Tyler Suiters:

Hey everybody. We're the Consumer Technology Association. I'm Tyler Suiters. We are the owners and the producers of CES, the largest, the most influential tech event on the planet. We are here to help you get CES ready. The big show is January 7th through the 10th, 2020 in luxurious Las Vegas, Nevada. And today we are talking about a segment of technology that is seeing exponential growth right now. That is pet tech, the devices, the products, the connectivity that we are using to better understand and to help the lives of our pets improve as well.

Tyler Suiters:

Some forecasts want to throw some data your way. From CTA in the year ahead, that is 2019, CTA is seeing that revenue growth will jump 80% for this category. This is just in the US. And the number of products sold, unit products sold in pet technology will rise more than 60% in a single year. A huge opportunity within technology.

Tyler Suiters:

Today we are talking to two of the innovators who are trying to make their names in this space. First, a company called Basepaws. You know the company 23andMe, it's made a few headlines in the last few years. This is a company that it refers to itself as 23 and Meow. I'll let that tease hang out there for a bit. We're talking with the founder and CEO who is relatively freshly off an appearance on Shark Tank. Also, a company called Petrics. This is an east coast company out of the Carolinas that is focusing on you helping your pets live healthier lives, not just your conductivity. All of that is coming up on this edition of CES Tech Talk.

Tyler Suiters:

Anna Skaya is founder and CEO of a company called Basepaws and if you're a fan of Shark Tank, chances are you know her and her company, at least to some extent. Anna, great to have you with us today. Thank you.

Anna Skaya:

Yes, so excited to be on the show with you guys.

Tyler Suiters:

All right. We'll call that Shark Tank reference a deep tease and we'll get to it in a few minutes, but first of all, let's start about out with with your background in the tech sector and how Basepaws came to be because you've always been entrepreneurial and at least in some degree, had your foot in a sector of technology that seemed to be growing. But you didn't really find your footing so to speak, until you arrived at Basepaws.

Anna Skaya:

That's right. That's right. So Basepaws is actually my fourth company. I've done startups in Europe for about a decade before coming onto Basepaws. I was a founder of a company called My City Deal, working for Rocket Internet in Europe, sold that company to Groupon. Was the CEO of Groupon Russia and then went on to do a few more companies in the ad tech space and got a little, a little tired of getting folks to click on ads and really wanting to do something a bit more meaningful. Went to Singularity University up in the Bay area and got really, really passionate about this idea of genetics. Did my own 23andMe, oh gosh, in 2013 and found out some radical things about my own genetics that really changed the way that I viewed myself, both my ancestry and also my health and got really excited about what genetics can do for myself.

Anna Skaya:

And started looking around, poking around. I'm an entrepreneur at heart, so whenever, I get excited about a technology, the first thing I want to do is get really deep. I don't have a science background, but that never stopped me. Really started looking around and got really excited about the idea of taking genetics into something that I was also really passionate about which was pets. It was really just a snowball effect of being excited about a new technology and really, really loving my own cat. And that's how it all got started.

Tyler Suiters:

Well you touch on an important point Anna, and that's one of the reasons clearly that pet tech is growing as a sector so rapidly is the fact that there is a passion among pet owners and clearly, you've tapped into that identification yourself. By your experience and why you got into this business.

Anna Skaya:

That's right. Pets are now a full-fledged member of our own households. The number is staggering. Something like 70% of all American households have a pet. It is something that is hard to wrap your head around. And because of that, we feel really, really connected with our pets and all the new technology that is coming out, like sequencing, like the stuff that used to be so expensive, it is now available not just for ourselves but for our pets too. Me, like any pet parent out there, of course I want to bring all this technology and understand my babies the same way that we want to understand ourselves. Exactly.

Tyler Suiters:

One of the catchphrases I've seen that you use to describe your company is a reference to 23 and Meow. Probably don't deliver it as well as you do, but do you feel like you're following something of a model that's already established out there? And to that extent, are we seeing more of that in your view of the pet sector, replicating success for some of the technologies, whether it's it's wearables or the elements of connectivity that we do and enjoy for ourselves that we're now extending to these furry members of our family?

Anna Skaya:

I think absolutely. To your point, yes, we sometimes do call ourselves, at least the cat part of our business, we are expanding to other pets, but we call ourselves 23 and Meow, and we do own that URL. And yes, we follow that model. We really value what 23andMe has done for the genetic space. They are the pioneers and have done amazing amount of work making this a household idea. You want to talk around the dinner table, you talk about 23andMe, you talk about the work that they have done.

Anna Skaya:

But yes, we really think that technology is transforming person to person interaction. It's innovating and of course we think technology's transforming person to pet interaction and that relationship. And we really believe that we are seeing the way that companies are working in the human space and we want to take that work and want to bring into the tech space. And that works across lots of different sectors. It definitely works across genetics. We look at what 23andMe is doing and for example, they've taken their data and they've put it into their work with therapeutics. Well, there's no reason why we shouldn't be using the data that we're taking from our work in felines and putting that right back into feline research and pet drugs, which is exactly what we're doing as well. We're learning from them. Absolutely.

Tyler Suiters:

All right. Let's talk about your Shark Tank experience. Not only did you come away successful, I thought you walked onto stage with an awfully brilliant prop. It was certainly an icebreaker with all the sharks. Please, please walk us through that.

Anna Skaya:

Sure. For those of you that have not seen the show, this is going to be, well, I'm going to tell you how it ends. I did walk on stage with a cat. The cat did not behave.

Tyler Suiters:

This is a cat with quotation marks.

Anna Skaya:

I wanted to bring on a bunch of kittens to be honest. And that was my original idea. My original idea was I wanted to bring on my own cat, dress her up as a shark, within a shark costume. And I thought that was going to be, it was just going to blow up the show.

Tyler Suiters:

Yeah. Because cats love to wear costumes.

Anna Skaya:

Well, I thought that was a brilliant idea. And, I bought the costume, I made my cat wear it. I got all scratched up. I thought, no big deal. Price you pay for an amazing Shark Tank episode. Lo and behold, I found out that right before me, right before I go on stage was Goga. Have you ever heard of Goga? Goga is goat yoga. A bunch of goats dressed up in shark costumes going on stage performing goat yoga in front of the sharks. They stole my idea. I was totally gutted, so I had to do something else.

Tyler Suiters:

I'm trying to imagine Anna, the spike in Google searches for goat shark costumes.

Anna Skaya:

It's a thing. It's a thing.

Tyler Suiters:

Clearly, clearly.

Anna Skaya:

It's a thing. The goats stole my idea for dressing up my shark, my cat in a shark costume. The next best thing was the producers suggested I think quite naughtily, that I would dress up as a cat and go on stage and pitch myself dressed up in a cat costume. That idea did not go very well with my investors. Next best thing we found a really nice soul that dressed up as a cat, we came on stage together. We pitched. All of a sudden, I think all five of the sharks were excited. We don't get to see the final cut, but to be honest, all five of the sharks were excited. It was a very, very exciting, long conversation. There was even a little bit of a cat fight between two of the sharks. The other day, we got two of them to invest. Both really, really strong sharks. Two really awesome investors, very different. They bring two very different skills. Mr. Wonderful and Robert, they come at the investments from two different angles. They both been really helpful and successful and actually we walk away incredibly grateful for the experience.

Anna Skaya:

On our website we even have Mr. Wonderful as an advisor. He promised that to us on the show. That he would be an actual adviser and he has been advising us. I've had calls with him. He's been an incredibly great business advisor for us. He understands marketing incredibly well. This guy is sharp, sharp, sharp. He got us into Amazon. Amazon has a really great program for young companies that have high potential. Thank you, he thinks that's us. He got us into a program called Amazon Launchpad, which is for companies like ours. The sharks, when they really believe in you, they go out of their way to really help you out. I've been thankful for Mr. Wonderful for really believing us. He really likes this product. He talks about us a lot on and off the show. Yeah, it's been great.

Tyler Suiters:

Well, another key proof point for the Basepaws company Anna, in the last year, is coming to CES 2019. Minus the goats and the shark costumes. That is a trial by fire in a sense as well. You are exposed to the place where technology business gets done, where you have the opportunity to make that synergy, meet the people who can make your company.

Anna Skaya:

What an incredible opportunity it was for us to go to CES and not a very, not a show that we ever thought we'd get into and not a show that we thought we'd be so successful at. We gave away more merch, more cards. We got more media attention from CES than any of the shows than we've ever did. We were a different thing. We also had that catch. Something to be said for standing out at CES, you've got to stand out. It's a really difficult show to stand out and so if you find a way to stand out, it really makes a difference. I saw that cat photograph on Instagram for weeks after the show. It snuck into so many pictures all around the world. We had an incredible time. We literally, we came in there with boxes of merch and cards and we walked away at the end with nothing. We had our tablecloth and that's about it. That's about all we had left at the end.

Anna Skaya:

It was incredible opportunity. We met, we got onto TV, radio shows in Australia, in Peru. We got into media, hits all around the world. We ended up having sales in Japan. Just completely new markets that we would've never hit if it wasn't for CES.

Tyler Suiters:

Great to hear Anna. And your enthusiasm is certainly infectious, but it also is demonstrative of the sector as a whole. I mentioned earlier that CTA is forecasting almost exponential growth. More than double revenue growth and also product unit growth just from 2018 to 2019 in terms of the annual forecast that CTA does. Where do you see this going? Are we still on the annual hockey stick curve, where it's continuing onward and upward? Or do you see a flattening at some point? Just what's your five-year perspective for this tech sector?

Anna Skaya:

I'm going to talk about pet tech in general. Pet parents want nothing more than for their pets to enjoy a long and happy life and for that life to be together. And when you, when I was on the CES floor this year, the amount of products I saw that spoke to that, litter boxes that, they did everything but I think sing songs to their pets. Self-cleaning, better smelling, self-scooping an incredible amount of products that will just keep getting in better. RFID tags, microchips so much.

Anna Skaya:

And then a lot of luxury stuff that I've just started to see now that, this high-tech pet stuff that we are, I think going to see more and more of over the next few years where money is not an issue anymore. Where you have this level of pet parents where, you see that a lot in Los Angeles, but I think you're going to start seeing that across the world where you have pets that nothing is going to stop a pet parent from buying that. We have a lot of pets that have anxiety and there's a lot of companies that are working a lot to alleviate anxiety. That can be from things like CBD. Can be from things that are robotic. I saw an enormous amount of robotics around pet play that I just love. There's some amazing pet spa experiences that I'd see. I think we're just scratching the surface with some luxury things that I know this year is going to be some really strong players in that space.

Tyler Suiters:

Yeah. I'm unabashed to say that I love my dog irrationally, Anna.

Anna Skaya:

Irrationally, but I don't have kids yet and so my pets are my kids and so I can really relate to when you say irrationally, to me that, yes and no because I don't see it as irrational. I want my pets to have the best. And when I come across a product that, for example, my cat has anxiety and if I can come across a product that can take that anxiety away from my cat, I don't have a problem spending money on it. I really want my cat to be calm. And if I can find a way for, and for instance what my partner's dog has, is that it's home alone sometimes. And I know there's products out there that are really exciting for dogs that are home alone.

Anna Skaya:

For example, there's video game type of products, and that's incredible. A video game for a dog. But if it solves a problem, it solves a problem. And it really doesn't matter if it's your child, it doesn't matter how much it cost. Luxury, that's the kind of stuff that's out there right now that I'm really, really excited about. I know that at CES it's going to be a thing and that's the stuff that I want to go see. I'm going to be walking the floor this year looking for that kind of stuff because I know that there's a need for it. And I know there's a market for it.

Tyler Suiters:

Anna Skaya is founder and CEO of Basepaws and obviously a passionate advocate for irrationally loving your favorite pet. Anna, great conversation. We got to keep this going. Please promise me you're going to join us again some time.

Anna Skaya:

Absolutely. Thank you so much for having me on the show.

Tyler Suiters:

Joining us now from Wilmington, North Carolina, a growing tech metropolis, is Edward Hall. He is CEO and president of Petrics. Ed, great to have you with us today.

Edward Hall:

Thank you for having me.

Tyler Suiters:

How's the surf out on Wrightsville?

Edward Hall:

Oh it's good. The weather's been really nice out here. Can't complain.

Tyler Suiters:

Well, let's talk about this sector in general. We'll get to Petrics specifically in a minute or two. But pet tech for lack of a more nuanced term, is blowing up. What's your quick thumbnail of the pet tech landscape, where it is right now and what the most immediate next step is?

Edward Hall:

Yeah, absolutely. Pet tech and the state of pet tech, it is growing for sure. Over these years we'd hoped it'd actually grow faster than it has. But there's definitely a few areas involved in that process, but it's definitely growing. And with the growth of the millennial generation, becoming the dominant players in the pet owners category, it's really helped a lot because obviously they're tech savvy and they are used to tracking health metrics. They're eating more organic foods because I grew up in the Whole Foods realm. And eating as a millennial myself, I understand this.

Edward Hall:

And so that tracking and having that data and anything that can help make our lives more convenient and efficient so that we have more time to do the things we love is really important. And obviously, and in my opinion, it's one of the most important things to think of when designing a pet tech product. Is this making things easier for them or is it adding a chore? That's a really critical thing for the millennial market for sure.

Tyler Suiters:

It sounds like much of the growth that you're looking at or that you expect is generationally based. It's less about the pets we have to some degree and more about what consumer attitudes are from an age demographic basis.

Edward Hall:

Yeah, absolutely. If you look at the baby boomer generation, and even when we were initially doing some discovery and they, a lot of them were like, well this is how I've been raising my dog 30 years, we don't need tech or we don't need these other specialized types of foods. It was pretty straightforward unless our vets were directly recommending something because of an illness or what it might be. But more on the millennial side, it's definitely an area of interest for them. Because especially with, Apple blowing up so much and Samsung does android and iOS thing and everybody's kind of tracking. The smartwatches are now growing so much where I rarely ever see a regular watch anymore.

Edward Hall:

It's just, it's becoming kind of a standard. And pet tech is going to become a standard. There's no ifs, ands, or buts about it. It's just a matter of when. And I think once the market can really start to understand, especially when you're looking at the retailers. Right now, it's still pretty siloed. It's fragmented. You got pet feeders on one side, you got activity trackers on another, you've got safety products over here, you got things like play day where they increase activity. But they're not really kind of brought together. And it's been one of the issues, and I talk about it with some of my friends in the pet tech space and the retailers are trying to figure it out too, because this is a big shift.

Edward Hall:

And when they're talking about a traditional industry where their marketing and their promotions were around products that were typically cheaply made, and that a lot of them were out of China. They come in, you got these little bowls and all this stuff, but now you're starting to add in tech, you're starting to add in data tracking. Well that's not something that they've ever been used to marketing. And it's not something, those price points also, aren't something that they're used to. And so that really changes the strategy for these big guys and it's going to happen. It's just a matter of how and when.

Edward Hall:

I think once they start to kind of figure out that strategy, how to market to the millennials and really get them in there, it's going to be important. And that also applies to the eCommerce side. I've noticed the same thing. Their categorization of products is really critical and if you have to, if you're in a store, I'll give you an example. If you go into a store and they do have pet tech products, a lot of times they're scattered. They might have like a feeder near the bowls and stuff, but they also might have a tracker somewhere else. And so there's no location for them to go find that. And that can make it kind of difficult to even be aware of it. Because awareness is key in selling. If things are scattered, they don't know what they don't know.

Edward Hall:

And so by being able to have like a better marketing presence, and I think Best Buy, when they were doing the connected pet tests, I remember when I saw it, and I saw PetMan and some of the others and Petcube, they were kind of hidden on a lower shelf in a corner. And I was like, oh wow, they have a connected pet category. But nobody knew. And it wasn't, there wasn't a sign. Sales reps weren't really talking about it. There's a whole break there. And once that starts to get figured out, I think we're really going to see this industry grow. And when the eCommerce sites are really starting to point out that there's a pet tech category on their eCommerce store, that stuff will really make it easier for the consumers to find those products and discover new things that they didn't know existed. Really cool products. There's a ton of them out there.

Tyler Suiters:

All right. And let's talk about those products, Ed, but specifically the technologies behind them. And before we do, probably need to step back for a second. For full disclosure, here about your own personal pet history. There are dog factions and cat factions and a iguana factions and never the twain shall meet sometimes. What's your perspective? Tell us about the animals you've owned.

Edward Hall:

Yeah, I've had dogs and cats on growing up my whole life. Currently I have a cat, I'm just so busy right now. I would feel guilty to have a dog at the moment and be gone all the time. Because you know how loyal they are. They wait for you. Their whole day be bud's food. I just don't want them waiting all day without me there.

Tyler Suiters:

Yeah. And disclosing my own perspective, a golden retriever is sitting at home right now, missing me, I'm sure. She's on my screensavers so I'm neck and neck deep in the ownership. Yeah, yeah.

Edward Hall:

Yeah. I would feel guilty about that right now, but I do want to get a dog again. Right now I have a cat, which is a much more independent animal. That definitely is more favorable to my current work schedule.

Tyler Suiters:

Well across dogs and cats, and since you've had both, I think you're a great candidate to talk about this. What does pet tech deliver for you that's a bit of a crossover? Whether you have a canine or a feline. What is that technology giving you as an owner that is such a big benefit that's driving this sector?

Edward Hall:

I think technologies that help you manage your pet's health. Identifying, if there might be some issues. But, you have things like Rover, which obviously help with the dog side. You're not going to see a lot of cat walkers out there. But for crossover, I think a lot of it is in a management application side. You're starting to see some really cool apps that are integrating in with the vets as well, which adds some transparency and communication, which is great. But yeah, the technology, I think when a lot of people think of technology, they think of physical products too. And obviously with CES, that's a big area, but it's also in the software side too. But one thing that really I'd like to see with that crossover are these activity toys, these interactive toys.

Edward Hall:

PlayDates, one of my favorite that I've seen. And I just think it's really cool because you can drive this ball around and whether it's a dog or a cat, they're going to chase it and play with it. And then you got the camera, you can see him. But what's really great about products like that is it increases the activity and right now, the Petrics does a lot in nutrition. We're looking at weight management, nutrition. We're doing food recommendation engines that we're building for vets and nutritionists and for pet owners. And so we're really heavy in the nutrition side. But a lot of the problem is it's in the weight management. And with this obesity epidemic and overweight epidemic that we have, where I think it's 56% of dogs right now and 60% of cats at the moment, the safety number is 53% are overweight and obese. But it's very high, bottom line.

Edward Hall:

And that research has shown it reduces the average life expectancy by up to two and a half years when they're considered clinically obese. That's a really big deal. And these are our fur babies. We want her to live as long as they can. And if you can do things to get them in their weight zone, that's key. But if you're working, it's hard to do that. You might not be able to take them on walks as much as you need to. Especially cats. And they're always, most of them are domestic, indoors, they don't do a whole lot. Having toys that increase or encourage this activity level is great.

Edward Hall:

But if you do happen to see any toys and interactive things like that, I highly, I highly recommend getting those, especially if you have a cat just because it will keep them active. They can hit their steps for the day in a sense. It'll help get them in their weight zone, but also keep an eye on how many calories they're in taking. It's simple math. How many calories they take in and how many calories they burn.

Tyler Suiters:

Right. What about the communicative element of pet tech, Ed? And the fact that you can read the signs that your dog is trying to give you and you can read books about the dog whisperer and try to understand the signals and the signs and the language that they use. But tech is another layer either on top of that or adjacent to that. That lets us know what our pets are up to. The things that they can't tell us that we can still glean based on this connectivity.

Edward Hall:

Yeah, absolutely. And so activity trackers are one of the vehicles in which we can really do a lot of that with. Unfortunately, we haven't seen too many activity trackers hit to have the sensitivity and bandwidth requirements needed in the technology to really get the behavioral characteristic talking about. Where we can actually flag them. And we can spot things like osteoarthritis becoming on setting. Stuff like that. Or we know the age of the pet and we know the likelihood that based on that breed, it should start to get this condition.

Edward Hall:

But I think I just saw Whistle has their new version out and it looks like they're starting to track more. And I think I've seen a few other trackers pop up where they're doing claims on the sensitivity capability, which would unlock this capability to see a lot more of that data and provide that communication from pet to owner. And that was a big thing for us. Early intervention and detection, because when we're gone, we don't know what's happening. I had an ex-girlfriend, her dog started having seizures and the first thing we took her into the, they asked, well how often was this? And we were like, we don't know, we've been at work, we just happened to catch it at 9:00. But the thing is, they could be cluster seizures. Or they couldn't, there's all kinds of things that we don't know.

Edward Hall:

There's a lot of data that still needs to be tracked and I'm hoping it will come about. And I'm hoping that based on certain parts of the growth in pet tech, it doesn't discredit, this category to the point where it makes it hard for companies and startups to come up in it and get investment that they need to create these innovative products that we really need to see. It can have that effect.

Tyler Suiters:

When you mentioned getting the investment you need, the attention you need, the conversations that happen in the B2B space. You're a CES veteran. Talk about your experience there and what has delivered to someone who is a CEO in an emerging sector within the tech market. We think of the big picture emerging sectors like self-driving vehicles and AI or voice recognition across all kinds of categories. But this is a bit more specific. And what does that look like to you when you're at CES and how have you seen it evolve?

Edward Hall:

Oh wow. CES was a blast for us. It was so successful for us and we applied for, to submit our products for a few categories in the spaces and we happened to walk away with the awards for tech for a better world and for smart home.

Tyler Suiters:

And these are the best of innovation awards. Yeah, yeah.

Edward Hall:

On the pet bed. Yeah, for the pet bed. Yeah. And so we didn't win top of the categories for each because each one has their winner. But we were selected for each one of those as the honorees. And I think there's only so many per category that are provided. Regardless, we were so, so happy. First time at CES and that was a fantasy as I watch it every year and my first time being there, it was just phenomenal. And we actually had an opportunity to be on stage too and do on a panel and I got to speak with some other really great innovators. CES was just phenomenal for us and our booth stayed busy the entire time. In fact, I met with some really high up executives with multi-billion dollar companies and it was just, yeah, I don't know another word other than it was amazing. I was kind of dumbfounded. I had the reaction and then being in the showcase and stuff. It was really great.

Tyler Suiters:

What are you looking at going into 2020 as a game plan for Petrics, Ed?

Edward Hall:

We got a lot in our pipeline right now and some really exciting stuff. We have our mobile app to help manage the pet's health on iOS and android right now that people can download for free. And we really just wanted to give people a really good tool for that. But there's going to be some updates and features that we're going to be adding a to help with a lot more. And it's really going to be exciting. And we also have, can't really talk too much about it yet, but it's in the nutrition space, which is an area that really needs some attention, but it's going to change a lot of how the industry does nutrition. And looks at foods and adds transparency and accountability in the industry. It's everything that it's needed. I can't really talk too much about it, but just be on the lookout. It's really exciting and we should be launching that soon. It'll really be around a lot of the vets and nutritionists and pet care professionals to help with the pet owners. There's that.

Edward Hall:

And then obviously, working on this hardware for the pet bed and the activity tracker side and we are looking at possibly, integrating with some other really innovative companies so that we can actually help provide their technology to the consumers too. Because we are big fans and supporters of it and really if they win, we all win in pet tech. And so the competing thing is, it's not really conducive for everyone when we need to grow this industry together. That's kind of what's going on. And really excited about it and hopefully, get these products out there as soon as possible.

Tyler Suiters:

Hey, we really value a good marketing tease over here, so that's great to hear that good things are on the way for Petrics. Edward Hall is CEO and President. Ed, great to talk to you and go home and give that cat some attention.

Edward Hall:

I will. Thank you so much for having me. It's a pleasure.

Tyler Suiters:

All right, we are here to help you be CES ready, so make sure you subscribe to our CES Tech Talk podcast. That way you won't miss a single episode as you're gearing up for the 2020 show. We are on all the platforms where you expect to find a podcast. As for the big show, CES 2020, it is January 7th through the 10th in Las Vegas, as always. The information you need is at ces.tech. Now, none of this is possible without our true stars executive producer, Tina Anthony and our senior studio engineer, John Lindsey. You guys are the best in the business. I'm Tyler Suiters, let's talk tech again soon.

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