Hedgehogs and Flywheels
How we scaled a doggy day care and training facility
Over the last thirty years, I've started and managed a dozen different businesses. Four had meaningful financial success, with one achieving lasting success. The other eight never materialized into anything significant. That's a pretty good track record by business startup statistics. But what my wife Pam has accomplished in her one and only business has far eclipsed the success of all my businesses combined.
Pam is passionate about dogs, full stop. I knew this from the moment I met her and her big white American bulldog Beatrice greeted me with a wet, slobbery kiss. Pam loves caring for dogs, learning what makes them tick, and teaching them to have happy, fulfilling lives within a family setting. She derives immense satisfaction from sharing her passion and teaching others how to love and care for their dogs. Throughout her career in dog rescue and as a professional trainer, she has helped thousands of dogs and people. This is her super-power.
How has Pam translated her passion for dogs into phenomenal business success? Until three years ago, she worked seven days a week as a dog trainer, running group classes, pack walks, and up to three in-home private training sessions a day. She only took breaks for two long weekend getaways and perhaps one vacation a year.
I had always supported Pam's career as a professional dog trainer and encouraged her to pursue her dream. However, I could see that her current business model limited her impact. Even if she helped three dogs a day, 365 days a year, that was just over a thousand dogs annually. It was obvious she was only scratching the surface.
So we decided to combine forces. Three years ago today, on our Woof-A-Versary of July 1st, 2021, Pam and I took all our retirement money, used it as a deposit on an SBA loan, and purchased a local doggy daycare in Encinitas, CA. This became Woof Academy. Now, Pam and her staff help over a thousand dogs a week!
Between day camps, group classes, private training, day-training, and boarding, Pam manages a staff of over a dozen passionate yard attendants, certified trainers, and nearly 500 active customers at any given time.
How was this possible? Pam embraced her own, very powerful Hedgehog concept. All I had to do was help her focus on that core hedgehog and build a flywheel to support it.
The Hedgehog concept, from Jim Collins' book Good to Great is the intersection of three circles: what you're deeply passionate about, what you can be the best in the world at, and what drives your economic engine.
Pam's Hedgehog is simple:
Pam is passionate about helping dogs, she strives to be the best dog trainer in the world, and she teaches people how to share her passion and knowledge.
My role has been to help Pam scale her vision and increase her impact. We did that by building a flywheel, first clumsily through trial and error, and now with a more focused effort. The more disciplined we've become in using the hedgehog as a lens to focus our business operations, the more momentum we've created with our flywheel.
The flywheel concept, also from Collins Good to Great, is a set of steps that carries momentum forward and increases velocity and impact in a virtuous cycle. Flywheels start with a Hedgehog Concept, providing context for building your business momentum.
A few months after our purchase of Woof three years ago, one of the things that both amazed me and puzzled me about the business was the absolute lack of any marketing needed to generate sales. For the last 30 years, the biggest limiter to ALL the businesses I had run was the demand side of the equation. For the first time ever, I was involved in a business that required virtually no marketing. There seemed to be a nearly unlimited demand for our services.
A while back, I saw a post on NextDoor about someone asking for recommendations for a dog trainer. Within a few hours, there were multiple enthusiastic recommendations for Pam and Woof Academy. This made me reflect on how we built such a powerful word-of-mouth marketing engine.
One key element of Pam's flywheel is the "pack walk." Years ago, Pam proposed offering low-cost group dog walks at the local park. Despite my initial skepticism, it turned out to be brilliant. Today, nearly 50 dogs and their owners attend two back-to-back pack walks every Sunday morning, paying $20 each. This provides great value to customers and generates significant revenue for the business.
More importantly, the pack walk became the top of Pam's business funnel. It's a low-cost, low-commitment way for prospective customers to check out our services. For Pam, it's an efficient way to assess dogs and determine appropriate training recommendations. The social aspect of pack walks also encourages word-of-mouth referrals.
Pam's Flywheel works like this:
A prospective customer calls about a dog-related challenge.
Pam invites them to a pack walk to assess their dog and offer initial advice.
The customer attends and sees progress, exciting them about further training.
They sign up for additional services (private training, group classes, day training, or socialization camp).
Seeing amazing results, the customer tells friends about their experience.
Those friends reach out to Pam for help with their own dogs and she invites them to a pack walk ...
This flywheel has become the foundation of our multi-million dollar business. Viewing everything through the lens of our hedgehog makes strategic business decisions easier and helps avoid mistakes.
To objectively measure our effectiveness, we look at a single financial indicator represented by our FETCH (Financial Efficiency in Training and Canine Handling.) This metric measures how much revenue we generate per dog for each hour of staff labor. So if we had a Groomer who makes $35/hr grooming a dog for an hour long service that costs $85, the FETCH would be 85/35 or 2.42. This number then serves as a proxy for how much value we can deliver in helping a dog for an hour of our time invested, while remaining economically viable.
Analyzing our services using our FETCH metric revealed:
Grooming: 2.28
Day Camp: 5.24
Private Training: 2.33
Pack Walks: 5.33
Group Class: 6.66
Day Training: 5.32
When I ran these numbers, a few things jumped out at me. First, private training was not very profitable relative to our other services. But this was a conscious decision on our part. Sometimes a dog simply needs to be trained in their home, and group class or socialization will not help them. Private training also serves as a marketing funnel as it gets Pam and our trainers out in the community helping dogs.
The second thing that jumped out at me was that each time we pulled a staff member out of the yard to groom a dog, we were impacting our effectiveness and losing money relative to the day camp. It forced me to ask the question: "How does grooming serve our hedgehog?" Does providing a haircut really help the dog? Does dedicating a staff member to one dog, when instead they could be helping 45, really serve our mission? The answer was obvious. It doesn't. So despite the significant capital investment we made to build out a grooming facility just a year prior, we shut it down.
Had we been more clearly aligned on our hedgehog a couple years ago, we would have saved a lot of time, money, and energy. We now know better and focus all our strategic initiatives through the lens of the hedgehog and our FETCH. Recently we started offering a new training service, Day Training, where a customer drops their dog off to us for either a full day or half day, and one of our trainers works one-on-one with that dog. I ran the numbers and saw it had a FETCH of 5.33, giving us confidence in our decision to invest in this new program.
Seeing that group class has the highest FETCH has given us the confidence to start a whole new revenue stream. We realized in order to scale our group classes, we needed more qualified trainers who can be equally as effective as Pam. So earlier this year, we began work on The Academy.
The Academy will be a fully immersive Canine Trainer Certification program with hundreds of online videos, written exams, and a week-long immersive on-site hands-on program with real-life fieldwork having participants training rescue dogs and performing in-home training complete with vetted and certified training plans.
The Academy will not only serve as creating a pool of trainers for us to run more group classes, it will also be the foundation for our longer-term and much bigger vision. Pam wants to help even more dogs, rescue dogs specifically, where her heart truly lives and brings her back to her days of running a 501c3 rescue group over twenty years ago.
Once the Academy is underway and we have a proven model to train other trainers, we plan on launching The Forever Home Foundation. This non-profit will be designed to fund a nationwide network of trainers whose mission is to help train and place rescued dogs into loving forever homes. By offering free training services to rescues, shelters, and adopters by qualified and certified trainers, we hope to have an even larger impact and be able to help more dogs nationwide.
While this vision may be a few years out, we know what we need to do to achieve it. We'll stay true to our hedgehog, continue to refine and improve our flywheel, and build momentum to support the success of The Forever Home Foundation. This is all part of Pam's larger vision, and my job is simply to help her see which threads to pull, which levers to use, and how to codify the vision into an effective, scalable flywheel.
I love the way you take a big thing, like starting and maintaining a business, and synthesize it into such succinct and understandable parts! The hedge hog/flywheel concept is a great tool. I also like the way you reverse engineered what you’ve done at Woof, capturing and creating data points of what has worked and what hasn’t, to inform yourselves about decision you’ll make in the future. No willy nilly, fly by the seat of your pants business decisions here. A clear and impactful vision and a well-designed road map of how to get there-I can’t wait to see what you and Pam do next!
Love this detailed story about how things started out at Woof.