If the embedded player doesn’t work go here.

Non-Spotify audio version is at the bottom of the page now.

 

---

Look into those adorable eyes

 

Want to keep your dog and/or cat safe and happy? Damn right you do, because you are a Good Pet Owner.

(No pets? Don’t worry it’s still mainly business tips this week.)

So, the story of how we got into a startup in the fun world of veterinary parasite prevention.

Time to share our investment secrets that are not really secret and are probably wrong for you.

 

Our secret investment checklist

 

Here’s our upfront investment decision checklist:

1. Is it interesting?

That’s it.

If not interesting, we’re not in.

If you’re an expert investor, or if you’ve read Barefoot, you can tell me all about balanced portfolios of shares, investment property, bonds and whatever*.

And my eyes just glaze over because I would sooner be dead than be one of those crusty investors who tells you of their many geared rental houses.

None of my skills bring any advantage to owning shares or properties. Millions know more than me about those things. So I take zero satisfaction or pleasure in them, no matter how much money they might earn.

My daily conversations with business partners on what we’re doing next are what keeps me alive and excited.

So I was interested when we got pitched by Fleamail, a subscription service that keeps pets safe from evil parasites.

There’s a chapter in my book on my dim-witted, obnoxious attempt to become a vet, which earned an ROI of zero on my parents’ investment. I would have been a dangerous liability to that profession.

Fleamail offered some kind of closure, a chance to make amends to pets and parents.

Obviously beyond the initial interest, we had questions. Here are the top 5 reasons why we invested.

 

1. A legit reason to exist

 

Dr Evan Shaw, the founder, used to be a clinical vet. One terrible day, he had to put down 16 pets. Each had a terminal but easily-preventable condition, from worms or ticks.

Their owners either hadn’t given them preventatives, or had used Facebook/Craig Kelly remedies. Like magnetic collar pendants or hibiscus juice.

Evan realised he could save thousands more pets through prevention rather than cure. So he set up Fleamail. Each month you get a blue envelope in the mail with all the worm, tick and flea treatment, and you put it in or on your pet.

More than anything else it’s a reminder service. Even if people have the meds in the cupboard, life is busy and they just forget as months roll by.

Plus you get the correct vet dosage for your pet’s size, an important safety issue.

 

 

Evan is a keen business guy, but he also has nuclear levels of drive to keep animals alive. Even a distressed bin chicken.

 

 

View this post on Instagram

 

A post shared by Evan Shaw (@dr.evan.vet)

 

Regular readers know my deep admiration for the dirtiest bird there is (read Success Lessons Of The Bin Chicken).

We want to invest in businesses that have a reason to exist beyond “make a shitload of money”.

A shitload of money is also good, but if that’s all that drives you, the people around you can tell. There’s no pride in what you’re doing, only greed.

You’re no better than Gerry Harvey or Solomon Lew.

2. They had paying customers

 

You see ideas that seem great, so people start that business.

And within a year or so  — to use the pet terminology – that business has crossed the rainbow bridge.

An idea is only a business if customers are prepared to hand over cash.

Fleamail had proof the idea works, with a modest number of subscribing customers. They knew the cost per acquisition. They needed money and a bit of business guidance to grow the place.

It’s a much more compelling pitch than a great idea.

Even if you’re a master of the venture capital universe – and we are the total opposite of that – buying into an idea is a 3am drunken roll of the roulette wheel.

Nobody knows what will work for sure.

 

3. Barriers to entry

 

The Fleamail service was an all-new idea. We won’t have the game to ourselves, but doing it safely needs a vet in charge.

There aren’t many vets who have extreme business drive and are also willing to walk away from practice.

There’s Glen Richards from Shark Tank, and I can’t think of another. That’s a good sign that the market won’t get flooded with competent competitors.

Though, annoyingly for our search results, there’s another veterinary Dr Evan.

Our own Dr E is quite a handsome fellow. But when you search “Dr Evan vet” you get swamped in Dr Evan Antin, Californian “hot vet of Instagram” who doesn’t mind doing his vet work in shirtless Love Island mode.

 

 

It’s like when that other guy released a book with the same title as mine a month ahead of me.

These things happen and you think ugh mate why do you even exist?

It sucks but it happens, deal with it.

OK two more points to go but first let’s take a pet break with this very good green-screen footage of a work-at-home TV weatherman in Canada.

 

My new favourite WFH problem. I don’t know why, it just gets funnier pic.twitter.com/NiIX5osHh7

— rose (@rosevalentee) August 30, 2021

 

Now back to business.

 

4. We knew them

 

The introduction to Fleamail came from one of the sweat-equity shareholders.

We had worked with him a few years back on a startup caper in a totally different industry, involving all sorts of secretive international trips and undercover meetings in dark bars. That one stalled on lift-off, for reasons outside everyone’s control, but we parted on good terms.

He suggested us as people who could be trusted not to be total external investor bastards, which is a risk in capital raising.

So they called us rather than talk to other investors who had approached them.

If you’re a pro startup investor it’s your job to have a million coffees with plausible-seeming randoms, and apply all your genius tests to see if you should go into business with them.

That’s not our vibe, and we’re fine with that. If you know someone before they want your money, that’s a much safer decision. Not safe, but safer.

That story is a good lesson in not being a dick in your general business dealings. That karma has a habit of coming back later on in unexpected forms.

 

5. It makes a profit

 

The Australian companies I admire the most are Atlassian and Envato, because they worked out to make a profit from the start. Like regular businesses do.

So they could finance their own growth and operate on their own terms.

Operating on your own terms is, for me, the single best thing about having a business. Light years ahead of the other factors.

If you’re going for rocket-ship user growth with free product or selling at a loss, you’re choosing a very different life for yourself.

An endless cycle of funding hustle, stress and a whittling away of control over your own destiny.

Both are legit choices but I know which way I’d go.

Also, as anyone who listens to Scott Galloway’s podcasts knows, businesses with a subscription revenue model attract much higher multiples should you choose to sell.

Anyway, don’t let your beloved pet perish from fucked-up parasite diseases, they’re a tragic place to end up.

Check out Fleamail here, or just buy the treatments yourself and set up monthly calendar reminders if you’re an organisation champion.

Either way, do it now. Your furry friend is relying on you.

 

---

 

* Jokes aside if you want intelligent personal financial advice start by reading Lacey Filipich’s book, she’s got it sorted out. And I acknowledge my privilege in that I’m now secure enough to indulge in investments for their entertainment value. Starting out that way is not right for you.

 

---

My book Undisruptable has been getting some sweet reviews from people with serious commercial runs on the board. Read why you need it here:

 

 

Or just buy it here. It comes in audio-book, e-book, or book-book.

Also if you’re new round here, I put out a story like this every Tuesday, drop your email here to get it in your inbox each week.

---

Audio Version 10 mins