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THIS WEEK'S TOPICS:

• ⚔️ $150K for an elite guard dog

• 🤪 Decoding your pet’s facial expression

• 💼 Business barkdown: premium dog gear biz for sale

⚔️ $150K FOR AN ELITE GUARD DOG

In the wake of high-profile crimes and a perceived increase in lawlessness, the demand for protection dogs has surged, especially among the affluent residents of upscale parts of Los Angeles.

These elite animals, often German Shepherds, Belgian Malinois, Dobermans, or Cane Corsos, are not just family pets but are trained to defend their owners and property against potential threats.

But why not just get a bodyguard?

Well bodyguards don’t typically live in your home 24/7. Neither do they have 100% loyalty to only you and your family, as well as have a cunning sense of smell, nor can detect a pin drop.

What does demand look like for these canines?

1. 😲 Arteom Bulgadarian, a resident of Sherman Oaks, spent a staggering $70,000 on a German shepherd named Rocky, trained to be a high-performance protection dog. This investment, he argues, is a small price to pay when amortized over the dog's lifespan, especially considering the security it provides.

2. ✨ These protection dogs, often marketed as “personal canine bodyguards” or “executive protection dogs,” have become status symbols. They offer an immediate layer of defense, unlike security cameras or home alarm systems which can be bypassed or ignored.

3. 👮 Kris Herzog, owner of the Bodyguard Group of Beverly Hills, mentions that celebrities and billionaires often consider protection dogs as a cost-effective alternative to hiring off-duty police officers at $400/hour.

4. 💰 The price range for these dogs varies, with some reaching up to $150,000, as stated by Kim Greene, founder of Svalinn, a breeding and training company. Four years ago, Greene charged $75,000 for a fully trained dog, but soaring demand has allowed her to consistently raise the price.

5. 🦮 Harrison K-9, a company specializing in protection dogs, sold a record 65 protection dogs last year, with prices ranging from $45,000 to $65,000. Their highest-priced dog ever was sold for $230,000.

A look at the numbers

Let’s estimate the annual revenue of an elite protection dog business, we'll need to consider a few factors based on the information we found:

1. Price of Dogs: The price of protection dogs varies widely. For instance, Harrison K-9 sells protection dogs usually for $45,000 to $65,000, but some dogs can go up to $230,000. Svalinn has dogs priced at $150,000.

2. Number of Dogs Sold: Harrison K-9 sold 65 protection dogs. Svalinn, on the other hand, produces no more than 18 adult protection dogs annually.

Let's calculate a rough estimate for both companies:

Harrison K-9:

• Average price of a dog = (45,000 + 65,000) / 2 = $55,000

• Annual revenue from dog sales = 65 dogs * $55,000 = $3,575,000

Svalinn:

• Price of a dog = $150,000 (as all dogs are priced the same)

• Annual revenue from dog sales = 18 dogs * $150,000 = $2,700,000

Now these are just projections based on numbers provided, there could be even more sources of revenue (e.g. ongoing support, additional handling/training, etc.). Considering the numbers in front of us that’s one hell of a niche they’ve carved out for themselves.

However we’re sure this is a very tough business to operate, high expertise needed, and long timelines to implement these rigorous training programs.

🤪 DECODING YOUR PET’S FACIAL EXPRESSION

Last week we covered Artie, the first of five winners of Purina's annual Pet Care Innovation Prize.

This week, we are talking about the second winner, Sylvester.ai and their app Tably, the first app to use AI to tell you how your cat is feeling.

WHOA, WHOA, WHOA, who let a cat in this newsletter!?!?!?

Alright, hear us out. Yes, we know there is a "rivalry" and this is a dog newsletter, BUT, this is interesting technology that can be applicable to our pooches soon. So give us a break, ok?

Sylvester.ai

Sylvester.ai is the maker of Tably, which they bill as "the world’s only app that uses AI to help you know how your cat is feeling.”

The gist of the app is that you can use your camera to take a picture of your cat and then get a score on how they are feeling based on veterinary pain scales.

The AI model uses five facial cues to evaluate how your cat is feeling:

• Ear position

• Orbital tightening

• Muzzle tension

• Whiskers position

• Head position

Additionally you can track trends around "good" or "bad" days, so you can potentially identify underlying health issues causing discomfort.

They claim their model is 90% accurate (how they know that is beyond us).

The app costs $3.99/mo and is currently only available on iOS.

One of the main use cases they talk about is monitoring your pet after a vet procedure, which is a time that many issues can pop up (e.g. infection).

Sylvester plans on developing products for dog owners as well as more.

Alright, reaction time 👇

We think this is pretty cool!

We don't expect it to be able to catch everything, but we've had our challenges from time to time telling if something is wrong with our pup.

Now dogs are easier to read than cats, so maybe this isn't as necessary, but anything that helps bridge the communication gap w/ our fur buddies is helpful.

AI is looking for more use cases, so we expect there will be more apps to come to help you know your dog and their health.

💼 BUSINESS BARKDOWN: PREMIUM DOG GEAR BIZ FOR SALE

That's right pooches and pups, it's time for another Dogonomist Business Barkdown!

We love to talk about different business for sale, and our hope is that we help any aspiring entre-paw-neurs take the leap they need to either start or acquire a business of their own.

This week on the docket, we have this UK based E-commerce company which sells high end pet products.

This business has been listed for sale on Acquire.com for $79,000, and reportedly has made $132,619 in revenue over the last 12 months.

Let's dive in snout first!

The Numbers 📊

Here is the excerpt from the posting:

Let's go a little deeper:

• Last 12 month margins = 41%

• Last month's margin = 37%

• Earnings multiple (how much more the asking price is than the earnings / profit) = 1.5x

• Unit price = not sure since the business isn't identified

• Customers = they list between 10,000 - 100,000

• Average web traffic = not shared w/ out an NDA

• What is this built with? = Shopify

• Business model - Dropshipping. This means they don't hold the inventory, but instead they make the sale and then order if from a manufacturer to ship to the customer

They list Waudog as a competitor, which gives us a little idea of the kinds of products they offer:

What we'd want to know 🤔

This posting doesn't tell us everything, but if we were thinking about buying, here is what we'd want to dig into with the seller:

• 💸 Expenses - since this is a dropshipping business we are guessing that it's primarily the product and logistic costs.

• 🧑‍🤝‍🧑 How do they acquire customers? - they mention that more advertising via multiple channels would help the business grow (ex. FB, YouTube, etc), but it's very important to know if their current paid marketing is profitable.

• 🌐 Traffic & sources - they will probably share this after any interested buyer signs an NDA (we didn't), but want to see how well they convert traffic into customers, and how that stacks up with standard industry benchmarks.

• ⏳ Time spent - with dropshipping, you typically don't need to spend too much time, since you don't have to worry about inventory, logistics, etc. So while this store doesn't make a ton of profit (average of $4,250/mo), if the time commitment is pretty low, then it makes things more attractive. You could even figure out a rough hourly rate and see how that compares to what you currently make.

• 📈 Trends - are things goes up or going down? Traffic, revenue, average purchase amount, etc. Are we interested in a business that is dropping, flat, or slowly growing? Very important.

What we'd do if we ran this thing 👔

We always like to first look for areas of improvement in the current business process before trying new things.

So can we improve the % of people that check out, can we increase prices, can we run better ads?

The idea is if you can improve things by just 10% with some small tweaks, you are looking at a few thousands dollars more in profit.

Plus, when you do explore new channels like more paid marketing, partnerships, etc, you benefit from a better conversion rate.

We've talked about micro influencers before in the dog space, and that is probably where we turn again. Find people whose followers fit our typical buyers and see if they will promote us.

Also, if the paid marketing is profitable (e.g. spending $50 on ads leads to $100 in sales), why not slowly ramp it up? It increases your upfront costs, but is often the fastest way to grow.

Do we think this is a good idea? 🤨

Well, the purchase price multiple is lower than the standard E-commerce benchmarks 👇

But, the profit is also low.

It's hard to tell without more info, but this store doesn't seem to stand out or have a unique "moat" (something that keeps customers in and competitors out).

Also, while dropshipping is easier, you are at the mercy of whoever creates the products and ships it. We aren't crazy about giving up a lot of control.

The verdict?

We will pass ❌.

There's plenty of fish in the sea, so better to wait for something that truly inspires you.

DOGGYDEX™

Winner 🏆: DOGGYDEX

Proudly introducing the DoggyDex™, an index comprised of 10 publicly traded companies whose primary focus is the dog/pet industry.

List of tickers used can be found at the very bottom of the newsletter.

The yellow line-plot in the chart represents these companies above (DoggyDex™) and their combined performance against both the S&P 500 and Bitcoin on a weekly basis.

Pawformance is measured by % gains & losses.

• 🇺🇸 The story of Roselle saving her blind owner from the 9/11 attacks: Watch Michael Hingson and his brave Lab, Roselle, tell Larry King their story of how she helped him down 78 floors during the 9/11 attacks.

• 🐺 There’s a new breed on the block: One woman in Palm Bay, FL is developing the Blue Bay Shepherd which is bred to look like a blue wolf and it’s unclear what breeds have been brought together to create this “breed.”

• 🏄 World dog surfing competition: Catch the highlights of these dogs shredding it in the World Dog Surfing Championship in Pacifica, CA.

DOGGY B-DAY

• $CHWY - Chewy: E-commerce platform for pet supplies

• $IDXX - Idexx Labs: Vet point of care instruments and vet software

• $FRPT - Fresh Pet: Pet food company

• $PETQ - PetIQ: Pet health products and medicines

• $PETS - PetMeds: Online pet pharmacy

• $ZTS - Zoetis: World's largest producer of meds and vaccines for pets and livestock

• $TRUP - Trupanion: Pet insurance company

• $WOOF - Petco Health & Wellness co.: Pet health & wellness company

• $BARK - BarkBox: Subscription service providing dog products, services, and experiences

• $PET - Wag! Group Co.: Tech platform that allows pet owners to connect with industry professionals for services such as, walking, training, etc.