Aug
17
Minneapolis

Barking up the right tree

The founder of Adogo Pet Hotels calls it the Marriott, but for dogs

With a two-decade career in human hotels, John Sturgess founded Adogo Pet Hotels four years ago to cater to the four-legged set, instead.

Colleagues questioned his sanity, but he’s found the same people who want a luxurious hotel room for themselves will spring for a 125-square-foot suite for their dogs, complete with flatscreen TV and a DVD player. (His clients’ favorite movie? Cats & Dogs.)

The trick is providing the same level of service expected at the finest hotels, but in a setting where your average couch gets chewed up within hours and the barking never stops.

Interview by Beth Ewen
Photographs by Jonathan Hankin

Upsize: You’re in the pet hotel business. Describe your company—and I believe it’s pronounced a-DOG-oh.

John Sturgess, Adogo Pet Hotels: Yes, we have three locations open. Our first one opened about four years ago in Minnetonka. Our second one opened in Maple Grove, right across from Arbor Lakes. The third one we opened five weeks ago, across from Ridgedale.

At Adogo Pet Hotels, we offer boarding, daycare and grooming services for dogs. I have two primary models, and understand, a lot of my modeling and business philosophy come from my 23 years in what I now call the human hotel business. Besides family, my two loves are the hotel business, and dogs.

Upsize: You have different models at those locations.

Sturgess: I have two primary models, one is more a full-service model and one is select-service in the same way as Marriott. They have a J.W. Marriott for full service, and they have a Marriott Courtyard.

The physical property is smaller, and it will have different services. So for example, my Minnetonka location and my Maple Grove location are facilities anywhere from 12,000 to 17,000 square feet. And then my select model is going to be more like 5,000 to 7,000 square feet.

Upsize: Why that approach?

Sturgess: I do want to grow this, both locally and regionally, and then nationally is my goal—in a similar way that I developed hotels on the human side. When I first looked into this industry I thought wow: This is something where there are a lot of really good people doing this, but there aren’t a lot of people who have my experience, which is growing hotels. This pet care industry is growing 30 percent a year, and it’s only going to increase.

The first thing I wanted to do is test….. does my vision work? So we opened up Minnetonka after many years of research. And the demand was absolutely there with a third of all U.S. families owning a dog. I felt that I wanted to go into the western suburban area, because that’s where a majority of the pet spend is, from the research we did.

We opened up the Minnetonka facility, and the response was just incredible. We started out with a bang, I’d say, and it hasn’t stopped.

In a given market , I could put a big box, or what I call my full-service model in a location, and a majority of my training and management team can be based there, and then in satellite markets around it I could put more of my select service model.

Think of it as hub-and-spoke, if you will. I think this is replicable throughout the country.

Upsize: That sounds less like the hotel business to me, and more like the airline business or FedEx.

Sturgess: The reason why it’s not utilized the way I think it could be in the hotel business, is that most of the hotels in the United States, they are not owned or even managed by the name on the hotel.

Upsize: Most are owned by franchisee groups.

Sturgess: I think it could work in the hotel business. I look at it as, where the demand is, and where am I going to put these hotels?

Upsize: What did you learn from the human hotel business that you’re applying to the pet hotel business?

Sturgess: Wow, that’s an hour conversation.

No. 1, you have to know exactly who your customer is and what exactly they are looking for, and how do you provide for what their needs and wants are, and provide a product that you can sustain over time.

No. 2 is service, I think. What I learned from human hotels, service is not just a smiling face. Service is training. Service is having a methodology and processes in place, that your employees can follow consistently, every single day, and that’s where you build the loyalty from your customers. In my business, it’s both for people and for their dogs.

No. 3 is location. In the human hotel business they talk about feeder cities. Most people coming to Minneapolis, they’re not coming from the local community, they’re coming from feeder cities, like Dallas or Chicago. The difference with Adogo, is demand is coming primarily from 10 miles from your location.

In the past, you did have to drive an hour to get to a good location, because people were developing these boarding facilities out in the country or putting them in the back of a warehouse. My model is, I want to be right out in the middle of that community.

Upsize: That sounds like expensive locations.

Sturgess: Yes, yes, they are more expensive when I talk about lease rates. But when I do my modeling and financial pro formas, it absolutely makes sense. There is a lot of the demand in the areas that I am capturing right now.

Our pricing is middle to high. If you want a 125-square-foot suite with a flatscreen TV and a DVD player for your dog, you can have that, in our Minnetonka facility.

Upsize: Really? What do the dogs like to watch?

Sturgess: Oh, they like Hotel for Dogs, and Cats & Dogs. [laughs]. We weren’t even going to put those private suites in originally, but the space had five offices so we were able to build them without extra cost. Our Adogo Suite, the biggest room, is full all the time.

But for most a smaller room is fine. It’s kind of like humans. Does a human being really need to get a 2,000-square-foot suite at a hotel? No, they want that extra amenity.

And in the same way, some owners want that much more for their dog, and some owners are saying no, I don’t want that big room, but I want the daycare services and the webcam services and the fountains where the dogs can play in the water, all being supervised by a team of professionals.

My goal is to provide the best service available, in the best locations within the Twin Cities, and then move in the Midwest and then nationally.

Upsize: The front of your facility looks like a hotel, not like a dog daycare.

Sturgess: The most important thing is the facilities and we have so many amenities. We’re the only facilities that have centralized cleaning systems. You know how you would have a centralized vac system? It’s a spray cleaning systems like that. We put cleaning solutions in it, and it’s like you would see at a car wash.

Upsize: What made you leave the human hotel business?

Sturgess: I loved my 23 years in the human hotel business. I had a great 10 of those years with Carlson. For Carlson, I initially was heading up the Country Inn & Suites and Park brands for North and South America.

The Country brand, we grew that tremendously, to almost 500 hotels in the time I was there. It was a great family- owned company, such as we are also.

It was great times. I will tell you, if it wasn’t for those wonderful times and the learning experiences, it set me up to be able to start a company such as Adogo, and sustain this company.

There’s no one simple answer of why I left Carlson. I knew that I wanted to run my own company. When I was young, I started a company mowing lawns. I saw it from getting an undergraduate degree at SMU in Dallas, to going to graduate school at the Carlson School of Management at the University of Minnesota. If you had asked me 15 years ago, though, I would have probably told you I would own human hotels.

Upsize: Yes, so why did you make the switch?

Sturgess: I was not meant to be behind a desk somewhere, and there’s nothing wrong with those jobs. But I do much better when I’m out there working with people. I was at Carlson, and I was heading up North and South American development.

I would be on the road at least three days a week, at least three weeks a month. And if I would go to a fun city, like L.A. or Dallas, I would bring my wife, and we didn’t have any kids at that time, so I would bring Stacey and stay an extra day.

We lived in Eden Prairie and we ended up getting a dog, Sam, a golden retriever, and then we got another dog, Frankie. Sam has passed but Frankie’s still here. We wanted to find good places to take our dog, and we found one that was good but it took us an hour or an hour and a half to get there.

One thing I noticed was, it was always hard to get in. And then when I got there—and I don’t think I’m better than anybody—but when you come from any service business, when you become the consumer you’re going to be that much more critical. You’re gong to say, ok, why wasn’t my food warm? And why didn’t I get my wake-up call?

I just looked at them and thought, wow, I think I can do this better. And then they talk about tipping points, and one of them came when we received kind of a report card or an overview of how my two dogs did. And what it said was, ‘Frankie and Sam played with the balls all weekend. They had so much fun.’

Now as you and I both know, dogs can’t talk. And as an owner, I was told exactly what I wanted to hear. But little did they know, my Sam would not chase a ball if it killed him. No, he wasn’t an athlete. Frankie, my other golden retriever was about as athletic as you get.

I thought, they didn’t tell me the complete truth. And I come from the consumer business, so that made me go, I’m going to check this industry out. We’re going to be as transparent as we can be as a service, so the owner of the dog has a great experience, but also the dog has a wonderful experience.

Upsize: It sounds like you did a lot of research before making the move.

Sturgess: There are a lot of people who have businesses that are a good idea, but it’s not something that you can sustain. So I looked into it and I thought, oh my goodness. I got a lot of my facts from the American Pet Products Association, with research on the pet industry. I learned that, holy cow, this industry is growing.

I thought, 33 to 34 percent of U.S. families own a dog. That means there are 100 million families with a dog. Then I learned the top revenue producers in the industry are where I come from. I’m not here to compete with Petsmart or Petco, but I don’t think there are that many people out there that have the knowledge and experience I have in developing hotels, and the love I have for dogs.

Upsize: It’s true people treat their dogs like family, and maybe better. Did you see the huge uproar over the Godaddy ad for the Super Bowl, where the puppy gets lost, makes its way home through storms and woe, and then is greeted joyfully by its owner when it returns home—and the owner exclaims, ‘You’re just in time because I just sold you.’

Sturgess: Look at that. They were going to spend $4 million on that ad. And when I saw it on the Today Show, I thought, they can’t run that ad. No one will like that. And I just don’t see this demand decrease. It’s only going to increase.

Upsize: But still, it’s taking a big leap of faith for you to open dog hotels.

Sturgess: I opened my first one in 2011, and people said, John, you have a great reputation in the hotel business, and the economy is horrible. What are you doing?

It wasn’t happenstance when I left Carlson. I went back to grad school in 2006, knowing that I am going to start this business, because I did this research. When I went back to grad school to get my MBA. I utilized that MBA as a think tank to help put together my business plan.

Upsize: Any regrets?

Sturgess: Absolutely not. First of all we’re all human and second of all nothing’s perfect, but I have got an incredible team. The first thing I thought about when you asked me that besides the team was my wife,. We work together, by the way, she heads up payroll, and human resources.

Most friends can’t work together, not to mention spouses, but it’s been an unbelievable experience, and being able to use her strengths and tie those together, and come together as a cohesive group.

We have one daughter, Ellie, who’s now 7, so not too long after I graduated I decided to take the plunge. I was traveling three days a week, three weeks a month, and I did that for the first two years of Ellie’s life, but she was so young she didn’t notice it. Being at home and being involved, that’s been great.

Upsize: What’s one lesson you’ve learned about growing a company from scratch:

Sturgess: The one thing I was trained on in my career is you absolutely have to prepare. You have to be diligent in being prepared and doing what you need to do to be successful. At the end of the day it’s never going to go the way you think it’s going to go.

For example, the business model is the most important thing, because that’s where you figure out who is my customer, and how will I be able to deliver the product or service to them over a period of time.

You look at stuff and you prepare as best you can. I knew that going in, but when you come up against hurdles, if you’re prepared for everything else, you’re going to be able to overcome those hurdles. It was a learning because I never had my own business. In the corporate world, if there’s a mistake you have a meeting about it.

Upsize: And it’s somebody else’s money.

Sturgess: Yes, it’s somebody else’s money. The truth of the matter is, something will come up that you didn’t think of. But if you thought about most of the points, you’re going to make it.
[contact]
John Sturgess is CEO and founder of Adogo Pet Hotel, based in Minnetonka: 952.933.5200; jsturgess@adogopethotels.com; adogopethotels.com

 

Beth Ewen

Editor
UPSIZE MN

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