Petcube - growth of successful project

Olexandr Neskin, PetCube co-founder, has a dog, which was worrying when Olexandr wasn't home. Rocky, his pet, was making loud noises and a huge mess. Because of the constantly worried dog, Olexandr's neighbors threatened him with the police, because Rocky prevented them from living in peace, making this farce.


Firstly, he used the radio. But it was useless. Then, he bought a special Chinese collar. When the dog started to bark and whim, the collar made a high frequency sound, making Rocky stop making noise. Third way to calm Rocky was the collar, which had to shock the dog. But Olexandr's girlfriend opposed this idea. It seemed too violent to her.

In order to somehow entertain the dog and distract him from the excitement without hurting it, Neskin connected a camera to his computer to see what the dog was doing when no one was home. It turned out that the pet was sitting or sleeping at the door. "I had to distract the dog somehow. I taped his favorite laser pointer to the camera and put the camera on two little engines to make it move the laser," says Neskin.

Olexandr created a simple site and connected a device to it. Relatives and friends visited the site, guided the laser pointer and thus played with the dog. So the idea gave rise to a prototype of the first device - Petcube Camera.

The Kickstarter campaign was an important milestone for the startup. It allowed us to check if people needed the product. If the first device did not get the right amount, it would not be worth spending years of life. However, the campaign was successful. The project achieved the goal - 100 thousand dollars a week. Petcube raised $251,000 and became the most successful Ukrainian project.

"This allowed us to make preliminary sales. We received the money a year before we delivered the product. Thanks to these funds, we were able to complete the development and launch the first batch into serial production," explains Azhnyuk.

There was a time in Petcube's history when a company could disappear without being born. This happened at the beginning of its existence, when only seven people were working on the project. The case concerned production, at that time there was no office in China. The most expensive part of the production of devices is the creation of molds. These are two metal parts that connect with each other and form a certain shape. Hot plastic is poured into the mold, the mold is cooled and a part appears at the outlet. The process of making the form is the most expensive and time consuming.

The production of the form usually takes two weeks. "I remember a month after we placed orders for the production of molds. It was one of the last money we could invest. It was Saturday morning. The director of the Chinese factory phoned them and said sadly: "My partner has been arrested and all your molds have also been arrested," Azhniuk recalls. It was the fourth month since Petcube delayed delivery to customers with Kickstarter. The loss of molds meant that everything had to start over. "It was a moment when it seemed possible to give up." says Azhnyuk. We managed to get out of that situation thanks to the support of people - the team and partners.

"For a while we had an office in the United States: up to 10 people worked there, including me. But two years ago, we realized that selling in physical retail stores is not very profitable. Therefore, we changed the sales channels: we left all physical retailers, which is more than 5 thousand. Individual stores of various chains - Brookstone, Macy's, Nordstrom and so on - and focused on online channels. Now most of our sales are through Amazon, we also use Walmart and Zulily. You can sell there from Ukraine, you do not need an office in the United States. Now there are less than 50 people in the team. All work is carried out in Ukraine, production - in China, and sales - in the USA." - recalls Azhnyuk.

The years 2018-2019 were difficult for the company: there were several reorganizations, reductions, revisions of sales channels. They failed to launch a social network for pet owners, which they have been developing for almost two years. The PetCube team thought people would share their cameras and play with other people's pets. But interest was not enough to compete with Facebook or Instagram. In addition, in 2018, funding failed, for which they had many plans. "Three days before signing the contract, potential investors changed their minds. It was a large American public company, which lost about 30% of its value in September 2018, and their market capitalization was about $2 billion. It seems that is why they broke the agreement.", says Yaroslav Azhnyuk.