How Kyle Goguen Started An Online Pet Supply Business
Hello! Who are you and what business did you start?
At 22, I threw away my 2 engineering degrees and started my own e-commerce business. Five years later, and I couldn’t be happier with my decision.
My name is Kyle and I’m the founder and CEO of Pawstruck.com. If you have a moment, I’d like to share with you the story of how and why I created my business.
I’ve been a passionate dog owner my entire life. My first dog, Mali, and I were inseparable growing up, and I now share that same bond with my current dog, Tyson.
When Tyson was a puppy, I visited a local pet store to find him some dog treats. My plan was to find him some tasty rewards to incentivize his progress in his potty training. I needed all the help I could get because my carpet was taking a beating! Tyson didn’t seem too picky when it came to the dog treats, but I took a closer look at the various options.
After making my way down the aisle, I noticed a trend. Everything I picked up was made with artificial ingredients. Words on the ingredient lists seemed like gibberish because of all of the complex scientific jargon (hydrogenated starch hydrolysate, ascorbyl palmitate, glucosamine hydrochloride…huh???).
So I started searching the Internet in the hopes of finding dog treats and dog chews that were healthy, all-natural, and reasonably priced. I wanted simple ingredients with no artificial additives or preservatives. After some serious research, I came to the conclusion that what I was looking for wasn’t available. My options were to spend an unreasonable amount of money on the handful of natural dog treats that were being sold or resort to giving Tyson treats of subpar quality.
Through that frustration came my “aha” moment and Pawstruck.com was born. I decided to leave my career in engineering for something I was passionate about—supplying other responsible pet owners high quality and reasonably priced dog products!
My dream has since become a reality. I have been lucky enough to surround myself with a fantastic team who share the same exact goals and philosophies that led me to this business in the first place. With the help of our dogs, we are able to produce and sell a wide variety of healthy dog products—all of which we proudly stand behind. In 2018, we were named #87 on the Inc 500—a list which ranks the fastest growing companies in the United States. This year we should continue that same trajectory and surpass 8 figures in revenue.
What's your backstory and how did you come up with the idea?
I'll always be an entrepreneur at heart. I founded my first eBay store at 16 when local restaurants refused to hire me—apparently having zero work experience isn't a desirable attribute.
eBay was my marketplace of choice for the next two years. From electronics to designer women's clothing, I sold anything and everything I could get my hands on.
One thing I have learned to do is give up micro-managing. As a leader, giving up control is hiring capable people to handle tasks that you need not do.
I was forced to do business under my dad’s name because of my age (shhh, don't tell PayPal...). I spent most of the profits purchasing inventory, which filled my parents' garage. Every other cent went straight into my savings account.
At 18, I headed off to USC—majoring in Industrial & Systems Engineering with an emphasis in Information Systems & Operations Management (quite a mouthful, right?). I put my eBay business on hold in an attempt to focus on my studies. That didn’t last long as tuition quickly did a number on my savings. Rather than jump back into eBay, I scooped up a few part-time jobs—one on campus as a Video Technician and the rest as a College Ambassador for brands like PlayStation, Monster Energy, and Ubisoft.
I rode that wave until I finished my Bachelor's and eventually my Master's. My Master's was in a much easier to pronounce field, Engineering Management. With my degrees in hand, I made an illogical decision (in the eyes of many) and chose to avoid a career as an engineer—the thing I had been training to do for over 5.5 years. Instead, I returned to my passion, eCommerce entrepreneurship and Pawstruck.com was born. Yes, a career in engineering could have been fulfilling both financially and emotionally, but I came to the conclusion it wasn’t for me. Like many of you out there, I’m an entrepreneur at heart and didn’t like the idea of being chained to a desk working a monotonous 9-5 job.
Take us through the process of designing, prototyping, and manufacturing your first product.
The majority of our products are made from natural animal body parts--things like cow ears, pig ears, hooves, etc. For that reason, our manufacturing and design process looks very different than most product-based businesses. Our very first products were our 100% natural bully sticks for dogs. Bully Sticks are made from a beef muscle. We scoured North America for the very best bulls ordering samples from as many suppliers as possible.
We initially worked with middlemen that were willing to provide us product at a lower quantity since we weren’t ready for full container loads. As the business grew, we eventually found that South American had the highest quality free-range, and grass-fed beef available and started importing directly and the rest is history! We started by selling directly through our website and then quickly expanded to other channels like Amazon. Here's an example of our Amazon bully sticks.
Describe the process of launching the business.
Launching Pawstruck was a mess! There were so many mistakes and hiccups. One in particular that comes to mind was with our original brand name.
We had the domain name purchased, the website developed, and were preparing for our launch when we got a cease and desist letter from a Korean pet company. Their letter accused us of infringing on their trademark.
To this day, I completely disagree with the claim, but we decided it wasn’t worth the fight especially since we hadn’t even started selling anything yet. That set forth a crazy two week period of scrambling to come up with a new company and brand name before we launched. After many late night brainstorm sessions, we came up with Pawstruck which is way better than the original.
While I would have preferred a seamless launch, it was those bumps in the road that really taught me what was necessary to launch and run a business.
For any new entrepreneurs, know that perfection is impossible. You’re going to make mistakes and you’re going to need to figure out how to learn from them and bounce back quickly.
We didn’t have an official “launch” of our e-commerce website. It was an anticlimactic moment when we flipped the switch and it was actually by accident. We moved our website to our live server but it was still supposed to be unindexed by Google so nobody could find it. Somehow, we messed it up and the website went live without us knowing.
About a week before we had our first shipment of inventory in our warehouse, we got our first order completely by accident. It was extremely exciting and also terrifying. We had nothing to send her! I ended up going to our local pet store, buying what she ordered at full price, and then mailing it to her. We ended up losing around $20 on that order but it’s one I’ll never forget.
Since launch, what has worked to attract and retain customers?
Over the years, our customer acquisition strategy has changed drastically. Initially, we completed focused on pay-per-click advertising. Since then, we’ve maximized that acquisition outlet and pursued many other avenues to decrease our dependence on one channel and to grow faster. At this point, our biggest growth opportunities are in product development and channel expansion.
What I mean by this is we’ve found the most success in adding new products to our catalog and then also spreading our catalog across new online sales channels like Amazon, eBay, Groupon, Walmart, etc. In 2019, we plan on continuing to expand using the same strategy.
Customer retention is where we shine. With robust automated email marketing flows in place, remarketing ads, quality products, and the industry best customer service, we’re able to get customers back through the doors. We’ve spent the time to calculate exactly when our customers usually run out of product and need more and spent the time to build that out into all of our remarketing strategies, particularly email, and that has greatly improved the performance and rate at which people purchase from us again.
Also, we promote the heck out of our subscribe and save subscription program which is both a convenience to our shoppers and also a huge boost to our average lifetime value of a customer. This program allows customers to automatically receive the same product on an automated schedule. For example, someone can get their dog treats delivered monthly and without having to come back to our website. There are no contracts and updates / cancellation can happen any time.
How are you doing today and what does the future look like?
Today, our team operates out of two facilities--one on the west coast and one in the midwest. We have 17 employees and plan on hiring another 5 before the end of 2019. This year we plan to continue our expansion into other online sale channels and new product lines outside just treats and chews.
Through starting the business, have you learned anything particularly helpful or advantageous?
One thing I have learned to do is give up micro-managing. As a leader, giving up control is hiring capable people to handle tasks that you need not do.
Giving up equity early on can be a big mistake. Finance your business in a different way and be confident in yourself that you'll make your new business a success.
It can be terrifying to someone who's used to complete control, but it’s equally stressful to do everything yourself. Learn to let go and delegate tasks to the right people.
Set up a task management software in place to effectively delegate tasks, work on priorities and get a clear view of each person's tasks, including your own.
What platform/tools do you use for your business?
What have been the most influential books, podcasts, or other resources?
The E-Myth Revisited by Michael E. Gerber. After 3 different people suggested this book to me, I finally gave it a read. It's perfect for new entrepreneurs in any industry and I now recommend it whenever I can. This book contains valuable info for businesses of any size and teaches you to work "on" your business and not "in" it—allowing you to scale from a solopreneur or start-up to a self-sufficient business with opportunities for growth.
As far as ecommerce podcasts, check out the eCommerceFuel Podcast and the EcomCrew Podcast. Both are perfect for ecommerce business owners looking for actionable advice.
Advice for other entrepreneurs who want to get started or are just starting out?
Giving up equity early on can be a big mistake. Finance your business in a different way and be confident in yourself that you'll make your new business a success.
Obviously, this advice varies depending on what type of business you are in and your goals, but for me, I can't overstate how important this takeaway has been.
I was warned that in giving up equity early, years later I would be kicking myself for giving up a portion of my business. I can't speak to the road not taken, but I can say that I learned to be self-sufficient in my business and trust in my strengths.
I learned to hustle and do whatever it takes to make my business work on my own. Now, I encourage that same attitude in all my employees- take ownership, hustle, make it work.
What's next for you?
My goal this year is to grow our team. We already have the processes in place to continue to grow our sales, but we are definitely short staffed! We'll be hiring quite a bit this year.
On top of that, we just made an exciting move and acquired a dog subscription box called The Dapper Dog Box. We'll be looking to learn as much as possible about the subscription box model and scale up subscribers as quickly as we can.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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