Spot On: The Spot Experience

New Yorkers sure do love their dogs. You can barely swing a Chihuahua in the five boroughs without hitting a doggie groomer, a dog-sitter, a dog-related retail shop, or even a dog-friendly bakery. New Yorkers would do anything for their furry four-legged friends—but they also need to work, too.

This was the position that Mitch Marrow found himself in several years ago. A UPenn Wharton grad working at a multibillion-dollar hedge fund, Marrow spent 14 hours a day on Wall Street—which was 14 hours that he couldn’t spend with his two dogs, Reggie, a 220-pound St. Bernard, and Hank, a 165-pound bullmastiff. “I could never find any place suitable for my dogs,” says Marrow. “I would spend time I didn’t have looking for some place that I could leave these two dogs and feel comfortable doing so. And I just had horrible experience after horrible experience.” Besides the fact that Marrow often couldn’t get a simple answer about the handlers’ training at various doggie daycare centers, he would sometimes see dogs fighting, or a dog shivering alone, in the corner of the room. “It was sad and it was scary,” he says.

At the same time, Marrow was involved with some publicly-traded pet industry businesses. “I was really enthralled by the pet industry and the growth that was happening, even as the economy was really tanking,” he says. “From a business standpoint, I had been doing a lot of research into the services end of the business and it became obvious that it’s a huge unmet need.” From his research, he found that there were approximately 25,000 registered dogs in his neighborhood on the Upper West Side. “There were a handful of doggie daycare–type places out there, but that could only account for about 500 of those dogs if they’re totally packed. And it was these same kinds of numbers showing up at all the different neighborhoods in and around the city,” he says.

So Marrow took the leap and left the hedge fund, buying two doggie daycare centers on the Upper West Side, about 10 blocks away from each other, and rebranding them as The Spot Experience in early January 2011. From the start, he knew he wanted to do things differently. Spot offers premium pet care services, such as daycare, overnight boarding, grooming, training, and walking services, along with transportation services and retail.

Aggressive Growth Plan

Spot employees are all certified to handle dogs after undergoing more than 50 hours of training in the Human Alpha Instinct Method, developed by Spot’s canine behavioralist, Brewster Smith. Each handler, many who come from a veterinary technician or assistant background, must pass the Human Alpha Instinct Method training regimen in order to be certified. Spot also offers total transparency through their use of webcams, allowing dog owners to see what their pets are up to 24/7 via computer or smartphone. Their location on 72nd and Columbus also has New York’s only private outdoor dog park, an Astroturf-ed garden complete with white picket fences, ramps, and a little pool. “It’s all for human consumption, to go see a place and it looks nice and cozy and the fixtures are pretty—but at the end of the day, your dog doesn’t really care. Your dog wants to be in the right environment and feel comfortable while he’s away from his mommy or his daddy,” says Marrow. “We staff it 24 hours a day, so we don’t stuff dogs in cages. We really, really treat these dogs like you would want them to be treated, as an owner.”

Spot’s first two locations were so successful that in the fall of 2011 Marrow bought another two locations downtown, one in Tribeca and one in Chelsea. Spot now has a staff of over 100 people, and Marrow has plans to expand steadily throughout the coming years. “We have an incredible expansion plan for 2012 and 2013, involving over 500 hires and between 25 and 50 new locations in and around Manhattan,” he says. “There are so many dog owners out there that, even if we had 150 locations in just Manhattan, we wouldn’t even be scratching the surface.”

To fund the initial purchase and subsequent expansion, Marrow leveraged his relationships with the investment and real estate community that he built while working on Wall Street. “Our investor base is really strong. We’re really well capitalized, which is nice. And then our banking relationships are also pretty deep, because although I’m fairly new to this business, the underlying existing businesses have a history of financials to show,” he says. “We have almost tripled revenues since I’ve taken over the existing four stores. It’s very easy to show the bank that ‘Wow, these guys are doing some amazing things.’”

Must Love Dogs

With the new locations come new hires and Marrow wants his employees to consider Spot an opportunity for a career path. “Most of our people, except for the more senior management, are people that were sort of pigeonholed into hourly wage-type job opportunities. They really wanted training and a career path, but never got it,” Marrow says. “We’re putting the money and the time into training them and Spot’s growing astronomically. We’re promoting from within and we’re giving our people that started out as hourly people the opportunity to move up and become supervisors and managers and eventually run a store, or a few stores.”

When it comes to hiring, Marrow says his team looks for people with maturity, and he trusts the managers at each store to make good decisions about who to bring on board. “There’s no other way to put it, we’re taking care of somebody’s family member,” he says. “The things we expect of the people that work here, the amount of training, the hours, is intense. So if you don’t really love the animals, it’s not going to be a great place to work.”

Since Spot’s four New York City centers were previously doggie daycare facilities, they inherited the structural problems that came with each location. “I try to move very quickly and I have that trader-esque mentality at times where I want to immediately get something done. That has led to some mistakes and I’ve since realized that it’s okay to take a step back and slow down,” he says. “The biggest mistake by far has been buying existing facilities. It was a necessary evil at first because I wanted to buy something that was up and running so I could learn from it.” Going forward, Marrow is planning on choosing raw spaces and building out, even though it may take longer to get up and running.