By Nancy Dahlberg
No, don’t take pictures of that, this is what not to do, Aaron Hirschhorn told the entrepreneurs in the first row taking a photo of his pitch deck from the early days of DogVacay. “This is terrible, it’s just bad.”
For Hirschhorn, founder and former CEO of dog-sitting marketplace DogVacay, much of his presentation at Refresh Miami’s monthly speaker event was like that – looking at mistakes made (like that wordy investor deck) and how the startup powered through them to success (and now you, dear reader, can learn from them). Hirschhorn exited DogVacay and is starting again.
Today, the serial entrepreneur is working on Startup No. 3 and is an angel investor and startup advisor. Luckily for the South Florida ecosystem, Hirschhorn and his family have recently made the Miami area their home.
To be sure, growing DogVacay from 0 to $30 million of revenue in the first three years was an exceptional feat for this company that didn’t even have a system to take credit cards when it launched its marketplace in 2012. The first couple of years, we were “just scrambling – you are always on your heels,” recalled Hirschhorn, in the Refresh Miami talk Tuesday at WeWork’s Security Building sponsored by eMerge Americas.
Once DogVacay had customers, lots of them including repeats, everything changed. The VCs were suddenly interested. DogVacay raised $43 million with big-name backers such as Benchmark Capital and Andreessen Horowitz.
But the phases his startup went through after that were not unlike many startup stories, including reaching “the oh shit moment” when growth slows and you miss projections. “It feels like game over. You have no idea what to do next.'
What Hirschhorn had to do was rebuild his management team, replacing passion and puppy love with experienced operators. “We needed hard work, accountability, great people and metrics,” he said.
It worked. DogVacay quickly grew to $100 million in revenue. Along the way, it came up with several innovations in the emerging marketplace space, including offering insurance.
Then it was time for some soul searching.
The market leader was Rover with more funding; DogVacay was a clear second. And in the No. 3 spot was Wag, which was growing faster than DogVacay and could soon be nipping at its heels.
Did Hirschhorn really want to invest another six or seven years to take the company to the next level? “It felt like the right time to sell,” said Hirschhorn. After talking to several potential suiters including Chewy, Petsmart, Petco and Wag, DogVacay combined with Rover in 2017. “It was an extremely successful integration…. It is essentially a billion dollar [pet services] company on the path to an IPO.”
Now what? Hirschhorn recalled the feeling the morning after the deal was done. Seven years of stress gone in an instant – check – but also his identity.
He and his wife, Karine, moved their family from LA to Miami Beach about a year ago. For Karine, it was a homecoming -- she is from Miami. He got involved in the local angel community through Miami Angels.
DogVacay wasn’t Hirschhorn’s first startup. In 2009, he co-founded a wellness marketplace for booking personal trainers and massages online, Better You. It failed: wrong time, pre-mobile, and wrong team, without tech and marketing expertise. Real talk: “Also, we were dramatically underfunded, the product sucked and we weren’t focused.”
His wife urged him onto startup No. 2 and put a dog-sitting business on Yelp to test the concept in 2010. The couple essentially turned their house into a kennel and she was a DogVacay co-founder.
Some advice he gave to the audience:
- Timing matters. He started his first business at the wrong time. “We started DogVacay at the right time. I believe timing is one of the most important things determining the success of a company.”
- Do less stuff better. “The best strategy is saying here are a thousand things we could do but here are 997 that we will not. … When I see entrepreneurs doing too many things, it’s a huge red flag.”
- Team is critical. “The founding team has to have a reason to be there. I watched a lot of dogs in my house the first year, 130 something, we watched a lot of dogs. This is a problem that was true to us -- I had a reason to solve this problem.”
- Focus on execution and understand your critical metrics.
- Don’t work with a--holes, it just sucks the life out of you.
Now as an angel investor, the fund-raising advice he gives to startups is to be strategic and have a controlled process. For his DogVacay Series A, he identified three groups of potential investors – The A-listers, Bs and Cs. Talk to the Cs first, take note of their questions and feedback and modify your deck before pitching the As and Bs. Then go for As before the Bs because then the Bs will feel a sense of urgency, he said.
Be careful about what you share and what you share the next time. Be sure you show momentum in every conversation, he said.
Don’t be obsessed with seed round pricing and terms, particularly for your first company. “You need money. Get the money in the bank and do your thing.”
Now Hirschhorn is building startup No. 3, a business he said involves regenerative medicine, or stem cells, for pets. “I thought, why is nobody doing this? I have figured out a way to make this work. The business will exist in a year or two whether or not I am doing it. I’ve gotta be the one.”
This time, he is able to hire an A-team from the onset and has hired a team to run the day to day so he can focus solely on business development and fund-raising, a luxury didn’t have with startups No. 1 and 2. He plans to continue angel investing in Miami, and he is an adviser and board member to several startups.
About his new company: “It is the right place, the right time, I think I am the right person, I have a lot of credibility, and we are doing something really big that I am really passionate about. I’m excited to go on this new journey.”
Follow Nancy Dahlberg on Twitter @ndahlberg and email her at firstname.lastname@example.org
Photos by Jorge Castillo