Podcast 211: Jon and Gila Kurtz, Founders Dog Is Good | Building A Brand From An Idea To Product

Apr 5, 2019 2:17:34 PM

Jon and Gila Kurtz, Founders Dog Is Good

Bob Phibbs interviewed Jon and Gila Kurtz, founders of Dog Is Good a pet products company based in Los Alamitos, CA. While attending SuiteWorld recently, they discussed taking their brand from concept to product, how they support their brick and mortar retailers, and staying focused on their goals. .

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Bob: Thanks for joining me on this week's podcast. We are meeting with Jon and Gila Kurtz, co-founders of Dog is Good. Welcome. So, who are you and what do you have to do with retail?

Jon: Dog is Good is a brand for dog lovers, not to be confused with a pet products company. We sell products for dog lovers - apparel, gifts, accessories, home décor into retail establishments.

Bob: Gila, what would you add to that?

Gila: I would add as a lifestyle brand for dog lovers, the thing that we do best is celebrate the dog-human connection and make available to the consumer their first two minutes home. That's, in essence, what we sell into the retail stores, giving retailers an opportunity to create amazing experiences for their dog loving customers.

Bob: One of my favorite shirts of yours, "It's all fun and games until someone ends in a cone."

Gila: Yes, a Dog is Good original trademark property.

Bob: Did you catch that? So, don't put that on your own T-shirt folks. It's trademarked.

Gila: Don't try.

Bob: Anyone who has had a dog, we all know that a cone is a possible thing is, and your dog hates you because they don't understand what happened and they can't see.

Jon: Right, right. And dog lovers get it. They just light up when they see that sign.

Bob: Right. Exactly. You know your customer. So, I know, Gila, you're a dog trainer. When you met, though, you were not a dog trainer, if I remember correctly. You lived up in Washington or something, right?

Gila: Jon and I?

Bob: Yes.

Gila: When Jon and I met, I was actually a high school teacher. I was teaching history and psychology at a high school in Glen Burnie, Maryland. And I met him at a Bid for a Bachelor auction, a fundraising event for the March of Dimes where I purchased him for $75.

Bob: I thought I read that.

Gila: He loves to say I purchased him, and he's been paying for it ever since.

Bob: Oh, I love that. I love that.

Jon: 30 years later.

Gila: 30 years later. But here we are. So, through his military journeys, we went a roundabout way, ended up in Washington where as a trainer, I was at a conference and saw this need for products for the pet lover because there weren't any, and I was dying to have some. And so, I came home from that conference that day and, "Hey, you know, there was this thing there, but it didn't really resonate with me," and we both decided, hey, we should do this.

Bob: But you're still in the service when she comes back and says that, right?

Gila: Yes.

Jon: Yes. So, the idea started then but the business didn't. And what we saw was at that point...and that was 2004, perhaps?

Gila: 2005.

Jon: Okay. There about.

Bob: You missed the roll of their eyes folks out there.

Jon: So, what we had seen as dog owners was the humanization of pets that had been going on, right? And it was growing and growing and growing, and we knew that it was going to be a place to be, somewhere in that realm. And we didn't have industry experience. We just knew that something was happening with the humanization, which probably started in the 90s. And we're, kind of, fond of saying you have to go back to when we grew up since then the dog has moved from the backyard to the bedroom and now, in fact, into the bed. And it's not a trend, it's a cultural shift that's taking place and we need to get in the way of that. And let us ride smartly.

Bob: Absolutely. When you guys were down in Los Alamitos, I used to be the CMO of It's a Grind Coffee which started not very far from you.

Jim: Right around the corner.

Bob: That's right, right around the corner from you guys. And we always used to joke, and I left It's a Grind in like 2004, and we would joke, we are in the wrong damn business. We should have been in the dog-something business with a collar, without people, without recipes, without having to be there at 5:00 a.m. that we could see the same thing. And Louise who was one of the co-founders was really big in rescue. So, she would come to work with some natty little animal that she found and then like, you know, two days later it would come back and it would look pretty, but it was the same thing. You hadn't really reached that critical mass of owning or showing that dog, which I almost said Dog and Cat, which I appreciated... Just sideline. Their Instagram yesterday was for April fool's day was cat is good or something, which was hysterical to me.

Bob: So, you're there in Los Alamitos, you formed this 15 years ago, is that right? You're in 15 years.

Gila: No, this is our 11th year.

Bob: Eleven year. So, how did you decide, you know, so you have the idea and you could have opened stores like Life Is Good Guys or other, you could say, "I'm going to do that." You could have just licensed the idea and said, well, we'll go and do this. But you decided to actually manufacture it and then wholesale it because you don't have your own stores, right?

Jon: Correct.

Gila: Correct.

Bob: You're wholesaling this to other pet businesses. So, what was the difference in thought there?

Gila: So, in the beginning it was easier to begin to the test ideas, test the messaging. Because the company is a message-driven brand. The messages can go on any product and it doesn't really matter what the product is, quite honestly. But to test it out, and this was all new territory for us to begin with. We didn't quite know really what we were going to do right from the get-go. We knew we wanted to create a brand. We didn't necessarily have it dialed into the methodology of which it would grow. And so, to test the validity behind it, we just started to do events at local markets, created a product and went direct to consumer and started to see what was resonating. And it was at those events that people said, "Oh, you need to be in stores." And so, that's where we did decide to move into the wholesale business. And what we discovered very quickly was because we were about the dog lover, that our product line could be in any retail vertical, not just pet or gift or resort, but a number of retail verticals.

Bob: So what was that moment when you guys got your first big account?

Gila: Potpourri Group, which owns as one of their many properties In the Company of Dogs, which is, I would say, the foremost mail order and online catalogue.

Bob: Okay. So, how did you get it?

Gila: The buyer came by our booth at a wholesale show. It was the SuperZoo tradeshow and loved it and gave us this huge order, which was our very first order. And I was beside myself because Jon was also retiring at the same time that we had to deliver this product. So he was going through a retirement from the Navy. We had to move from our beautiful home on the Navy base into a new location. And we had this assembly line.

Jon: We were still working out of our house.

Gila: Yes, we were working out of our home. And we had an assembly line of all of our neighbors helping to put together, based on their routing guides, what was required to deliver products.

Jon: And we didn't have a UPS account that came and picked up and that sort of thing because we had to drive to Cerritos, the UPS Center. So, we had, you know, a couple of trips with the SUV because it was a very big order. I mean, to this day it would be considered a sizable order.

Bob: So, what I love about entrepreneurs, that's exactly the way it starts, is a friend of mine, or one of my earliest clients 30 years ago, and she did hand painted vases, glass vases. And I'm sorry, I can't remember your name. But she, on a whim decided, you know, I'm right in the backyard of Nordstrom's South Coast Plaza. So, she takes a cardboard box. She just puts a selection of 12 vases with a note, "I would love for you to carry my product." The buyer gets it, amazingly. He calls her, and like, here's the order. And she's a one-woman operation and they want it all by Christmas and this was July -same thing. But what I think is interesting in both that case and yours is you didn't say, "Oh, we can't do that." Or oh, can we wait? Right. You strike while the iron's hot, right?

Jon: Of course.

Gila: Absolutely.

Gila: Because I think a lot of people, kind of, can back away from success and I think that's, you know, my listeners are all kinds of people in retail, from CEOs, and mom and pops, and manufacturers, and IT people and all kinds of things. But ultimately, you were able to push past that fear, certainly at that moment. But also, more importantly, you've had other decisions along that line as well, right? Because you have contracts with people you're having to go out and...

Jon: Yes. So, it's, kind of, like say yes and then figure it out.

Gila: Exactly. So one of the other retail avenues that we've put into place in the past 18 months grew out of a, kind of, organically requests from our fans out there. Other dog lovers who wanted to have a retail business for themselves but not a brick and mortar. And so, we created our Dog is Good popup shop business opportunity. And as that started to snowball and has grown expansively, as well as adding more stores, now you get into a situation where you're challenged to keep enough inventory in stock, and ensure that your suppliers, our suppliers, have inventory in stock to manage all of that. What would you say for you?

Jon: I would say, like most small businesses, cash flow is always the biggest challenge.

Bob: Of course.

Jon: And we're at a point, I'm sorry, where we're, sort of, in between. And we know that this brand, this company the avenues we haven't even pursued yet that we know are worthwhile, that's all yet to come. But we have to get there. And, you know, it's that cash flow challenge, well, we need inventory. We need to get out at NetSuite Conference and look at all of these capabilities that could help us get there. But I can't do that. You know, the priority is paying employees and keeping inventory on the shelves. So, you know, we're always piecing things together, whether it's, you know, that financing and now seeking investment capital.

Bob: But you're looking at it. See, that's the thing, I can see other people who would just say, "Well, I can't go there because I couldn't afford anyway." And, at least, you're able to say, you know, what this would allow us to do is x, y, and z. And at least it kind of goes in your wish list. I get so tired of people saying like, "Oh, it's on my bucket list." It's, like, why don't you get a damn bucket list for your business? Because there should be a bucket list and say, "You know, I want to work less, and I want to automate more, or I want to have processes in place that allows me to do x." So, that's my bucket instead of, "I want to go to Tahiti and have this."

Jon: We burned all the bridges behind us and we're, you know...

Gila: What he means is, our focus and our vision is so strong, and we do not waver. I mean, every single day our team knows this. We talk about our big picture vision with our team members and our suppliers, and everybody that we can, where we are going and what we see. And we know the possibilities. And we continue to expand our thinking and are moved in those directions because we're so convicted in our purpose around what the brand is about.

Bob: So, when you get overwhelmed with some of these decisions and stuff, what do you guys do to unpack or get your groove back or what do you do?

Jon: Yes. Well, we're committed fitness people. So, I think, we both clear our minds to a degree by, you know...

Bob: Running or something?

Jon: Doing our own kind of thing. Well, all of the above.

Gila: I know I just said this, but I do. I revisit the vision and the bigger picture every single morning. I meditate. I journal about it and I focus on all the good things that are happening and the contributions that we are making. And I keep every note, every testimonial, every personal thing that I've ever received. So, if I am having a day where I'm like why am I doing this, I can read those and remind myself, "This is not about me or Jon, this is a much bigger opportunity." And I have always believed because of the dog-human connection, and because there's a reason why people are so connected with their dogs, they get from their pets something they don't get from other people or in their lives, in general. And if we can create that joy and that sense of peace and excitement in a person, imagine that ripple effect that occurs.

Jon: And when people are scared of Amazon and then their customers are, in fact, distracted because there's no other reason to go in their store other than to pick up a commodity, enter Dog is Good, right? People love their dogs. They don't love dog food. They love their dogs. So, why not have a Dog is Good display?

Bob: So, you're having as you're mining this data to know what sells in certain areas. Is that, kind of, it and then bubbling it back around that thing or it's more intuition?

Jon: Well, a lot of it is not rocket science because we know the art of messaging is often geographically specific. You know, some of them might be fishing related. People that fish with their dogs or that sort of thing. And then there's, kind of, you know, total dog lover or I got to dress like my dog, kind of mentality, right? There are different classifications of dog lovers when you're looking at it.

Bob: Wow. Who knew that? All right. Well, but that makes sense.

Jon: Yes. Well, we've been doing these observations. And like I said, they're not rocket science. They're observations. But they work and people who don't do what we do don't necessarily understand because they've never had to think about it. But that's the kind of thing that we can tailor to, you know, well, tell me about your location? Well, I have 1,000 square feet. No, tell me about your location.

Bob: Who is your customer etc.?

Jon: Who is your customer or where do you live? Are you in a resort area where you've got people come in and they want to take stuff back to their pet sitter, for example? So, those are things that we work with. But what we're doing is creating connection.

Bob: Nice. Nice. I think that's the key that having that strategy, I'm always surprised when people go through and they'll go to a show and then they'll bring in like 100 pieces. And you're like, don't do that. And that's like, why not? It's all new. It's like because it'll get old and you can stage things. You know, people are like, "Oh, Supreme is doing such a great. This product drops every two weeks." Like, well, that's what merchandising is about. That's what a retailer does because then it's new for you and it's new for the audiences and it's new for the associates so they can get excited about it.

I mean, I think the thing that you tap into is this idea that Dog is Good that, you know, dogs open their heart to us. Most dogs. There's those, kind of, nasty ones or old ones. But that feeling is what translates to the apparel, right? Which is not unlike your logo with the little, you know, little halo on his head and the whole bit like that. So, I think that's ultimately what that feeling that they can take back with them is what makes the difference. But it's not easy being a pet store right now, right? There's an awful lot of online retailers that could bring... I'm sure you hear people say they can get your merch online and why do I need to carry in my store? You must have those conversations.

Jon: I would say not as often as you think because that's just the way things are right now.

Bob: Well, I would say that it's discovery. In a store, I have discovery. So, to your point, I'm going to go with my 80 pounds of dog food, right, and lug it out. And then I see your display and it's like, oh yeah, I could get that. But if I was on a website and I'm looking for dog food, and I'm looking through 80 different products to get to the one, suddenly I saw your T-shirt and be like, "What the hell is that?" But in a store, we accept that. It's like, oh, well, that's interesting. So, I think it is yours. And they are different customers as well because the customer online is looking for that 80-pound. That's it. Versus in a store, I'm open to whatever you have to open, which ultimately is how you help about because you can help them increase their number of items per sale and their average ticket, right? That's the goal.

Gila: I mean, there's a lot of retailers out there that... One of my favorite questions to ask a retailer this time of year is, "What are you doing for Mother's Day? And it doesn't matter who the retailer is, whether it's an outdoor retailer, a resort store, a gift shop, or a pet store. When I asked that question, they'll have something in mind as far as the mom like gift stores are really good at Mother's Day. But most other stores don't even think about it. Like, 'What are you doing for the dog mom for Mother's Day?" Because that's a huge, huge retail holiday.

Bob: Who knew?

Gila: But in the pet world, mothers of fur babies, as they refer to them, they consider themselves dog moms. They talk to each other as dog mom. And so, they could create a whole small set and a whole strategy around engaging their customer for Mother's Day by just attending to the dog parent.

And we have a package like that for retailers that does come with a marketing strategy around it to help them, you know, make this a thing for their stores. And those that have started to do this over the past couple of years, they're blown away because they don't think that way. Like, oh yeah, the dog mom for Mother's Day.

Jon: Yes. We have a patriotic line as well. So, we've got that Memorial Day to July 4th and then again Veteran's Day. So, we make that available. And to one of the points made before is we can keep changing the mix, right? We have the agility because of doing all these things to change the mix. Now, you can take a commodity store and not just necessarily pet. We sell into hardware stores, we sell into all kinds of places, places that people previously didn't go in unless they needed something.

Bob: Exactly.

Jon: Now, they go in because there's something that's going to be changed up, something that's different. They'll go in there because there's a fun brand, not because they need dog food or a screwdriver. You know what I mean?

Bob: Yes, I totally get that.

Jon: It's experience.

Bob: I mean, selling, you know, retail exists to answer a customer's one question, which is what's new? So, a lot of retailers have a tough time because the store looks and smells, let's be honest, it looks and smells and feels like it's been here for 20 years. That's not a good thing because there's a lot of competitors out there that are doing good.

Bob: So, neither one of you have a licensing background. So, how does that work? Your first time you decided to sell it because now you've got that, oh my God, they're going to take our brand, and it's going off to China and it's going to go on everything, in Walmart, and we're going to lose it all. I mean, those fears have to be in your mind, right? I mean at some point.

Jon: Yes, yes. And not just from licensees, we've been knocked off a number of times. We've had legal tussles. There have been unpleasant, you know, situations to work through.

Bob: So, did you start with a lawyer? Did you say like find an IP lawyer and then go out into, I don't know, there's a show for them, a licensing show? Did you go to there and then did you just, kind of, shop it around or did you keep it all close to your chest and then decide?

Jon: No, we actually got approached by a licensing agent, and actually it happened a couple of times. And then I met with one that was not too far away in Irvine and he said, "Hey, I saw your stuff at a store when I was on vacation in Hawaii and I thought it had a really positive message. So, let's talk." And I'm thinking, yes, okay, another one. And it was like, he was genuine, he was smart. He just struck me as being a really honest guy, I said, "I can't promise you anything, but here's what I can do for you. Hey, you're a brand-new brand. No one knows who you are but once you start knocking down a couple of good contracts, then things will start taking off." And don't expect overnight success. And it took a number of years before people started coming to us.

Bob: Yes.

Jon: So, starting with an agent was the way to go. He had all these contracts that just needed to be manipulated to fit whatever particular circumstance. We licensed with a big pet products manufacturer. It was a very complex kind of contract. For us, it was complex. You know, with guarantees and minimums.

Bob: So, I want you to think about if you had a friend of yours, a friend of yours comes to you and says, "Oh, we want to open our own retail business, or now we want to consider business like yours," you're over at Starbucks, what would you tell them?

Gila: A business like Dog is Good?

Bob: A business. Let's try to keep it a little, little away from you so you don't have to worry about the, you know, them trying to steal your customers.

Gila: The first thing I always ask everybody that I work with as far as them starting something, I ask them to answer this question, what does success look like to you? Like, do you have that dialed in? And I don't mean just the success of your business but how does that business fit into your lifestyle and who you are as a person? Because it's very easy to grow something very quickly and successful, and when you are in that spot of what you deem as success or what others deem as success, you may not be living the lifestyle that you want to be living.

So how can you create it from the get-go? Know what that vision is and reverse-engineer it so that you actually achieve that. And then also asking the questions. And as Jon said earlier, it's not what you know, it's who do you know, because there's so many resources that can help put it into place and getting the right mentorship there for all those areas in order to launch it to get to where you want it.

Bob: Well, I want to go back that because you only have 12 eggs of energy in your life. That's it. 12 in a day. That's it. 8 go to the business, there's only four for your daughter, Abby, right?

Gila: Yes. It's Abby.

Bob: And even joke about it in your website but, you know, realistically that does, you know, people say, "Oh, you know, I can do it all." Realistically. You can't do it all. Realistically, either you have to have enough people behind you that allows you to do it all. But in the beginning, particularly, I think, people, either A, like you said, think it's going to happen over. And I'm on my 25th year for God's sake. I'm in my best year so far. My 25th year, mind you, like, and not even realizing what I am now was where I was. That wasn't even it. Right. But also realizing that there were a lot of compromises that happened along that way. And if you've got a young family, that's a different version of success. And I think that's really important to bubble up. What would you say to somebody?

Jon: In addition to some of the elements that Gila spoke about, regardless of the business, they need to know what's going to make theirs different? How can they differentiate themselves? No, one is going to invent a new marketplace in the scenario you're talking about. So, if you're going to go into this x business, how are you going to be different from everyone else?

Bob: All right. I'm going to challenge you, Jon, I'm going to open a dog food and cat salon that will do dog grooming and dog training. We'll have treats and we'll have class and we'll have all kinds of events. We'll do doggy birthday parties. It'd be so great.

Jon: Great. Yes, it sounds good to me but how are you going to be different than the people who are already doing it?

Bob: How would it be me? Yes, see, that's what I wanted to get to is that how is it different than the people already doing it? Because most of you get an idea that's outside of where we already are, if that makes sense. So, for me, it might be like I could open a Mexican restaurant. It's going to be great. Like, dude, you're not even a chef. Why do you think...? Oh, well I love going to Mexican restaurants. Like, that's not the same as running it, to your point. And there's other people out there doing... They've already planted the flag around the city here. So, how are you going to be different, right?

Gila: And I think part of that is the kind of research that that individual does. So, I would also ask the question of who have you talked to? Who is doing what you are doing so well that you could have a conversation with? And, obviously, it may not be in your immediate area but look around. If that was what that person wanted to create--a daycare, a grooming, birthday party, adventure for dogs--they should be looking for who is the most successful by their standards, who is already doing exactly what I want to be doing and doing it really, really well. And I would want to have a conversation with them. How did you get there? Because the answers are all around.

The shortcuts are available with the right questions to the right people. And then the piece I think is, and this is one of our messages in Dog is Good, never walk alone. It's not where you walk, it's who walks with you. Who are you going to surround yourself with? If it's not employees, it hopefully is a mentor of some sort. And when you are in that position to bring on a team, you know, really vetting how you want to pull your team together. Knowing what you want your company culture to be and the attitude and values that you want to hire better be congruent with yours and, as well as, the work ethic and the skillset.

Bob: And that's true. And I would just add one more thing, which I'm sure Jon would have alluded to. You damn well better know your numbers. Because it's all great to have a party and throw dog cookies and all that. But at the end of the day, how many widgets do I have to sell for me to live the life I want? And knowing, as we started out discussing originally, that cash flow idea that it's your money sitting on that sales floor. So, how are you going to sell the merchandise? Because it was just sitting there and you're waiting for someone to walk in. I don't need a T-shirt that's 40 bucks. I don't need a rhinestone dog collar; I want it but you're going to have to find a way to let me let my guard down to browse in your store and then say I want that.

And I think that's where I see the opportunity for so many small retailers that there's just a lot of bad retailing going on. You know, we walk into your specialty pet store and it's okay for you to have some part-time employee who you begrudge paying minimum wage to behind the register on their phone and telling me, well, you know, they just go through them so much. I don't train them. And it's like, but this is your life, right? I mean, this is theoretically, this is you. This is an embodiment of whatever you are. It's this thing. Right?

So, I think that ultimately, the products are certainly important, but I think we get caught up in the souvenirs of it. To me, if it's a souvenir of a great experience. If I had a great experience in your store, I'm going to buy three or four shirts, I'm going to be open to all the other trinkets that you have and that's going to be great. But make no mistake, it's not just about that. You've got to create some kind of a feeling like people have with your brand, right?

Gila: Exactly.

Bob: There's a feeling that comes from that. So, tell me something good about retail. Let's start with Gila.

Gila: I think retail is in a great position these days. I know that there is a lot of buzz about competing with online. But I think the savvy retailer who knows how to stay relevant is out there creating experiences for their customers. And I think that if they are coming from a place of how they can serve their customer better and engage their customer on a different level that they're going to continue to see growth. I mean, there's so many fun products out there. There really are. And I as a customer, I actually don't shop online that much. Probably much to Jon's happiness. I really actually don't shop that much in general, but I love to walk in and be able to see things and to be able to see things merchandised well and have it grab my attention.

Bob: Absolutely. Jon, what would you add? Tell me something good about retail.

Jon: I would say that every time, you know, you open up the business page a store is downsizing, and this one is closing 1500 and this one's buying this one. They're going to close 500 stores. And even stores that we sell into, oh, we're doing a major reorganization and, you know, we're looking for stuff like yours. We're dropping stuff, whatever. It's always bad news. But it's not bad news. If you look at it and the stores that are starting to fall off the radar, either A, overbuilt or maybe they're in malls and malls are, kind of, falling. They went into favor whenever, 1950s, 1960s and now they're falling out of favor.

Bob: They're still going to come back though. But anyway, yes...

Jon: They very well can. Retail is not dead. Boring retail is dead. And if you look at some of the other trends that are out there, why is Amazon opening stores? Because they can't get to that customer online, but that customer is still there. And there's brands, what's the eyeglass one? Warby...

Bob: Warby Parker.

Jon: Right, they have stores.

Bob: Cover Girl. There's a million of them that are all going directly.

Jon: Exactly. So, if retail is dead, or if brick and mortar retail is dead, then why is this happening? Well, success leaves clues, right? It's the rise of what they call craft brands, right? Of which I would say we are one. They're brands that create experience. An analogy I like to use, you know, the exit through the gift shop mentality, where you just came off the crazy ride and now, you're walking through the gift store, and you buy this chetak kind of thing. But it has so much meaning to you because it was the experience.

Bob: That's exactly it. That's exactly it. Well, thanks very much for joining me today, Jon and Gila. I really appreciate it. And how can we find out more about you and your products?

Gila: dogisgood.com, that's where everything is.

Bob: All right. Well, that was easy enough. Thanks very much.

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