Dog-Walking Startup Wag Raised $300 Million To Unleash Growth. Then Things Got Messy (cnn.com) 58
At the start of 2018, Wag looked like tech's next Big Thing. From a report: In January, the founders of the dog-walking startup announced they had landed a $300 million investment from SoftBank's Vision Fund. The world's largest tech investor, SoftBank had $93 billion at its disposal and a network of global connections second to none. Unlike almost any other venture capital firm, it was capable of single-handedly supercharging businesses and shaking up entire industries. Launched in 2015 at the height of the on-demand boom, Wag was founded by brothers Joshua and Jonathan Viner, along with Jason Meltzer, who previously ran a traditional dog walking business. Together, they followed Uber's playbook: connect pet owners with Wag's network of dog walkers, who work as independent contractors. The startup attracted endorsements from celebrities including singer Mariah Carey and actress Olivia Munn, who is also an investor. By the time of the SoftBank deal, Wag had reached 100 US cities. With SoftBank's backing, and the appointment of a veteran CEO around the same time, Wag looked primed to become a global pet care services leader.
More than a year and a half later, SoftBank and Wag have fallen short. Wag has gone through multiple rounds of layoffs, endured management changes, and shuttered its customer service hub in the Hollywood Hills, according to interviews with 17 former employees who've recently left Wag, some as part of layoffs. Most spoke with CNN Business on condition of anonymity, citing non-disclosure agreements or fears of retaliation. Some of the former employees claim that Hilary Schneider, a veteran tech executive who joined Wag as CEO in January 2018, has yet to get a handle on fundamental issues facing the business -- including growth, safety of pets, and customer service.
More than a year and a half later, SoftBank and Wag have fallen short. Wag has gone through multiple rounds of layoffs, endured management changes, and shuttered its customer service hub in the Hollywood Hills, according to interviews with 17 former employees who've recently left Wag, some as part of layoffs. Most spoke with CNN Business on condition of anonymity, citing non-disclosure agreements or fears of retaliation. Some of the former employees claim that Hilary Schneider, a veteran tech executive who joined Wag as CEO in January 2018, has yet to get a handle on fundamental issues facing the business -- including growth, safety of pets, and customer service.
Invest like it's 1999 (Score:5, Funny)
Unfortunately, Pets.com could not be reached for comment.
$300 Million for an app? (Score:5, Interesting)
Re:$300 Million for an app? (Score:5, Funny)
Actually it only took $10 million, and $290 million to add the cat walking support.
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$1M for Development, hosting, and infrastructure spend. The remaining $299M would be spent on advertising and executive bonuses.
Serious answer. I'm sure they are following the Uber model to a "t": Subsidize services, losing money on each transaction. Then bleed, piss, and shit money until it's widely adopted enough that they can get out via IPO.
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Serious answer. I'm sure they are following the Uber model ...
That is a serious red flag to smart investors, "We are going to be like / follow the model of [insert unicorn here] but in the [insert some other area here] market". I mean seriously, that gets you slapped around in university student entrepreneurship competitions.
Re:$300 Million for an app? (Score:4, Informative)
What are you talking about?
This is a resounding success. The founders got a bunch of money form the investors. The people developing the app got paid great salaries while the fun lasted. The investors got their cash laundered. Even the synopsis says the company had 3 billions looking to be 'invested'.
And I would not be surprised if some dogs got walked in the whole process.
Win, win, win.
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I mean seriously, that gets you slapped around in university student entrepreneurship competitions.
I can't speak about "university student entrepreneurship competitions", but I can speak about hackathons.
If you're in a hackathon and want to win, speak with the judges as early as you can (most of the time, this will be possible if you ask)
Usually, I'll preface that talk with "I'm not asking for special treatment and I'm not even asking if you like our idea. I just want to know if you find this idea bad, or if this is something you've already seen somewhere else before. In other words, I'm only seeking neg
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Re:$300 Million for an app? (Score:5, Informative)
Its an abusive relationship as well, because they shift all blame for harm done to pets on to the owner-walker relationship, but equally bind the owners and walkers to a restrictive contract which only allows services to be tendered for via the app - if the owner and walker decide to carry on a relationship outside of the app, they can be sued for it under the contract.
Yet another abusive company.
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Yet another abusive company.
Abuse is the basis of all these stupid "gig economy" companies. If they can't exploit the workers, they need to exploit their customers.
Unfortunately for Wag, the cost of setting up as a dog walking business is so low that any high school student can do it, so they can't really exploit their workers.
Softbank are either drunk or stupid to have not figured that out. (Unless they thought they could offload their shareholding onto some rube with more money than sense, which might be true).
The startup attracted endorsements from celebrities including singer Mariah Carey and actress Olivia Munn, who is also an investor.
Mariah Carey is a
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Abuse is the basis of all these "capitalist" companies. If they can't exploit the workers, they need to exploit their customers.
FTFY
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I thought the same thing. 300 million would go a looong way in any other life-endeavor. If they're spending 300 mil on app development, I'd be very weary about using said app.
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The problem is that Wag's business model is just not like Uber's.
Using Wag may be convenient in case of emergency, but most of the time, you'll want to use the same couple of dog-walkers over and over again. And if that's your wish, you might as well cut out the middleman and pay your one or two preferred dog-walkers directly.
With Uber, you don't really have that option of using the same drivers over and over again (unless you live, work, and do everything in a very small town). So it's difficult to pay som
Re:$300 Million for an app? (Score:4, Insightful)
In other words, I'm not sure what Softbank was really thinking in this case.
I am going to guess it's something to do with:
The world's largest tech investor, SoftBank had $93 billion at its disposal
Which is more-or-less free money the Saudis are trying to launder before the oil runs out, so they don't care who they spray it all over.
Either that, or the boys at Softbank really like saki.
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The world's largest tech investor, SoftBank had $93 billion at its disposal
Which is more-or-less free money the Saudis are trying to launder before the oil runs out, so they don't care who they spray it all over. Either that, or the boys at Softbank really like saki.
It's sake, not saki, by the way. I follow Softbank a bit because I have a small amount of money invested in foreign stocks and they are one of the ones I picked. I have the impression that their CEO is basically just throwing spaghetti at a wall to see what sticks with the Vision Fund. They make a lot of really strange investments in very dubious ideas like this because of the chance that one of them may pay off big time, even though it seems unlikely. I have no idea what criteria their CEO uses to p
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It's sake, not saki, by the way.
Oh good lord, quite right. I may have drunk too much Soju.
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Yeah. I'm happy to trust my body to any random idiot with a car but anybody wanting to look after my cats gets properly vetted.
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Ugh we get this every time from some arrogant slashdotter and lots of arrogant mods modding it up. Hur hur it's just an app I could make it in a weekend hur hur why is it worth $600,000,000.
Well, OK it's overvalued and stupid, but making a company is way, way harder than making an app. The app is much less than half of the company, I'll bet. The difficulty arises in you know finding a bunch of people to walk a bunch of dogs and dealing with the inevitable shit when something goes wrong. A pooper scopper onl
Bravo (Score:1)
I just thought someone should applaud the headline writing on that one, well done!
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Some dogs don't grow as large as you might like.
Who would have thought? (Score:5, Funny)
Who would have thought that the dog walking business would be ruff?
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booooooooo~
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Who would have thought that the dog walking business would be ruff?
In today's business climate, it's a dog-eat-dog[walker] world
dafuq? (Score:5, Interesting)
She had surgery for ovarian cancer 2 months ago, and last week had round 2 of a 6 round chemo plan. I'm on the list of people to take her to chemo. One of those things where I hope to $diety I'm not called, but will be there if needed.
What does this have to do with dog walking? Pretty much nothing, except pray for Barb and hope she doesn't puke in my car. Oh yeah, and how the hell can a dog walking business be worth any more than a 6 pack exchanged for a favor between friends?
Seriously though, pray for my friend She is good people.
Re: dafuq? (Score:2)
Aging population (Score:3)
This is a company trying to get a piece of that action by inserting itself into your friend's side gig. It's part of the broader gig economy that's cropping up because jobs that pay enough to live are few and far between.
But the gig economy doesn't pay enough to live either, so you drive Uber/Lift, deliver Amazon packages and groceries and now you walk dogs. If you work 12-
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I met a girl who paid about $600 a month to have her dog walked. I rolled my eyes and considered going into the business.
I absolutely don't think an app to connect dog walkers and owners is worth $300 million though. To start with, that's a hell of a lot of friction. Secondly, the serious customers want to trust their walkers, give them keys, etc. Imagine giving an Uber driver the keys to your house.
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Secondly, the serious customers want to trust their walkers, give them keys, etc. Imagine giving an Uber driver the keys to your house.
That's the biggest issue here - no goddamn way am I letting someone I don't know AND trust walk my dog! That's how they end up dead in a car in a Walmart parking lot, or sold to a fighting ring!
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We used them to take care of our dogs when going on vacation - much better than putting the dogs in a kennel, even if not cheaper. Both were friends of the family, so we trusted them with our dog
Re:dafuq? (Score:4, Informative)
How is dog walking a million dollar thing?
How is it not?
I work all day and have a large Doberman Shepherd who needs to be walked every day during the day. I pay a dog walker to do it. She has two "packs" of 6 dogs each, one she walks in the morning, and one she walks in the afternoon. She charges $25/dog, and works around 8 hours a day. She drives all over the city (Toronto) so her gas expenses must be crazy, but she's grossing like $600 a day before expenses and taxes!
Plenty of room for someone else to skim some profits if they can streamline things for the walkers.
Re: dafuq? (Score:2)
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She's a lovely woman, too young to die. But when they replace chemo with hospice at chemo #3, yeah. fuck.
I has a major sad.
Oh yeah, how can retired folks making less than minimum wage for the chance to spend a couple hours with dogs be worth millions?
$300M for a dog-walking app? (Score:2)
It's probably mostly advertising. (Score:2)
Wag is a huge success! (Score:5, Funny)
It does not matter whether Wag continues to exists or makes dog owners happy. It was founded to collect stupid money, and that it did great, 300M is quite a number. Mission accomplished!
$300m... yeah (Score:2)
Yep, $1m to make a dogwalking app connecting people to dog owners wanting walkies, $9m for "startup salaries" and $290m to the founders who are very happy indeed.
Goes to show its not what you know, but who you can perauade to give you the keys to the rich mans' club.
SoftBank (Score:2, Funny)
These sorts of businesses may be unworkable. (Score:3)
As soon as this got moderately successful (which it never would, but let's pretend) CA and NY would decide that a person who uses an app to walk dogs for a bit of extra money is an 'employee' of Wag and should be getting medical insurance, paid vacation, paid maternity leave, etc...for walking dogs in their spare time.
This is why you invest in teams ... (Score:2)
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What are you talking about? I'm sure that's exactly what SoftBank did here - they invested in the team, not the idea. Some well-connected insiders, plus some experienced Surveillance Valley developers, plus a monumentally stupid idea. That way, when it fails, at least they just made the rich richer. Definitely wouldn't want to give that delicious delicious freeeeeee money to someone from outside the Old Boys' Club.
Investing in a good idea is the right thing to do. But there are two obstacles: 1) Hard
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What are you talking about? I'm sure that's exactly what SoftBank did here - they invested in the team, not the idea.
There were some qualifications after "team": "that can turn an idea into a product with a good/product market fit and a realistic plan to grow."
But there are two obstacles: 1) Hardly anyone has a (new) good idea.
Actually ideas aren't the problem, a CAPABLE team is.
2) The investor class are not particularly bright, and couldn't tell a good idea if they saw one.
You are mistaken. The professions are brighter than the amateurs, the latter should have paid heed to "a fool and his money are soon parted." The professional investors demand data. That's part of what make a good team. People who support the hypothesis regarding reachable market, the need or want, the product/mar
Yahoo! tie in (Score:5, Informative)
Bad timing. (Score:2)
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Softbank: I'm beginning to think... (Score:3)
...their entire reason for existence is to launder money. I mean, look at the ultrra-cappy, badly conceived, badly run businesses they invest in.
Modern gilded age (Score:3)
Anyone who doesnt think we are in a modern gilded age are either blind or deluding themselves. Massive valuations with nothing backing them. Personal fortunes gone in an instant(Elizabeth Holmes was a theoretical billionaire before the Theranos scam burst). That gold leaf is going to peel off eventually and when it does a lot of people arent going to like the look of what's underneath
Another SoftBank (apparent) failure (Score:1)
Let's see...
Uber, WeWork, and now Wag; anyone seeing a pattern here?
It's almost as though the Vision Fund exists to collect big-loss-making "visionary" poop that no sane fund manager would put into a basket actually expected to make money. We see that sort of thing in SE Asia and the Third World frequently as what turn out to be "convenient" money-laundering-at-industrial-scale operations. Now, without casting any aspersions on SoftBank, Occam's Razor is a thing, and their recent string of high-profile dogs