Marking territory? Can doo!

Pup-Pee Solutions co-founder Tobi Skovron has taken the classic ‘why didn’t someone think of this before’ idea and made a successful global business. He tells AMANDA GOME the story.

By Amanda Gome

Pup-Pee Solutions co-founder Tobi Skovron has taken the classic ‘why didn’t someone think of this before’ idea and made a successful global business.

Tobi Skovron’s big moment was not coming up with the idea for his innovation, a pet loo. It was appearing with the product on The New Inventors. 

Revenue for his company Pup-Pee Solutions was $1.5 million last year, and he expects it to be $5 million for 2007-08. He has been cashflow positive since day one – not bad for a 27-year-old in the manufacturing business.

Skovron tells Amanda Gome the lessons he learnt taking his business Pup-Pee Solutions global. He is available to answer your questions until 21 March. Just email feedback@smartcompany.com.au

Amanda Gome: How did you think of it?

Tobi Skovron: Pets have always been a big part of our lives for me and my partner Simone Iglicki. I wanted to keep a dog in our Melbourne apartment without it messing it up or having to take it to the nature strip at three in the morning. We had a little spoodle. The only products on the market were puppy pads made out of nappies that you then throw in the bin. They are expensive. So we started to work on ideas.

Was there a ‘eureka’ moment?

No. I was running a corporate health company and Simone was at university. We talked about the idea of the pet loo for years, but I hate debt.

I spoke to a lot of people and investing in the business was a very high risk. Just to produce the machinery to manufacture a piece at a time would cost $100,000 or $200,000 if we wanted to do it locally. Then there was the cost of patenting!

I knew if we didn’t succeed we would be in big trouble, which was a big risk for a young couple. We could make a lot more working in a large corporation. But I knew the concept had merit and others could see the opportunity so we manufactured a sample run, went on The New Inventors in July 2006 and 500 pieces were sold overnight locally and internationally.

We had hired a PR company once we knew we were going to appear on The Inventors so we could make the most of every opportunity.

The next big moment was when AOL did a publication on us in the US. All of a sudden the website went bananas!

You obviously spent a lot on the branding and name?

I wanted the product to look fresh, to look good having it in your apartment.

And I wanted that reflected in the branding. The grass on the top of the box is green and I always had this vision of sitting on the toilet reading the newspaper so we incorporated the dog doing that in the branding. I wanted it to be personal.

We stick to the KISS rule: Keep it simple, stupid.

Did you give up your corporate fitness company?

I stayed working until August 2007. I wanted to make sure it would work. I wanted to make sure we had enough products.

What was an early concern?

Being able to meet supply. I asked how many can you produce a day and what’s the lead time on 1000 pieces? They said two weeks, so I told the market four, and then delivered two weeks ahead of expectation.

The pet loo looks easy to copy.

I have patents on 20 different designs of the pet loo. It’s a strategy to minimise the risk. If people try, they get a very aggressive letter from my lawyer. I have every intention of following through if they go further. I won’t be messed around with.

Who have you turned to for advice?

My board. We had a meeting until 12 last night! I brought together experts in different disciplines; patent attorney engineers, tax agents, international business experts on import, export… I pay for their time and they are very trusted people.

What have been your challenges in leading such a fast growing company?

I feel as a developing entrepreneur that I have grasped the concept of business. Now I go to the board and say this is how we are going about it; I can say I know xyz and my intentions are abc. And they can see I have looked at all the possibilities.

I think this is in my blood. My Dad was a very successful entrepreneur who developed a concept and sold it worldwide. (Alan Skovron developed a fuel injection cleaning product.) Unfortunately he was unsuccessful with health and wellness and he died 10 years ago.

The biggest export mistake?

I have been waiting on a UK deal to come through since September last year. The distribution agreement and orders have been signed but the UK company is trying to drum up interest for it before paying us.

It is a very promising company in the UK, but I have stood still there for seven months waiting for it to happen and turned down offers from others.

I could have sold 150 pieces in the UK every month. Instead I have sold nothing. I should have acted sooner, but yesterday I gave then 24 hours.

Next step forward?

We are setting up an online store so customers can place an order and buy one at a time. When they buy at the full retail price I get amazing margins, so it is worth it to send one at a time and wear the freight costs.

Best tip to market on a small budget?

We get our suppliers to market for us. So pet stores will do SEO for us because, as we have pointed out, if people come to buy our loo they will then buy treats and other things for their dogs.

We also have a call for action on our website, thepetloo.com. We have a bunch of flags and we say if your company is not there maybe there is an opportunity for you; contact us.

What is the structure of your sales team?

I have a team of eight. Some are on say $40,000 base salary and are on commission for sales. The others are just heavily incentivised.

They get $15 to $20 a unit so if they sell 100 a week, that’s a good salary!

I also have a general manager, two girls in admin and we outsource our accounting.

How do you handle your cashflow?

I had some help from family at first. I also didn’t draw any money from the business for the first year and a half so I had no fixed expenses, which meant we were cashflow positive.

Future plans?

We are now in eight different countries (the US is the biggest market, bringing in 40% of revenue) and I am in negotiating with 29 others.

Our niche is innovation. I am working on distributing 16 new products for pets that all have the wow factor. We might in the future look at rolling out pet concept stores, but that is a very aggressive market. At the moment you have seven players out there buying up lots of mum and dad shops. I don’t want to get into competition with them… maybe we will be bought out by the time we are ready to roll out concept stores.