Startups after your dog's $1.4b business

Wag Labs, which operates in 12 major US cities, tracks dogwalker travels with your pooch via GPS, so clients can watch their pet's route in real-time on dedicated apps. Photo / Wag Labs.

In human years, Woodrow is a teenager, so it follows that his love was fairly short-sighted.

After an intoxicating start, she began showing up late for dates.

Then she took a trip.

Upon return, she began standing him up entirely.

The last straw came when Woodrow saw his sweetheart breezily riding her bike-with another dog trotting alongside.

Woodrow looked heartbroken.

Dog walking-the old-fashioned, analog kind-is an imperfect business.

Finding and vetting a good walker involves confusing and conflicting web research, from Yelp to Craigslist.

And there's no reliable way to tell how good or bad a walking service is.

Coming home to find the dog alive and the house unsoiled is pretty much the only criteria for success, unless one snoops via camera or neighbor.

Recognizing room for improvement, a pack of start-ups are trying to swipe the leash from your neighbor's kid.

At least four companies flush with venture cash are crowding into the local dog-walking game, each an erstwhile Uber for the four-legged set.

Woodrow, like many a handsome young New Yorker, gamely agreed to a frenzy of online-dating to see which was best.

As the search algorithm is to Google and the zany photo filter is to Snapchat, the poop emoji is to the new wave of dog-walking companies.

Strolling along with smartphones, they literally mark for you on a digital map where a pup paused, sniffed, and did some business, adding a new level of detail-perhaps too much detail-to the question of whether a walk was, ahem, productive.

This is the main selling point for Wag Labs, which operates in 12 major cities, and Swifto, which has been serving New York City since 2012.

Both services track dogwalker travels with your pooch via GPS, so clients can watch their pet's route in real-time on dedicated apps.

This solves the nagging question in dog-walking: whether and to what extent did the trip actually happen.

After taking Woodrow for a spin, both services posted report cards with route maps, time, distance, a little write-up, and a photo of the dog. With his ears hanging limp, a dopey, tongue-wagging grin, and glassy eyes, Woodrow looked like a blissed-out hippie.

Next, we tried DogVacay and Rover, the other two startups in the walking wars. These services aren't nearly as slick with their status reports, but they are far bigger and better funded.

Together, they have raised US$138.5 million ($194m) from some of Silicon Valley's most influential venture capitalists.

In scheduling a walk, both platforms populate maps with nearby walkers, each of which offers a price they set themselves.

This is a full-on Uber-like embrace of the gig economy.

While Swifto and other regional services hire walkers and require them to commit to a minimum number of walks, DogVacay and Rover are geared for dog-lovers who want to make a few extra dollars on a Monday afternoon.

"The value proposition is: sign up for free, make money watching puppies," says DogVacay founder Aaron Hirschhorn. Finding labor hasn't been a challenge for either company.

Both companies go to great lengths to screen potential walkers, each claiming to accept fewer than one in five.

Those who get bad ratings are kicked off and the best walkers are bubbled up to the top of search results by algorithm.

After a Rover query, Bryn showed up on the top of the list.

A few days later, she stopped by for a gratis "meet-and-greet" with a reassuringly hefty ring of keys clipped to her belt-loop.

Meanwhile, Daniel from DogVacay showed up in a stocking cap and Vibram minimalist running shoes.

He typically doesn't do walks, but said he was between jobs and seemed genuinely happy to pad around with a fellow bro, albeit a furry one. Woodrow, ever dopey, trotted off with Daniel as if he were family.

There are good reasons why startups are relatively new to dogwalking; it is, by many respects, a spectacularly bad business.

People are crazy about their dogs in a way they aren't about taxis, mattresses or any other tech-catalyzed service.

Logistically, it's dismal. Walking demand is mostly confined to the few hours in the middle of a weekday and unit economics are hard to improve without walking more than one dog at a time .

More critically, dog-walking is a fairly small market-the business is largely confined to urban areas where yards and doggie-doors aren't the norm.

And dogwalkers don't come cheap. Woodrow's walks ran from US$15 for a half-hour with DogVacay's Daniel to US$20 for the same time via Wag and Swifto. A 9-to-5er who commits to that expense every weekday will pay roughly US$4,000 to US$5,000 over the course of a year, a hefty fee for avoiding guilt and not having to rush home after a long workday.

All told, the entire U.S. dog-walking segment is worth roughly US$1 billion, according to IBISWorld.

Not surprisingly, tech startups like DogVacay and Rover, who probably hope to make that kind unicorn money all by themselves, are more squarely focused on dog-sitting, which comprises about seven times as much revenue.

The hope for this new pack of companies is that dog-walking demand is actually much bigger than it appears.

Rover Chief Executive Officer Aaron Easterly calls this the "shadow market:" people who don't trust their critter in the hands of a stranger and either call in favors with family and friends or just force their pup to hold it in a few extra hours.

"If you can solve the trust barrier and make this just a normal thing ... we think you can cause a step function to the size of the market," he explains.

Venky Ganeson, a managing director at Menlo Ventures, heard that idea five years ago when his firm decided to invest in Uber. "It was a little bit like déjà vu when I met Aaron," he said of the Rover CEO.

Menlo typically only invests in early-stage companies, but in September it joined Rover's fifth round of funding, a US$40 million pile.

"We kind of doubled down," Ganeson said. "The company's metrics give us great comfort."

Rover said it's on track to pick up between US$100 million and US$200 million in revenue this year.

DogVacay has a run-rate of US$70 million a year, at the moment.

In the end, almost all of the walkers Woodrow tested out were fairly competent, though there were issues that had little to do with the company they were aligned with. A Swifto walker showed up late.

A Wag walker struggled to open our lockbox.

A DogVacay member neglected to nix "walking" from her profile; she offers only sitting, an important nuance arrived at only after a long messaging volley. But different walkers from all those services performed without a hitch.

It became clear that much of a great dog-walking experience rests on personality and general competence, both of which are difficult to optimize with an algorithm.

It's not unlike eating at a fine restaurant: all of the waiters will be good, but you are going to like some more than others.

This is where mom-and-pop dog-walking shops may still have an edge.

After Woodrow's many walks, my top pick was Ruff City, a small New York-based business with about 40 walkers doing about 200 walks a day.

Co-founders Heather Doll and Stacia Anderson handle every scheduling request and all of the hiring (they prefer walkers who are in grad school, freelancing, or trying to make it in the arts).

"We want to ensure there is a real human factor, not just people logging on and changing their walks and not ever speaking to me," Doll says.

"The shared economy works really well for a lot of things, but I do think people would enjoy the personalization of a smaller company when it comes to their dogs."

In six years, Ruff City hasn't expanded beyond the East Side of Manhattan; even with the new crop of competition, it hasn't had to.

Until it does, Woodrow will be walking with Bryn via Rover-or any other company she decides to join.