Startup Story: Arthur Read
Here’s a startup founder who has a startup story we can all learn from.
Yes, Arthur Read from the popular PBS kids show Arthur. You can watch his company being founded, growing, and finally exiting in the episode Arthur’s Pet Business (season 1, episode 5).
The Inception: Passion into Business
Arthur Read’s Pet Company was founded from Arthur’s passion for dogs. In the beginning of the episode we see Arthur infatuated with having a dog. We see him fantasizing what owning a dog is going to be like.
Unfortunately, Arthur can’t have a dog because he is limited by his current socioeconomic status (he’s an eight year old aardvark and his parents won’t let him).
Yet, Arthur is relentless in his pursuit of his dream. He consults his friends for ideas to overcome this obstacle. While they offer decent advice, it’s Francine’s advice to “do something you like” that spurs Arthur to found his startup.
Again, we see Arthur leveraging the power of his network when he begins marketing his pet sitting service. Instead of advertising on the internet or getting blogged about by a big news site, he advertises the old-fashioned way with fliers. Not only that, but he leverages his parents’ connections to help advertise his newly found company.
Building the Product
Arthur initially designs his product as if he was a consultant for one specific customer, Mrs. Wood’s pet Perky. Next, we see Arthur diligently working and improving his product (the pet sitting).
In each scene, we see Arthur significantly improving the quality of his pet care using the feedback from his customer Perky. Furthermore, he takes advantage of his small company size by personally taking extra care of Perky, even though this personal attention won’t scale.
Though Perky seems more dissatisfied with Arthur’s pet care than ever, it has apparently improved the product significantly because the entire neighborhood has come to leave their pets with Arthur. This is important for two reasons: one, Arthur has hit the point where he has made something people want and two, Arthur shows us that his early advertising was worthwhile.
Now that Arthur’s company has experienced growth that would make any founder jealous, Arthur faces the challenges of scaling.
Arthur starts to scale by himself, but it’s clear that he can’t handle the workload alone. His entire house has become dedicated to his company. The divide between personal life and work life has been completely obliterated. The startup has consumed Arthur’s life, and he’s taken serious personal sacrifices to do it.
He’s spending all of his time putting out fires, which stalls progress on building the product, so he makes the bold decision to begin hiring. His first (and only) hire is his sister DW.
However, to do this he needs to give away a part of the profits he’ll make to DW (effectively trading stock for capital).
This enables Arthur to deal with the traffic that his company has garnered.
Finally, Arthur reaches the end of the week. Instead of advertising yet again to gain more users, Arthur decides to let all his contracts expire and exit the market with a cool sum of $10 and a puppy (turns out Perky was so upset because she was pregnant, also who lets an eight year old be the caretaker of a dog that’s about to give birth and then not tell him?).
Sadly, the end for this great startup founder is really sour. Remember how Arthur gave his sister liquidation preference during his stage of growth? Well Arthur either didn’t grow his business large enough or gave away too much stock, because in the end DW gets all of the cash, leaving Arthur with just the puppy.
Conclusion (Too Long; Didn’t Read)
So what did we learn from this young aardvark entrepreneur’s story?
First, do something you love. Arthur scratched a personal itch to have a dog by setting up a pet sitting company.
Second, build something people want. Arthur creates a killer product by effectively acting like a consultant for his first customer Perky, even offering services he knows he isn’t going to be able to offer when he scales up.
Third, don’t take too much investment. Arthur’s eagerness to accept investment from DW ends up being the one thing he does very wrong. He basically screws himself out of any money this way.
Fourth, money isn’t everything. Even though Arthur gets screwed out of his money, he ends up getting what he wanted, a dog.
Special thanks to my roommate and friend Alex Yao for the inspiration and help. Find me on the internet at http://nathanh.me/.