Get The Memo: Issue 9

Pawlytics

Company Overview

Lizz Whitacre is the Founder and CEO of Pawlytics , software that aggregates and consolidates pet data to create electronic health records. These records help pet professionals & owners alike to adopt, care for, and treat any animal at any time. She is a serial entrepreneur and subject matter expert with two decades of her life dedicated to the pet space. Foremost, Lizz is dedicated to creating profits through purpose with a focus on helping to save her true love, homeless pets.

The pet industry uses fragmented data to piece together a pet’s history, behavior, and medical background. Pawlytics is aggregating pet data into unified electronic health records by creating software that will replace the outdated and inefficient options available today. Pet professionals will have access to a pet’s critical history through Pawlytics by using the pet’s microchip number. Big players like pharmaceutical, insurance, nutrition, and manufacturing companies will have access to data unified like never before, allowing them to truly create a better world for pets.

At age 19, Lizz founded her first a non-profit to save pets, while simultaneously founding a student organization at to connect student volunteers with rescues in Nebraska. Lizz has won several awards, such as the Inspire Award for Top Future Business Leader, the 3..2..1 Quickpitch competition of Nebraska (x2), UNL’s New Ventures Competition , completed Start Up School through Y Combinator and NMotion.co, a 2019 Pipeline Fellow, and most recently, the Young Entrepreneur of the Year award in Lincoln, Nebraska.

They key team members include:

· Sara Steinkruger is the Chief Customer Officer responsible for growing weekly web traffic by 5x; and 6x for weekly new paying customers. Lizz met when Sara was fostering kittens in Colorado.

· Justin Collier, the CTO, was a college friend and cofounder of their previous company, Family Pet Project. This led to them pivoting into Pawlytics.

· Joe R. Smith is Pawlytics data architect and backend developer. They met in the local community and soon after, Joe ended up adopting a dog from Lizz.

· Blaine Kastenis their project manager and lead front end developer. He is a top developer who has worked at notable dev shops such as Formidable.

Market, Model & Inflection Point

Lizz has been studying the animal care market since she was 4 years old, jumping ahead of many industry trends. 5 years ago, she planted a flag in the ground, saying the industry would trend towards being foster based and community focused, and COVID essentially accelerated that process. The trends moving forward in the animal sheltering space will including:

  • Using machine learning to better predict market buying trends of pets
  • Utilizing ads to reach people who don’t know they want to adopt yet
  • Using technology to keep in contact with adopters.

Pawlytics’ business model is a mix between performance-based pricing and monthly software subscriptions.

  • For the ‘mom and pop’ animal rescues, they charge $1 per adoption. This creates a low barrier to entry and undercuts competitors who are priced at industry standard $2/adoption.
  • As they move into large animal shelters, their package of features will be priced at $5,000 to $20,000 annual subscriptions. Other pet professionals will have their software packages priced at $1,000 to $3,000 annual subscriptions which is competitive with current software.
  • As they can aggregate pet data, they will monetize licensing their data to pet pharmaceutical companies, insurance companies, nutrition companies, and more.

Pawlytics acquires customers from cold outbound emails utilizing the list gathered from scraping the internet, none of which required any capital. They currently serve and sell to foster based animal rescues, organizations that do not have a central location, are typically run entirely by volunteers. These groups need limited software features but still microchip every animal. This gives Pawlytics a foundation of software to make some money from while being able to help with limited software features.

Their next customer will be large, brick and mortar animal shelters and animal control facilities. These groups process 20,000 pets annually (on average) and are more regulated in their paperwork and operations by USDA/Department of Ag.

As Pawlytics moves into vet clinics, their customer will change to vets and clinics, and so on and so fourth through the groomer and boarder industries.

Now is the time for this technology because this is an industry that has not been disrupted in a long time. Long standing players in the industry have been around since the 70s and are not cloud based.

Pet care providers in all industries are beginning to be overtaken by younger generations who demand and expect technology that is as good and easy to use as anything else in their world. Many vet clinics, still use fax machines to share pet records, causing them to continue spending time on manually calling, getting, and entering data. For large corporations, fragmented or a lack of data has inhibited their ability to create new supplies, medicine, or nutrition in keeping with our culture’s newfound belief that “pets are family.”

Competition

Pawlytics has software providers they are competing within both the animal shelter software market as well as Pet EHR market. When it comes to animal shelter software, their advantage lies in a superior and more intuitive interface, being cloud-based, and having interconnected data (versus static data) that automates basic tasks and streamlines workflow. In the EHR space, their advantage lies in creating a beachhead of microchipped pet data through animal shelters, allowing us to create immediate value for the next markets they intend to enter. This value compounds on itself with each market segment they capture.

Pawlytics’ competitive advantage in attaining animal rescues and animal shelters in creating a platform that is unbelievable easy to use, on scalable technology that will not need to be rebuilt to create EHRs. As they enter the market of electronic health records for pets, their moat is in the microchipped pet records they attain through animal shelters. Animal shelters are the largest distributors of implanted and registered microchips with almost 100% of all pets leaving shelters having an implanted chip. Pawlytics is the only EHR company also competing via a better software interface with a goal to replace existing software. By having all the data feed into one database via their interfaces, they will not need to transcribe data from existing software, and it incentivizes other companies to integrate with their technology as they hit critical mass

How would you deploy capital if you hit your next milestone?

When Pawlytics hits their next milestone in fundraising, they will utilize most of that capital on product development. Their sales/marketing/customer team has been able to grow their customer set to over 210 paying animal rescues from around the globe on an MVP product that has not changed much since 2019 without spending more than $150 in marketing (yes, over 2 years). In their research done on existing customers, churned customers, and future forward customers, more than 90% who don’t use their product today pointed to a lack of product features needed to support their operations. Hiring talented developers is expensive, especially in this ever increasingly globalized world in which they compete with companies like Netflix for salaries.

Pawlytics’ goal is to continue raising money to ensure they can build out the features necessary to sell to large animal shelters — their highest paying SaaS customers. Once they have an MVP feature set built and live for shelters, Lizz will be working to sell into 25 shelters to break even at a $20k monthly burn. From there, the next milestone in sales is 125 total shelters to hit $1M in ARR.

The biggest hole in the business today is not having full time developers. Pawlytics has been able to utilize contractors, but their rates are not scalable long term and as they wind contractors down, they will not have someone to maintain the code or have context to how or why things were built. Pawlytics is currently actively trying to hire full time developers but run into walls with what they can offer as salary — which is where fundraising comes in. Hitting this next milestone will allow us to build a true team, as developers do struggle to be the only person in an engineering department.

What is the legacy you, as a Founder, want to leave?

I want to be the reason the entire pet care industry is changed for the better. I want to ensure better outcomes for pets and a better environment for those working with pets. I have been obsessed with making a huge impact in this industry since I was a child — this obsession has led me to continue trying businesses until a find a scalable solution. I am determined to make money, change the world, and have fun doing it.

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Spencer Tyson

Spencer Tyson

Writing short memos to highlight underrepresented founders in Tech.