Intuition trumps data when you truly know your customers, says Pet Circle’s co-founder
Pet Circle co-founders James Edwards and Michael Frizell
Thu 29 June 2017 - 12:00 pmAdvice | Entrepreneur | Featured | News | Profiles
Despite operating in an era where data-driven strategies are the norm, the founders of rapid growth start-up Pet Circle have come to realise that trusting one’s instincts can often lead to better results.
Launched in 2011 under the name ‘Paws for Life’, Pet Circle (as it is known today) is the brainchild of Michael Frizell (CEO) and his co-founder James Edwards (COO). The pet food delivery service, which has an annual turnover of more than $70m, is currently Australia’s #1 online pet store with a 44% market share, based on intelligence from IBISWorld.
Although it is the nation’s third largest pet retailer (behind Greencross and Pet Stock), Frizell told Dynamic Business that he and Edwards have their sights on Pet Circle becoming the overall market leader: “With year-on-year growth of over 100%, we are confident this target is achievable within the next few years.”
‘The industry was ripe for disruption’
Frizell, a former investment banker and management consultant, explained that his motivation for leaving behind those two roles and launching Pet Circle was “two-fold”.
Firstly, he had a desire to use his skillset to solve a consumer pain point he and his family of pet-lovers had felt at one time or another. He explained, “The traditional way of buying pet food wasn’t just costly, it was inconvenient and labour-intensive. Back in the 90s, we had milk delivered to our house twice a week. Reflecting on this type of service sparked the idea for Paws for Life”.
Secondly, Frizell was attracted to ‘certain attributes’ of the pet sector; namely, its “strong and consistent growth”, its “loyal and passionate customers” and the fact that it operated in a traditional retail landscape, which he considered “ripe for disruption”.
“The idea was to provide pet owners with a combination of value and convenience,” he said. “For the privilege of having to drive to a pet store, pick up a 15kg bag of pet food, lug it back to the car, drive home and carry it inside, consumers were paying significantly more than what they would now pay us to deliver it to their doorstop at no additional cost.”
‘Our original name was confusing’
In January 2011, Frizell began working on the idea for Pet Circle at Vibewire, a co-working space in Ultimo, Sydney. It was there that he met Edwards. At the time, his future business partner was working on his own venture – an enterprise resource planning (ERP) software platform for warehousing and logistics. Once the two got to talking, Edwards began assisting Frizell with the tech aspects of Pet Circle (then ‘Paws for Life’). In turn, Frizell helped with the business side of Edwards’ venture.
“After working on each other’s ideas for a while, James and I realised it would benefit both of us to join forces,” Frizell said. “From there, he merged his ERP system with Paws for Life, and we became partners. When we launched the business out of Vibewire, our first few bags of pet food were stored in a 16 square metre Kennards shed, located a block away. Now, we have 10,000 products (including popular and in-house brands), 7,000 square metres of warehouse space across Australia and more than 130 employees.”
In 2014, Frizell and Edwards rebranded their company from Paws for Life to Pet Circle. Even after considering the obvious risk – a potential loss of customers – they decided it was a necessary move, not only to more accurately represent their growing product range and customer base, but to expand their marketing reach.
“When we originally launched, our focus was just products for dogs and cats, hence the word ‘paws’,” Frizell explained. “By the time of the rebrand, however, we had expanded our product range to cater for a number of other animals including birds, fish and reptiles. Consequently, we felt the Paws for Life brand was no longer aligned with our core business.
“Apart from feeling ‘out of date’, James and I had come to realise Paws for Life doesn’t work in all marketing mediums. We’ve been across every marketing channel you can imagine, including TV, radio, print and outdoor. In channels that weren’t visual, Paws for Life was remarkably confusing. If someone hears the word ‘paws’, they’re liable to misinterpret that as ‘pause’, spelt P A U S E. Same with ‘for’, which might be heard as ‘four’. So, Paws for Life wasn’t entirely effective.
“The decision to become Pet Circle was made relatively quickly. Between the time we had the idea for the rebrand and the time we implemented it, only about a month passed by. It didn’t have any major, negative impact. We saw a slight loss of traffic for a few weeks but our customers knew who we were – we have very sticky, long-term relationships with them. They buy from us every couple of weeks. Ultimately, we experienced significant growth following the rebrand.”
‘We’ve surrounded ourselves with brilliant people’
The factors that have helped Pet Circle push through each phase of growth into the next have generally changed over time, Frizell explained; however, he said the following factors have consistently helped him drive growth in Pet Circle throughout the company’s lifecycle:
- Peer support: “I’ve been a part of Entrepreneurs’ Organization (EO) for around four years. Surrounding yourself with business leaders who have faced (or are facing) the same or similar problems, and with whom you can share the issues you’re facing, is very useful. Sometimes, you just want to find the answer to what you’re facing but more often than not, it’s just as useful to know that everyone has dealt with the same problem and it’s just par for the course.”
- Mentors: “James and I have been lucky enough to have Craig Blair, the founder and managing partner of AirTree Ventures, as our chairman for more than five years. He’s been a great mentor to both of us and we think of him as part of the founding team. Surrounding ourselves with brilliant people, such as Craig, whose opinions we trust and value, has been critical.”
- The right people: “Our infrastructure and technology are critical, but by far the most important factors in the business has been the quality of the people and the way in which they execute tasks in their roles. James and I have always believed that people will do a great job if they love what they do. As such, when we’re recruiting staff and assembling teams, we’re looking for people who want to grow and go on the pet Circle journey with us. We’ve had team members who’ve been with us for a long time. We don’t need to push them, they push themselves because they love a challenge. It makes life a lot easier when you surround yourself with people show share the same vision and goals”.
‘Take the time to consider if your data is correct’
Asked to name a key lesson he has learned at the helm of his multi-million-dollar pet business, Frizell said it was to trust his intuition, even when it doesn’t necessarily reflect the data.
“We spend a lot of time thinking about our customers, what they value and how to solve their pain points – it’s what I’m passionate about,” he said. “In the early days, we wanted to be very data-driven in the way we did this. Although we still rely on data – and listen to what it’s saying – sometimes it’s at odds with what our intuition tells us. The longer we’ve been in business, the more I’ve learned to trust my intuition. This was challenging when we first started out. By testing my intuition and bouncing it off peers, I’ve gained more confidence in my intuition and found that more often than not, I’m correct.
“It’s important for us to really connect with our diverse group of customers and focusing on this helps strengthen our intuition. If the data is telling you something different, I think you really need to take the time to consider whether the data is correct or whether it’s just another input into your decision making. If you can, get in front of your customers because it gives you great insights into their pain points and where your servicea can be improved. It helps that I’ve been a customer of Pet Circle myself and that my parents and relatives as well as my best friend are customers. Also, I have a real-time feed of customer feedback, both positive and negative, which I make sure I read. We have to understand our customers because if we don’t, we won’t be able to solve the problems they really want us to solve.”