BARK: Matt Meeker

0:08 You've got a tr uh uh big task ahead of you because You know, this is a a a business that you launched and at the end of twenty eleven. There was massive, rapid growth. You s you know, you saw it go public. And I'm sure this is you know, not fun to be reminded of, but still was and is not profitable.

0:28 So that year ending March thirty first, we burned A hundred and ninety four million dollars. And If we had done that. For the next twelve months, that would have been it. We're done.

0:40 We're gone. So the immediate challenge is Do everything possible to keep this thing alive and floating and Don't die. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements. They built.

1:10 I'm Guy Raz and on the show today, have a great Dane named Hugo became the inspiration for Bark. A subscription business that sells toys, treats, and even airplane rides. For dogs. It might surprise you to learn that Americans spend more on their pets than they do on cosmetics and footwear combined.

1:34 In twenty twenty three We spent almost$150 billion on pets, and that's just in the US. 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 bucks. And the seats are going fast.

1:59 That business is called Bark Air. It's part of a larger company called Bark. That brand was co-founded in twenty twelve 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. So Bark began as a dog toy subscription box, which eventually morphed into all kinds of dog products. Food treats, furniture.

2:28 And now? Chartered flights. Before Bark, Matt and a partner launched an idea back in 1999 that was way ahead of its time. A credit card size device that could essentially send and receive text messages. The business flopped after about 18 months, but it taught Matt an important lesson about what not to do when starting a business.

2:51 A lesson he would definitely apply when he co-founded his next business called Meetup. And we'll get there. But for now, Matt Meeker grew up in the 1970s and 80s in the small town of Mason City, Iowa. 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. And I walk into a class that was called Marketing Communications and The professor was a visiting professor from the London School of Economics.

3:24 First words out of his mouth, he said, Who in here knows what the internet is? And He got zero hands. out of maybe thirty five, forty of us, nothing. And he said

3:35 From now on, this class is Internet one oh one. 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. And I didn't know what he was saying. I liked him. Just I like the person. And it was the most eye opening experience ever. instantly you knew he w he was talking about something important and big and That the world was about to change.

4:00 And I mean I c clearly that that was a pivotal experience for you because I guess when you graduated You wound up. uh applying for a job at a at a digital ad agency in New York. Um called Eye Traffic. And that was that was just probably I mean Nineteen ninety seven.

4:17 doing that kind of work, right? I mean, you were just at the cusp of a revolution. So I mean it was a there was a pr probably a lot of action there. A lot of action and um By the time I got there they had signed Disney as a client and The it was just Booming.

4:34 It felt like new things got invented in the world every day and we were on the front lines of learning about those and and then Incorporating them into our work instantly. And this was really the sort of the beginning of the dot com Boom, you're uh but I guess This company that you were with, I traffic.

4:52 Uh it got acquired. um before all that happened and and probably got acquired for quite a bit of money. We did. We we were acquired. By Agency dot com.

5:02 And December of nineteen ninety nine. And uh it 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

5:16 Equity. My my piece of that ended up being thirty thousand dollars and To me that was That was fantastic. Yeah. That was all the money in the world. It was great. Yeah.

5:27 You got a thirty thousand dollar payout for just w you know, working there for like what, two years or something? A little less than two years. Yeah. So um when that happened, you know, you're like what, twenty s twenty six, twenty seven at that point. I guess you you start to think about maybe starting your own thing. Uh I I did. I I knew my time was up and I was looking for

5:48 The next thing to do, and I came across um This couple who Had Oh. Bold.

5:56 ambitious idea at at a time where the whole world had big bold ambitious ideas. And and who who was this couple and what was their idea? Shimon and Robin Newstein. And They had a concept where

6:09 What they wanted to do was Uh it sounds silly today, but they wanted to put mobile devices in everyone's hands a and um create a text messaging channel f that connected everyone in the US. Hm.

6:24 Actually the the network that we were using to to send the messages was the existing paging network. So we're sending text messages through the paging network. Very low cost. Into these Devices that were

6:37 the size, the form factor of a credit card. And the credit card had an L C D screen built into it. Imagine going into your wallet today, taking out your credit card and reading a text message on it. Right. That's what it was. Amazing. I mean now you've you've got

6:53 better options. But yeah, I mean in two thousand that was like that could be life changing. Um, w what what happened at that company?'Cause obviously that that that device did not come out uh w and and it's Get out. Not a story that I've heard of. So what happened?

7:08 I believe in starting the company we made every mistake that you could make in starting a company and and for me, I believe that starts with r having access to way too much capital. leads to some bad decisions and We had a COO.

7:26 Who was a C level executive at Citibank. And we brought him over. Well. Uh we brought over the CMO from A T and T to be our CMO. So you guys are paying big salaries. Absolutely. Um as a start off does.

7:42 Right. So you have very talented people who are bringing You know, imagine you're running marketing for A T and T one day and the next day you're trying to start something. You're bringing that approach. Yeah. 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. Uh yeah.

8:05 So it was just who were not meant for that stage. So we took a good idea and didn't Didn't do it well. And probably burnt the cache.

8:15 Yes. Like more than ten million dollars. Um I would guess more like thirty. Wow. And um it wasn't you were not I mean, you were of course brought on to the team, but

8:25 you were not the guy who was kind of s seeking out the financing, I mean, but you were part of this project and okay, and that fizzles out. And so what I mean and I guess this is probably This probably takes you through nine eleven in New York City, right? I mean you were probably In the city at that time. I I was and uh For me.

8:45 I didn't know what to do. Uh 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. Yeah. Uh and I'm meeting with Shimon the the founder.

9:01 At the same time Scott, who is the founder of uh eye traffic. He was also coming off of a Failed startup attempt and And we have

9:11 a bunch of ideas and we're uh more and more we're hanging out. We're walking around the city. Uh, like you said, it's post nine eleven. One of the most striking things in the city then was People. Actually cared about each other. Yeah.

9:25 Yeah. You'd walk down the street and people would say, How are you? and they meant it. They wanted an answer. Uh Uh and

9:33 It really hit us, so we we had a collection of Things we could do, ideas we could start. Uh but the one we kept coming back to was was what ultimately became meetup and One of the inspirational moments for it was Boy, when when all these strangers come together

9:53 And they talk and they actually talk. They really talk and they listen to each other. There's some serious power in that. So so this is interesting. This is your friend Scott, and Scott Hefferman, I think is his last name. Heferman, yep. Okay.

10:08 I b because you guys come up with this idea after nine eleven, like let's create these sort of A way for people to meet up. Um But did you feel like uh you must have felt like people weren't meeting up. In real life.

10:23 Uh and and there's a really great book from a guy called uh Robert Putnam. Bowling Alone, yeah. And and all the trends there sh showed that The American from the fifties. Much worse today than it was in two thousand. For sure, for sure. Uh and then of course all the side effects of that, the health effects, the mental health. So we we wanted to create a construct that made it safe for people to come back together and and have healthier communities and be closer to their neighbors. And and how would they be organized? Like why like how

10:59 It was was it wasn't gonna be a dating service, right? It was gonna be like just gather, but I'm assuming around shared interests. Around shared interest, yes. So first of all, how did you find somebody to help you kind of Do the do the the the tech side of this. It was March of two thousand two we put an ad on

11:22 Craig's list. It was very obnoxious saying interviews are next week. Uh we were looking for a co founder, CTO. If you're not here in New York City next week, then you're you can't be interviewed and that's it. Uh within twenty four hours we had four hundred and fifty applicants. We chose sixty. We did eight AM to eight PM. in one hour interviews Monday through Friday the following week. So interviewed sixty people. And we came out with with our

11:50 With our co founder, Peter Kamali. And and w what about financing? I mean, at this time uh again, at this time it wasn't cheap just to start an internet company. It was not and Scott and I Both felt like we had just learned the lesson that Too much capital is a bad thing.

12:08 And so we We swung the pendulum way to the other side and said. How about zero? How about we raise zero dollars. Uh but to your point. It's hard to rent an office or hire people or or really do much. If anything was zero. And you didn't have any cash at the time. Very little. Very little. So what we we ended up raising an angel round of two hundred and fifty thousand dollars and largely from Scott's network. Right.

12:35 So many lessons in that for me as well. First I I asked my parents to invest. They wouldn't do it. And so I invested ten thousand dollars for them because I said they would regret it if they didn't do it. But then we you know, you get to the end and I'm sure it's a familiar story for founders of you get a lot of commitments saying, I'm in, I'm in, I'm in.

12:56 But getting that signed document and getting that check. Is another thing. Yeah. And so hurting the cats was a challenge. So what we did It was the exact moment where the iPod came out.

13:10 And We sent notes to all of them and we said Hey, uh Matt's gonna come up and pick up your paperwork and your check. Uh, 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 and so I bought like eight of those. We loaded them up and I traded iPods for checks.

13:32 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. No, it was everywhere. Oh wow. Um

13:45 Which Probably went as well as as that sounds like it would go. Uh you've got a a computer in New York City making decisions of how things should go in Moscow. We started with a couple hundred topics. And then we would tell people

14:00 It's seven PM at that Starbucks. And and how did you get The war I mean In actually initially, who did you think um, you know, would Would sort of

14:11 So the people who were more disenfranchised and in the shadows are were the ones who really grasped onto it initially, so it was witches and pagans and vampires and vampire hunters and Uh these

14:27 Real fringe groups and then technology oriented groups um around Python. Coding language, things like that. I mean w w was it hard to get people to kind of trust in it in two thousand two, two thousand three? Like was it Just'cause people were I think.

14:45 you know, wary about meeting strangers to the internet. It was very difficult and we would We would go stalk the local meetups in New York. And there was Um a common common behavior.

14:59 U worldwide what we would see is about half of the people who are CP would actually show up. Right. 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

15:13 Wherever the venue was, and s sort of slow down and look in the window and keep walking slowly but looking. 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 they made their choice. But It was a new activity and they didn't know what to make of it.

15:32 Yeah. Um but then I I mean something pr pretty significant would happen, uh that would help you guys uh gain traction, which is that In two thousand three Howard announced he was gonna run for

15:45 for president. He was the the governor of Vermont at the time. And and um I mean this is in the days when politicians were like starting to tap into the power of the internet, right? And and it It seems like pretty early on I guess some of his people saw the potential In meetup, right?

16:02 Yeah, in February of two thousand three, a young guy on our team. Yeah. Very boldly called The governor's mansion in Vermont. And said. Well I I have a proposal for you and

16:15 Um that turned into a meeting with Governor Dean and Joe Trippy, his campaign manager. At which they said. Uh I intend to run for president. And I don't have a lot of money.

16:27 But I can promise you this from now until the day I get a out of the race, I will end every speech I give with join your local Howard Dean meetup. Hm. At that point no one knew who Howard Dean was outside of Vermont.

16:40 He ended up racing to the head of the Uh Democrats. Uh nomination. Yeah. In two thousand four, yeah. He was a big deal. And so by March of of two thousand three, there was a 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 five hundred people inside just to hear him speak and

17:05 That was the moment we said like we We did this and he knew We did it. We did it together. And That catapulted him to to the point where

17:15 Every other campaign. Wesley Clark, John Carey, all of them. Start using it. Yeah, well came to us and said, Can you do for us what you've done for Governor Dean, please. 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 or something to use it or to post.

17:31 Yeah. We were scrambling for a business model in the early days. And so The initial idea. For a business model was

17:41 This will be great for all the businesses. What we'll do is we'll direct traffic into These local businesses and and And they will pay us for sending foot traffic into their business. So uh as an example, we set up a group. of about thirty people into a Barnes and Noble in Union Square, New York.

18:00 And then our our smart plan was to call Barnes and Noble the next day and say, see all those people last night? You can 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. Yeah. Uh they they weren't ready for it.

18:17 And so we we learned something there, but we we really tried everything we could and we were cobbling it together and Making a little bit of money, but Uh it took us Probably four years to get to the subscription service. Um

18:32 I I guess at a certain point. Um from what I understand. I mean it got you know was starting to get you know pretty pretty Stable and I guess uh around

18:43 Forty to fifty people. Now on staff. Um and you left in two thousand eight. Um you decided that you didn't wanna be part of it anymore. W can you kind of explain your thinking around that because I mean, you know, it seemed like

18:57 It was just starting to hit hit its stride. Yeah. It was doing very well, growing quickly. Profitable. Supportive investors on board. Everything

19:07 Looking very good. And Ten million plus. active members worldwide every month. Oh wow. At that point I kinda took a look at it. And looked at myself and said

19:19 If I 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. And the other part was I was feeling very overwhelmed by the size and the size of the team.

19:34 And thinking. Forty five people, this is enormous, and I think Oh wow, they're all depending on us to keep this afloat. Um So it it became an overwhelming thought to me and

19:47 Uh and I decided I opt out for those reasons. So what did you do? I ran a marathon. Uh spent spent the summer training for that. I was trying to find what's next and I was struggling with that. Sort of looking for that next lightning strike and

20:06 Feeling frustrated by it. Yeah. W were you like financially were I'm I'm assuming you hadn't made any money yet, right? Because uh I mean. Meetup was not. It wasn't acquired, it wasn't sold or anything, or or had you.

20:20 No, it wasn't acquired or sold. I had taken a little bit of secondary money off the table and and and enough to sustain me for a bit. Um and this is gonna factor into the next chapter in your life, you adopt a dog. Yes. Um June of twenty ten, I adopted Hugo. Right.

20:38 Uh a little great dane. A little grey dane, no, I think a big grey d how how big was Hugo? Well what I got him he was ten pounds. Um he grew to be a hundred and forty pounds. Wow, that's a human. Yes.

20:53 So all right, so y and and having a great day in and did you live in an apartment? Presumably you live in an apartment in New York, right? Yep. Sure did. And a great Dane is like a roommate. Roommate not paying rent. Yes, took a lot of space and took took a lot of food.

21:08 A lot of medical care. Tell me how Hugo kind of starts to uh affect your life and the way you're thinking about a problem that eventually you want to solve. Mainly I I became obsessed with Hugo. And I loved him more and more and more. He He was

21:25 My first child. And And so I I w fell into the mode of I wanna make him happy. And there was a a local little pet store right around the corner from my

21:36 My apartment. And they would hand me a bully stick and charge me twelve dollars for it. Yeah. And I take that home and give it to him and and If I'm honest, Hugo is probably thrilled with that setup.

21:47 But it wasn't connecting for me. I was just disappointed with the offerings. And tried the local pet codesmarts as well. It was all the same.

21:59 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. And I guess Uh I mean, how does it kind of lead you to start thinking about well, maybe there's something I could do about this? Well, it it took a bit of time and and there was

22:22 A another intersection that happened. So in April of Two thousand eleven. I went to a a conference called Summit Series.

22:32 Uh I had never heard of it before. It was up and coming, but this year they were doing it on a cruise ship. And so it's three days at sea. Um I I was cheap, so I bought the cheap ticket. And what that meant was

22:45 You got you got paired with a roommate. Who you didn't know. And and that gentleman was Henrik Wordelen, who's my co founder in Bark. Wow. And and he he was just uh he happened to be your roommate there. Okay, keep going. And what happened was we had Three days at sea.

23:02 getting to know each other and talking about our philosophies. We had both gone through startups in the early two thousands where we raised too much money and flamed out. 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 and talk about possibilities and ideas. Yeah.

23:24 And At that time. Um one of the hot startups in New York was Birchbox. Yes. And so we were looking at the subscription service. 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? And we said

23:42 Samples of food and toys and treats and things that were um appropriate for the different size of dog. And Henrik came up with an absolutely terrible name. He's Danish, so we we forgive it, but Uh he called it doggy baggy.

23:59 Which was Just awful. We we said goodbye for that Friday afternoon and on Saturday morning I woke up to I'm marked up. Designed home page of a site.

24:12 That he p that he put together. That he put together overnight. And he said, I really like this and when he's When I got the visual of it, I thought Well, that's interesting.

24:22 And I had my phone. I took that image and I put it as the lock screen on my phone Uh 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. When it's live, let me know and I'll buy it.

24:38 And there was nothing at that time in 2011, 2012, there was no dog subscription box, or must have been. 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. Hm.

24:55 So I started to carry a square. In my pocket and I'd show people and they give me the reaction, I'd plug the square in and I'd say, It's live, swipe your card. And I'd hint Hand the phone to them. And their faces would change. They'd be like well uh So the first person I did it to is a very good friend.

25:13 And he said. I don't even have a dog. Yeah. Evan, you know people at dogs, buy'em a gift. Come on.

25:21 Get out your credit card. And he got out the card and swiped it, and those were the first two we saw. When we come back in just a moment, how Matt eventually expands the business beyond dog toys to dog food, dog health care, even an airline. For dogs. But not cats.

25:40 Stay with us, I'm Guy Raz, and you're listening to How I Built This. 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. Meanwhile, to pay the bills Matt's running a startup incubator in New York called

26:12 Coincidentally. Dog Patch Labs. So in in a way I got paid to be a little bit more than a little bit. The co founder of twenty different startups simultaneously. Without the headache of

26:24 Sleepless nights or What's gonna happen next week or any any of that. E commerce was hot. At that point. Oh. Ever it was on fire and so part of my

26:37 the the day job was meeting a lot of companies and I I'd say a quarter to a third of those were commerce related. Yeah. And I felt so dumb. I I didn't know how those businesses worked. I didn't know how to engage in the conversation and uh

26:53 To suss out is there something here. So part of this for me was I I wanna educate myself through experience as to What's important, how do these things work? So we we found our third co founder at that point.

27:07 And this was uh Carly Streit who had worked at Uber to kind of help you guys turn this into s so she must have been really encouraged by this idea. Did you Uh and I think this is around the time where you've got a again, I mean you mentioned Birch Bucks, which got Dollar Shave Club and I mean there's some really interesting new business models starting up. Um was it easier for you guys to raise

27:30 Initial. Mm funding and financing for this? We we didn't try. You didn't try. No, not at all. Uh Henrik and I

27:40 Together put in ten thousand dollars and Kinda that same story of Too much money or or money at all. Yeah. Isn't the type of company we want to build. We want to build something for us and something that's profitable and It this isn't going to be a venture back thing. It's gonna be A business that we build.

27:58 And the idea was uh when we need it, we'll start to raise it. We thought we would never raise money. That was the hope. That was the plan. Uh and Henrik and I Had no intention of leaving our jobs. I thought it was like, here's Carly, we'll give her a little bit of money and off she goes. How how did you attract her from I mean Uber

28:18 Man, I mean to leave Uber in twenty twelve was you know I mean it t turned into a massive company, right? Tw twenty twelve Uber was still early days, but uh but how did you guys Attract her with very small salary. Presumably you you you you you gave her a big chunk of equity. We did.

28:35 An equal chunk of Equity. So a third of the company. And and yes, I hope she's not listening, but um It was She was the thirteenth employee at Uber.

28:45 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 started in New York. And so she was at that time running around Making deals with uh Black car services and

29:01 Yeah. I think the line we used with her is Do you want to be a cab dispatcher your whole life? And But she was Very hungry to start her own thing and And we

29:13 Made this her thing. Yeah, and and by the way, I mean w w what exactly d did you plan to to put into the subscription boxes at this point? Like did you have a A plan for how you're like how you're gonna source them? The the stuff inside. Uh so

29:29 So Carly d 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 I think a reasonable question is. Yeah. And we said, Those are great questions, you should answer them and she's a force. Um U and so as quickly as she asked, she's on a plane. In Vegas at a pet show. walking the floor.

29:51 selling people on this concept and how big it will be and getting them to s sell her products that she thought was cool. And sheep. Put together Products from all these different companies.

30:02 Um source them, had them shipped to my Uh my incubator. And And then in December. We we went in and we packed all those boxes. Uh we assemble 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

30:22 Holiday notes in the on the lids of every box on the inside. We got Almost all the way through where Henrik said Uh I have a question. Is holiday spelled with one L or two? And we said it's one L he said. Should I redo all of these and

30:39 Like no, just just leave it. Somebody will have a story to tell about that. That that was month one. And the first box was shipped in December of two thousand eleven. Got it. And these are to the to the initial like fifty subscribers, friends that you signed up. Yeah, we sent uh

30:58 Seventy eight boxes, I believe. 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 gonna go to

31:11 you know, if if the idea was to really Scale this thing. 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? We we started at uh Twenty five dollars a month.

31:29 Got it. Okay. We heard from people that that's too much. And Our reaction to that was it. It doesn't cost too much. You just don't like love your dog enough for this product. But we

31:42 One of the things I had learned from Meetup It was about generating cash flow. I I I had a cash flow generation Trick up my sleeve. Offering a long term discount for prepayment.

31:55 So saying if you subscribe now for six months or a year and you pay it up front. It's not twenty five dollars, but it's twenty, or it's eighteen. So today I would collect Two hundred dollars from you. that I owe you back in product over the next twelve months but now I have two hundred dollars of cash that's going to fund this month's inventory. Yeah.

32:15 And so you could front load the cash, but then and then presumably um negotiate with the the companies where you buy the products from for a discount in Prices on their products. That's right. Yeah. So this launches in at the end of twenty eleven and

32:32 Um starting with your friends, right? And But um you launch at a fortuitous time because of group on. I think group on

32:43 really kind of supercharged your early growth because you are presumably offering a cut rate price to sign up. They were very popular. To the point where um As we got into

32:56 twenty thirteen, we were calling it We needed to get off the group on crack. We were just 'Cause it was probably probably losing money on those those subscriptions. Probably, yes. I mean we had a very good deal with them. But if I remember right, we were selling Three months.

33:12 subscriptions for Forty five dollars. Um so fifteen dollars a month. But you'd probably have a twenty dollar cost of goods in every box. Yeah. Probably just generated tons and tons of subscribers.

33:25 It did. I mean t tons and tons is relative, I guess, but That first year we thought we were huge where we We ended the year with about fifteen thousand subscribers. And how did you keep them? I mean, d uh what what kind of tactic tactics did you use after those three months ended to retain some of those or many of those subscribers? Well, certainly auto renewing subscription is part of that. But

33:48 You you're you're trying to Be very responsive. We're we're very curious. It's we send out a product to you, we want to hear from you. Yeah. Did you love it? Did you hate it? If you didn't love it, tell us why. We'll make it right. So

34:04 I I remember the first four months that we were alive, we had no churn. Not one per not one subscriber left, no not a whole lot of subscribers there, but Um Out of over a hundred, no one left. 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 I'm not falling off of this one hundred percent retention rate. Come on, let's do it. So

34:28 A 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.

34:40 Make them make it unforgettable for them where they they just can't leave it. Um it becomes hard to do that when you Like a year into it? Uh Uh again, I don't know that it was clear.

34:58 And it wasn't the plan. And uh May of two thousand twelve. Mike Hirschland, who had started Dog Patch Labs. And Mike and I obviously worked closely while while I was there.

35:11 And he reached out and said, I'm starting this new fund. 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

35:23 You have to jump in full time and be the CEO and run this thing. And Uh that wasn't even something I had considered. Before then. That was that was a difficult choice for me.

35:35 All right, so what did that mean? I mean how to t tell me sort of more specifically about what you race and and And yeah, and and what that meant. We we raised one point five million dollars. Mm-hmm.

35:48 I I think it meant You're 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. 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

36:07 I'd say somewhat inspired by the traction in those first eight months saying Something like this doesn't come along very often. Yeah. It doesn't happen all the time. So when it happens, uh do you have a responsibility to to take on that capital and And supercharge it before someone else does.

36:25 One of the things that I read at the time, this is uh around twenty thirteen You had said was And and I'm I'm assuming this this is sort of in reaction to raising capital because now the the ambitions grow and the scale the scale this thing grows, you said You know, we're

36:42 the new generation of pet brands. Like we're We want to be a five billion dollar company. You know, pet smart, pet co art, they don't um Speak to our needs and the needs of millions of of dog owners and

36:56 Yeah. So there was a lot of ambition behind this. I mean you you were Clearly, you know, kinda publicly saying you know, sort of planting a flag and and saying this is what we're gonna be. Uh there there was after that turn. And mentally I had to make a turn.

37:11 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. It's it's your life uh and often at the expense of many other things. Um, obviously you couldn't do that other job. That was one thing. Exactly. Mentally I I do very well when I focus

37:33 On one thing. I'm not great at giving a little bit of of myself to this and this and this. And so anything that sort of fell outside of bark or bark box at the time. And dogs. really didn't get my attention. Uh and so those things suffer. Um

37:51 I I was I 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

38:04 Just head down working eighteen hour days. Uh it it's It's not about the heads down I'm at the office at the desk necessarily eighteen hours a day, but my head is in it twenty four hours a day. My interests are aligned to it. Uh you asked me to go to dinner with friends on a Saturday night. And it's a bother for me because there's something I want to I wanna crank on, even if I'm just sitting in in my home.

38:31 I I become Consumed by it. Probably unhealthy. Yeah. But that's I mean, that's part of the deal.

38:38 Yeah, it is. Um so my f my First call, I mean, this is a question that you would have been asked today if you were starting this business today, but I I wonder back then If anyone ever said, you know, the challenge with this kind of business is that it's easily re replicable. There's there the only thing that you you you're doing here is just curating

39:00 products and uh there's risk there's inherent risk to that kind of business. True. But We we kinda hit the the market at just the right time where when we started There were thirty eight million households in the US with a dog, and today that's sixty five million. Wow. And just

39:18 A decade. That's incredible. We caught a wave. And we were very lucky to catch that wave. Yeah.

39:26 Uh we also caught another wave where It was early twenty thirteen. Facebook advertising became a thing. Instagram. Started to become a thing.

39:38 that would also attract competitors, right? And that and competitors start to pop up almost, you know, within a year of you guys launching. They did. Competitors would pop up and they would look exactly like us. And that's where we would stop being worried about them.

39:54 We'd say if we're going to be able to do 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 were just We we would lean on them.

40:05 uh th they're usually copying the whole playbook, 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 w will we'll bleed you over time. And and that happened time after time after time.

40:22 Uh the other question I have about this time period, right, two thousand thirteen. Um I I have to imagine that the especially your investors were like well You know, you're calling it Barkbox now. But really you have to think about what else you're gonna do and

40:37 You know, you're gonna wanna serve all c all kinds of pets, not just dogs. Uh We were we were very clear from the beginning. Only dogs. Only dogs. I uh 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.

40:56 So let's go deep on the thing that we're good at instead of Branching out further into the pet department. Hm. We had customers who would um contact us early days and say, What about for cats? 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. And and and so what were the things that would stress you out or

41:20 Or keep you up at night. I mean you're growing. and acquiring more users. Like w what were the some of the things that worried you? Well. We made mistakes. We started a service in twenty thirteen called Barcare.

41:34 Which was An in home vet service in New York. And People loved it. Dogs loved it. Everyone was loving it.

41:44 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 a a on call vet that would come to your house. Yeah, so we had Vets on staff. You'd make an appointment and uh the appointment happened in your home. Wow.

42:00 And It it was magical. But we couldn't make it work. financially with the resources we had. So we We shut it down.

42:10 And what about conflicts? Did you guys uh I mean are you just personality wise, d were you just so well matched, or did you did you have dis disagreements about I don't know, initiatives or the direction that you wanted to head in. We're very well matched. Um Carly and Henrik are

42:28 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. And And so

42:39 The two of us should be complaining to the third one. who would be taking on board that information and trying to guide us back closer together and And it was never the same too. It just sort of kept rotating around the triangle, so 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. Yeah. Like we we we genuinely liked everyone and if someone made their way into that

43:04 If we made a mistake and hired someone that we didn't like. We got rid of him pretty quick. It's like you just don't fit, I'm sorry. Not nothing personal, but you just don't fit. Alright, so the first kind of five years W what I'm wondering is

43:17 In that time period. with that really rapid growth.'Cause I think by twenty sixteen you're doing like A hundred million dollars in revenue, not yet profitable, from what I understand. You must have started to field some acquisition offers or some interest in potentially acquiring the brand. We did.

43:35 Yes. A few. And and you just outright Or not interested in in having those conversations yet? Oh we had the conversations and we walked away from a couple of but

43:46 We took them seriously. We we just couldn't get there. Hm. At that point to You take on the new capital, we invest in the new capital and the way we We said we would.

43:58 It was successful and we get into twenty eighteen and It was a It was a thing that Henrik and I forgot from the beginning. We never looked at the market data or the market sizing and said, Let's go here.

44:12 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.

44:25 We We started to talk to investors in mid twenty eighteen about another round and the f questions were always about food. To make dog food. To make a product in food. We didn't really know what it was. But we were starting to sell

44:40 The idea that investors wanted us to sell them. Uh the toy. industry. is relatively small and everyone starts to point us to Well, food's really big.

44:52 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. Mm. And not surprising that That fundraising round Didn't turn out well. We didn't

45:09 We didn't like the feel of it. So we I I definitely freaked out my board and Our investors. Uh but walked away from

45:19 The fundraising round and said, forget it. In twenty eighteen. Yeah, we'll just uh We'll generate our own cash. We'll be our own company. And they were scared and

45:29 And and and presumably scared. Uh because I'm I'm I'm pretty sure your your growth was slowing. I mean at at this point your user acquisition was going down and and at the same time I have to imagine that that your board and investors Uh wanted you to to to diversify, right? Because you were Y you were a subscription service, and I think

45:50 Um just the year before you did start to sell at retail, like like start to sell toys at A target? Yep. That's right, twenty seventeen and They they did want us to diversify, but it

46:01 It wasn't leading to the best outcomes. And Boy, we were we were really living hand to mouth there, um, from Mid twenty eighteen throw. early twenty twenty.

46:13 When you say hand of mouth, what do you mean? You're the the We were we were running out of cash. And that 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 Mm.

46:26 It catches up to you and works in reverse. And eats away at your cash. So For about two years we just ran steady. Um, we grew enough. to maintain, but our cash was very flat. Would you call that a

46:41 I mean a much more stressful period than the actual first five years when you were when you were really just a scrapy startup? Definitely more stressful. Uh and I was Probably shouldering the stress for

46:55 our board and and our investors Yeah. I would say they are downright freaked out. Personally I'm more comfortable With very little cash on hand.

47:06 Than with a lot. So it didn't bother me a bit. I feel like I can find my way through that. But I I was taking on the stress of Everyone else. Yeah.

47:16 And so w I mean I guess I mean there were initiatives that you launched like F first of all. The food idea You abandoned it but but then You must have c come back to it'cause you do have a food vertical today. U a Bark f I think it's called Bar Eats, right?

47:32 Exactly. We've gone in and out and in and out of food. Um The idea Again, maybe uh Misfortune of timing, but We went

47:42 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. And so we had this concept of bringing back the the milkman.

47:55 in the US and We deliver your food to your home, and I think we started that in January, February of twenty twenty. We found out. During a pandemic people don't really like someone coming to their door and coming in for a conversation.

48:09 Uh so it kinda shot the whole Theory right there. But we've continue to try to navigate it. We continue to this day and there's a concept

48:21 Just on the horizon. uh for food that I think we're all pretty excited about is very different. All right, so you so let's talk about the pandemic for for a moment. I mean you This is actually gonna be a boom time for you because there was a

48:38 At that time there was a spike in the number of people, there was a massive demand for dogs during the pandemic and there was a shortage. You could p people were couldn't get, they couldn't adopt dogs. And I imagine That you must have seen some kind of uptick at that time. We did. It was It was that and

48:55 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. So But but I wasn't that certain. We were We were scared again, we were going month to month on our cash. I remember in March of twenty twenty having conversations with investors and our banks and saying, Well, we'll see. We'll see what retention looks like on April first.

49:18 And then all of a sudden. Customer acquisition is just Off to the races. Booming. So

49:25 We accelerated. Very fast. Uh Through twenty twenty. And twenty one. You

49:32 I think at the end of twenty twenty step down. As CEO a couple of things were going on. You know, first of all, imagine it was you you just went through this two year period of extreme stress, right? Of of just like Cash crunch. Tell me about about that decision.

49:47 Well yeah, a actually the the decision Came almost a year before I 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.

50:00 Um We should talk about that at the next meeting. And then it would get punted to the next one and the next and Eventually I said to them, We gotta take this seriously, I really mean it. But but the

50:12 The rationale for me was twofold. 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. And Then we also had ambitions of someday being a public company and I

50:28 I had an idea that I didn't want to be a public company CEO. Fast forward to September of twenty twenty. And uh Manish steps in as the New CEO of Park.

50:41 This is Manish. Genage. Yes. And and he uh he was a former, I guess, Amazon executive, so he comes in as CEO. Yep. Yep. Yep, he came over from Amazon. Big dog person. Love uh and a very good guy.

50:56 That's Uh I think we put into Um difficult spot. Um you're saying to someone, take on a CEO role. Take it on in the middle of a pandemic.

51:07 He'll live in Seattle, but he'll commute to New York. That's fun. Um you won't get the opportunity to meet most of the team or engage with most of them, but Take responsibility for a culture. And by the way, we just signed up to do this thing called a spAC and go public. So now you're gonna be a public company CEO. Congrats.

51:27 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. Welcome back to How I Built This. I'm Guy Raz. 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. Essentially, a way to take BARC public in a faster compressed time frame is

52:15 Without as much oversight. I was getting calls left and right, you should call it the spat Craze, like everyone was coming at me saying We wanna merge with you and our spec and and I kept pushing away saying, This is a fad, this is a fad Yeah. And I asked around for someone who could teach me about it and got introduced to a guy named John Ledecki. And John was introduced to me as the godfather of spaces.

52:41 And John gave a lot of advice. And He knew the subject matter quite well. And then shortly after John formed a spAC and said, Now I have a spec and I think you

52:53 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 he's usually right about most things. He said.

53:04 Chewy stock is at an all time high. The pet category is on fire. And what that means is Chewie's the only public pet company. That means January first.

53:16 There's gonna be a line of these people. Signing up for SPACs. You don't wanna be the eighth company. You wanna be the first one, so you have access to the best quality capital out there. Which means we gotta go now. We gotta go fast.

53:30 That was mid November. And we went fast. We we did a two day virtual road show and Mid December. of twenty twenty. Yeah, we went out.

53:41 We went out to raise a hundred million through that. Pipe process. We had interest of Nearly five hundred million. So we ended up raising two hundred from that.

53:50 In addition to the SPAC funds. He 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. You You stepped away for about I think about a year and a half.

54:05 Um and came back. as CEO in in early twenty twenty two. Um tell me the the the the thinking behind. I mean when you had left did you think it was temporary or did you think that uh it it was for good? I thought it was for good. We we brought in Manish.

54:22 I'm Moved to Florida with my wife, followed her for her job. And I thought that was that. And then in December, late December, December twenty eighth of um Twenty twenty one, Hugo passed away.

54:36 And My feeling was the opposite of what I expected, which was more This company is His it's his legacy. Uh

54:46 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 and and so I had this strong urge or desire to jump in.

55:02 And uh I don't wanna speak for an easy but Uh If I'm reading the room, it coincided with Manisha's Uh probably feeling very burnt out uh and f he's a very positive, energetic person who

55:17 was just feeling worn out. So I think we caught each other at just the right moment. Alright, so you come back. And you've got a true a uh big task ahead of you because You know, this is a a a business that you launched in at the end of twenty eleven. There was massive, rapid growth. You s you know, you saw it go public.

55:37 And um You know, I'm sure this is you know not fun to be reminded of, but still was and is not profitable. And and so what did that me I mean, were you did you feel like a s uh I'm assuming you felt a charge to kind of get get it to that place. More than a charge, um

55:56 Our fiscal year ends March thirty first. I came back. January eleventh. Um so that year ended March thirty first, we burned A hundred and ninety four million dollars. And

56:07 If we had done that. For the next twelve months, that would have been it. We're done. We're gone. So the immediate challenge is Don't die. Just do everything possible to keep this thing alive and floating and right and looked at every angle to do that.

56:25 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 size the team. Th there are a lot of those things that are difficult in the moment. They're not fun in the moment, but

56:44 It was just survival mode. And And we have really turned that around and gotten ourselves into profitability and into cash flow generation and and now that's starting to compound. So um tell me about

56:58 Um you know, where you see opportunities, right? It's it's a different Um, it's harder to acquire users today. Instagram and social media is just harder. I mean a lot of people say you it's just not worth it. You spend more than you actually get in return.

57:15 I mean what what is sort of g give me a sort of sense of the playbook. I mean, is it is it expanding product offerings? Is it is it trying to get into a bunch of different spaces and seeing what works and what what might not work? I think it's returning back to Who we are and what we're good at. Uh one of the things that we're

57:34 we're great at and we have big advantage in his toys. And It does get It gets poo pooed by a lot of a lot of people because well, that's only three and a half billion dollar industry. And you already own ten percent of it.

57:48 Okay. But we don't own ninety percent of it. So I understand relative to food It's one tenth the size, but

57:56 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 design in house design team.

58:08 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.

58:21 You don't own your factory, for example. We don't, but we're we're getting closer. So we're we're inching in that direction. Right. 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. Yep. So

58:39 Let's become a great product company and put our products where where the people are. Um w one of the things that you guys have have uh d do and I think I imagine this is not a huge part of your business, but it certainly has generated a lot of um um news stories is You are working with some charter airlines to offer flights for humans and their dogs.'Cause it's really hard to bring dogs on on on airlines now. They're really cracking down most of most

59:06 Airlines just don't all and certainly big dogs don't allow them On there are a couple of smaller companies like Jet Suite X in in here in the Bay Area they operate here and you can fly with your dog on those flights. Um so you are doing a version of this, right? You're you're basically working with charter companies to like fly between New York and London like like long haul flights. Yeah.

59:28 a classic huge problem for people with dogs and especially those with larger dogs, which has a special place in my heart, obviously, but But we are We're 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.

59:47 Uh Those tickets are six to eight thousand dollars one way. And We're sold out in September. Uh we were sold out in August. Wow. So we're not flying enough at those prices. Uh but the other thing that I'm obsessive about right now is How do you take a six thousand dollar ticket and turn it into a six hundred dollar ticket and really, really solve this problem? Yeah. And and so

1:00:13 The flights you're offering, you literally could have your dog like out of a cage like next to you in the seat, right? In the seat, uh uh on the floor at your feet. Um but they usually wander around and say hello to everyone else. Uh and they're not going to be a And there's so many touches to this experience. It's the dogs are served meals, um the dogs get their drinks first, then the humans

1:00:37 The dogs are Uh our pilots come back and say, Come on, bring your dog up front, I'll put him in the captain's chair, we'll take some photos. So mid flight, the dogs are up there flying the plane. Uh. It's everything is built around them and their comfort.

1:00:54 And how many I mean, how many flights are you doing a week now? Two. Two week. How I mean, how do you how much time do you do you give a new initiative. Like

1:01:05 um you know, Bark someone's like, Let's do Bark Erin and everyone's like cool, love that idea. 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? I think it depends. There are a lot of factors in that. It's the The capital being burned. The consumer reaction

1:01:26 Your belief that you have You're you have line of sight to something that works and can be meaningful. Customers love it. We have ideas of how it expands. Um

1:01:40 We have line of sight too. How do we get to that six hundred dollar ticket? We have very clear line of sight to doing that, I'd say. In the next year.

1:01:49 So That's one where Uh the the good idea is panning out. Better than I could have ever hoped. So

1:01:57 I mean is getting to I mean you mentioned, you know, your revenue's public, right? So I think your your revenue is about a half a billion dollars a year, which is a a nice healthy revenue. Um you're much higher than your your market cap, so you have reason to be optimistic. Um But do you have a timeline in mind of of when you When you hit equilibrium, when you hit profitability? This year.

1:02:21 This year. Yeah, we've turned in those profitable quarters and our fiscal year twenty two, when I stepped in, we lost fifty seven million dollars. The next year it was thirty one. Last year it was Eleven. This year we should make

1:02:34 four or five million dollars and And and up from there. And What I what I say to people now is I intend to die in the saddle.

1:02:43 Yeah. Truly it goes back to Hugo and that responsibility that and and the legacy. But I say that knowing that I'm a month away from having a baby boy.

1:02:57 A human child. A human child, yes. Yeah. Maybe that becomes my obsession. And you know, if you'd asked me if I'm gonna be in the pet industry in two thousand ten, I would have thought you were crazy. But

1:03:09 But right now my intention is this is My life's work. Uh Matt, when you think about um where you are and and what you know, you've I think you've done pretty well from from some of the businesses you've been involved with. How much of where you are now and and and what you're running and and what happened in your journey do you attribute to

1:03:28 to the work you put in and how much do you think has to do with luck and and timing and Good fortune. I definitely work hard at it. And And always have, but

1:03:39 Some of this like You know, when I I think it goes back to when we were talking about twenty eighteen and not raising that money and There wasn't a clear idea of How do we get this accelerating again and to profitability. It was about hanging on.

1:03:55 And we hung on Eighteen months there, and then the pandemic came and your fortunes changed. Um the world changed around you and w and we got lucky. We're in the right place at the right time. In two thousand eleven with the right product.

1:04:10 We didn't do some market study, so Uh sometimes it's just grinding away until The world turns in your favor. Um Working hard through it and making smart, sensible decisions along the way.

1:04:24 That's Matt Meeker, co-founder and CEO of Bark. By the way, just uh getting Mm. Do you just not like them? I mean do you do not like cats? I'm okay. Whatever. I mean, come on.

1:04:43 I don't hate cats. I w I won't go that far, but You deeply dislike them? Uh 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. Like there is nothing Not not a single animal on the planet.

1:05:04 comes close to the entertainment value of a cat chasing a laser pointer. It's just unfreaking believable. I I'll give you that. You're a huge opportunity. There's a lot of custom laser pointers you could put in those boxes. Twelve months of laser pointers. I love it. 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. 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 guyras.com.

1:05:38 This episode was produced by Devin Schwartz with music composed by Ramteen Arabli. It was edited by Neva Grant. With research assistance from Olivia Rockman. Our engineers were Patrick Murray and Maggie Luthar. Our production staff also includes Alex Chung, Carla Esteves, JC Howard, Sam Paulson, Chris Massini, Carrie Thompson, John Isabella, and Elaine Coates. I'm Gai Raz, and you've been listening to how I built this.

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