The Aha! Moment That Transformed My Business Model

Tim Vogel is an Entrepreneurs’ Organization (EO) member in South Florida where he serves as Chair for the chapter’s EO Accelerator program, which empowers entrepreneurs with the tools, community and accountability necessary to aggressively grow and master their businesses. Tim is founder and CEO of Scenthound, a membership-based dog grooming and wellness company. We asked Tim how his experience in a business accelerator program helped pinpoint the unique business model that is disrupting the pet care industry. Here’s what he shared:

Tell us about your entrepreneurial journey.

After we got married, my wife, Jessica, wanted a dog. Oddly, I was against the idea because of the extra responsibility. Long story short: We got a puppy, and I fell instantly in love with our new family member. Over the years, I learned a lot about the pet industry―and grooming in particular. So having a dog ultimately inspired us to start a business in the pet space.

How did you learn about the business accelerator program?

At the time, I owned a mobile pet grooming business and had just opened our first brick-and-mortar grooming salon. I knew about EO from a previous employer who was a member. While struggling to solve issues around scaling the business, I reached out to the local EO chapter and learned about the Accelerator program. I was excited to find a community of motivated entrepreneurs who understood the challenges I was facing.

What is a Learning Day, and which day provided you with the most significant benefit?

The Accelerator program has four quarterly Learning Days focused on the business fundamentals of strategy, execution, people and cash. In the morning, your coach explains the topic and offers insights, and then since everyone in the room is an entrepreneur trying to grow their company, a lively discussion ensues. In the afternoon, speakers from successful businesses share practical knowledge, and you ask questions and try to absorb as much as possible to benefit your company.

Strategy Day changed my business! I remember the moment very clearly. The lesson had to do with your biggest barrier being the path to success. If you can solve for that bottleneck, then you can solve your scaling problem. My most significant barrier by far was finding and keeping qualified groomers. My Aha! moment was realizing that we needed to get rid of groomers.

This led to an additional realization: Only two of the top ten dog breeds owned in the US need haircuts, but all dogs need preventive care―and the entire grooming industry focuses on haircuts rather than health. From there, I changed the business model to focus on making preventive care fast, easy and affordable. Especially for the 80 percent of dogs that don’t need haircuts.

That insight transformed the business model. I changed the name from Pet Groomerie to Scenthound―SCENT stands for skin, coat, ears, nails and teeth. We replaced breed-standard haircuts with a one-length overall “puppy cut.” This simplified training and execution so we could scale.

The second massive improvement came after Cash Day when I implemented Labor Efficiency Ratio to increase gross margin with the same labor dollar output, which added 15 percent to the bottom line.

What was the overall impact of your business accelerator participation?

I completely changed the company’s brand position, service offering―even the name. I also learned to measure key performance indicators better, lead more effectively and hire based on core values.

During four years in Accelerator, we achieved 185 percent growth in revenue. I spent the first two years trying to scale my former business model and grew roughly 25 percent each year. After my year three Aha! moment, I changed the business to be both wellness-focused and membership-based. We doubled the business in the last two years.

What’s next for your company?

In 2018, we built the franchise foundation and are now actively selling franchises. Because we made the service so process-oriented, it’s much more scalable. As the only wellness-focused grooming business in the country, we decided franchising was the path to rapid growth. Our goal is to sell 10 franchises this year, 30 next year and 60 the following.

As Accelerator program chair, you now help startup entrepreneurs learn to grow and scale. What’s it like being on the other side?

I love the energy of the Accelerator program. It’s done much more than just help me learn the systems and processes to create a scalable business. That was how it started, but once I graduated from the program and became an EO member and Accelerator coach, I found an amazing opportunity to become a better leader, coach and mentor. As program chair, I am learning how to be a leader of leaders. Eight years after initially joining, Accelerator is still teaching valuable skills that benefit me in more ways than I would ever have expected. Who knew?

Lyft Kicks Off Highly-Anticipated ‘Year of the IPO’

Lyft’s initial public offering on Thursday is the first of a series of highly-anticipated debuts by tech companies in public markets. And so far, Lyft is proving that it’s the right time to make the leap.

“With what we’re seeing with the excitement and feedback from the investment community, this IPO market could end up being historic,” said Barrett Daniels, national IPO services leader at Deloitte & Touche.

Lyft, which will begin trading on Nasdaq on Friday, was one of several big tech companies expected to go public this year. In the IPO, the company priced its shares at $72, at the high range of what it had initially anticipated.

“This IPO is a ‘watershed’ event for the tech sector as well as the ridesharing industry that in our opinion has become one of the most transformational growth sectors of the U.S. consumer market over the past five years,” analysts at Wedbush Securities wrote in a note following Lyft’s IPO.

Meanwhile, Pinterest, which filed its public paperwork with the Securities and Exchange Commission on March 22, is expected to begin trading on the New York Stock Exchange in April. Lyft rival Uber, also expected to go public in April on the NYSE after filing confidentially, could have a valuation of up to $120 billion and become one of the largest IPOs in history. Postmates, Zoom, Slack, and Airbnb, also are anticipating debut later this year.

Investors’ appetites are strong for these “decacorns,” or companies with valuations larger than $10 billion, Daniels said. Lyft’s IPO was oversubscribed a week before it went public, signaling the heavy demand for its shares that helped send its market value to $24.3 billion, higher than the $23 billion valuation it had initially expected. Meanwhile, Airbnb was privately valued at more than $30 billion during the last two years, while Pinterest was most recently valued at $12 billion.

“These are not your Boomer-generation IPOs,” said Duncan Davidson, general partner at venture firm Bullpen Capital. “We killed the small IPO after 2000.”

That’s because for years, the venture capital market has bet big on newer ventures, allowing companies to stay private and well-funded for longer periods of time. But generally, investors expect a return on their investment. So this year, those heavily venture-capital-backed companies are finally making the big move, in an effort to take advantage of the current strong market conditions.

The excitement for Lyft will likely spill over into Uber’s expected initial public offering, Davidson said. But that doesn’t mean that all tech IPOs will get the same reception because some companies don’t have a clear path to profitability.

“It won’t be … the tide that lifts all boats,” Davidson said. “The market will still be selective.”

What excites investors most about these large tech companies, most of which are unprofitable, is revenue growth, according to Deloitte’s Daniels. Lyft’s revenue in 2018 doubled to $2.2 billion while it lost $911 million, 32% more than the year before.

“A lot of these startups made a conscious decision early in their lives to grow and grow quickly,” Daniels said. “It would appear they’re going to be rewarded for it.”

Daniels says most companies that have been considering IPOs are speeding up the process to ensure they debut this year. Though a couple of companies may opt for a direct listing, a process that foregoes underwriters, he expects this to be the year of the IPO.

“It feels like it’s going to be real exciting here for the next couple of months” and continuing into the year, Daniels said. “It’s going to be a historic year.”