached to it. So I started to carry a Square in my pocket and I'd show people and they'd give me the reaction.

00:27:57 Speaker_00
I'd plug the Square in and I'd say, it's live, swipe your card. And I'd hand the phone to them and their faces would change. They'd be like, oh, oh. So the first person I did it to is a very good friend, and he said, I don't even have a dog.

00:28:13 Speaker_00
And I said, well, Evan, you know people with dogs, buy him a gift. Come on, get out your credit card. And he got out the card and swiped it, and those were the first two we sold.

00:28:23 Speaker_04
when we come back in just a moment, how Matt eventually expands the business beyond dog toys to dog food, dog healthcare, even an airline for dogs, but not cats. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

00:28:43 Speaker_04
Life is busy and full of things that take a long time to do, like sorting through countless emails, putting together office furniture, organizing files. And if you're an employer, you can add hiring to this list.

00:28:56 Speaker_04
But now there's hope, thanks to ZipRecruiter. ZipRecruiter finds qualified candidates fast, and today you can try it for free at ziprecruiter.com. How fast does ZipRecruiter's smart technology start showing your job to qualified candidates?

00:29:13 Speaker_04
Immediately! ZipRecruiter's powerful matching technology works fast to find top talent, so you don't waste time or money. Let ZipRecruiter find top talent for your roles in no time at all.

00:29:26 Speaker_04
See why 4 out of 5 employers who post on ZipRecruiter get a quality candidate within the first day. And if you go to ZipRecruiter.com slash built right now, you can try it for free.

00:29:38 Speaker_04
That's the same price as laughing so hard that your sides hurt or getting a compliment from a random stranger. Again, that's ZipRecruiter.com slash built. ZipRecruiter, the smartest way to hire.

00:29:52 Speaker_04
While most CEOs believe innovation is the lifeblood of the future, few of them feel that their teams excel at innovation, and more than 8 out of 10 innovation projects stall.

00:30:04 Speaker_04
The problem is, once teams move from ideation to product development, there are a lot of factors that slow the innovation process. Things like outdated process management tools, team alignment, and constant updates.

00:30:17 Speaker_04
Take a big step to solving these problems with the Innovation Workspace from Miro. The Innovation Workspace comes loaded with AI-enabled tools to help teams get from idea to output faster.

00:30:30 Speaker_04
Our team in particular loves AI summaries to condense documents, stickies, and overall board content in seconds to produce retrospective summaries, meeting briefs, research notes, and more.

00:30:43 Speaker_04
Whether you work in innovation, product design, engineering, UX, agile, or IT, bring your teams to Miro's revolutionary innovation workspace and be faster from idea to outcome. Go to Miro.com to find out how. That's M-I-R-O dot com.

00:31:02 Speaker_04
As a B2B marketer, you know how noisy the ad space can be. If your message isn't targeted to the right audience, it just disappears. But with LinkedIn ads, you can precisely reach the professionals who are more likely to find your ad relevant.

00:31:19 Speaker_04
Using LinkedIn's targeting capabilities, you can reach professionals by job title, industry, company, and more.

00:31:26 Speaker_04
Now, if you've been listening to this show for a while, you might know that I'm a small business owner myself, and LinkedIn has been a huge asset for my production company. In fact, when I look for new hires, LinkedIn is one of the first places I go.

00:31:40 Speaker_04
Start converting your B2B audience into high-quality leads today. We'll even give you a $100 credit on your next campaign. Go to linkedin.com slash built this to claim your credit. That's linkedin.com slash built this. Terms and conditions apply.

00:31:59 Speaker_04
LinkedIn, the place to be, to be. Hey, welcome back to How I Built This, I'm Guy Raz. So it's 2011, and Matt and his partner Henrik are trying to drum up excitement for their new business idea, a subscription box for dog toys.

00:32:22 Speaker_04
Meanwhile, to pay the bills, Matt's running a startup incubator in New York called, coincidentally, Dogpatch Labs.

00:32:31 Speaker_00
So in a way I got paid to be the co-founder of 20 different startups simultaneously without the headache of sleepless nights or what's gonna happen next week or any of that. E-commerce was hot at that point. It was on fire.

00:32:51 Speaker_00
And so part of the day job was meeting a lot of companies and I'd say a quarter to a third of those were commerce related. And I felt so dumb. I didn't know how those businesses worked.

00:33:04 Speaker_00
I didn't know how to engage in the conversation and to suss out, is there something here? So part of this for me was, I want to educate myself through experience as to what's important. How do these things work?

00:33:20 Speaker_00
So we found our third co-founder at that point.

00:33:23 Speaker_04
And this was a Carly Strife who had worked at Uber to kind of help you guys turn this into so she must have been really encouraged by this idea. Did you?

00:33:33 Speaker_04
And I think this is around the time where you've got a again, I mean, you mentioned Birchbox, which got Dollar Shave Club. And I mean, there's some really interesting new business models starting up.

00:33:43 Speaker_04
Was it easier for you guys to raise initial funding and financing for this?

00:33:51 Speaker_00
We didn't try. You didn't try. No, not at all. Henrik and I together put in $10,000, and kind of that same story of too much money or money at all isn't the type of company we want to build.

00:34:05 Speaker_00
We want to build something for us and something that's profitable. And this isn't going to be a venture-backed thing. It's going to be a business that we build. And the idea was when we need it, we'll start to raise it.

00:34:18 Speaker_00
we thought we would never raise money. That was the hope, that was the plan. And Henrik and I had no intention of leaving our jobs either. It was like, here's Carly, we'll give her a little bit of money and off she goes.

00:34:31 Speaker_04
How did you attract her from, I mean, Uber, man, I mean, to leave Uber in 2012 was, you know, I mean, it turned into a massive company, right? 2012 Uber was still early days, but how did you guys, attract her with a very small salary.

00:34:46 Speaker_04
Presumably, you gave her a big chunk of equity.

00:34:50 Speaker_00
We did, an equal chunk of equity, so a third of the company. And yes, I hope she's not listening, but it was, she was the 13th employee at Uber.

00:35:01 Speaker_00
They had done, had a good start in San Francisco and Travis brought her on and said, we've done this in San Francisco, we've started in New York. And so she was at that time running around, making deals with black car services and- Yeah.

00:35:18 Speaker_00
I think the line we used with her is, do you want to be a cab dispatcher your whole life? But she was very hungry to start her own thing and we made this her thing.

00:35:31 Speaker_04
Yeah. And by the way, I mean, what exactly did you plan to put into the subscription boxes at this point? Like, did you have a plan for how you're, like, how you're going to source them, the stuff inside?

00:35:44 Speaker_00
So, so Carly did the work of what you're doing, asking all the questions of what kind of products do you think and where are you going to get them? I think a reasonable question to ask. Yeah. And we said, those are great questions.

00:35:56 Speaker_00
You should answer them. And she's a force.

00:36:00 Speaker_00
And so as quickly as she asked, she's on a plane in Vegas at a pet show, walking the floor, selling people on this concept and how big it will be and getting them to sell her products that she thought was cool.

00:36:14 Speaker_00
And she put together products from all these different companies, sourced them, had them shipped to my incubator. And then in December, we went in and we packed all those boxes.

00:36:30 Speaker_00
We assembled the boxes into boxes and then we filled them up with the products. And because it was our first one and we're doing it by hand, we're writing holiday notes on the lids of every box on the inside.

00:36:43 Speaker_00
We got almost all the way through where Henrik said, I have a question, is holiday spelled with one L or two? And we said, Henrik, it's 1L. And he said, should I redo all of these? And I was like, no, just leave it.

00:36:57 Speaker_00
Somebody will have a story to tell about that. That was month one. And the first box was shipped in December of 2011. Got it.

00:37:08 Speaker_04
And these are to the initial like 50 subscribers friends that you signed up?

00:37:12 Speaker_00
Yeah, we sent 78 boxes, I believe.

00:37:16 Speaker_04
So I guess my I mean, my question is, like, with so little money, right? I mean, eventually, you would not be able to survive, you would have to bring in more money, if you're going to go to, you know, if the idea was to really scale this thing.

00:37:30 Speaker_04
And even before you scaled, I mean, you would have to buy get inventory and you would have to ship this stuff out. And what was the what was the subscription fee every month? How much did it cost?

00:37:41 Speaker_00
We started at $25 a month. Got it. Okay. And then we, we heard from people that that's too much. And our reaction to that was, it doesn't cost too much. You just don't like love your dog enough for this product.

00:37:57 Speaker_00
But one of the things I had learned from Meetup was about generating cash flow. I had a cash flow generation trick up my sleeve, offering a long-term discount for prepayment.

00:38:11 Speaker_00
So saying if you subscribe now for six months or a year and you pay it up front, It's not $25, but it's 20 or it's 18.

00:38:20 Speaker_00
So today I would collect $200 from you that I owe you back in product over the next 12 months, but now I have $200 of cash that's going to fund this month's inventory.

00:38:30 Speaker_04
Yeah. And so you could front load the cash and then presumably negotiate with the companies where you buy the products from for a discounted prices on their products.

00:38:42 Speaker_00
That's right.

00:38:43 Speaker_04
Yeah. So this launches in at the end of 2011 and starting with your friends. Right. And but you launch at a fortuitous time because of Groupon.

00:38:57 Speaker_04
I think Groupon really kind of supercharged your early growth because you are presumably offering a cut rate price to sign up.

00:39:07 Speaker_00
They were very popular to the point where, as we got into 2013, we were calling it, we needed to get off the Groupon crack. We were just... Because it was probably losing money on those subscriptions. Probably, yes.

00:39:22 Speaker_00
I mean, we had a very good deal with them. But if I remember right, we were selling three month subscriptions for $45, so $15 a month. But you probably have a $20 cost of goods in every box. Yeah, probably just generated tons and tons of subscribers.

00:39:41 Speaker_00
It did. I mean, tons and tons is relative, I guess, but that first year we thought we were huge where we we ended the year with about 15,000 subscribers.

00:39:51 Speaker_04
And how did you keep them? I mean, what what kind of tactics did you use after those three months ended to retain some of those or many of those subscribers?

00:40:00 Speaker_00
Well, certainly auto-renewing subscription is part of that. But you're trying to be very responsive. We're very curious. We send out a product to you. We want to hear from you. Did you love it? Did you hate it? If you didn't love it, tell us why.

00:40:18 Speaker_00
We'll make it right. So I remember the first four months that we were alive, we had no churn. Not one subscriber left. Now, not a whole lot of subscribers there. Out of over a hundred, no one left.

00:40:33 Speaker_00
I remember the first one leaving was someone that I knew and I called him and I said, whatever it is, we'll make it right. I'm not falling off of this 100% retention rate. Come on, let's do it.

00:40:44 Speaker_00
A lot of that idea, though, of caring deeply that somebody paid for something and they expect something for it. And if you miss the mark, make it right. Make them make it unforgettable for them where they they just can't leave it.

00:41:00 Speaker_00
It becomes hard to do that when you get much larger.

00:41:03 Speaker_04
At what point did you feel like or did it was it clear that you had to raise money like a year into it?

00:41:12 Speaker_00
Again, I don't know that it was clear and it wasn't the plan. In May of 2012, Mike Hirschland, who had started Dogpatch Labs, and Mike and I obviously worked closely while I was there, and he reached out and said, I'm starting this new fund.

00:41:30 Speaker_00
Can I invest in this thing? Can I lead around for you? But that came with the string for me of, if I invest, you have to jump in full time and be the CEO and run this thing. And that wasn't even something I had considered before then.

00:41:48 Speaker_04
That was a difficult choice for me. All right. So what did that mean? I mean, tell me sort of more specifically about what you raised and what that meant.

00:42:00 Speaker_00
We raised $1.5 million. I think it meant you come to that fork in the road of if you're taking venture capital on, you're now deciding to build a different kind of business in a different way. Yeah.

00:42:16 Speaker_00
And Henrik and I, at least, we knew it was a fork in the road and we were wary of taking it. We were also, I'd say, somewhat inspired by the traction in those first eight months saying, something like this doesn't come along very often. Yeah.

00:42:31 Speaker_00
It doesn't happen all the time. So when it happens, do you have a responsibility to take on that capital and supercharge it before someone else does?

00:42:41 Speaker_04
One of the things I read at the time, this is around 2013, you had said was, and I'm assuming this is sort of in reaction to raising capital, because now the ambitions grow and the scale of this thing grows.

00:42:56 Speaker_04
You said, you know, we're the new generation of pet brands. Like we want to be a $5 billion company. You know, PetSmart, Petco, they don't speak to our needs and the needs of millions of dog owners. So there was a lot of ambition behind this.

00:43:14 Speaker_04
I mean, you were clearly, you know, kind of publicly saying, you know, sort of planting a flag and saying, this is what we're going to be.

00:43:22 Speaker_00
There, there was after that turn and mentally I had to make a turn, but I certainly didn't want to start something because I knew what comes with starting a new company. I mean that for me, it becomes the center of your world.

00:43:36 Speaker_00
It's, it's your life and often at the expense of many other things.

00:43:42 Speaker_04
Obviously couldn't do that other job. That was one thing.

00:43:44 Speaker_00
Exactly. Mentally, I do very well when I focus on one thing. I'm not great at giving a little bit of myself to this and this and this. And so anything that sort of fell outside of Bark or BarkBox at the time and dogs Really didn't get my attention.

00:44:04 Speaker_00
And so those things suffer. Um, I was, I was married and my, my marriage suffered and ultimately failed because of it. Um, and I didn't know that would be an outcome, but it doesn't surprise me either.

00:44:19 Speaker_04
You were just, just head down working 18 hour days.

00:44:26 Speaker_00
It's not about the heads down, I'm at the office, at the desk necessarily 18 hours a day, but my head is in it 24 hours a day. My interests are aligned to it.

00:44:36 Speaker_00
You ask me to go to dinner with friends on a Saturday night and it's a bother for me because there's something I wanna crank on, even if I'm just sitting in my home, I become consumed by it. Probably unhealthy.

00:44:52 Speaker_04
Yeah, but that's, I mean, that's part of the deal. Yeah, it is.

00:44:57 Speaker_04
I mean, this is a question that you would have been asked today if you were starting this business today, but I wonder back then if anyone ever said, you know, the challenge with this kind of business is that it's easily replicable.

00:45:12 Speaker_04
The only thing that you're doing here is just curating products and there's risk, there's inherent risk to that kind of business.

00:45:21 Speaker_00
True. But we kind of hit the market at just the right time, where when we started, there were 38 million households in the US with a dog. And today, that's 65 million. Wow. In just a decade. A little bit more than a decade. That's incredible.

00:45:38 Speaker_00
We caught a wave, and we were very lucky to catch that wave. We also caught another wave where it was early 2013, Facebook advertising became a thing. Instagram started to become a thing.

00:45:53 Speaker_04
But of course, that would also attract competitors, right? And competitors started to pop up almost within a year of you guys launching.

00:46:02 Speaker_00
They did. Competitors would pop up and they would look exactly like us. And that's where we would stop being worried about them.

00:46:10 Speaker_00
We'd say if they lack creativity so much that they have to copy us pixel for pixel, that's not a competitor we need to worry about. And we would just, we would lean on them. They're usually copying the whole playbook.

00:46:23 Speaker_00
So taking to Google search or Facebook advertising and it's easy enough to just lean on them and outspend them. If you're bigger, we'll bleed you over time. And that happened time after time after time.

00:46:38 Speaker_04
The other question I have about this time period, right, 2013, I have to mention that especially your investors were like, well, you know, you're calling a bark box now, but really you have to think about what else you're going to do.

00:46:53 Speaker_04
And, you know, you're going to want to serve all kinds of pets, not just dogs.

00:47:00 Speaker_00
We were very clear from the beginning, only dogs. Only dogs. I hear almost everyone say the dog is my child. I don't hear a lot of people say the cat is my child. That's true.

00:47:12 Speaker_00
So let's go deep on the thing that we're good at instead of branching out further into the pet department. We had customers who would contact us early days and say, what about for cats?

00:47:24 Speaker_00
And we'd say, order the bark box for your dog, take all the stuff out, give the box to the cat, ta-da, there's your product.

00:47:32 Speaker_04
And so what were the things that would stress you out or keep you up at night? I mean, you're growing and acquiring more users. What were some of the things that worried you?

00:47:45 Speaker_00
Well, we made mistakes. We started a service in 2013 called Bark Care, which was an in-home vet service in New York. And people loved it. Dogs loved it. Everyone was loving it.

00:48:00 Speaker_00
But it would have taken us a tremendous amount of capital to do it and scale it the way that it needed to be done. This was like an on-call vet that would come to your house.

00:48:10 Speaker_01
Yeah.

00:48:11 Speaker_00
So we had vets on staff. You'd make an appointment and the appointment happened in your home. Wow. And it was magical, but we couldn't make it work financially with the resources we had. So we we shut it down.

00:48:26 Speaker_04
And what about conflicts? Did you guys I mean, are you just personality wise? Were you so well matched or did you did you have disagreements about, I don't know, initiatives or the direction that you wanted to head in?

00:48:40 Speaker_00
We're very well matched. Carly and Henrik are two of my best friends in the world to this day. And when there are disagreements, when there were, it was usually between two of us.

00:48:53 Speaker_00
And so the two of us would be complaining to the third one who would be taking on board that information and trying to guide us back closer together. And it was never the same two. It just sort of kept rotating around the triangle.

00:49:08 Speaker_00
What we were trying to do was build a company where we could come in every day and be around a lot of people that we just wanted to hang with. We genuinely liked everyone.

00:49:18 Speaker_00
And if someone made their way into that, if we made a mistake and hired someone that we didn't like, we got rid of them pretty quick. It's like, you just don't fit. I'm sorry. Nothing personal, but you just don't fit. All right.

00:49:29 Speaker_04
So the first kind of five years, What I'm wondering is, in that time period, with that really rapid growth, because I think by 2016, you're doing like $100 million in revenue, not yet profitable, from what I understand.

00:49:44 Speaker_04
You must have started to field some acquisition offers or some interest in potentially acquiring the brand. We did. Yes, a few.

00:49:52 Speaker_00
And you just outright were not interested in having those conversations yet? We had the conversations and we walked away from a couple, but we took them seriously. We just couldn't get there.

00:50:06 Speaker_00
We're trying at that point to, you take on the new capital, we invested the new capital in the way we said we would. It was successful and we get into 2018 and it was a thing that Henrik and I

00:50:21 Speaker_00
Forgot from the beginning we never looked at the market data or the market sizing and said let's go here if we had we would have never chosen toys and When we started to look at a market is when we started to make decisions for the wrong reasons What were some of the decisions you start to make?

00:50:41 Speaker_00
We started to talk to investors in mid 2018 about another round, and the questions were always about food. To make dog food. To make a product in food.

00:50:52 Speaker_00
We didn't really know what it was, but we were starting to sell the idea that investors wanted us to sell them. The toy industry is relatively small and everyone starts to point us to, well, food's really big.

00:51:07 Speaker_00
You should get into those bigger categories because you have this great brand and it connects to people. And we were just saying back to them what we thought they wanted to hear. And not surprising that that fundraising round didn't turn out well.

00:51:23 Speaker_00
What it felt like we were becoming we didn't we didn't like the feel of it. So we I Definitely freaked out my board and our investors But walked away from the fundraising around and said forget it in 2018 Yeah, we'll just we'll generate our own cash.

00:51:41 Speaker_04
We'll be our own company and they were scared and and and presumably scared because I'm I'm pretty sure your growth was slowing I mean at this point

00:51:52 Speaker_04
your user acquisition was going down and at the same time I have to mention that your board and investors wanted you to diversify, right?

00:52:01 Speaker_04
Because you were a subscription service and I think just the year before you did start to sell at retail, like start to sell toys at Target.

00:52:11 Speaker_00
Yep, that's right, 2017. And they did want us to diversify, but it wasn't leading to the best outcomes. And boy, we were really living hand-to-mouth there from mid-2018 through early 2020. When you say hand-to-mouth, what do you mean?

00:52:32 Speaker_00
We were we were running out of cash and That model that I talked about early on of how we can generate cash to pay for the inventory today if you're not growing It it catches up to you and works in reverse and eats away at your cash.

00:52:46 Speaker_00
So for about two years We just ran steady. We grew enough to maintain but our cash was very flat and

00:52:56 Speaker_04
Would you call that a much more stressful period than the actual first five years when you were really just a scrappy startup?

00:53:05 Speaker_00
Definitely more stressful. And I was probably shouldering the stress for our board and our investors where I would say they were downright freaked out.

00:53:17 Speaker_00
Personally, I'm more comfortable with very little cash on hand than with a lot, so it didn't bother me a bit. I feel like I can find my way through that, but I was taking on the stress of everyone else.

00:53:37 Speaker_04
First of all, the food idea, you abandoned it, but then you must have come back to it because you do have a food vertical today. I think it's called Bark Eats, right? Exactly.

00:53:49 Speaker_00
We've gone in and out and in and out of food. The idea, again, maybe a misfortune of timing, but

00:53:57 Speaker_00
We went right before the pandemic, we launched a food thing saying, food is food, but what is the service layer that you can apply to it that makes it special?

00:54:07 Speaker_00
And so we had this concept of bringing back the milkman in the US and we deliver your food to your home. And I think we started that in January, February of 2020.

00:54:18 Speaker_00
And we found out during the pandemic, people don't really like someone coming to their door and coming in for a conversation about their dog. So it kind of shot the whole theory right there. But we've continued to try to navigate it.

00:54:33 Speaker_00
We continue to this day. And there's a concept just on the horizon for food that I think we're all pretty excited about. It's very different.

00:54:43 Speaker_04
All right. So you so let's talk about the pandemic for a moment. I mean, you this is actually going to be a boom time for you because there was a At that time, there was a spike in the number of people.

00:54:57 Speaker_04
There was a massive demand for dogs during the pandemic, and there was a shortage. People couldn't get, they couldn't adopt dogs. And I imagine that you must have seen some kind of uptick at that time.

00:55:09 Speaker_00
We did. It was that and now you're home with your dog all day and they need to be entertained because they're bothering you. You're trying to work. But it wasn't that certain. We were scared. Again, we were going month to month on our cash.

00:55:24 Speaker_00
I remember in March of 2020, having conversations with investors and our banks and saying, well, we'll see, we'll see what retention looks like on April 1st. And then all of a sudden customer acquisition is just off to the races, just booming.

00:55:40 Speaker_00
So we accelerated very fast through 2020 and 21.

00:55:47 Speaker_04
You, I think, at the end of 2020 stepped down as CEO, a couple things were going on, you know, first of all, imagine it was you just went through this two year period of extreme stress, right of just like cash crunch.

00:56:01 Speaker_04
Tell me about about that decision.

00:56:03 Speaker_00
Well, yeah. Actually, the decision came almost a year before I did it. So I'd had a couple of conversations with our board saying, I think I need to step down. And they'd say, oh, that's a good idea. We should talk about that at the next meeting.

00:56:19 Speaker_00
And then it would get punted to the next one and the next. Eventually, I said to them, we've got to take this seriously. I really mean it. But the rationale for me was twofold.

00:56:30 Speaker_00
It was Hugo was getting old, and I knew his time was limited, and I didn't feel I'd want to be around the company when he passed.

00:56:40 Speaker_00
Then we also had ambitions of someday being a public company, and I had an idea that I didn't want to be a public company CEO. Fast forward to September of 2020, and Manish steps in as the new CEO of Bark. This is Manish Juneja?

00:56:59 Speaker_04
Yes. And he was a former, I guess, Amazon executive. So he comes in as CEO. Yep.

00:57:05 Speaker_00
Yep. Yep. He came over from Amazon. Big dog person. Loved. And a very good guy that I think we put into a difficult spot. You're saying to someone, take on a CEO role. Take it on in the middle of a pandemic.

00:57:23 Speaker_00
You'll live in Seattle, but you'll commute to New York. That's fun. You won't get the opportunity to meet most of the team or engage with most of them, but take responsibility for our culture.

00:57:34 Speaker_00
And by the way, we just signed up to do this thing called a SPAC and go public. So now you're going to be a public company CEO. Congrats.

00:57:43 Speaker_04
When we come back in just a moment, Matt talks about Bark's latest initiative, an airline where dogs get to roam free. Stay with us. I'm Guy Raz and you're listening to How I Built This. This podcast is brought to you by Squarespace.

00:58:05 Speaker_04
Squarespace is the all-in-one website platform for entrepreneurs to stand out and succeed online.

00:58:13 Speaker_04
Squarespace can help any business owner craft a strong web presence and sell anything from products to content to time, all in one place, all on your terms. With Squarespace Blueprint, you can build a complete

00:58:27 Speaker_04
a completely personalized website optimized for every device, with powerful SEO tools that help you grow the way you want.

00:58:36 Speaker_04
Squarespace makes checkout seamless for your customers, accepting credit cards, PayPal, and Apple Pay, and in eligible countries, Afterpay and Clearpay.

00:58:46 Speaker_04
And you can easily manage your clients and invoices, from vetting leads to receiving payments, in one streamlined, customizable workflow. So check out squarespace.com for a free trial.

00:58:59 Speaker_04
And when you're ready to launch, go to squarespace.com slash built to save 10% off your first purchase of a website or domain. What does the future hold for business? Ask nine experts and you'll get ten answers. Inflation's up or it's down.

00:59:15 Speaker_04
Some days you wish someone would just invent a crystal ball. Until then, over 40,000 businesses have future-proofed their business with NetSuite by Oracle, the number one cloud ERP

00:59:27 Speaker_04
bringing accounting, financial management, inventory, HR into one fluid platform. With one unified business management suite, there's one source of truth giving you the visibility and control you need to make quick decisions.

00:59:41 Speaker_04
With real-time insights and forecasting, you're peering into the future with actionable data. And when you're closing the books in days, not weeks, you're spending less time looking backwards and more time on what's next.

00:59:53 Speaker_04
Tons and tons of brands and businesses that we featured on this show depend on NetSuite by Oracle.

00:59:59 Speaker_04
Whether your company is earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities.

01:00:08 Speaker_04
Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com slash built. The guide is free to you at netsuite.com slash built netsuite.com slash built. Hey, welcome back to How I Built This. I'm Guy Raz.

01:00:30 Speaker_04
So it's 2021, and Matt's temporarily stepped away from the CEO job at Bark. But he's still getting besieged with inquiries about taking the company public. Not in the usual way, but through a SPAC.

01:00:45 Speaker_04
Essentially, a way to take Bark public in a faster, compressed time frame without as much oversight.

01:00:52 Speaker_00
I was getting calls left and right. You called the SPAC craze. Everyone was coming at me saying, we want to merge with you and our SPAC. And I kept pushing away saying, this is a fad. This is a fad. Yeah.

01:01:06 Speaker_00
And I asked around for someone who could teach me about it and got introduced to a guy named John Ledecky. And John was introduced to me as the godfather of SPACs. And John gave a lot of advice and he knew the subject matter quite well.

01:01:23 Speaker_00
And then shortly after, John formed a SPAC and said, now I have a SPAC, and I think we should merge, and you should do it quickly, and here's why. And John's theory, which turned out to be right, he's usually right about most things.

01:01:38 Speaker_00
He said, Chewy stock is at an all-time high. The pet category is on fire. And what that means is Chewy's the only public pet company That means January 1st, there's going to be a line of these people signing up for SPACs.

01:01:55 Speaker_00
You don't want to be the eighth company, you want to be the first one. So you have access to the best quality capital out there, which means we got to go now, we got to go fast. That was mid November. And we went fast.

01:02:08 Speaker_00
We did a two day virtual roadshow in mid December of 2020. Yeah, we went out to raise 100 million through that pipe process. We had an interest of nearly 500 million. So we ended up raising 200 from that in addition to the SPAC funds.

01:02:28 Speaker_00
He was absolutely right. The market was very hot and the third, fourth, fifth, sixth didn't have nearly the same success that we did.

01:02:36 Speaker_04
You stepped away for about, I think about a year and a half and came back as CEO in early 2022. Tell me the thinking behind it. I mean, when you had left, did you think it was temporary or did you think that it was for good?

01:02:54 Speaker_00
I thought it was for good. We brought in Manish. I moved to Florida with my wife, followed her for her job. And I thought that was that. And then in December, late December, December 28th of 2021, Hugo passed away.

01:03:11 Speaker_00
And my feeling was the opposite of what I expected, which was more, this company is his. It's his legacy. I can't entrust that to someone else, regardless of how I felt about them. I felt deep responsibility to make sure that that legacy lived on.

01:03:31 Speaker_00
And so I had this strong urge or desire to jump in. And that, I don't want to speak for Manish, but if I'm reading the room, it coincided with Manish's probably feeling very burnt out.

01:03:48 Speaker_00
And he's a very positive, energetic person who was just feeling worn out. So I think we caught each other at just the right moment.

01:03:57 Speaker_04
All right, so you come back and you've got a big task ahead of you because, you know, this is a business that you launched at the end of 2011. There was massive rapid growth, you know, you saw it go public.

01:04:12 Speaker_04
And, you know, I'm sure this is, you know, not fun to be reminded of, but still was and is not profitable. And so what did that mean? I mean, were you did you feel like I'm assuming you felt a charge to kind of get get it to that place?

01:04:29 Speaker_00
More than a charge, our fiscal year ends March 31st. I came back January 11th. So that year ending March 31st, we burned $194 million. And if we had done that for the next 12 months, that would have been it. We're done. We're gone.

01:04:48 Speaker_00
So the immediate challenge is don't die. Just do everything possible to keep this thing alive and floating.

01:04:57 Speaker_00
And looked at every angle to do that and got the unit economics in shape, got the supply chain fixed, brought on really great talent, brought on a fantastically talented CFO, brought discipline to the business, right-sized the team.

01:05:13 Speaker_00
There are a lot of those things that are difficult in the moment, they're not fun in the moment, but it was just survival mode.

01:05:22 Speaker_00
And we have really turned that around and gotten ourselves into profitability and into cash flow generation, and now that's starting to compound.

01:05:31 Speaker_04
So, tell me about, you know, where you see opportunities, right? It's a different marketplace. It's harder to acquire users today. Instagram and social media is just harder. I mean, a lot of people say it's just not worth it.

01:05:47 Speaker_04
You spend more than you actually get in return. I mean, what is sort of, give me a sort of sense of the playbook. I mean, is it expanding product offerings?

01:05:56 Speaker_04
Is it trying to get into a bunch of different spaces and seeing what works and what might not work?

01:06:03 Speaker_00
I think it's returning back to who we are and what we're good at. One of the things that we're great at and we have big advantage in is toys.

01:06:13 Speaker_00
It gets poo-pooed by a lot of people because, well, that's only a $3.5 billion industry, and you already own 10% of it. OK, but we don't own 90% of it. So I understand, relative to food, it's 1 10th the size.

01:06:31 Speaker_00
But this is one thing that we're very good at. And there are a lot of places that we don't show up, and a lot of different types of products that we can create and we can invent. You have your own in-house design team.

01:06:43 Speaker_00
We have our own in-house design team. We have a very strong supply chain. We're about as close to being vertically integrated on the toy side as you can be without being vertically integrated. You don't own your factory, for example.

01:06:58 Speaker_00
We don't, but we're getting closer. So we're inching in that direction. We need to show up where the customers are as well. So one way we're growing very rapidly right now is Amazon. People love their Amazon Prime.

01:07:13 Speaker_00
So let's become a great product company and put our products where the people are.

01:07:19 Speaker_04
One of the things that you guys have do, and I think, I imagine this is not a huge, part of your business, but it certainly has generated a lot of news stories is you are working with some charter airlines to offer flights for humans and their dogs.

01:07:35 Speaker_04
It's really hard to bring dogs on airlines now they're really cracking down most of most airlines just don't allow certainly big dogs don't allow them.

01:07:44 Speaker_04
On their couple of smaller companies like JetSuite X and here in the Bay Area, they operate here and you can fly with your dog on those flights. So you are doing a version of this, right? You're basically working with charter companies to like.

01:07:57 Speaker_04
fly between New York and London, like long haul flights.

01:08:01 Speaker_00
Yeah. And this is a classic huge problem for people with dogs and especially those with larger dogs, which has a special place in my heart, obviously.

01:08:11 Speaker_00
But we're going every other week between New York and Los Angeles, every other week between New York and, I'll say London, but we mix Paris in there too. Those tickets are $6,000 to $8,000 one way. And we're sold out in September.

01:08:29 Speaker_00
We were sold out in August. So we're not flying enough at those prices. But the other thing that I'm obsessive about right now is how do you take a $6,000 ticket and turn it into a $600 ticket and really, really solve this problem?

01:08:46 Speaker_04
Yeah. And, and so the flights you're offering, you literally can have your dog like out of a cage, like next to you in the seat, right?

01:08:55 Speaker_00
In the seat on the floor at your feet. Um, but they usually wander around and say hello to everyone else. Um, and they, and there's so many touches to this experience. It's the dogs are served meals.

01:09:09 Speaker_00
Um, the dogs get their drinks first, then the humans, the dogs are, Our pilots come back and say, come on, bring your dog up front. I'll put them in the captain's chair and we'll take some photos. So mid-flight, the dogs are up there flying the plane.

01:09:26 Speaker_00
Everything is built around them and their comfort. And how many flights are you doing a week now?

01:09:33 Speaker_04
Two. Two a week. How, I mean, how do you, how much time do you, do you give a new initiative? Like, um, you know, Bark, someone's like, let's do BarkAir. And everyone's like, cool, love that idea.

01:09:44 Speaker_04
Obviously, I'm sure you did some research before, but, um, in your mind, like how, how much time before you pull the plug on something new? Like six months, a year, two years?

01:09:53 Speaker_00
I think it depends. There are a lot of factors in that. It's the, the capital being burned, the consumer reaction, your belief that you have. you have line of sight to something that works and can be meaningful. BarkAir right now, customers love it.

01:10:12 Speaker_00
We have ideas of how it expands. We have line of sight to how do we get to that $600 ticket. We have very clear line of sight to doing that, I'd say, in the next year. So that's one where the good idea is panning out better than I could have ever hoped.

01:10:31 Speaker_04
So, I mean, is getting to — I mean, you mentioned, you know, your revenue is public, right? So I think your revenue is about a half a billion dollars a year, which is a nice, healthy revenue.

01:10:42 Speaker_04
You're much higher than your market cap, so you have reason to be optimistic. But do you have a timeline in mind of when you hit equilibrium, when you hit profitability? This year? This year.

01:10:56 Speaker_00
Yeah, we've turned in those profitable quarters. And our fiscal year 22, when I stepped in, we lost $57 million. The next year, it was $31. Last year, it was $11. This year, we should make $4 or $5 million. Wow. and up from there.

01:11:13 Speaker_00
And what I say to people now is I intend to die in the saddle. Truly it goes back to Hugo and that responsibility and the legacy. But I say that knowing that I'm a month away from having a baby boy. A human child. A human child, yes. Yeah.

01:11:35 Speaker_00
Maybe that becomes my obsession. And, you know, if you'd asked me if I'm going to be in the pet industry in 2010, I would have thought you were crazy. But but right now my intention is this is my life's work.

01:11:48 Speaker_04
Matt, when you think about where you are and what you know, I think you've done pretty well from from some of the businesses you've been involved with.

01:11:56 Speaker_04
How much of where you are now and what you're running and what happened in your journey do you attribute to to the work you put in and how much you think has to do with luck and timing and good fortune.

01:12:09 Speaker_00
I definitely work hard at it and always have, but some of this, I think it goes back to when we were talking about 2018 and not raising that money and there wasn't a clear idea of how do we get this accelerating again and to profitability.

01:12:27 Speaker_00
It was about hanging on and we hung on 18 months there and then the pandemic came and your fortunes changed. The world changed around you and we got lucky. We're in the right place at the right time in 2011 with the right product.

01:12:45 Speaker_00
We didn't do some market study. So sometimes it's just grinding away until the world turns in your favor and working hard through it and making smart sensible decisions along the way.

01:12:59 Speaker_04
That's Matt Meeker, co-founder and CEO of Bark. By the way, just getting back to your thing about cats for a sec, do you just not like them? I mean, do you not like cats?

01:13:11 Speaker_00
Eh, I'm okay, I'm okay. Eh, whatever.

01:13:13 Speaker_04
Just lay it on the line. I mean, come on. I mean, it sounds like you hate cats.

01:13:18 Speaker_00
I don't hate cats. I won't go that far, but... You deeply dislike them? Eh.

01:13:24 Speaker_04
Cats are amazing, amazing animals. I would encourage you to start the cat company. Go for it. There is nothing like watching a kitten chase a laser pointer.

01:13:34 Speaker_04
Like there is nothing, not a single animal on the planet comes close to the entertainment value of a cat chasing a laser pointer. It's just un-freaking-believable. I'll give you that. You're missing a huge opportunity.

01:13:48 Speaker_04
There's a lot of custom laser pointers you could put in those boxes. 12 months of laser pointers.

01:13:53 Speaker_00
I love it.

01:13:55 Speaker_04
Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And of course, it's free.

01:14:04 Speaker_04
And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at Guy Raz.com. This episode was produced by Devin Schwartz with music composed by Ramtine Arablui.

01:14:17 Speaker_04
It was edited by Neva Grant with research assistance from Olivia Rockman. Our engineers were Patrick Murray and Maggie Luthar.

01:14:25 Speaker_04
Our production staff also includes Alex Chung, Carla Estevez, JC Howard, Sam Paulson, Chris Messini, Kerry Thompson, John Isabella, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

01:14:44 Speaker_04
If you like how I built this, you can listen early and ad free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music.

01:14:56 Speaker_04
Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey.

01:15:04 Speaker_03
Three, two, one, liftoff! With an entirely new way to play.

01:15:10 Speaker_04
Wondery Kids and the number one kids' podcast, Wow in the World, are making STEM toys fun like never before. Tinker with slime-bubbling volcanoes, build rockets that fart, and uncover dynamite dinosaurs.

01:15:25 Speaker_03
For the first time ever, be wowed with exclusive, engaging companion audio that comes with each STEM toy.

01:15:31 Speaker_03
And as you play, Guy Raz and I, co-hosts of Wow in the World, bring you and your family bonker balls facts about the natural world, like how crystals and rainbows are related.

01:15:41 Speaker_04
And each STEM toy includes a bonus science tool and three months of Wondery Plus free.

01:15:47 Speaker_03
So the whole family can listen to their favorite podcasts like Wow in the World early and ad free. Shop Wow in the World toy collection today at Amazon.com slash Wondery Kids. That's Amazon.com slash W-O-N-D-E-R-Y Kids.