Spiffy Dog gives entrepreneurs fresh start

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Edward Watson and John Cardillo have reinvented themselves in the business sense, and this time, they have a doggone golden idea.

Watson and Cardillo, the entrepreneurs who wouldn't say "quit," have swapped the whitewater kayaking industry for the $35 billion dollar pet-accessory market. Their new company, Spiffy Dog Pet Products LLC, has placed its lightweight dog collars and leashes in more than 700 boutique pet stores nationwide.

It isn't that their last company, Fat Eddy's Threadworks, was all wet. It's just that their ingenious safety and lifestyle products for paddlers were competing in a relatively tiny pond. Compared with the size of the pet industry, whitewater kayaking is a puddle.

Noreen Moore, the business development director for the Steamboat Springs Chamber Resort Association, said Cardillo and Watson are a good example of entrepreneurs who are willing to learn from past experiences and push on.

"Edward and John had the experience of creating a company that reflected the 'ready, fire' method," Moore said. "They learned well from that experience and for Spiffy Dog, they did the homework of placing the 'aim' part of 'ready, aim, fire.' The credit belongs to them and their ability to learn and adapt."

In January 2001, the pair of Steamboat enterpreneurs was hoping to double Fat Eddy's annual gross sales of $250,000. Their products, such as the two-timer kayak bag and the townie tote courier bags, were well-accepted by the public, as were the company's staple, Fat Eddy's watchbands. The young company had 10 sales representatives covering most of the United States, and the product line grew to 50 items.

But they came to realize they weren't going to put their business over the top, and they weren't going to amass personal fortunes. Besides, because of the way the company was structured, they didn't have time to spend with their families. And that was self-defeating.

"The industry was too saturated," Watson said. "You're already working in a small market, and the whitewater kayak market is just 17 percent," of the overall paddling sports market. "We were getting pretty big in that industry, but there wasn't any money in it. It was a lot of work to keep 52 products in inventory and to have a life here in Steamboat Springs while working 14 to 16 hours a day."

Fat Eddy's is still marketing watchbands, but Cardillo and Watson are putting their energy into a line of dog leashes and collars that they are confident is poised to grow this year.

There was a time when Watson sat at an industrial sewing machine and sewed most of the products he sold. Today, Spiffy Dog LLC uses a Southern California broker to arrange manufacture of its dog accessories in China. Spiffy Dog markets the Air Collar, a lightweight decorative dog collar that is ideal for pups who love to jump into mountain rivers and lakes. The fabric wicks moisture away from the dog's coat, resists mildew and doesn't hold odors. The collars are customized with decorated woven ribbons with illustrations that proclaim the pet owner's lifestyle. The patterns depict everything from rainbow trout to soccer balls.

The Let'em Lead dog leash ($16) quickly adapts to a tether for dogs temporarily tied up outside coffee shops. A set of four reflective ankle bands is meant to make pooches visible to motorists at night. The bands are called DRP ($13), short for Doggy Reflection Protection.

Cardillo convinced Watson to design a lightweight Air Harness for dogs that won't tolerate collars. Like the Air Collar, it's made out of the same kind of lightweight mesh used in the breathable panels on running shoes.

New for 2005, Cardillo has come up with an adaptation for people who take their dogs hiking in the mountains and don't really like to walk long distances with a dog on a leash. The new Cross Country harness leash incorporates a zipper pocket that rides on the dog's back and contains a leash already fixed to the harness. Dog owners approaching a group of hikers coming from the opposite direction can extract the leash quickly and adhere to proper dog etiquette.

Watson thinks he and his partner are better prepared for success with their new company thanks to lessons learned from Fat Eddy's Threadworks.

"With Fat Eddy's, we never did a business plan," Watson said. "And we never had the capital to push it. With Spiffy Dog, we did it right. We took six months, and John did a business plan."

Cardillo did considerable research about the pet industry through the Pet Industry Distributors Association. Scott Ford of the Small Business Development Center at Colorado Mountain College helped him gather data about how much people spend on their pets. They used the Consumer Expenditure Survey prepared by the U.S. Department of Commerce. It confirmed their impression that people spend far more on their pets than they do on recreational products such as those being marketed by Fat Eddy's.

Ford also provided Cardillo with a model business plan to guide his efforts for his own company.

"It saved me a lot of time and really got me going in the right direction," Cardillo said.

When Cardillo wrote the business plan, Watson said, he anticipated the need to build wholesale prices to account for the shares distributors and the teams of sales reps underneath them, would take from sales. Carefully balancing sales reps' commissions to accounts for varying terms in different regions of the country is critical to their success, Watson said.

Cardillo and Watson took the advice of Steamboat businessman Jim Larson, and during their initial two years in business, they have limited their focus on just three basic products. The business plan has become a form of self-discipline that helps the two entrepreneurs in their mid-30s to measure their progress and assess what they should be doing next.

Watson said Alpine Bank President Scott Gordon and Vice President Austin Mackrill have been exceptionally helpful in helping them establish a line of credit that provides the working capital they will need to double sales again in 2005 as they did in 2004. Mackrill even stops by Spiffy Dogs headquarters on Downhill Drive to check on the men's progress.

Watson's mind is generating ideas continuously for new products. But the idea he's working on for Spiffy Dog's newest product came from his friend Royce Meyers. Watson is in tests with a manufacturer of plastic flying discs working on a prototype of a dog disc that would light up at night. The lights ring the edge of the flying disc and are powered by a single watch battery. The big challenge is embedding the circuitry in the plastic so pets' sharp teeth can't get at the wires. Watson is convinced it will take off if he can get it right.

The partners also are working on a plan to team with other local entrepreneurs to build and own their own building.

Moore thinks Spiffy Dog has a bright future.

"They are wonderful models for us all in that they learned what it takes to be successful and followed up on it," she said.

Spiffy Dog Pet Products can be found at www.spiffydog.biz. Call them at 870-6164 or write the company at P.O. Box 770746, Steamboat Springs, Co 80477.

-- To reach Tom Ross call 871-4205

or e-mail tross@steamboatpilot.com

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