Submit the above two write-ups as one document separated by their sub-headings 2-36 How might Rover.com use focus groups to gain a better understanding of its current and potential customers and their
Bruce R. Barringer, Oklahoma State University R. Duane Ireland, Texas A&M University Introduction Jill is a 26-year-old sales rep for a technology company. She lives in a two-bedroom townhouse with her golden retriever Rex. Jill travels about twice a month, and when she’s gone, she has three options regarding care for Rex. Option #1—She can ask a neighbor to watch him, but that’s hit-and-miss, and she hasn’t found anyone she can depend on; Option # 2—She can take him to her parents’ house, but they live about an hour away; and Option #3—She can take Rex to one of the two kennels that are close to where Jill lives. There is nothing wrong with them, but they are typical kennels. The dogs are cooped up most of the day, and a month ago, Rex came home from the kennel with a cough he picked up from another dog. Jill loves Rex and has no plans to give him up, but every time she travels, it’s a problem to decide what to do with Rex. A Bad Experience at a Kennel Leads to a Business Idea Many people are just like Jill. They either have trouble finding suitable arrangements for their dog when they travel, or they feel badly when they’re packing for an exciting trip with their dog’s big, sad eyes staring at them. The idea for Rover.com—a service that connects dog owners with dog sitters and walkers—occurred to Greg Gottesman after his yellow Labrador Ruby Tuesday had a bad experience at a traditional kennel. To see if the idea had legs, Gottesman pitched it at a Startup Weekend event in Seattle in 2011. Startup Weekends are events held across the country. Anyone can pitch a business idea and get feedback from peers. Gottesman’s idea received top prize, and six months later, he launched Rover.com. Although Gottesman may have had a good pitch, a little research helped validate the business idea. More than 54 million U.S. households have a dog. The pet grooming and boarding market is about $5.7 billion a year. More encouraging is that the market could be much larger in that, currently, only 8 percent of dog owners take their dog to a kennel when they are out of town. As a result, 92 percent of dog owners are like Jill, the dog-owner profiled above, who scrambles to find a place for her dog while she’s planning a trip. In addition, surveys show that the majority of Americans see their pets as family members. In fact, those with dogs are more likely to see themselves at pet “parents” than dog “owners.” Overall, annual spending on pet food and products in America has risen by around 40 percent over the past 10 years. There is another factor that plays a critical role; namely, the rise of the peer-to-peer economy, pioneered by companies such as Airbnb, Uber, and Lyft, shows that people are willing to use online platforms to connect with other people to satisfy a need. Putting all these factors together, to Gottesman it didn’t seem like a stretch to believe that people would spend money on a service that would connect people who needed their dogs watched with people willing to do it. Gottesman’s intuitions have proven to be correct. In 2016, Rover.com took in more than $100 million connecting dog owners and dog sitters. It has 65,000 sitters in 10,000 U.S. communities, and someone books its service every eight seconds. And just as Gottesman suspected, two-thirds of Rover’s customers come from people who previously used family, friends, and neighbors for pet care. How Rover Works Rover’s service is run through its website and app. If you are a dog owner, you simply follow the prompts on the website, which ask you to identify your location and select the dates you need your dog to be watched. You can indicate whether you’d like your dog to be watched at your home or the sitter’s household. You’re then provided profiles of Rover approved dog sitters in the area. The profile includes prices (per night), photos, reviews, certifications, and a full description of the sitter. The reviews are particularly helpful. For example, a Rover.com customer wrote the following about Ella, a Rover.com sitter in Stillwater, Oklahoma: “Ella has taken care of my high maintenance dogs on several occasions and has done a wonderful job. My dogs are both rescues so they are very skittish around new people. Ella was more than happy to spend all the time necessary to get my pups comfortable with her in order to provide the best care. I would recommend Ella to anyone who is looking for a very personable, caring dog-sitter/walker.” Rover sitters charge between $10 and $150 per night (Ella charges $40). In San Francisco, Rover’s biggest market, there are over 500 sitters registered on the site. Rover also offers drop-in visits, doggy day care, and dog walking. A drop-in visit consists of a sitter stopping by your home for 30 visits to feed and play with your dog. Clients are charged on a per-visit basis (usually around $15). This service works particularly well for elderly people who want to keep their dogs but struggle to provide basic care. Doggy day care allows you to drop off your dog at a sitter’s house, while you are at work or unavailable during the day. It can be a one-time visit, or follow a regular schedule, like Monday through Friday from 7:30 am to 5:30 pm. The sitter will care for the dog and make sure it gets plenty of play time. Dog walking is similar to drop-in visits. A sitter will stop by your house and walk your dog for 30 minutes. That usually costs around $15 per visit. When Rover launched in 2011, it offered only its overnight pet watching service. Adding the additional services has not only been good for Rover, but it’s been good for its 65,000 sitters. It has provided them additional streams of income, which has encouraged some of them to quit their regular jobs and make Rover their full-time living. If you’d like to become a Rover sitter, the website walks you through the application process. You must create a profile and be approved by Rover. There is a careful vetting process, and the company approves about 20 percent of its applicants. Rover handles client billing and takes a 15 percent commission for its part. Top Rover sitters earn several thousand dollars a month. A Rover sitter can also work as much or as little as they want. A sitter’s profile includes a calendar indicating when the sitter is available. The average stay for a dog at a sitter’s home is just over four days. Rover tries to take care of both the dog owner and dog sitter by offering additional layers of protection. For example, every stay booked through Rover includes premium insurance for emergency vet bills, property damage, liability, and more. To assure dog owners and make things fun, Rover.com has an app that allows sitters to send photos of the dogs they are watching during their stay. Making Things Fun Rover makes things fun for both its dog owners and dog sitters. In 2013, for example, it introduced Rover Reel, which offers Rover customers free videos of their dog’s experience during their stay with a Rover sitter. All the sitter has to do is take five or more photos of the dog under his or her care, send the pictures to Rover’s support team, and the support team will create a video album with background and music, and send a copy of it to the dog owner. It’s pretty cool and can be shared online. Rover’s newest invention is Rover Cards, which is now part of its mobile app. Rover Cards let care providers share real-time information with the dog’s owner, such as a GPS-powered map of the dog’s walk, photos, and other messages. Rover also encourages a “meet-and-greet” session before a dog owner tries a sitter. This suggestion recommends that the dog owner (with their dog in tow) meet the dog sitter at a mutually agreed upon time and place to talk before they try each other out. The meet-and-greet can be arranged through Rover’s website. Challenges Ahead and Growth Plans Rover’s potential has garnered plenty of attention. It now has several direct competitors, including Jogs for Dogs and DogVacay. Rover plans to expand internationally. Several similar services have popped up in different countries, including Australia, Brazil, and Britain. Even though Rover is in 10,000 communities, the majority of its business is centered in large cities. One thing the company hopes to do is expand its business in suburban areas and smaller towns. To date, Rover has raised $90.9 million in funding. Its latest raise was a Series E round of funding of $40 million in September, 2016. It anticipates an initial public offering in 2018. The company doubled its size from 2015 to 2016 and now has 175 employees. Submit the above two write-ups as one document separated by their sub-headings 2-36 How might Rover.com use focus groups to gain a better understanding of its current and potential customers and their needs? 2-37 In this chapter, we noted that a true business opportunity is attractive, durable, timely, and anchored in a product or service that creates value for a buyer. To what extent does Rover’s service satisfy each of these criteria? 2-21 Identify three start-ups, other than those discussed in this chapter., that were started to solve a problem. Briefly describe the problems the three start-ups are solving and how they are going about doing so.