You’ve heard of like dog daycare. You’ve also heard of co-working. What if you put them both together? That is exactly what Work and Wolf is doing here in Austin, Texas.
— Austin sits at about 75% of all residents have a dog. That comes out to roughly 750,000 dogs.
— They took two simple ideas and are hoping to strike it rich.
— Last year we had about 5,000 reservations.
— What I care about is money, right? Are they making money?
— Our revenue last year was $370,000. And is there a way where I can write a check and help the founder expand faster? I get really nervous about uh investing when the founder sort of thinking about getting out cuz as you know it’s very difficult. I grew up with golden retrievers Libby and Goldie and I miss them with my mom in Colorado. But as you know I’m also an entrepreneur. I like working in co-working spaces. You can see the dog area back here right and uh then this is the co-working space in here. We’re going to learn about the revenue. If I see an opportunity, right, if there’s good revenue, good growth, I might offer a check on the spot to the owner. So, let’s see what happens. All right. Hey, I’m Nathan.
— Hi, I’m Jill. Nice to meet you.
— Nice to meet you, Jill. Where are we standing?
— You are in Workinwolf. We are a dog daycare, co-working space, and indoor dog park.
— Interesting. And how did you come up with this idea? Did you grow up with dogs or
— No, actually, I didn’t get a dog until a year before I opened this place. When I was living in Chicago, I was really into co-working. It was a cool place or like way to meet people. And then I moved to Austin and I adopted my dog, Luca. And I just really wanted a place for her and I to be together, but I still needed to work. And so I thought, man, it’d be cool if like I had a place to work, she had a place to play, but we could both go home together at the end of the day.
— This is a great combination. Explain to me what’s happening through the rest of the space here.
— Yeah. So what you’re looking at right here is the co-working side. So we have some we have a conference table, we have some open desks, and then we have some private offices.
— So you can come and co-work with a dog in the office with you. You can co-work without a dog if you just happen to be a dog lover. Or you can co-work where you are in the office and you drop drop your dog off to play either inside or outside.
— I’m Nathan. Hello. Oh, you look so nice.
— This black and white one is Rieton.
— Hi, Riot Tony.
— Hi, guys.
— This brown one is mine. Her name’s Luca.
— Hi, Luca.
— So, I actually have a degree in hotel restaurant management. So, I call this K9 hospitality. I came to Austin and I fell in love with the dog culture and so I thought, you know, why don’t we take everything that makes Austin great and the dog community and just build something where people can gather and hang out. And
— did you move to Austin knowing you wanted to find a spot like this and open the business?
— No. Oh my god. I moved here on a whim. I came here on vacation in 2015 and I just fell in love with the city.
— What year did you launch the business?
— So, we opened on June 2nd of 2018.
— How many square feet is this?
— 6705. 67 6,75 square feet. You know that down to the foot.
— I do. And we have the outdoor space, too, which is an additional 8,000 square feet.
— That cannot be cheap.
— But rent is very, very high.
— Are you comfortable sharing like a range or how much you pay in rent every month?
— Yeah. So, we pay somewhere in the ballpark of about 13 to $15,000 a month. So, we originally set out to be an indoor dog park in a co-working space. The idea was that we would have a bustling full-time co-working, you know, with people coming in and out all day and also the indoor spot. But what ended up happening is I enrolled Luca in another daycare. Okay. And I loved the idea that she was going and socializing and getting to play. But traditional kennels put them in a kennel.
— And I liked the idea that she could roam free and have fun. And I didn’t even know if that was a possibility. I’d never had a dog before. So I just started asking a bunch of people questions. And it turned out that a lot of people wanted more flexibility, wanted a different type of daycare, but were confined to what was already existing.
— And and I guess one of the things I always look at when you look at companies is why doesn’t this idea already exist? It sounds like one of the big barriers to entry is exactly what we just talked about. It’s it’s the real estate. It’s like expensive. Tell me more about, you know, how you got uh the initial launch done. Did you come I mean were you like super rich? That’s not a cheap lease, right?
— Yeah. So I actually uh went to my family and said, “Hey, I really think
— Oh, wait. pointed this way. Is this family over here?
— Yes, that’s Dave. So, this is my dad Dave. He is a uh mechanical engineer and he owned company.
— Good to meet you.
— I was sitting at another business actually and I was just watching how many people were coming and going with their dogs and I actually called him and I said, ”Hey, I think the next time you come to visit, you need to come with me to this business so you can see like how robust the culture is here of dog ownership.“ And so, he came and we sat down and he’s looking around going, ”Everybody goes everywhere with their dogs.“ I I had no idea that there were so many dogs in Austin, but I think Austin has the second highest per capita dog ownership in the United States. residents have a dog.
— Wild.
— So for us, that comes out to roughly 750,000 dogs.
— Okay. So, so when you ran the math, you’re thinking, okay, I got to raise X amount of money. Did what was the ask to dad?
— Um, it came out to around 100K.
— Okay.
— And what went through your head the first time she said, ”Dad, I really think the number is 100K. What can you do?“ I made her go through the numbers and we looked at it and I mean we looked at cost.
— He said if you come up with a business plan and you commit to sitting down and doing the numbers with me, he said, then we will heavily consider what you’re asking.
— So what was the what was the deal? Was it an equity deal?
— Um it was a friends and family loan.
— I retain Yeah. So I retain 100% of the company.
— Okay. And how expensive was the loan? Are we talking like a 20% interest rate or like a 2% interest rate?
— No, I gave her the the fatherdaughter deal.
— Okay. How how discounted though if you’re comfortable sharing?
— Um zero.
— Yeah.
— Zero for Wait, how’s he making money then?
— Uh he’s not.
— Okay. How was business going the first 3 weeks? What happened?
— Uh it was it was slow. It we our biggest challenge was trying to explain to people what they were getting because co-working and daycare doesn’t didn’t exist then. It doesn’t really exist now. So trying to explain to people like oh there’s a place that you can come and work but your dog can play. I knew that, you know, she she could market the the services and it was just going to be a matter of time any and now what 50 today?
— Yeah, we had 50 today. We had 52 yesterday.
— Mhm. Very very cool. Well, Dave, it was great to meet you. Thanks for jumping in. Yeah, appreciate it. Okay, so Jill, was this your initial sort of price list here? And how did you think about packaging in the early days?
— So, we start with the evaluation day. That’s the very first day when they come in and we
— look at their behavior to see if they’re a good fit for us. And then that evolves into either half days or full days. And then the packages go from there. And then the co-working, like we mentioned, you can come in and co-work if you don’t have a dog or you want to keep the dog in the office with you. So that’s a good option. And then these are a bunch of our extras that we offer. So we these have evolved over time, but we do like baths, nail trims.
— So if I bring my dog Libby in here, golden retriever, and I want her to be here for, you know, a week, what am I going to pay you today?
— So today we would do the evaluation day. That’d be the $35. will monitor, make sure she likes it here and that she does well with us. And then you can bring her back every single day. You can pay by day or you can get one of the packages.
— What is the most popular package on here? Is it five full days or 20 full days or five half days or what’s your best seller?
— Uh 20 full days is our best seller.
— So 20 full days for $630.
— Okay. And do people use that all in one? You know, they’re going to Myrtle Beach for 3 weeks and they drop them or they they split it up?
— So we don’t offer any boarding. So for it’s by we it’s daycare only. Why don’t you guys do overnight boarding?
— I was worried about work life balance if I’m being totally honest and I liked the idea of being a co-working space and an indoor dog park and daycare kind of came third. Boarding just was not then was never part of the conversation.
— Interesting. Okay. So, what was your first big revenue milestone?
— Month three was when we really hit our stride when I really started to think, ”Oh my gosh, this could be profitable.“
— When what was that total sales in month three? Do you remember? Yeah, I think we did about 10 grand, which for us was a huge milestone considering that we started on day one with nobody. So
— that’s W. So what is that? Is that that’s like 50 dog average there? Like what is 10 grand a month?
— 10 grand a month for us was about 10 to 12 dogs on average and now we see somewhere between 30 to 70.
— What was total revenue last year if you’re comfortable sharing like all in?
— Uh last year we did $370,000.
— How many dogs came through your doors in that year? Last year we had about 5,000
— Wow. Okay. And what um what growth did that represent over the prior year? So how much revenue did you do in 2023?
— 2023 was about 350,000. So it was a small on the smaller side of growth, but still up. We doubled our revenue from 2021 to 2022. 160,000 to about 300,000.
— Okay. And how did you do that? That’s crazy growth. It was a lot of co instead of traveling all year some most of them got dogs honestly and so we saw a huge need for people that were here needed a place for their dog to go during the day.
— Interesting. But it sounds like it wasn’t a bump that then decreased. They stayed with
— Right. because a dog is a lifelong commitment. So once they got the dog and they got in our facility and we became a part of their regular routine that they stay with us.
— What’s your goal for this year? What would be a crazy year? a a crazy year would be get to get to close to 400,000. I don’t know that we’ll get there. Um but business has been steady and for us that’s a good thing.
— But I peaked your Instagram ahead of this, right? So like this Boo thing like the first six stories are basically dogs with like crazy things on.
— I like to look at it as if you don’t have kids and you treat your dog like your kids and you get to take these activities in and you don’t get you don’t have to miss out.
— Do people pay extra for this or just a nice thing you do?
— So this is an add-on. We do a different monthly photo each month. It’s $9 and we theme it. So February we always do Valentine’s Day. March we bounce between like Marty GR, St. Patrick’s Day, March Madness. And then June we do Pride. Uh and then December we do the holidays.
— What is your most You know McDonald’s, right, has French fries to their hamburger. It’s their most successful upsell. What is your best upsell?
— Oh, it’ll be our photos.
— It’s okay. That’s why I asked.
— Yeah, but we do anywhere from about 30 to 50 photos per month per booth. Holy m. Wait, so what how much revenue are you doing on doggy photos per month?
— We’re on track to do $40,000 this year in doggy photos.
— Wow. So you got to come up with a reason every month for a new doggy photo. You’re making up holidays.
— Oh yeah, we holidays. We have corresponding treats, everything.
— How many dogs are out here in the park right now?
— So we have 50 total today.
— Mhm. And is that a pretty average day?
— Um it’s it’s a it’s a great day for us. 50 is a great day. We see somewhere on the low end about 35 and on the high end about 65. And if you get sort of this area, you talked about the square footage to max capacity. Yeah. Right. What could total revenue be in a month?
— Um if at max capacity, we could probably be doing about 50 to 55,000.
— Okay. And what are you at right now monthly?
— We are somewhere between 30 and 35,000.
— Okay. And so how do you make up the gap? What do you think gets you there from 30 grand a month to your full capacity?
— Uh doing more marketing. Do you have like a lot of customers that change quickly or do you sort of have power customers that they make up like 90% of your revenue?
— I have clients who have been with me since the first week I was open.
— What do you think your top customer has paid you life to date?
— Oh, my top customer paid life to date is just shy of $40,000.
— You you know the number
— and I know the clients are here today.
— That’s Wow, that’s a lot. The co-working is basically empty today. Is that business model sort of struggling or
— we’re actually on track to do twice as much co-working traffic in 2025 as we’ve ever done.
— Um it is the slowest part of the business. It only makes up about 10% of my revenue. Okay. Um but I do believe it’s the thing that separates us and I do think it’s a great value ad for my clientele. Uh and we see anywhere from about 2 to seven people co-working a day and it really just kind of depends on the day of the week.
— What does 2026 look like? How do you grow this thing?
— I think we really need to put a bigger emphasis in marketing. Our marketing and social media is great as it is, but putting more money, more power behind that and getting people in um and to really recognize us. We’ve been nominated for best dog daycare in Austin for the last four years. We have a stellar reputation. So, I think it’s just about getting our name in front of more people.
— How much money are you spending on marketing and on what channels?
— So, we don’t have a huge marketing budget. I spend maybe $5,000 a year and it mostly goes to online marketing. We find that videos that showcase what the daily life is for the dog are the things are the type of content that um performs the best because I think that if you’re going to trust us to take care of your dog all day, you want to see how they’re spending their time.
— Do you know you can spend a dollar on Instagram ads and get a $1.50 and the equivalent of dog day passes?
— Yes, we have seen in on a much smaller scale because of our marketing budget. We’ve seen it work and I know that if we were to put more money into it, we would see a bigger return. What would the right amount of money be to put behind that ad spend just to get a really good test done? Are we talking like a grand or 10 grand or 100 grand or
— I think we could make I think we could show a lot for about $1,000 a month.
— And do you generate enough profits today to take those kinds of risks or are you operating sort of right at break even so like you don’t have 10 grand sitting around to run that kind of test?
— We do run pretty close to break even. So our big two expenses are our people and our rent. Um right now so the industry standard for payroll for my industry is about 30%. Uh my colleagues run 60 70%. I try to run 30 to 35%. But my rent is 70%. And that is very very high in my industry.
— If you had 100 grand where could you spend it to grow faster?
— The big thing would be the addition of crate and kennfree boarding. Um because that’s the one thing that people that utilize us during the day, they love us during the day, but when they do travel, they don’t have us as an option for the overnight part.
— Are there any things money-wise holding you back from doing that?
— We would have to make changes to this facility. I think that probably it would be about a $50,000 investment. It’s definitely just money that isn’t available to us right now.
— Are you like an aggressive business person? You’re trying to raise his money now and you know, you can’t find anyone to give you a 0% loan or uh like how are you trying to raise? Tell me more about sort of how you’re thinking about the capital. I’ve had many people approach me over the years of either starting a second one of these or asking if, you know, would I take on an investor and now just seems like the right time to start those conversations whereas I feel like a couple years ago I just wasn’t ready.
— Let’s say I made an offer to invest something small like $10,000. Is your preference to, you know, talk about in terms of, you know, I’m not a charity, so I want a return. Would you look at and prefer an equity type deal or would you prefer to look at something where, hey, Nathan, I pay you back over a period of time and it’s a debt deal, no equity. I’m definitely open to the idea of equity. I want to be with the right person who understands the model.
— If if I made you an offer and had equity in the business, how would I get a return on that equity? Like, are you planning to grow it and sell it in two years? Like, how would I eventually get a return on, let’s say, you know, a stake in the business?
— The idea to grow and sell is very attractive to me. I think that there’s so much potential and I think being able to grow it and sell it and give my equity, you know, partner a return on their investment would be the way to go.
— How would you value a business like this today? Well, my colleagues that do boarding do somewhere in the ballpark of 1.5 million to 2 million in revenue.
— But but if I own car if I did a deal with you and own I’m making this up 5% of the business, right? You growing the revenue is fantastic, but I don’t get a return on my money. I don’t get a return on my money until the business actually sells or you buy me out or something. So the revenue growth is great, but that would be a better fit for a debt deal where you or you pay back as revenue grows versus equity. Would you be open to that?
— Yeah, absolutely. When I structure debt deals, I generally want to be paid back in somewhere between like one to two and a half or 3 years. And so, one way we could structure a deal, assuming we get along and we like the partnership, is, you know, something like $10,000 that you then pay back something on the order of um, let me do the math, something on the order of um, 3 to 5% of monthly sales until I’m paid back up to X amount, obviously above the 10K because I want to make extra money. Would you be open to a structure like that?
— Yeah, absolutely. The last thing I want to do is have you paying me back a percent of monthly sales, but it encumbers your ability to grow the business cuz it’s the payment is too big.
— It also can’t be too small where it takes me 10 years to get paid back,
— right?
— So, what’s the right amount of monthly sales percentage-wise to pay me back? And the thing way to think about this is how fast could you grow the business if I give you an extra 10k today?
— We’re we’re in a place right now like where we are running very close to break even. So I I worry I worry about like as as great a deal as that is I do worry about what that would do in the immediiacy like in the immediate future. Um so I don’t you know I don’t know 3 to 5% sounds reasonable.
— How much revenue could you add in like call it one or two months if you had an extra 10k today to invest in marketing? I definitely think that we could we could add probably off the bat $3 to $5,000 because once people get in the lifetime spend is quite high for our our top 10%. They spend annually maybe $4 to $5,000 a year with us and that’s just on doggy daycare and the extras like the photos that we talked about. Um that’s a pretty significant spend.
— You mentioned wanting to sort of grow and sell. Is this something that you are actively wanting to sort of look at potential exit opportunities in the near future? or is this something you want to grow for the next 10 years before looking at any kind of exit opportunity?
— Um, we’re absolutely looking at an an exit opportunity within the next 3 to 5 years.
— Okay. You also see a clear path to grow the business if you had some extra cash today.
— Um, interesting. But I get really nervous about uh investing when the founder is sort of thinking about difficult. I’ll make you an offer. I’ll see how you respond. Okay. So So here’s my offer. uh $10,000 specifically to help you spend some extra money on ads to grow the business so that you can work towards getting to an exit that you want. In exchange for my $10,000, I’ll be paid back as 2% of monthly revenue until I’m paid back. But if I’m not paid back at the end of 2 years, the full amount would be due. Okay.
— The effective interest rate on that we would that we would do is not 0% as dad’s watching. uh we would do something, you know, in the 10 sort of 10% range.
— How would you respond to a deal like that?
— Um I mean, it’s definitely interesting. The 2% makes it a lot more manageable, I think, for where we’re at in terms of business. And I think that we can do a lot with that 10 grand.
— What do you think about a deal like
— Um yes, I would say you would have a
— All right. Well, hey, let’s get to work, Joe. I’m looking forward to it.
— Yeah, me too. Thank you so much. Very, very cool. If you’re looking for capital, go to founderpath.com and create an account for free. Then connect your profit and loss statement so I can understand your cash flows and revenue. Then my AI agent will write a 10-page memo for you all in under 2 minutes. And it will include a capital offer at the end. If you like the offer, just type yes in the chat. Tell me what bank you want to swear the money to and we’ll get a deal done together. I’ll see you over at founderpath.com.
