Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How a Dog Walking Service Scaled to 30 Million Without an App
Transcript
- Lucas: So there's a dog walking company in Chicago that just crossed $30 million in annual revenue. No app. No on-demand booking. No GPS tracking for customers. They run on phone calls and paper route sheets. Luna: Wait — $30 million and no app? How do customers even book a walk? Lucas: They call a phone number. A dispatcher answers, takes down the request, and assigns a walker who already knows the dog. That's it. The founder, a guy named Mike, started walking dogs himself back in 2012. By 2018, he had 10 walkers and maybe half a million in revenue. Last year, they did 30 million with 150 walkers. Luna: That's a massive jump. But no app means no scale in the traditional sense. How did they add customers? Lucas: Almost entirely word of mouth. Mike told me their customer acquisition cost is basically zero. They don't run ads. They don't have a website with a booking portal. They have a simple landing page that says 'call us' and lists the number. That's it. Luna: So their growth came from referrals. But at 30 million, you'd think they'd need some tech to manage logistics. Lucas: And that's the interesting part. They do use software — but it's internal. Dispatchers use a custom-built scheduling tool that's basically a digital version of a paper grid. Walkers get printed route sheets each morning. Customers get a text when the walker arrives, but that's automated from the dispatch system. The customer-facing experience is deliberately low-tech. Luna: Why would you deliberately keep it low-tech? Isn't that leaving money on the table? Lucas: Mike's argument is that the moment you introduce an app, you commoditize the relationship. He says dog walking is a trust business. Customers are giving you keys to their home. They want to know the person. An app creates distance. A phone call builds rapport. Luna: But what about competition? Rover and Wag have apps. They're national brands. Lucas: And they're losing money. Rover's business model is a marketplace — they take a cut, but the walkers are gig workers, often inconsistent. Mike's walkers are W-2 employees. Full-time, with benefits. That changes everything. Luna: So he's betting on retention over acquisition. Lucas: Exactly. Their monthly churn is under 5 percent. Clients stay for years. And because walkers are employees, they know the dogs' routines, the owners' preferences, the quirks. That's a moat you can't build with an app. Luna: I've heard this story before — actually, I want to make a quick point. If these conversations have moved your work forward in some small way, a couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Lucas: Yeah, it really does make a difference. And it keeps us independent, which means we can do episodes like this one — digging into a business that doesn't follow the usual playbook. Luna: Right. So back to Mike — what's the downside? You can't scale a phone-based dispatch system to 500 walkers, can you? Lucas: That's the open question. Mike says he's hitting the limits. They've got 6 dispatchers handling peak hours, and it's getting chaotic. He's now considering building a customer-facing app — but not for booking. Just for communication. He wants to keep the phone as the primary booking channel. Luna: Interesting. So he's not abandoning the model, he's adding a layer. Lucas: Right. And that's the lesson for scaling service businesses: don't adopt tech just because it's standard. Adopt it only when the operational bottleneck is worse than the loss of human touch. Luna: What's their profit margin look like? Full-time employees in a low-margin service — that can't be huge. Lucas: They run around 12 percent net margin. Not spectacular, but sustainable. And they've had zero venture capital. Mike owns 100 percent of the company. Luna: That's rare for a 30 million business. Most founders would have diluted by now. Lucas: He's been approached by private equity. Multiple times. He says he's not interested until he feels the business can scale without losing what makes it work. And that's a very Mike answer. Luna: So what's the bottleneck now? Besides the dispatch center? Lucas: Walker supply. They're in a tight labor market. They pay above-market — $20 an hour plus benefits — but they need people who genuinely like dogs and are reliable. That's a smaller pool than you'd think. Luna: And they can't just onboard quickly because every walker has to be trusted with keys and access. Lucas: Exactly. They spend two weeks training each new walker. Shadowing. Pairing with a veteran. It's slow. But it's why their NPS score is 85. Luna: So the trade-off is deliberate. Slow growth, high quality, high retention. Lucas: And that's the counter-narrative to the 'move fast and break things' era. Mike's company shows you can scale without venture capital, without an app, without a sales team — if you build a system where every interaction adds trust. Luna: But can it get to 100 million without an app? That's the question. Lucas: Mike isn't sure. And he's honest about it. He says if they hit a wall, he'll adapt. But he wants to push the analog model as far as it can go first. Luna: I think there's a lesson for any service business here. The thing you think you need — the app, the website, the marketing — might be the thing that dilutes your value. Lucas: Yeah. And it's not about being anti-tech. It's about being intentional. Mike's company uses internal tools. They just don't expose customers to them. That distinction matters. Luna: Do you think investors will eventually force his hand? Lucas: Only if he takes their money. Right now, he doesn't need it. The business throws off cash. He's reinvesting in training, in dispatcher salaries, in a backup van fleet. All boring stuff. All essential. Luna: Boring but profitable. I'd take that over a flashy app that loses money any day. Lucas: And that's the episode. A 30 million dollar dog walking company that runs on phone calls and paper. Sometimes the best way to scale is to not add friction. Luna: Let's see if they can keep it going another five years. I'm rooting for the paper route sheets.