My startup story from founding to exit
I’m excited to announce that my company, GoFetch, has been acquired (Future Pet Animal Health Inc.). I have been wanting to write about this experience for the past month, but needed some time to reflect on my feelings. Thankfully, the tears were very short-lived; they ended right after I realized how much I have learned and how big of an achievement GoFetch, and the work of its team, actually was. Now, with a clear head, I can share what I have learned and why the past three plus years of my life have been an absolute blast.
Boarding Delta 5003 in New York on a Friday night in March, I left Deep Singh, our Sr. Vice President of Operations (formally a Sr. Director at Ola, the leading ridesharing app in India) in the city for the weekend and headed to Vegas for a “mental retreat”. Him and I had been scrunched together in the back row of a Uber SUVs for the past five days of our VC meetings but now, when I landed in Vegas, I was alone. I called our major investor to tell him not enough firms were interested in a Canadian, fast-following, online marketplace and the direction of the business would need to change. This was only weeks after a competitor, Wag!, raised $300 million from SoftBank Vision Fund, a $100 billion fund that wants to be the largest shareholder in 100 technology companies around the world.
At this point, the company achieved some great things:
- Product-Market-Fit across four categories: Dog Walking, Dog Sitting, Dog Boarding, and Doggy Daycare;
- Recruited and retained a world-class team of software engineers, product folks, businesses operators, and senior leadership;
- Built and fostered great culture and value attribution as we scaled;
- Launched in every major Canadian city;
- Achieved a $1 million run rate – our revenue was primarily coming from Toronto and Vancouver;
- Revenues were growing on average 30% every month;
- Raised $3.5 million in funding from Angels, micro-VCs, and Family Offices;
We also covered a lot of the components that make great peer-to-peer online marketplaces. We were a “market-maker” in the sense that we were tapping into a market that has virtually never used an app to find a dog walker or sitter, similar to the way in which companies like Uber and Airbnb accessed previously untapped markets in ridesharing and vacation rentals. I could literally write pages and pages about online marketplaces (and I have), but you can read more on that here.
As I entered the Wynn Resort in Vegas, I didn’t even realize my shirt was inside-out until bumping into an investor’s wife. After a brief “hi and bye”, I spent the rest of the weekend in my hotel room (with the occasional trip to the bar and pool) plotting options for the future of the business.
Venture markets are very analytical, and even more analytical if you are a single-country, fast-follower, online marketplace with two Unicorns on your completive map (Rover.com and Wag!) with a 25 year old CEO wanting to do a Series A.
All major Venture Capital firms would meet with me because funding flows to the pet-technology space have been red hot. However, the “venture math” never made sense. Remember, most venture firms are looking for their investment to return the amount of their entire fund in usually 5-7 years. Don’t get me wrong, I realize every firm has their own economics, but for simplicity, I am being generic.
At this point, bets have already been made on Rover.com, DogVacay.com, and Wag!. Rover.com then purchased DogVacay in an all stock deal… yikes! Not to mention the competitive dynamics that have started to play out in other verticals such as ridesharing, food delivery, home services, vacation rentals, etc…
A lot of people have asked me about these competitive dynamics, mentioning that there can me many online marketplace winners in a single vertical. I agree to a certain point. In reality, the nuance of TAM (total addressable market) in online marketplaces plays a huge role. In most heavily competitive verticals, let’s use ridesharing as an example, you will usually see at most only two global players and then one single county player. And, although GoFetch is growing fast across Canada, there are only 36 million people in the country. This makes it tough to see how big the business can be and how big it actually needs to scale to before becoming profitable. The reason single country players such as Lyft or Ola survive is simply the TAM – plus product market fit and venture dollars – India has 1.3 billion people; and it was a great move for Lyft to go deep / play in the “middle of the field” in the US, owning 60 cities with pink moustaches.
In sum, we had a few directions (perhaps better know as choices):
- Raise a venture-backed A-Round at horrendous terms… I rather start a new business.
- Scale back and run a lifestyle business… I rather start a new business.
- Pivot… I rather start a new business.
- Get acquired… game on 😉
I was lucky that all my shareholders and board had different “funding economics” associated with ROI and IRR metrics as oppose to typical venture funds.
By the end of the week, I had Non-Disclosure Agreements signed with every player in our space, including a strategic partner we had at the time, Future Pet – a partner that happened to share an investor in common with GoFetch.
I even engaged a Private Equity firm to run a deal hunt.
It was on the flight home from Vegas where I started reflecting on what we, as a team and company, have accomplished and what the future will hold for the company my co-founder and I started nearly four years ago. I have since learned that the ability to reflect is one of the most powerful attributes anyone can have, no matter what their craft. I have also found that building a company has a very special way of teaching oneself about life. If you’re still reading, I think you’ll find the below interesting – apologies if you don’t:
- Life is hard. And I think when you accept that and embrace the unknown future and pain that will come your way, the more you will learn and compound. Tears dry and the pain takes over if you don’t embrace the future and reflect on the past.
- Never neglect family, friends, boyfriends/girlfriends. Tell them you love them, very often. Achieve a small group of very good friends rather than a massive network of acquaintances. Make fostering close relationships with those you love a daily activity – for new and old friends. Random acts of kindness have an ROI but don’t do them for an ROI, obviously.
- Know who is in your winner’s circle and who is not. Believe it or not, there will be people that don’t want you to win. Cut ties with all those that give negative vibes. Be careful of those that clap when you lose. Negative people are very bad – don’t even respond.
- Remember that people and companies die. Have fun when you are with them.
- Pick the right problem to solve. Don’t think about doing a startup if you don’t like solving problems. Ask yourself if you’re the right person to solve the problem you’re thinking of solving – don’t force the solution if you’re not.
- I truly think real happiness is when you can burn all your material things (aside life necessities) and be equally as happy as when you had them all. For this reason, money can’t buy happiness. However, money buys freedom, and freedom is a major key. Having no money is very stressful. Having enough money so you don’t stress about paying rent or making payroll is a very nice place to be. Keep your company’s and your personal burn rate very low and think very hard about what profitability looks like and takes – both in business and life. Spending money can seem fun, but making money is the actual fun part.
- Authenticity is a must. You’ll find that being authentic and real is much more easy than being a promoter or having a cocky persona. Trust me, I have taken deep dives in both. Don’t be a CEO / founder that’s blinded by the glow. When being authentic, you will find that people will treat you differently – see how that makes you feel. You eventually don’t care what people think. Reality wins everyday of the week.
- The proof is in the revenue. Not the press headline.
- Don’t categorize people. Treat everyone with kindness. Don’t be complex with your relationships and social circles. Rather, be unique.
- Bottle service is always a bad idea. So are complicated cap tables and term sheets. Stay away from both.
- A note on goals: They really and truly matter. Figure out what you want, what it takes to get there, and go take your shot. Understand that life is not fair, but it does reward people that take their shot. Achieving your goals takes relentless focus and veracious prioritization. It also takes being well-connected. But in my opinion networking is sleazy and a massive waste of time. If you put out good work, the phone will ring. It also takes ego – however, be sure you keep the ego in check, as it’s a double-sided sword. Share your goals with everyone. For instance, if you want to bring an NBA team to Vancouver before you turn 60 (hint hint), let people know! Ask for what you want – don’t skimp. I think every ambitious person is a stones throw away from greatness – at some-point, it just becomes a function of time. In business, have alignment with your goals. If your board, employees, and shareholders don’t have what I call “goal alignment”, you most likely will not achieve your goals. Also, people that comment on your goals that have no skin in the game are usually just talking out of their ass. It’s harder to find people that actually care than you think. Watch out for those that drive from the back seat or coach from the side lines.
- Executive coaching sounds lame, but it works. So does meditating. And getting a good nights sleep. Drugs and alcohol do not.
- Mental health is a real thing that does not show on the surface of folks in startup land. It should get more attention. I think the reason it doesn’t is because most people in life don’t need to build a product that attracts millions of users, raise millions of dollars, hire hundreds of people, deal with shareholders and employees, and have 10 times return on investor money within 5-7 years. Because most folks don’t ever deal with this, they can’t relate. I am unofficially involved in a mental health non-profit that can change a persons life for $2,500 a year. I made a donation to change someone’s life for the next 20 years… perhaps there should be something like this in venture capital? Perhaps it’s a startup waiting to launch?
- Things don’t really progress without having hard, brutal conversations.
- Be empathetic but understand the right or wrong hire can send your business in either a very positive or negative direction. This is the same with relationships and personal trajectory.
- Don’t be a talker. Just be a doer. People tend to want to overcomplicate things, and talk for weeks about the direction of things that don’t even matter. Don’t be one of those people. Understand the root of a certain decision and be analytical. Create an efficient system and put in the work. I think it is funny when people talk about “working smart” instead of “working hard”. I believe doing both, simultaneously, are vital. Especially if you’re in startup land.
- If you stick your neck out, get ready to be criticized.
GoFetch eventually got acquired by Future Pet Animal Health. And I am super stoked about it. The co-founders, Mike Sherman and Adam Little, are really (like, really) smart people. They are doing something sufficiently different in the pet-technology space and will be leveraging our technology, customers, brand, and expertise to bring their business to the next level. The GoFetch brand will continue to grow across Canada, and one of my largest, former shareholders now sits on their board. I get to Advise them and help where I can. I will also be helping some other startups, something I am very lucky to have the opportunity to do through Cross Venture Group (thanks to the folks that chipped in for proprietary deal flow – stay scrappy!).
I’m currently taking sometime to think about the next journey hence my cheesy LinkedIn title.
PS – I want to say thank you to everyone that worked for GoFetch (you folks are family and I miss you), all my investors for their capital, expertise, and belief, my lawyers and accountants (personal and corporate), mum, dad, and brother, and all strategic partners that helped us along the way.