BARK: Matt Meeker

When Matt Meeker started sharing a Brooklyn apartment with a Great Dane, he didn’t know it would inspire him to launch a multi-million dollar company. But, disappointed by what pet stores offered for big dogs like his, Matt co-founded BARK, a subscription service for dogs of all sizes. After launching in 2012, the brand expanded to include food, furnishings, and luxury charter flights, where dogs roam free about the cabin. Along the way, Matt applied critical lessons from his past startups, including a failed text-messaging company, and the social platform Meetup. This episode was produced by Devan Schwartz with music composed by Ramtin Arablouei. This episode was edited by Neva Grant, with research by Olivia Rockeman. Our audio engineers were Patrick Murray and Maggie Luthar. You can follow HIBT on Twitter & Instagram and sign up for Guy's free newsletter at guyraz.com. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

  Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned, money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back

• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

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• 3:45Guy Raz?

  or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the car that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talked to on this show, because the best

• 4:27Guy Raz?

  ones obsess over things their customers will never see. Tiny details, invisible improvements, relentless iteration. And not because anyone's watching, but because it makes the product better. That's what the mobile brand does. It engineers fuel the same way great founders engineer their products. Mobile Supreme Plus Premium Gas helps keep engines three times cleaner, which can mean better performance and improved gas mileage. It's for people who care about what's under the hood, even if they never see it. Three times cleaner compared to mobile regular gas in port fuel-injected engines. Actual results may vary. Visit mobilefuels.com for details.

• 5:19Guy Raz?

  You've got a big task ahead of you because, you know, this is a business that you launched at the end of 2011. There was massive, rapid growth. You saw it go public. And I'm sure this is not fun to be reminded of, but still was and is not profitable.

• 5:38Speaker 01

  So that year ending March 31st, we burned $194 million. And if we had done that for the next 12 months, that would have been it. We're done. We're gone. So the immediate challenge is do everything possible to keep this thing alive and floating and don't die.

• 6:08Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:20Guy Raz?

  I'm Guy Raz, and on the show today, how a Great Dane named Hugo became the inspiration for Bark, a subscription business that sells toys, treats, and even airplane rides for dogs.

• 6:36Guy Raz?

  It might surprise you to learn that Americans spend more on their pets than they do on cosmetics and footwear combined. In 2023, we spent almost $150 billion on pets, and that's just in the US. The opportunity is so big that one company is now offering luxury flights for you and your dog. A standard one-way ticket from New York to LA runs around $6,000, and the seats are going fast. That business is called Bark Air. It's part of a larger company called Bark. That brand was co-founded in 2012 by a guy named Matt

• 7:19Guy Raz?

  Meeker. At the time, Matt was frustrated by the lack of dog toys for large dogs, in his case, a Great Dane named Hugo. So Bark began as a dog toy subscription box, which eventually morphed into all kinds of dog products: food, treats, furniture, and now, chartered flights. Before Bark, Matt and a partner launched an idea back in 1999 that was way ahead of its time: a credit card-sized device that could essentially send and receive text messages. The business flopped after about 18 months, but it taught Matt an important lesson about what not to do when starting a business, a lesson he would definitely

• 8:03Guy Raz?

  apply when he co-founded his next business called Meetup. And we'll get there. But for now, Matt Meeker grew up in the 1970s and 80s in the small town of Mason City, Iowa. He spent a few years in the Navy and then studied finance and marketing at the University of Minnesota, where one of his classes made a huge impression on him.

• 8:26Speaker 01

  And I walk into a class that was called Marketing Communications and the professor was a visiting professor from the London School of Economics. First words out of his mouth, he said, who in here knows what the internet is? And he got zero hands out of maybe 35, 40 of us, nothing. And he said, from now on, this class is internet 101. It's not marketing communications. If you don't want to take that class, that's fine, but that's what we'll be doing this quarter. And I didn't know what he was saying. I liked him, just I liked the person. And it was the most eye opening experience ever. Instantly you knew he was talking about something important and big and that the world was about to change.

• 9:10Guy Raz?

  And I mean, clearly that was a pivotal experience for you because I guess when you graduated, you wound up applying for a job at a digital ad agency in New York called iTraffic. And that was, that was just probably, I mean, 1997, doing that kind of work, right? I mean, you were just at the cusp of a revolution. So it was, there was probably a lot of action there.

• 9:36Speaker 01

  A lot of action. And by the time I got there, they had signed Disney as a client and it was just booming. It felt like new things got invented in the world every day and we were on the front lines of learning about those and then incorporating them into our work instantly.

• 9:54Guy Raz?

  And this was really the sort of the beginning of the dot com boom era. But I guess this company that you were with, iTraffic, it got acquired before all of that happened and probably got acquired for quite a bit of money.

• 10:09Speaker 01

  We did. We were acquired by agency.com in December of 1999. And it was a great learning for me. This was the first time anyone had talked to me about ownership or equity of the company you work for. And everyone there had equity. My, my piece of that ended up being $30,000. And to me, that was, that was fantastic. Yeah, that was all the money in the world. It was great.

• 10:37Guy Raz?

  Yeah. You got a $30,000 payout for just, you know, working there for like, what, two years or something, a little less than two years?

• 10:43Speaker 01

  Yeah.

• 10:44Guy Raz?

  So when that happened, you know, you're like, what, 26, 27 at that point? I guess you you start to think about maybe starting your own thing.

• 10:55Speaker 01

  I did. I knew my time was up and I was looking for the next thing to do. And I came across this couple who had a bold, ambitious idea at a time where the whole world had big, bold, ambitious ideas.

• 11:12Guy Raz?

  And who was this couple and what was their idea?

• 11:14Speaker 01

  Schimman and Robin Neustein. And they had a concept where what they wanted to do was, it sounds silly today, but they wanted to put mobile devices in everyone's hands and create a text messaging channel that connected everyone in the US. Actually, the the network that we were using to send the messages was the existing paging network. So we were sending text messages through the paging network, very low cost, into these devices that were the size, the form factor of a credit card. And the credit card had an LCD screen built into it. Imagine going into your wallet today, taking out your credit card and reading a text message on it.

• 11:59Guy Raz?

  Right.

• 12:00Speaker 01

  That's what it was.

• 12:01Guy Raz?

  Amazing. I mean, now you've got better options. But yeah, I mean, in 2000, that was like, that could be life changing. What happened at that company? Because obviously, that device did not come out and it's, you know, not a story that I've heard of. So what happened?

• 12:19Speaker 01

  I believe in starting the company, we made every mistake that you could make in starting a company. And for me, I believe that starts with having access to way too much capital leads to some bad decisions and.

• 12:35Speaker 01

  We had a COO who was a C-level executive at Citibank and we brought him over.

• 12:41Guy Raz?

  Wow.

• 12:42Speaker 01

  We brought over the CMO from AT&T to be our CMO.

• 12:46Guy Raz?

  So you guys are paying big salaries.

• 12:48Speaker 01

  Absolutely, as a startup does.

• 12:52Guy Raz?

  Right.

• 12:53Speaker 01

  So you have very talented people who are bringing, you know, imagine you're running marketing for AT&T one day and the next day you're trying to start something, you're bringing that approach.

• 13:02Guy Raz?

  Yeah.

• 13:03Speaker 01

  And it meant we spent a lot of days in conference rooms talking about PowerPoints. And when we got stuck on things, we hired consulting firms to help solve those.

• 13:14Guy Raz?

  Yeah.

• 13:15Speaker 01

  So it was just wonderful people who were not meant for that stage. So we took a good idea and didn't, didn't do it well.

• 13:23Guy Raz?

  And probably burned through the cash.

• 13:25Speaker 01

  Yes.

• 13:26Guy Raz?

  Like more than $10 million?

• 13:28Speaker 01

  I would guess more like 30.

• 13:30Guy Raz?

  Wow. And now it wasn't, you were not, I mean, you were of course brought onto the team, but you were not the guy who was kind of seeking out the financing. I mean, but you were part of this project and, okay, and that fizzles out. And so what, I mean, and I guess this is probably, this probably takes you through 9/11 in New York City, right? I mean, you were probably in the city at that time.

• 13:52Speaker 01

  I was and for me, I didn't know what to do. So I kept coming into our office and I kept working on this problem and trying to start this company that everyone had given up on.

• 14:07Guy Raz?

  Yeah.

• 14:08Speaker 01

  And I'm meeting with Shimon, the founder. At the same time, Scott, who was the founder of iTraffic, he was also coming off of a failed startup attempt. And we have a bunch of ideas and we're, more and more, we're hanging out, we're walking around the city. Like you said, it's post 9/11. One of the most striking things in the city then was people actually cared about each other.

• 14:35Guy Raz?

  Yeah, yeah.

• 14:36Speaker 01

  And you'd walk down the street and people would say, how are you? And they meant it. They wanted an answer. And it really hit us. So we had a collection of things we could do, ideas we could start. But the one we kept coming back to was was what ultimately became Meetup. And one of the inspirational moments for it was, boy, when when all these strangers come together and they talk and they actually talk, they really talk and they listen to each other, there's some serious power in that.

• 15:12Guy Raz?

  So so this is interesting. This is your friend Scott and Scott Hefferman, I think is his last name?

• 15:16Speaker 01

  Hefferman, yep.

• 15:17Guy Raz?

  Hefferman, okay. And because you guys come up with this idea after 9/11, like, let's create these sort of a way for people to meet up. But did you feel like you must have felt like people weren't meeting up in real life?

• 15:32Speaker 01

  No, we didn't. And there's a really great book from a guy called Robert Putnam.

• 15:39Guy Raz?

  Bowling Alone, yeah.

• 15:40Speaker 01

  Bowling Alone. And all the trends there showed that the American community had just disintegrated from the 50s.

• 15:49Guy Raz?

  Much worse today than it was in 2000.

• 15:52Speaker 01

  For sure, for sure. And then, of course, all the side effects of that, the health effects, the mental health. So we we wanted to create a construct that made it safe for people to come back together and and have healthier communities and be closer to their neighbors.

• 16:07Guy Raz?

  And how would they be organized? Like, what like how it was was it wasn't going to be a dating service, right? It was going to be like just gather, but I'm assuming around shared interests.

• 16:17Speaker 01

  Around shared interest, yes.

• 16:19Guy Raz?

  So first of all, how did you find somebody to help you kind of do the the tech side of this?

• 16:29Speaker 01

  It was March of 2002, we put an ad on Craigslist. It was very obnoxious, saying, interviews are next week. We were looking for a co-founder CTO. If you're not here in New York City next week, then you can't be interviewed. And that's it. Within 24 hours, we had 450 applicants. We chose 60. We did 8 a.m. to 8 p.m. one hour interviews, Monday through Friday, the following weeks, interviewed 60 people. And we came out with with our with our co-founder, Peter Camali.

• 17:03Guy Raz?

  And and what about financing? I mean, at this time, again, at this time, it wasn't cheap to start an internet company.

• 17:09Speaker 01

  It was not, and Scott and I both felt like we had just learned the lesson that too much capital is a bad thing. And so we swung the pendulum way to the other side and said, how about zero? How about we raise zero dollars? But to your point, it's hard to rent an office, or hire people, or really do much of anything with zero.

• 17:33Guy Raz?

  And you didn't have any cash at the time?

• 17:35Speaker 01

  Very little, very little. So what we ended up raising an angel round of $250,000, and largely from Scott's network.

• 17:45Guy Raz?

  Right.

• 17:45Speaker 01

  So many lessons in that for me as well. First, I asked my parents to invest. They wouldn't do it. And so I invested $10,000 for them because I said they would regret it if they didn't do it. But then we, you know, you get to the end, and I'm sure it's a familiar story for founders of you get a lot of commitments saying, I'm in, I'm in, I'm in. But getting that signed document and getting that check is another thing.

• 18:11Guy Raz?

  Yeah.

• 18:12Speaker 01

  And so hurting the cats was a challenge. So what we did, it was the exact moment where the iPod came out. And we sent notes to all of them. And we said, hey, Matt's going to come up and pick up your paperwork and your check. If you hand it to him today, he's going to hand you back an iPod pre-populated with a thousand songs on it. So I went over to the Apple Store in Soho. I bought like eight of those. We loaded them up and I traded iPods for checks.

• 18:42Guy Raz?

  So you raised the money, the initial money you need. And, you know, with that money, the idea was to start, presumably just to start in New York City, right? Is just to see what you could do in the city?

• 18:52Speaker 01

  No, it was everywhere.

• 18:54Guy Raz?

  Oh, wow.

• 18:55Speaker 01

  Which probably went as well as that sounds like it would go. You've got a computer in New York City making decisions of how things should go in Moscow. We started with a couple hundred topics. And then we would tell people, it's 7pm at that Starbucks.

• 19:14Guy Raz?

  And how did you get the word? I mean, actually, initially, who did you think would would sort of gather together? What were their interests?

• 19:23Speaker 01

  So the people who were more disenfranchised and in the shadows were the ones who really grasped onto it initially. So it was witches and pagans and vampires and vampire hunters and these real fringe groups and then technology oriented groups around Python coding language, things like that.

• 19:46Guy Raz?

  I mean, was it hard to get people to kind of trust in it in 2002, 2003? Like, was it just because people were, I think, wary about meeting strangers through the internet?

• 19:59Speaker 01

  It was very difficult and we would we would go stalk the local meetups in New York and there was a common behavior. Worldwide, what we would see is about half of the people who are SCP would actually show up.

• 20:15Guy Raz?

  Right.

• 20:16Speaker 01

  And we would go and we'd sit across the street and sort of watch. And you had this common thing where people would walk by wherever the venue was and sort of slow down and look in the window and keep walking slowly but looking. And then they would either go up and they'd circle back and then come in or they'd run. So they had seen what they needed to see and they made their choice. But it was a new activity and they didn't know what to make of it.

• 20:42Guy Raz?

  Yeah. But then, I mean, something pretty significant would happen that would help you guys gain traction, which is that in 2003, Howard Dean announced he was going to run for for president. He was the governor of Vermont at the time. And I mean, this is in the days when politicians were like starting to tap into the power of the internet, right? And it it seems like pretty early on, I guess, some of his people saw the potential in meetup, right?

• 21:12Speaker 01

  Yeah. In February of 2003, a young guy on our team

• 21:17Guy Raz?

  Yep.

• 21:18Speaker 01

  very boldly called the governor's mansion in Vermont and said, I have a proposal for you. And that turned into a meeting with Governor Dean and Joe Trippi, his campaign manager, at which they said, I intend to run for president and I don't have a lot of money, but I can promise you this, from now until the day I get out of the race, I will end every speech I give with, "Join your local Howard Dean meetup." At that point, no one knew who Howard Dean was outside of Vermont. He ended up racing to the head of the Democrat nomination.

• 21:56Guy Raz?

  Yeah, in 2004, yeah.

• 21:58Speaker 01

  He was a big deal. And so by March of 2003, there was a good sized venue on the lower east side of New York and he showed up and they were opening the windows and there was a huge crowd on the street and about 500 people inside.

• 22:13Guy Raz?

  Wow.

• 22:14Speaker 01

  Just to hear him speak. And that was the moment we said like, we, we did this and he knew we did it. We did it together. And that catapulted him to, to the point where every other campaign, Wesley Clark, John Kerry, all of them.

• 22:29Guy Raz?

  Started using it.

• 22:30Speaker 01

  Yeah. Well, came to us and said, can you do for us what you've done for Governor Dean, please?

• 22:34Guy Raz?

  And so presumably they weren't paying for it, right? But there was a business model, like you had to pay a membership fee or something to use it or to post?

• 22:42Speaker 01

  The, we were scrambling for a business model in the early days. And so the initial idea for a business model was this will be great for all the businesses. What we'll do is we'll direct traffic into these local businesses and, and they will pay us for sending foot traffic into their business. So as an example, we sent a group of about 30 people into a Barnes and Noble in Union Square in New York. And then our, our smart plan was to call Barnes and Noble the next day and say, see all those people last night? You can, we can do that every day for you if you just pay us. And we called them and we said that and they said, that was you? Don't ever do it again. And they, they weren't

• 23:27Speaker 01

  ready for it. And so we, we learned something there, but we, we really tried everything we could and we were cobbling it together and making a little bit of money. But it took us probably four years to get to the subscription service.

• 23:42Guy Raz?

  Um, I guess at a certain point, um, from what I understand, I mean, it got, you know, it was starting to get, you know, pretty, pretty stable and. I guess around 40 to 50 people now on staff and you left in 2008. You decided that you didn't want to be part of it anymore. Can you kind of explain your thinking around that? Because, I mean, you know, it seemed like it was just starting to hit its stride.

• 24:10Speaker 01

  Yeah, it was doing very well, growing quickly, profitable, supportive investors and board. Everything looking very good and 10 million plus active members worldwide every month.

• 24:23Guy Raz?

  Oh, wow.

• 24:24Speaker 01

  At that point, I kind of took a look at it and looked at myself and said, if I had said to myself at the beginning, this is where we would get to, would I be happy with it? And I, absolutely, this, this would have been a great outcome right here. And the other part was I was feeling very overwhelmed by the size and the size of the team and thinking, 45 people, this is enormous. And I think, oh, wow, they're all depending on us to keep this afloat. So it became an overwhelming thought to me and, and I decided to opt out for those reasons.

• 25:01Guy Raz?

  So what did you do?

• 25:03Speaker 01

  I ran a marathon, spent, spent a summer training for that. I was trying to find what's next and I was struggling with that. Sort of looking for that next lightning strike and feeling frustrated by it.

• 25:19Guy Raz?

  Yeah. Were you like financially, were you, I'm assuming you hadn't made any money yet, right? Because, I mean, Meetup was not, it wasn't acquired, it wasn't sold or anything, or had you?

• 25:30Speaker 01

  No, it wasn't acquired or sold. I had taken a little bit of secondary money off the table and enough to sustain me for a bit.

• 25:39Guy Raz?

  And this is going to factor into the next chapter in your life. You adopted a dog.

• 25:43Speaker 01

  Yes, in June of 2010, I adopted Hugo.

• 25:48Guy Raz?

  Right.

• 25:49Speaker 01

  A little Great Dane.

• 25:50Guy Raz?

  A little Great Dane, I think a big Great, how, how big was Hugo?

• 25:54Speaker 01

  Well, when I got him, he was 10 pounds. He grew to be 140 pounds.

• 25:59Guy Raz?

  Wow, that's a human. That's not a dog. So, all right, so, and, and having a Great Dane, and did you live in an apartment? Presumably you live in an apartment in New York, right?

• 26:09Speaker 01

  Yep, sure did.

• 26:11Guy Raz?

  And a Great Dane is like a roommate, roommate not paying rent.

• 26:15Speaker 01

  Yes, took a lot of space and took a lot of food, a lot of medical care.

• 26:20Guy Raz?

  Tell me how Hugo kind of starts to affect your life and the way you're thinking about a problem that eventually you want to solve.

• 26:28Speaker 01

  Mainly, I became obsessed with Hugo and I loved him more and more and more. He was my first child. And so I fell into the mode of, I want to make him happy. And there was a local little pet store right around the corner from my apartment, and they would hand me a bully stick and charge me $12 for it.

• 26:51Guy Raz?

  Yeah.

• 26:52Speaker 01

  And I'd take that home and give it to him. And if I'm honest, Hugo was probably thrilled with that setup, but it wasn't connecting for me. I was just disappointed with the offerings and tried the local pet codes and pet smarts as well. And it was all the same.

• 27:09Guy Raz?

  And you felt like everything was made for smaller dogs?

• 27:13Speaker 01

  Absolutely. Even the food, it took us a while to find the right food for him. And everything was difficult to find the right thing for a Great Dane.

• 27:23Guy Raz?

  And I guess, I mean, how does it kind of lead you to start thinking about, well, maybe there's something I could do about this?

• 27:29Speaker 01

  Well, it took a bit of time and there was another intersection that happened. So in April of 2011, I went to a conference called Summit Series. I'd never heard of it before. It was up and coming, but this year they were doing it on a cruise ship. And so it was three days at sea. I was cheap, so I bought the cheap ticket. And what that meant was you got, you got paired with a roommate who you didn't know. And that gentleman was Henrik Werdelin, who's my co-founder in Bark.

• 28:04Guy Raz?

  Wow. And he was just, he happened to be a roommate there. Okay, keep going.

• 28:08Speaker 01

  And what happened was we had three days at sea, getting to know each other and talking about our philosophies. We had both gone through startups in the early 2000s where we raised too much money and flamed out. We had a lot of shared experiences and ideas about how do you do this? So after Summit, we would get together every Friday afternoon for beers and talk about possibilities and ideas.

• 28:34Guy Raz?

  Yeah.

• 28:34Speaker 01

  And at that time, one of the hot startups in New York was Birchbox.

• 28:40Guy Raz?

  Yes.

• 28:41Speaker 01

  And so we were looking at that.

• 28:42Guy Raz?

  Subscription service.

• 28:44Speaker 01

  Yes, subscription service, sending samples of different beauty products. And we were looking at that and saying, wow, what if we did that for dogs? And we sent samples of food and toys and treats and things that were appropriate for the different size of dog. And Henrik came up with an absolutely terrible name. He's Danish, so we forgive it, but he called it Doggy Baggy, which was just awful. We said goodbye for that Friday afternoon. And on Saturday morning, I woke up to a mocked up designed homepage of a site.

• 29:23Guy Raz?

  That he put together.

• 29:25Speaker 01

  That he put together overnight. And he said, I really like this. And when I got the visual of it, I thought, well, that's interesting. And I had my phone. I took that image and I put it as the lock screen on my phone. And nearly everyone I would come across, I'd show them and I'd say, what do you think of this? And they'd usually say, oh, that's cool. When it's live, let me know and I'll buy it.

• 29:48Guy Raz?

  And there was nothing at that time in 2011, 2012, there was no dog subscription box. There must have been.

• 29:55Speaker 01

  No, not at all.

• 29:57Guy Raz?

  Wow.

• 29:58Speaker 01

  But nothing had been designed or built. So again, this is an image on my phone with now a Square account attached to it. So I started to carry a Square in my pocket and I'd show people and they'd give me the reaction. I'd plug the Square in and I'd say, it's live, swipe your card. And I'd hand the phone to them and their faces would change. They'd be like, well. So the first person I did it to is a very good friend. And he said, I don't even have a dog. And I said, well, Evan, you know people with dogs. Buy them a gift. Come on, get out your credit card. And he got out the card and swiped it and those were the first two we sold.

• 30:37Guy Raz?

  When we come back in just a moment, how Matt eventually expands the business beyond dog toys to dog food, dog healthcare, even an airline for dogs, but not cats. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 30:57Guy Raz?

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• 31:39Guy Raz?

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• 32:23Guy Raz?

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• 33:05Guy Raz?

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• 33:35Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2011, and Matt and his partner Henrik are trying to drum up excitement for their new business idea: a subscription box for dog toys. Meanwhile, to pay the bills, Matt's running a startup incubator in New York called, coincidentally, Dogpatch Labs.

• 33:57Speaker 01

  So in a way, I got paid to be the co-founder of 20 different startups simultaneously, without the headache of sleepless nights, or what's going to happen next week, or any of that. E-commerce was hot at that point. It was on fire. And so part of the day job was meeting a lot of companies, and I'd say a quarter to a third of those were commerce-related.

• 34:25Guy Raz?

  Yeah.

• 34:26Speaker 01

  And I felt so dumb. I didn't know how those businesses worked. I didn't know how to engage in the conversation and to suss out, is there something here? So part of this for me was, I want to educate myself through experience as to what's important, how do these things work? So we found our third co-founder at that point.

• 34:48Guy Raz?

  And this was Carly Strife, who had worked at Uber to kind of help you guys turn this into... So she must have been really encouraged by this idea. Did you... And I think this is around the time where you've got, again, I mean, you mentioned Birchbox, which got Dollar Shave Club, and I mean, there's some really interesting new business models starting up. Was it easier for you guys to raise initial funding and financing for this?

• 35:16Speaker 01

  We didn't try.

• 35:17Guy Raz?

  You didn't try?

• 35:18Speaker 01

  No, not at all. Henrik and I together put in $10,000 and it kind of that same story of too much money or money at all.

• 35:29Guy Raz?

  Yeah.

• 35:29Speaker 01

  Isn't the type of company we want to build. We want to build something for us and something that's profitable. And this isn't going to be a venture back thing. It's going to be a business that we build.

• 35:40Guy Raz?

  And the idea was when we need it, we'll start to raise it.

• 35:43Speaker 01

  We thought we would never raise money. That was the hope. That was the plan. And Henrik and I had no intention of leaving our jobs either. It was like, here's Carly, we'll give her a little bit of money and off she goes.

• 35:56Guy Raz?

  How did you attract her from, I mean Uber, man, I mean, to leave Uber in 2012 was, you know, I mean, it turned into a massive company, right? 2012 Uber was still early days. But, but how did you guys attract her with very small salary? Presumably you gave her a big chunk of equity.

• 36:15Speaker 01

  We did. An equal chunk of equity. So a third of the company.

• 36:19Guy Raz?

  Right.

• 36:19Speaker 01

  And, and yes, I hope she's not listening, but it was, she was the 13th employee at Uber. They had done, had a good start in San Francisco and Travis brought her on and said, we've done this in San Francisco. We started in New York. And so she was at that time running around making deals with Black Car Services and.

• 36:42Guy Raz?

  Yeah.

• 36:43Speaker 01

  I think the line we used with her is, do you want to be a cab dispatcher your whole life? And, but she was very hungry to start her own thing and, and we made this her thing.

• 36:56Guy Raz?

  Yeah. And by the way, I mean, what exactly did you plan to put into the subscription boxes at this point? Like, did you have a plan for how you're like, how are you going to source them, the stuff inside?

• 37:09Speaker 01

  So Carly did the work of what you're doing and asking all the questions of what kind of products do you think and where are you going to get them?

• 37:17Guy Raz?

  I think a reasonable question to ask.

• 37:19Speaker 01

  Yeah. And we said, those are great questions. You should answer them. And she's a force. And so as quickly as she asked, she's on a plane in Vegas at a pet show, walking the floor, selling people on this concept and how big it will be and getting them to sell her products that she thought was cool. And she put together products from all these different companies, sourced them, had them shipped to my incubator. And then in December, we went in and we packed all those boxes. We assembled the boxes into boxes and then we filled them up with the products. And because it was our first one and we're doing

• 38:02Speaker 01

  it by hand, we're writing holiday notes on the lids of every box on the inside. We got almost all the way through where Henrik said, I have a question. Is holiday spelled with one L or two? And we said, Henrik, it's one L. And he said, should I redo all of these? And it's like, no, just leave it. Somebody will have a story to tell about that. That was month one. And the first box was shipped in December of 2011.

• 38:33Guy Raz?

  Got it. And these are to the initial like 50 subscribers friends that you signed up?

• 38:37Speaker 01

  Yeah, we sent 78 boxes, I believe.

• 38:41Guy Raz?

  So I guess, I mean, my question is, like, with so little money, right? I mean, eventually you would not be able to survive. You would have to bring in more money. If you're going to go to, you know, if the idea was to really scale this thing, and even before you scaled, I mean, you would have to buy, get inventory and you would have to ship this stuff out. And what was the, what was the subscription fee every month? How much did it cost?

• 39:06Speaker 01

  We started at $25 a month.

• 39:10Guy Raz?

  Got it. Okay.

• 39:11Speaker 01

  And then we, we heard from people that that's too much. And

• 39:17Speaker 01

  Our reaction to that was it doesn't cost too much. You just don't like, love your dog enough for this product. But we, one of the things I had learned from Meetup was about generating cash flow. I, I had a cash flow generation trick up my sleeve, offering a long-term discount for prepayment. So saying if you subscribe now for six months or a year and you pay it upfront, it's not $25, but it's 20 or it's 18. So today I would collect $200 from you that I owe you back in product over the next 12 months. But now I have $200 of cash that's going to fund this month's inventory.

• 39:56Guy Raz?

  Yeah. And so you could front load the cash, but then, and then presumably negotiate with the, the companies we buy the products from for discounted prices on their products.

• 40:08Speaker 01

  That's right.

• 40:09Guy Raz?

  Yeah. So this launches in, at the end of 2011 and starting with your friends, right? And, but you launch at a fortuitous time because of Groupon. I think Groupon really kind of supercharged your early growth because you are presumably offering a cut rate price to sign up.

• 40:33Speaker 01

  They were very popular to the point where as we got into 2013, we were calling it, we needed to get off the Groupon crack. We were just.

• 40:43Guy Raz?

  Cause it was probably probably losing money on those, those subscriptions.

• 40:46Speaker 01

  Probably yes. I mean, we had a very good deal with them.

• 40:50Guy Raz?

  Yeah.

• 40:50Speaker 01

  But if I remember right, we were selling three months subscriptions for $45. So $15 a month, but you probably have a $20 cost of goods in every box.

• 41:02Guy Raz?

  Yeah. Probably just generated tons and tons of subscribers.

• 41:06Speaker 01

  It did. I mean, tons and tons is relative, I guess, but that first year we thought we were huge, where we, we ended the year with about 15,000 subscribers.

• 41:16Guy Raz?

  And how did you keep them? I mean, what, what kind of tax tactics did you use after those three months ended to retain some of those or many of those subscribers?

• 41:26Speaker 01

  Well, certainly auto renewing subscription is part of that, but you're, you're trying to.

• 41:32Speaker 01

  Be very responsive. We're, we're very curious. It's, we send out a product to you. We want to hear from you.

• 41:39Guy Raz?

  Yeah.

• 41:40Speaker 01

  Did you love it? Did you hate it? If you didn't love it, tell us why. We'll make it right. So I remember the first four months that we were alive, we had no churn. Not one, not one subscriber left. Now, not a whole lot of subscribers there, but out of over a hundred, no one left. I remember the first one leaving was someone that I knew and I called him and I said, whatever it is, we'll make it right. I'm not, I'm not falling off of this 100% retention rate. Come on, let's do it. So a lot of that idea though, of caring deeply that somebody paid for something and they expect something for it. And if you miss the mark, make it right. Make them, make it unforgettable for them where they, they just can't leave it.

• 42:25Speaker 01

  It becomes hard to do that when you get much larger.

• 42:29Guy Raz?

  At, at what point did you feel like, or did, did, was it clear that you had to raise money, like a year into it?

• 42:36Speaker 01

  Uh, again, I don't know that it was clear and it wasn't the plan. In, uh, May of 2012, Mike Hirschland, who had started Dogpatch Labs and Mike and I obviously worked closely while, while I was there. And he reached out and said, I'm starting this new fund. Can I invest in this thing? Can I lead a round for you? But that came with the string for me of if I invest, you have to, you have to jump in full time and be the CEO and run this thing. And, uh, that wasn't even something I had considered before then. That was, that was a difficult choice for me.

• 43:16Guy Raz?

  All right. So what did that mean? I mean, how, tell me sort of more specifically about what you raised and, and, and yeah, and, and what that meant?

• 43:26Speaker 01

  We, we raised 1.5 million dollars. I, I think it meant you're, come to that fork in the road of if you're taking venture capital on, you're now deciding to build a different kind of business in a different way.

• 43:41Guy Raz?

  Yeah.

• 43:41Speaker 01

  And Henrik and I at least, we knew it was a fork in the road and we were wary of taking it. We were also, I'd say somewhat inspired by the traction in those first eight months saying,

• 43:54Speaker 01

  Something like this doesn't come along very often.

• 43:56Guy Raz?

  Yeah.

• 43:57Speaker 01

  It doesn't happen all the time. So when it happens, do you have a responsibility to take on that capital and and supercharge it before someone else does?

• 44:07Guy Raz?

  One of the things that I read at the time, this is around 2013, you had said was, and I'm assuming this is sort of in reaction to raising capital, because now the ambitions grow and the scale, the scale of this thing grows. You said, you know, we're the new generation of pet brands. Like, we're, we want to be a $5 billion company. You know, PetSmart, Petco aren't, they don't speak to our needs and the needs of millions of dog owners and.

• 44:37Speaker 01

  Yeah, yeah.

• 44:38Guy Raz?

  So there was a lot of ambition behind this. I mean, you were clearly, you know, kind of publicly saying, you know, sort of planting a flag and saying, this is what we're going to be.

• 44:47Speaker 01

  There was after that turn. And mentally, I had to make a turn, but I certainly didn't want to start something because I knew what comes with starting a new company. I mean, that for me, it becomes the center of your world. It's, it's your life and often at the expense of many other things.

• 45:07Guy Raz?

  Obviously, you couldn't do that other job. That was one thing.

• 45:10Speaker 01

  Exactly. Mentally, I do very well when I focus on one thing. I'm not great at giving a little bit of myself to this and this and this. And so anything that sort of fell outside of Bark or Bark Box at the time and dogs really didn't get my attention. And so those things suffer. I was, I was married and my, my marriage suffered and ultimately failed because of it. And I didn't know that would be an outcome, but it doesn't surprise me either.

• 45:45Guy Raz?

  You were just, just head down, working 18-hour days?

• 45:49Speaker 01

  It's not about the heads down. I'm at the office at the desk necessarily 18 hours a day, but my head is in it 24 hours a day. My interests are aligned to it. You ask me to go to dinner with friends on a Saturday night and it's a bother for me because there's something I want to crank on, even if I'm just sitting in my home. I've become consumed by it. Probably unhealthy.

• 46:17Guy Raz?

  Yeah, but that's, I mean, that's part of the deal.

• 46:20Speaker 01

  Yeah, it is.

• 46:22Guy Raz?

  So my first, I mean, this is a question that you would have been asked today if you were starting this business today, but I wonder back then if anyone ever said, you know, the challenge with this kind of business is that it's easily replicable. There's the only thing that you're doing here is just curating products and there's risk, there's inherent risk to that kind of business.

• 46:46Speaker 01

  True, but we kind of hit the market at just the right time where when we started, there were 38 million households in the US with a dog and today that's 65 million.

• 46:57Guy Raz?

  Wow. In just a decade, a little bit more than a decade. That's incredible.

• 47:03Speaker 01

  We caught a wave and we were very lucky to catch that wave.

• 47:07Guy Raz?

  Yeah.

• 47:08Speaker 01

  We also caught another wave where it was early 2013. Facebook advertising became a thing. Instagram started to become a thing.

• 47:18Guy Raz?

  But of course, that would also attract competitors, right? And that and competitors start to pop up almost, you know, within a year of you guys launching.

• 47:27Speaker 01

  They did. Competitors would pop up and they would look exactly like us. And that's where we would stop being worried about them. We'd say if they lack creativity so much that they have to copy us pixel for pixel. That's not a competitor we need to worry about. And we would just, we would lean on them. They're usually copying the whole playbook. So taking to Google search or Facebook advertising. And it's easy enough to just lean on them and outspend them. If you're bigger, we'll bleed you over time. And that happened time after time after time.

• 48:03Guy Raz?

  The other question I have about this time period, right? 2013. I have to mention that especially your investors were like, well, you know, you're calling a BarkBox now, but really you have to think about what else you're going to do. And, you know, you're going to want to serve all kinds of pets, not just dogs.

• 48:26Speaker 01

  We were, we were very clear from the beginning, only dogs.

• 48:28Guy Raz?

  Only dogs.

• 48:30Speaker 01

  I, I hear almost everyone say, the dog is my child. I don't hear a lot of people say, the cat is my child.

• 48:36Guy Raz?

  That's true.

• 48:37Speaker 01

  So let's go deep on the thing that we're good at instead of branching out further into the pet department. We, we had customers who would contact us early days and say, what about for cats? And we'd say, order the BarkBox for your dog. Take all the stuff out, give the box to the cat. Ta-da, there's your product.

• 48:57Guy Raz?

  And, and, and so what were the things that would stress you out or, or keep you up at night? I mean, you're growing and acquiring more users. Like what, what were the, some of the things that worried you?

• 49:10Speaker 01

  Well, we made mistakes. We started a service in 2013 called Bark Care, which was an in-home vet service in New York. And people loved it. Dogs loved it. Everyone was loving it. But it would have taken us a tremendous amount of capital to do it and scale it the way that it needed to be done.

• 49:32Guy Raz?

  This was like an on-call vet that would come to your house?

• 49:36Speaker 01

  Yeah, so we had vets on staff. You'd make an appointment and the appointment happened near your home.

• 49:41Guy Raz?

  Wow.

• 49:42Speaker 01

  And it was magical, but we couldn't make it work financially with the resources we had. So we, we shut it down.

• 49:52Guy Raz?

  And what about conflicts? Did you guys, I mean, are you just, personality wise, were you just so well matched? Or did you, did you have disagreements about, I don't know, initiatives or the direction that you wanted to head in?

• 50:05Speaker 01

  We're very well matched. Carly and Henrik are two of my best friends in the world to this day. And when there are disagreements, when there were, it was usually between two of us. And, and so the two of us would be complaining to the third one, who would be taking on board that information and trying to guide us back closer together. And, and it was never the same too. It just sort of kept rotating around the triangle. So what we were trying to do was build a company where we could come in every day and be around a lot of people that we just wanted to hang with.

• 50:41Guy Raz?

  Yeah.

• 50:41Speaker 01

  Like, we genuinely liked everyone. And if someone made their way into that, if we made a mistake and hired someone that we didn't like, we got rid of them pretty quick. It's like, you just don't fit. I'm sorry. Nothing personal, but you just don't fit.

• 50:54Guy Raz?

  All right. So the first kind of five years, what I'm wondering is, in that time period, with that really rapid growth, because I think by 2016, you're doing like $100 million in revenue, not yet profitable, from what I understand. You must have started to field some acquisition offers or some interest in potentially acquiring the brand.

• 51:16Speaker 01

  We did. Yes, a few.

• 51:18Guy Raz?

  And, and you just outright were not interested in, in having those conversations yet?

• 51:23Speaker 01

  Uh, we had the conversations and we walked away from a couple, but we took them seriously. We just couldn't get there.

• 51:31Guy Raz?

  Hmm.

• 51:31Speaker 01

  We're trying at that point to, you take on the new capital, we invested the new capital in the way we, we said we would. It was successful. And we get into 2018 and it was, it was a thing that Henrik and I forgot from the beginning. We never looked at the market data or the market sizing and said, let's go here. If we had, we would have never chosen Toys. And when we started to look at a market is when we started to make decisions for the wrong reasons.

• 52:04Guy Raz?

  What were some of the decisions you started to make?

• 52:06Speaker 01

  We, we started to talk to investors in mid 2018 about another round. And the questions were always about food.

• 52:14Guy Raz?

  To make dog food?

• 52:16Speaker 01

  To make a product in food. We didn't really know what it was, but we were starting to sell the idea that investors wanted us to sell them. The toy industry is relatively small and everyone starts to point us to, "Well, food's really big. You should get into those bigger categories because you have this great brand and it connects to people." And we were just saying back to them what we thought they wanted to hear. And not surprising that that fundraising round didn't turn out well. What it felt like we were becoming, we didn't, we didn't like the feel of it. So we, I definitely freaked out my board and our investors, but walked away from the fundraising round and said,

• 53:01Speaker 01

  "Forget it."

• 53:02Guy Raz?

  In 2018?

• 53:03Speaker 01

  Yeah, we'll just, we'll generate our own cash. We'll be our own company. And they were scared and...

• 53:10Guy Raz?

  And presumably scared because I'm, I'm, I'm pretty sure your, your growth was slowing. I mean, at this point, your user acquisition was going down. And, and at the same time, I have to mention that, that your board and investors wanted you to diversify, right? Because you were, you were a subscription service. And I think just the year before, you did start to sell at retail, like, like start to sell toys at, at Target?

• 53:36Speaker 01

  Yep, that's right. 2017. And they, they did want us to diversify, but it, it wasn't leading to the best outcomes. And boy, we were, we were really living hand to mouth there from mid 2018 through early 2020.

• 53:54Guy Raz?

  When you say hand to mouth, what do you mean?

• 53:57Speaker 01

  We were, we were running out of cash. And that, that model that I talked about early on of how we can generate cash to pay for the inventory today, if you're not growing, it, it catches up to you and works in reverse and eats away at your cash. So for about two years, we just ran steady. We grew enough.

• 54:18Speaker 01

  To maintain, but our cash was very flat.

• 54:21Guy Raz?

  Would you call that, I mean, a much more stressful period than the actual first five years when you were, when you were really just a scrappy startup?

• 54:30Speaker 01

  Definitely more stressful. And I was probably shouldering the stress for our board and our investors where I would say they were downright freaked out. Personally, I'm more comfortable with very little cash on hand than with a lot. So it didn't bother me a bit. I feel like I can find my way through that.

• 54:53Guy Raz?

  Right.

• 54:53Speaker 01

  But I was taking on the stress of everyone else.

• 54:57Guy Raz?

  Yeah. And so, I mean, I guess, I mean, there were initiatives that you launched, like, first of all, the food idea, you abandoned it, but, but then you must have come back to it because you do have a food vertical today. A bark, I think it's called Bark Eats, right?

• 55:14Speaker 01

  Exactly. We've gone in and out and then out of food. The idea, again, maybe a misfortune of timing, but we went right before the pandemic, we launched a food thing saying, food is food, but what is the service layer that you can apply to it that makes it special? And so we had this concept of bringing back the, the milkman in the US and we deliver your food to your home. And I think we started that in January, February of 2020. And we found out during the pandemic, people don't really like someone coming to their door and coming in for a conversation about their dog. So it kind of shot the whole theory

• 55:55Speaker 01

  right there. But we've continued to try to navigate it. We continue to this day. And there's a concept just on the horizon for food that I think we're all pretty excited about. It's very different.

• 56:09Guy Raz?

  All right. So you, so let's talk about the pandemic for, for a moment. I mean, you, this is actually going to be a boom time for you because there was a At that time, there was a spike in the number of people. There was a massive demand for dogs during the pandemic and there was a shortage. People couldn't get, they couldn't adopt dogs. And I imagine that you must have seen some kind of uptick at that time.

• 56:34Speaker 01

  We did. It was, it was that and now you're home with your dog all day and they need to be entertained because they're bothering you. You're trying to work. So, but, but it wasn't that certain. We were, we were scared. Again, we were going month to month on our cash. I remember in March of 2020, having conversations with investors and our banks and saying, well, we'll see, we'll see what retention looks like on April 1st. And then all of a sudden, customer acquisition is just off to the races, just booming. So, we accelerated very fast through 2020 and 21.

• 57:12Guy Raz?

  You, I think at the end of 2020 stepped down as CEO. A couple of things were going on. First of all, imagine it was, you just went through this two-year period of extreme stress, right? Of just like cash crunch. Tell me about, about that decision.

• 57:28Speaker 01

  Well, yeah, actually, the decision came almost a year before I did it. So I'd had a couple of conversations with our board saying, I think I need to step down. And they'd say, oh, that's a good idea. We should talk about that at the next meeting. And then it would get punted to the next one and the next. And eventually I said to them, we got to take this seriously. I really mean it. But, but the rationale for me was twofold. It was Hugo was getting old and I knew his time was limited and I didn't feel I'd want to be around the company when he passed. And then we also had ambitions of someday being a public company. And I had an idea that I didn't want to be a public company CEO.

• 58:13Speaker 01

  Fast forward to September of 2020 and Manish steps in as the new CEO of Bark.

• 58:23Guy Raz?

  This is Manish Jheneja?

• 58:24Speaker 01

  Yes.

• 58:25Guy Raz?

  And he was a former, I guess, Amazon executive. So he comes in as CEO. Yep.

• 58:30Speaker 01

  Yep. Yep. He came over from Amazon. Big dog person. Loved. And a very good guy that I think we put into a difficult spot. You're saying to someone, take on a CEO role, take it on in the middle of a pandemic. You'll live in Seattle, but you'll commute to New York. That's fun. You won't get the opportunity to meet most of the team or engage with most of them, but take responsibility for a culture. And by the way, we just signed up to do this thing called a SPAC and go public. So now you're going to be a public company CEO. Congrats.

• 59:09Guy Raz?

  When we come back in just a moment, Matt talks about Bark's latest initiative, an airline where dogs get to roam free. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 59:34Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2021 and Matt's temporarily stepped away from the CEO job at Bark, but he's still getting besieged with inquiries about taking the company public. Not in the usual way, but through a SPAC, essentially a way to take Bark public in a faster, compressed timeframe without as much oversight.

• 59:58Speaker 01

  I was getting calls left and right. You called the SPAC craze. Like, everyone was coming at me saying, we want to merge with you and our SPAC. And I kept pushing away, saying, this is a fad. This is a fad.

• 1:00:12Guy Raz?

  Yeah.

• 1:00:12Speaker 01

  And I asked around for someone who could teach me about it and got introduced to a guy named John Ledecky. And John was introduced to me as the godfather of SPACs. And John gave a lot of advice and he knew the subject matter quite well. And then shortly after, John formed a SPAC and said, now I have a SPAC and I think you, we should merge. And you should do it quickly and here's why. And John's theory, which turned out to be right, he's, he's usually right about most things. He, he said Chewy stock is at an all time high. The pet category is on fire. And what that means is Chewy is the only public pet company.

• 1:00:55Speaker 01

  That means January 1st, there's going to be a line of these people signing up for SPACs. You don't want to be the eighth company. You want to be the first one. So you have access to the best quality capital out there, which means we got to go now. We got to go fast. That was mid-November and we went fast. We, we did a two-day virtual roadshow in mid-December.

• 1:01:20Guy Raz?

  Of 2020.

• 1:01:21Speaker 01

  Yeah, we went out, we went out to raise a hundred million through that pipe process. We had an interest of nearly 500 million. So we ended up raising 200 from that in addition to the SPAC funds. He, he was absolutely right. The market was very hot and the third, fourth, fifth, sixth didn't have nearly the same success that we did.

• 1:01:43Guy Raz?

  You, you stepped away for about, I think about a year and a half and came back as CEO in, in early 2022. Tell me the, the, the thinking behind it. I mean, when you had left, did you think it was temporary or did you think that it was for good?

• 1:02:01Speaker 01

  I thought it was for good. We, we brought in Manish. I moved to Florida with my wife, followed her for her job. And I thought that was that. And then in December, late December, December 28th of 2021, Hugo passed away.

• 1:02:17Speaker 01

  And my feeling was the opposite of what I expected, which was more this company is his, it's his legacy. I can't entrust that to someone else, regardless of how I felt about them. I felt deep responsibility to make sure that that legacy lived on. And, and so I had this strong urge or desire to jump in. And that, I don't want to speak for Manish, but if I'm reading the room, it coincided with Manish's probably feeling very burnt out. And he's a very positive, energetic person who was just feeling worn out. So I think we caught

• 1:03:02Speaker 01

  each other at just the right moment.

• 1:03:04Guy Raz?

  All right. So you come back and you've got a big task ahead of you because, you know, this is a business that you launched at the end of 2011. There was massive rapid growth. You know, you saw it go public. And, you know, I'm sure this is, you know, not fun to be reminded of, but still was and is not profitable. And, and so what did that mean? I mean, were you, did you feel like, I'm assuming you felt a charge to kind of get, get it to that place?

• 1:03:36Speaker 01

  More than a charge. Our fiscal year ends March 31st. I came back January 11th. So that year ending March 31st, we burned $194 million. And if we had done that for the next 12 months, that would have been it. We're done. We're gone. So the immediate challenge is don't die. Just do everything possible to keep this thing alive and floating.

• 1:04:03Guy Raz?

  Right.

• 1:04:03Speaker 01

  And looked at every angle to do that and got the unit economics in shape, got the supply chain fixed, brought on really great talent, brought on a fantastically talented CFO, brought discipline to the business, right sized the team. There are a lot of those things that are difficult in the moment. They're not fun in the moment, but it was just survival mode. And, and we have really turned that around and gotten ourselves into profitability and into cash flow generation. And, and now that's starting to compound.

• 1:04:38Guy Raz?

  So tell me about where you see opportunities, right? It's a different marketplace. It's harder to acquire users today. Instagram and social media is just harder. I mean, a lot of people say it's just not worth it. You spend more than you actually get in return. I mean, what is sort of, give me a sort of sense of playbook. I mean, is it expanding product offerings? Is it trying to get into a bunch of different spaces and seeing what works and what might not work?

• 1:05:09Speaker 01

  I think it's returning back to who we are and what we're good at. One of the things that we're great at and we have big advantage in is toys. And it does get, it gets poo-pooed by a lot of people because, well, that's only $3.5 billion industry. And you already own 10% of it. Okay, but we don't own 90% of it. So I understand relative to food, it's 1/10 the size. But this is one thing that we're very good at. And there are a lot of places that we don't show up and a lot of different types of products that we can create and we can invent.

• 1:05:47Guy Raz?

  You have your own design, in-house design team?

• 1:05:50Speaker 01

  We have our own in-house design team. We have a very strong supply chain. We're about as close to being vertically integrated on the toy side as you can be without being vertically integrated.

• 1:06:02Guy Raz?

  You don't own your factory, for example?

• 1:06:04Speaker 01

  We don't, but we're getting closer. So we're inching in that direction.

• 1:06:09Guy Raz?

  Right.

• 1:06:10Speaker 01

  We need to show up where the customers are as well. So one way we're growing very rapidly right now is Amazon. People love their Amazon Prime.

• 1:06:19Guy Raz?

  Yep.

• 1:06:19Speaker 01

  So let's become a great product company and put our products where the people are.

• 1:06:25Guy Raz?

  One of the things that you guys have do, and I think, I imagine this is not a huge... Part of your business, but it certainly has generated a lot of news stories is you are working with some charter airlines to offer flights for humans and their dogs. It's really hard to bring dogs on airlines now. They're really cracking down. Most airlines just don't allow, certainly big dogs, don't allow them. On their couple of smaller companies like Jet Suite X, here in the Bay Area, they operate here and you can fly with your dog on those flights. So you are doing a version of this, right? You're basically working with charter companies to like fly between New York and London, like long haul flights.

• 1:07:07Speaker 01

  Yeah. And this is a classic huge problem for people with dogs and especially those with larger dogs, which has a special place in my heart, obviously. But we are, we're going every other week between New York and Los Angeles, every other week between New York and I'll say London, but we mix Paris in there too. Those tickets are $6,000 to $8,000 one way and we're sold out in September. We were sold out in August. So we're not flying enough at those prices. But the other thing that I'm obsessive about right now is how do you take a $6,000 ticket and turn it into a $600 ticket and really, really solve this problem?

• 1:07:52Guy Raz?

  Yeah. And, and so the flights you're offering, you literally could have your dog like out of a cage, like next to you in the seat, right?

• 1:08:01Speaker 01

  In the seat, on the floor at your feet, but they usually wander around and say hello to everyone else. And they, and there's so many touches to this experience. It's the dogs are served meals, the dogs get their drinks first, then the humans, the dogs are, our pilots come back and say, come on, bring your dog up front. I'll put him in the captain's chair. I'll take some photos. So mid-flight, the dogs are up there flying the plane.

• 1:08:31Guy Raz?

  Yeah.

• 1:08:32Speaker 01

  It's, everything is built around them and their comfort.

• 1:08:35Guy Raz?

  And how many, I mean, how many flights are you doing a week now?

• 1:08:39Speaker 01

  Two.

• 1:08:40Guy Raz?

  Two week. How, I mean, how do you, how much time do you, do you give a new initiative? Like, um, you know, bark, someone's like, let's do bark air. And everyone's like, cool. Love that idea. Obviously, I'm sure you did some research before, but um, in your mind, like, how, how much time before you pull the plug on something new? Like six months, a year, two years?

• 1:09:00Speaker 01

  I think it depends. There are a lot of factors in that. It's the, the capital being burned, the consumer reaction, your belief that you have, you're, you have line of sight to something that works and can be meaningful. Bark air right now, customers love it. We have ideas of how it expands. We have line of sight to how do we get to that $600 ticket? We have very clear line of sight to doing that, I'd say, in the next year. So that's one where the, the good idea is panning out better than I could have ever hoped.

• 1:09:37Guy Raz?

  So, I mean, is getting to, I mean, you mentioned, you know, your revenue is public, right? So I think your, your revenue is about a half a billion dollars a year, which is a nice, healthy revenue. Um, you're much higher than your, your market cap. So you have reason to be optimistic. Um, but do you have a timeline in mind of, of when you, when you hit equilibrium, when you hit profitability?

• 1:10:01Speaker 01

  This year.

• 1:10:02Guy Raz?

  This year?

• 1:10:03Speaker 01

  Yeah, we've turned in those profitable quarters and our fiscal year 22, when I stepped in, we lost $57 million. The next year it was 31. Last year it was 11. This year we should make four or five million dollars and, and, and up from there. And what I, what I say to people now is I intend to die in the saddle. It truly, it goes back to Hugo and that responsibility that, and, and the legacy. But I say that knowing that I'm a month away from having a baby boy.

• 1:10:38Guy Raz?

  A human child.

• 1:10:39Speaker 01

  A human child, yes.

• 1:10:41Guy Raz?

  Yeah.

• 1:10:42Speaker 01

  Maybe that becomes my obsession. And, you know, if you'd asked me if I'm going to be in the pet industry in 2010, I would have thought you were crazy. But, but right now my intention is this is my life's work.

• 1:10:54Guy Raz?

  Matt, when you think about where you are and, and what, you know, you've, I think you've done pretty well from, from some of the businesses you've been involved with. How, how much of where you are now and, and what you're running and, and what happened in your journey do you attribute to? To the work you put in and how much you think has to do with luck and timing and good fortune?

• 1:11:15Speaker 01

  I definitely work hard at it and always have, but some of this like, you know, I think it goes back to when we were talking about 2018 and not raising that money. And there wasn't a clear idea of how do we get this accelerating again into profitability? It was about hanging on and we hung on 18 months there. And then the pandemic came and your fortunes changed. The world changed around you and we got lucky. We were in the right place at the right time in 2011 with the right product. We didn't do some market study, so sometimes it's just grinding away until

• 1:11:58Speaker 01

  the world turns in your favor and working hard through it and making smart, sensible decisions along the way.

• 1:12:06Guy Raz?

  That's Matt Meeker, co-founder and CEO of Bark. By the way, just getting back to your thing about cats for a sec. Do you just not like them? I mean, do you not like cats?

• 1:12:17Speaker 01

  I'm okay, okay, whatever.

• 1:12:19Guy Raz?

  Just lay it on the line. I mean, come on. I mean, it sounds like you, it sounds like you hate cats.

• 1:12:25Speaker 01

  I don't hate cats. I won't go that far, but.

• 1:12:28Guy Raz?

  You deeply dislike them? Cats are amazing, amazing animals.

• 1:12:33Speaker 01

  I would encourage you to start the cat company. Go for it.

• 1:12:36Guy Raz?

  There is nothing like watching a kitten chase a laser pointer. Like there is nothing, not, not a single animal on planet comes close to the entertainment value of a cat chasing a laser pointer. It's just un-freaking-believable.

• 1:12:52Speaker 01

  I'll give you that.

• 1:12:53Guy Raz?

  You're basically a huge opportunity. There's a lot of custom laser pointers you could put in those boxes.

• 1:12:58Speaker 01

  12 months of laser pointers. I love it.

• 1:13:02Guy Raz?

  Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show, and of course, it's free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at guyraz.com. This episode was produced by Devin Schwartz with music composed by Ramtin Arablouei. It was edited by Neva Grant with research assistance from Olivia Rockman. Our engineers were Patrick Murray and Maggie Luthar. Our production staff also includes Alex Chung, Carla Estevez, J.C. Howard, Sam Paulson, Chris Messini, Kerry Thompson, John Isabella, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.