|1||First mover advantage focused on innovating the traditional dog training market|
|2||US total addressable market is $1B a year, and growing at 10% a year; has the global reach market potential- any companion dog, any language|
|3||Launched closed beta in December 2019 with 50 dog owners; quickly got 39 testers converted to customers at a 78% conversion rate|
|4||Partnering with two breeders and two shelters that are promoting us to dog owners|
|5||Built product with $0 outside fund, technical founders develop and iterate the product quickly|
|6||Field experts onboard to create professional dog training content|
|7||Solid customer discovery by talking to over 400 dog owners and trainers to find the product-market fit|
|8||Advocate animal welfare and against animal cruelty; proper dog training could help mitigate behavioral issues and decrease abandonment rate|
It was in a day in December 2014, the day that I rescued ZaiZai from a severe car accident. Although I’ve always loved animals, I never thought a cat would change my life. It started as an average day for me, but it was the beginning of suffering for ZaiZai. The first time I laid eyes on ZaiZai, he had been run over by a car. With bloody hind legs, ZaiZai was dragging himself towards the median with its two front legs. I stood there, shocked by the fight in him, and decided I would take care of him until his last day.
The truth is, it wasn’t me that saved ZaiZai, it was him that shed light to my future and saved me. I didn’t know what I wanted for the longest time. Taking care of him, I realized what I wanted was simple – better relationships between humans and animals. ZaiZai inspired me to leverage the power of technology to facilitate petcare. I want all other animals to live with dignity and have better care. That right shouldn’t belong to humans only.
With the ambition in my mind, I came to the U.S. to pursue my master’s degree of Human-Computer Interaction at Rochester Institute of Technology (RIT), where I met my best friend and most important business partner, Ting. We always did class projects together and got good grades. The heavy workload of school projects didn’t make me forget my dream. I wanted to apply the skills I've learned from school to building an app for dogs.
Originally, I thought it is very important to bring a dog for a walk twice everyday. However, my guess was that lots of owners don’t walk their dogs enough because dog walking could be very boring when it becomes a daily routine. Then I asked Ting if she wanted to develop an app that could probably make the dog walking more fun to motivate owners. As an animal lover, Ting thought this was an interesting and meaningful project and decided to join. We named our team Sniffy and started our startup journey.
We brought the prototype of our idea to RIT student innovation center, Simone Center, and wanted to see how RIT could help turn the idea into a real product, so that it would be able to impact and benefit more people. Starting from taking the class Applied Entrepreneurship (AE), we then took National Science Foundation’s Innovation Corps Short Course, graduated from 2 RIT student accelerators, and finally got into RIT Venture Creations Incubator.
During the AE class, we were asked to conduct 50 customer discovery interviews, which was a big challenge for us. Since we are not native English speakers, it was really challenging for us to interview people and quite understand their situation. But this didn’t stop us from pursuing our dream. After some interviews, we became more confident in talking to people and expressing ourselves.
The most important lesson we've learned from the AE class is that we were envisioning a product that likely no one's gonna use. According to the dog owners we interviewed, we found that seldom people used the cellphone while walking their dog(s). It is because they wanted to focus on the dog(s) and be cautious of emergency, and it was almost impossible to use the cellphone outside during winter. Moreover, walking their dog(s) wasn't that boring to them. Although this was a frustrating finding, the good news was that we found an opportunity in another field - dog training, which is very related to dog's behavioral issues. We conducted another 350+ customer discovery interviews in RIT accelerators. We found lots of dogs have behavioral issues and owners do know their dog(s) needs training, however, not every owner gets the chance to go to training classes.
The main reason is that owners have demanding schedules. Furthermore, even some owners go to a class, the group setting of the class doesn’t fit into their personal needs and the dog's learning curve. Some owners even had used negative methods in training which may lead to severely behavioral and mental problems developing in the dog later. Eventually, some owners decided to tolerate the behavioral issues or even turned their dog(s) into a shelter. Our online research found that there are about 3 million dogs entering shelters every year in the U.S. Of those, about 700,000 are euthanized. The most common reason that owners abandoned their dog(s) is behavioral issues - about 47% of dogs in shelters were abandoned because of not behaving well. As a result, we envisioned an idea of making professional dog training resources accessible to every dog owner, and providing tailored plans to fit into their needs and dog's learning curve.
To achieve this goal, we decided to build a professional dog training and management app, Sniffy, tailored to not only each individual dog but its owner as well. We collaborate with certified canine behaviorists and trainers with numerous years of experience to produce the training content. Dog owners can get customized training plans which are composed of a series of training modules. Each module contains a pre-made training video and instructions. Besides, Sniffy also sends notification to owners everyday to remind them to train their dog. If owners need extra help, they can consult our trainer through video calls.
We are currently working with 4 certified dog trainers, Stacy Fleming, Rebecca Rene, Rebecca Giannavola, and Eleonora Clemente, who helped us build the beta version of Sniffy. We conducted the beta test with 50 dog owners and 39 of them have paid for the future product.
The most important thing we’ve learned from the testers is that owners can really learn how to train dogs by watching the training videos. The training videos were highly complimented by the testers for helping their dogs learn basic manners. About 84% of testers mentioned that they like using Sniffy because the training videos helped them train their dogs at their own pace. Moreover, about 60% testers had the experience of bringing their dogs to a group training class but found it wasn’t effective. It was because there were lots of distractions so they couldn’t learn very well in the class. After they went home, they forgot how the trainer did the training and they had no references. Sniffy perfectly solves this problem since owners can watch the training videos anytime, anywhere! Without promptly, almost all testers said that the reminder really helped them keep consistency in the daily practice. As a result, they can easily see their dogs’ progress and they are very satisfied with that. According to the feedback from our customers, we truly believe that Sniffy has the potential to shape more dogs into valued family members, make professional dog training resources more accessible, and save more dogs from being abandoned.
Our next step is to officially launch Sniffy app on App Store and Google Play this June. We are now improving and redesigning the app based on feedback from beta testers and producing more training content for dog owners.
Our ultimate goal is to provide a platform that integrates training, pet care services, healthcare, insurance and other pet industry segments all together in one streamlined service. At Sniffy, we believe if a system like this was to be in place, it could curb the issue of pet abandonment in North America and other areas. This vision is what keeps us and our partners striving to see Sniffy come into fruition.
COVID-19 Update: The team hopes everyone who sees this is staying well, so do their family and pets. So far, the app development (tech part) and training content production has been going smoothly and has not affected by COVID-19. We are still aiming at this August to officially release the app. As people are now spending more time staying at home and with their dogs, we believe we can see the growth in the following months. We really appreciate your support and trust in this tough time, and will do what we can to adapt to the pandemic. Stay healthy!
Sniffy Labs has financial statements ending December 31 2019. Our cash in hand is $400, as of February 2020. Over the three months prior, revenues averaged $200/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $600/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We create online dog training experience for dog owners and make it professional and smooth for them to manage every aspect of the training. Customers learn how to train a dog through tailored training plans with in-depth video tutorials, daily practice, and access to expert advice through certified canine trainers.
We aim to be the leader in the pet training market – the first place everyone thinks of when they need pet training. We want to be a brand that keeps innovating in the pet care industry, while also providing excellent services so that people never think of going anywhere else. We hope to have channels like shelters and vets in major North America cities, and also aim to have nationally recognized partners like Chewy. Users will be able to find right plans for their dog in Sniffy, no matter what the breed, age or size is.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Sniffy Labs was incorporated in the State of Delaware in September 2019.
Since then, we have:
Historical Results of Operations
Our company was organized in September 2019 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 10 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 10 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Sniffy Labs cash in hand is $400, as of February 2020. Over the last three months, revenues have averaged $200/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $600/month, for an average burn rate of $400 per month. Our intent is to be profitable in 18 months.
From the beginning of 2020, we started to generate revenue from our paid private beta testing. As of 2/27/2020, we've earned $750. It is expected that we could make around $1,000 from the beta. We started to pay rent for office and mentorship from incubation centers, which is $200 in total for each month. We got our company authorized in NY State to do business and around $1,000 was paid for legal services and filing fee. If need be, founders can contribute capital from their personal savings to cover short-term operations.
Our revenue for last 3 months comes from our paid beta test. For the next 4 months, we will spend our time on app development and plan to launch our product in the market in June. So we will not have revenue until then. We will spend more money on app development. Once we launch our product, we will start spending money on digital marketing.
We hope to receive the RG&E grant at $25,000 in June 2020. Other than that, we have no other sources of capital to rely on at this time.
People tend to not spend money on apps. The Company has to put much effort on increasing awareness of the value of the product.
New competitors would probably pop up soon and compete with us, some of which might have a solid financial and operational support, and it could have an adverse effect on our business model, revenues and profits.
The two full-time co-founders of the Company are not U.S. citizens. They have to renew their visa in 3 years to stay in the U.S.
There are big pet stores which are also offering dog training classes and have a solid financial and operational support. There is a risk that they will also develop similar products and outcompete us.
The Company is early stage and has only just begun generating revenues. Predictions about future revenues and growth cannot be guaranteed.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
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