Tobi Skovron, Founder of CreativeCubes.co
FROM CANINES TO COMMUNITIES
How Tobi Skovron’s unlikely entrepreneurial journey has led him to create not one, but two game-changing products.
Tobi Skovron had dreams of becoming an entrepreneur from the time he was very young, growing up in Sydney, Australia. Imagining the shops he could build and the products he could invent was as much a part of his childhood as math class and recess.
“This entrepreneur being laid dormant in me forever,” he says.
As an adult, that being eventually emerged, and thanks to his problem-solving personality, inventive mind, and commitment to quality, Skovron would go on to create two truly unique products: Pet Loo and CreativeCubes.Co. Today, he’s the CEO of both CreativeCubes.Co and NeonLife.Co. His entrepreneurial escapades have earned him a long list of awards, including Winner of Best Overall Mobile Application in a 2015 U.S.-based ranking, Winner of 2018’s Melbourne Design Awards, and Winner of Australian Entrepreneur of the Year Under the Age of 30 back in 2008.
But getting to the point of earning awards and helming multiple companies was quite a circuitous route.
When Skovron’s group of friends embarked on their educational journeys, many pursued medical degrees, and he decided to do the same. Only his motivation was a little different. Skovron got into podiatry in hopes of creating the ultimate, fashionable-yet-functional shoe of the future.
That didn’t last long, as three years into his studies, Skovron decided he had had enough of looking at images of skin disease and foot fungus. Reluctant to disappoint his loved ones, especially his mother, he made her a promise.
“I promise you I’ll make you proud one day,” he recalls telling his mother, “but right now I can’t continue to do this. This is just not my flavor.”
So he dropped out of college in pursuit of a new goal, only he had no idea what that goal would be.
“I’m a university drop out,” he says, recalling his mindset at the time. “My mom believes I can do bigger and better things, but I haven’t found that thing yet.”
He considered becoming a franchise owner of an Athlete’s Foot, a store he had worked at during college, but his mom encouraged him to could do more. Skovron felt lost and unsure what his future held, but that was when a new guiding light burst into his life.
Enter Simone, now Skovron’s wife and mother to their two children. She brought him a new sense of meaning and purpose, and he eventually moved with her from Sydney to Melbourne, where they shared a one-bedroom apartment. Here, he decided that the time had come to take one of the most classic “girlfriend, I’m really serious about you,” steps in the book. And it changed his life forever.
In 2003, when Skovron was 23 years old, he bought Simone a dog.
The Invention of Pet Loo
As any dog owner knows, especially those living in apartment buildings, puppy bathroom breaks can be frequent and bothersome. It’s a small price to pay for the love of our furry best friends, but if only there were a more convenient way for them to do their business…
This problem struck Simone one day, when she casually wished aloud that there was a patch of grass on the back balcony for their pup. Just like that, a lightbulb went off in Skovron’s head, and the sleeping entrepreneur inside him jolted to life.
“That was the eureka moment,” he says. “This entrepreneurial instinct just took over.”
Skovron started to toy with the idea of an indoor puppy bathroom that used synthetic grass and could be cleaned for reuse.
“I was not really looking to sell it,” Skovron says of his initial idea. “I was just looking to solve my own problem.”
But when he solved his own problem, he cracked an unsolved problem for so many others. Friends would come over, see his prototype in action and encourage him to sell it. So began his 10-year journey of designing, manufacturing and selling Pet Loo, a portable, indoor dog toilet that used a combination of synthetic grass, a drainage system and a waste catcher to eliminate those drowsy 5 a.m. dog walks.
Because ecommerce was still a relatively new arena in the early 2000s, Skovron decided to pursue a more traditional mode of selling his product. He loaded a Pet Loo on a trolley and carted it from pet store to pet store across Melbourne, pitching his invention.
With every store he visited, his pitch became more and more refined.
Slowly but surely he won over smaller, independently owned shops, then worked his way into rising chains like PETstock, Petbarn and Petco. With every new store, he gained hundreds of new customers and solidified his reputation for delivering quality products.
In fact, he says he was so confident in the quality and usefulness of his creation that he sold it exclusively on its value, never on its price. The Pet Loo cost $200, but Skovron knew from experience that people were spending five to 10 times that for disposable pee pads, a solution that wasn’t nearly as convenient or environmentally responsible. He knew that desperate dog owners like him would agree that the value well exceeded the cost.
“If you’re going to make a difference, and it’s going to solve a real pain point for me, I’ll throw everything I’ve got at it,” he says.
He also added a line of matching products, including training supplies, cleaning products and ways to trap and eliminate odors, building lasting loyalty among his customers.
“I was able to create a new category in the market and continue to execute it,” he says. But what really put him on the map was an appearance of the Australian television show, The New Inventors.
In 2006, Skovron applied to present his invention on the show, and in July of that year, he took his dog on a walk to check his P.O. box for a response. He had received a reply, but it was only to thank him for his application and inform him that they were flooded with submissions and any response would take a few months.
Frustrated with the form letter response, Skovron fumed. “I’m literally scrunching this piece of paper up, going, ‘How many other thousands of people got this?’ and my phone rang,” he says.
As if by magic, a voice on the other end of the line asked him if he could catch a flight to Sydney that Friday to be on the show. Two days later, he appeared on the 99th episode of The New Inventors, winning the People’s Choice Award, the first of several awards he would earn, and making the Pet Loo a household name among pet owners.
Em-barking on a New Adventure
Just as his business began to boom, Simone Skovron expressed an interest in living abroad. The idea of “throwing themselves to the world” appealed to him as well, and so, after setting up the Australian wing of Pet Loo to operate with him checking in remotely, they hopped on a one-way flight to California.
Determined to develop his business in the United States, he gathered up 300,000 Australian dollars to invest in his expansion.
The year was 2008, and his timing couldn’t have been worse.
At the peak of the global financial crisis, he converted his money and watched as it plummeted to just over $150,000.
“I was up shit creek without a paddle, so they say,” he recalls. “Even though we were a great business [in Australia], doing a few million dollars a year in revenue at a healthy, profitable margin, I basically entered the U.S. market as a startup.”
With his product housed in third-party facilities, he operated his business out of the spare bedroom of their Venice Beach apartment, and it felt like starting over again from scratch.
“I’ve got to get back to grassroots,” he says. “I’ve got to get back to the hustle. I’ve got to get back to what made the business successful in Australia.”
For years, he labored away in his spare bedroom to make Pet Loo into the kind of phenomenon it had become in Australia, but the toil began to take a toll.
“I felt like I was on this treadmill during the day, trying to pound the pavement and crank out more orders and new business,” he says, “and then I’d finish and be completely depleted.”
He recognized that grinding away at work in his home, a place that should be a restful haven, wasn’t a healthy choice for him, so he decided to look into coworking spaces. In the heart of Santa Monica, the third-largest technology center in the United States, Skovron took out space in the Real Office Centers building. This changed everything.
Suddenly, the secluded, work-from-home entrepreneur was surrounded by some of the biggest and most innovative minds in tech, infusing him with new energy and filling him with life.
“I fell in love with the coworking landscape,” he says. “I sort of fell in love with collaboration, and I fell in love with community. It’s something that was so refreshing to me as an entrepreneur.”
Despite being the lone pet-related business owner in the building, he thrived on the newfound ability to meet new people and learn new things, and a new idea began to brew in his mind. So, when PetSafe came knocking in 2013 and asked if Skovron would be interested in selling his company, he said yes. Then he called his business partner and invited him to Santa Monica to see the beauty of the coworking experience and hear his new idea.
Investing in Community
The collaborative nature of the coworking community affected Skovron deeply, and that same year, he decided to create one of his own.
“While I love the pet landscape, I really, really love community and collaboration, and surrounding myself with likeminded people that want to win,” he says.
It took several years for his plan to come to fruition, but in 2016, he and his wife returned to Australia and signed their first building contract. In September 2017, CreativeCubes.Co officially launched. It’s a coworking space, but one unlike any other.
“Our product is received by the consumer the minute they walk into the door,” he says. “The way you’re greeted; the way you’re spoken to; the hospitality we have; the lengths that we will go for you; the space you can reside in; the environments that foster creativity and thought.”
“Nothing you could ask is ever a bother to us, whether it’s big or small.”
Skovron describes CreativeCubes.Co as being less like your basic “slap some paint on the wall and put some desks in a room” coworking space, and more like a hotel. Rather than being told where the water is, Skovron says it will be brought to the thirsty visitor.
“I want to always deliver the best,” he says. “I want my customers, my members, consumers of my product to know that when they’re interacting with something I’m involved with, that it’s second to none.”
And how does he know when he has achieved the best? “It’s my best,” he says. “From me as a creator to you as a consumer, this is the best I have to offer.”
He acknowledges that he will always have room to grow, but as long as he gives 100 percent in the moment, he can always make necessary adjustments next week or even later this afternoon.
While he believes that CreativeCubes.Co is a scalable business, he says that “this is not about scaling for the sake of scaling and having a watered down product with each building that you open.”
With the second building currently under construction, Skovron says the number of CreativeCubes.Co buildings that pop up will correlate directly to how many he believes he can maintain at his uncompromising level of quality.
“I’m not in the business to try to scale to 50 locations if my product starts to fray at 10 and I’m unable to deliver the world-class service,” he says. “We are less focused on financial outcome. We look at financial outcomes as a byproduct of delivering everything else.”
From stop-ins to regular residents, Skovron says he is curating a community that fosters positivity and creativity and that protecting those values is his most important duty. “I built this business based on what I wanted when I was peddling my Pet Loo business. I wanted this type of environment which would take me to the next level,” he says. “I wanted to be around the venture capitalists and the startups and everyone in between.”
Skovron’s journey so far has been marked by success, because of the unwavering commitment he has to improving his customers’ lives through his quality products.
“I focus on delivering the best and making people happy, and then from there, I’m successful. But if I can’t deliver the best and I can’t make people happy—and it doesn’t matter whether it’s coworking or it’s creating my own sneakers or a dog toilet—if I can’t execute on the one fundamental, which is delivering a good, quality product to a customer, then I don’t deserve to be in business.”
As the Pet Loo continues to fly off the shelves and entrepreneurs find a new sense of community at CreativeCube.Co, it doesn’t look as though Skovron is in danger of that any time soon.
One thing, however, is certain—Skovron’s mother has a lot to be proud of.
- How the idea for Pet Loo became a reality (it was his wife’s idea)
- The 10-year journey of designing, manufacturing, marketing, and selling Pet Loo
- How Skovron’s love of the co-working landscape led to the creation of his second successful product
- Why Skovron won’t scale his business for the sake of scaling
Key Resources from our Interview With Tobi Skovron
Full Transcript of Podcast with Tobi Skovron
Nathan: So, the first question I ask everyone that comes on is, how did you get your job? –
I don’t think I have a job, man, honestly. I’ve actually never had a job. I’ve never felt like I am going to work. I’m legitimately passionate, probably maybe too passionate about what I’m doing. Sometimes I’ll lose my head in that because I just love it, and I do it for the love of the game, but the reality is I don’t feel like I have a job.
Nathan: Awesome. So, how did you find yourself doing the work you’re doing today? Can you tell us a little bit about your journey and what you’re working on right now, and what led to that?
Yeah, absolutely. So, you know, the journey has pretty much led me to where I’m at. So, I’m an entrepreneur. I was born and raised in Sydney, Bondi Beach, or North Bondi. Grew up there with Mom. Unfortunately I lost my father when I was a lot younger, so grew up with…- Sorry to hear that, man.
Yeah, man. And it’s painful, but, you know, like, the reality is I don’t think I’d be who I am, what I’m doing, etc., if, you know, that disruption didn’t happen in my life. So, grew up with a single mom, two sisters, was kind of like the man of the house, and this entrepreneur being lay dormant in me forever.
As a young kid, you know, I had aspirations of starting shops and doing a whole bunch of different things. I loved sneakers. I’m a bit of a sneaker head. I’m not crazy sneaker head, like, I don’t go to shows and, sort of, like, meetups, and all that, but, like, every city that I go to, I have to stop by a sports store, or a unique shoe store to see what’s up. And so, sort of, started studying podiatry.
All my friends were doctors, lawyers, dentists, you know, surgeons, etc., and I felt that at the young age I need to try and keep up with those people because that was my crowd. And so, I studied podiatry, but the spin-on that I had was, “I’d love to be able to create a fashionable, but functional shoe, sort of, like an Asics but like Nike, so like Nike cool, funky, retro, but like Asics, taking into consideration the biomechanics of the foot.”
Nathan: How long ago was this?
Tobi: This was in, like, ’98, ’99, 2000.
Nathan: Wow. So, you were into sneakers, like, back then?
Dude, I…like, crazy for sneakers. I’d get 100% from my grandmother who was so poor that she used to put cardboard in the bottoms of her shoes because she just didn’t want to let her shoes go. She loved shoes that much. And so, she literally wore them to the death.
And then, when the shoes were about to die, she would put cardboard in them to, sort of, try and keep the soles intact. But, I totally get it from my grandmother, and I’ve loved shoes forever, and I’m sitting here today in a pair of Jordan Ones, just for context. So, I studied podiatry thinking, “Hey, I’ll be a doctor that creates really cool shoes.”
Three years in, learning about skin disease, distropathy, like, all the revolting stuff, fungus, I went to my mom, and I was like, “Listen,” like, “I’m really sorry, but this is just not for me. I promise you I’ll make you proud one day, but right now I can’t continue to do this. This is just not my flavor.”
And my mom was like, “You do what you want to do.” Anyway, during my time in university, I was working at Athlete’s Foot and Foot Locker. I started at Foot Locker, then moved across to Athlete’s Foot because it was considered more of a science focus than…so, like, fashion at Foot Locker, and then, sort of, like, tried to convince my mom that I’d be amazing franchise owner of an Athlete’s Foot store.
It’s so dumb when I look back at it, but that was, sort of, like, “Mom, I can do this. I love this. I can make this a success.” Anyway, she was like, “No, I think you can do other things.” Anyway, long story short, I met this beautiful girl along the journey. We fell in love. I moved from Sydney to Melbourne and, literally, was kind of a little bit lost professionally, because I, kind of, was like, “I’m a university dropout. You know, I haven’t disappointed my mom. My mom believes I can do bigger and better things, but I haven’t found that thing yet.”
I met this beautiful girl, moved from Sydney to Melbourne over a period of time. It was like a year after we started seeing each other that I moved, because she was in university and I was, kind of like, not. And, I rented a one-bedroom apartment in Melbourne and my girlfriend at the time who’s now, thankfully, my wife and mother of my two kids, and we live in a very loving home, I bought her a dog, who’s actually also with us and roaming the floors here at CreativeCubes.
But, I bought her a dog, and Sim said to me, “Tobs, we just need a patch of backyard on our balcony,” because we lived in a one-bedroom apartment, and that was the Eureka moment, Nathan. Like, this entrepreneurial instinct just took over, and over the next 10 years, I basically built a dog waste management company, and a thriving brand in the global pet industry that was, in 2013, acquired for cash by the largest player in the space, called PetSafe.
Nathan: I see. And, you spent a lot of time in the States. Was that for that Pet Loo? So, the company was called Pet Loo?
Tobi: Yeah, it was, P-E-T L-O-O, Pet Loo, and it’s exactly what it stood for, a pet toilet. And then, I basically built out a bunch of value-add products and, ultimately, for the business enthusiast listening to the podcast today, you know, I turned that business, or that product into a printer-paper ink-cartridge business model.
So, for every Loo that was purchased, I would see recurring revenues through our consumable products which were, you know, made to fit, designed to complement, and it became a very nice business. In 2008, sort of, like, five years after I’d moved to Melbourne, and the business was up, like, business was thriving in Australia, Sim said to me, “Tobs, would you like to live abroad?”
And I said, “Yeah, but we’ve got a business now. Like, I can’t just pick up and just walk away from this.” She was like, “What if we took the next year to orientate a managing director for the Australian business, which would then free you up to be able to go and execute the business abroad and we, kind of, lived and work as a young married couple, and throw ourselves to the world?”
And so, in 2009 I moved to Los Angeles. The end of the previous conversation was, Sim says to me…she says, “What do you think?” I was like, “Yeah, I’m in. Like, where do you want to go?” And she goes, “Where do you want to go?” I go, “No, no. I asked you first.” And she said, like, “On the count of three, you say where you want to go, I’ll say where I want to go.”
So, “One, two, three,” she said LA, and I said Los Angeles. So, in 2009…April 22, 2009, I got on a flight a week ahead of Sim, because she was flying a week later with the dogs, and basically found an apartment, set us up, and we lived…in the early days we lived in Venice Beach, and then we moved to Brentwood, which is infamous for O.
We spent a year in Beverly Hills, sounds really exotic and really great. It was actually in an apartment, not in the hill, but on the flats in Beverly Hills. And then, we ended up going back to Brentwood the last four years, ended up staying eight and a half years in Los Angeles. Were supposed to be there for two, we ended up staying eight and a half.
We’ve been back a year and just shy of a year and a half now, and I absolutely love Melbourne. I love the people, but, my God, I miss Los Angeles, and the people, and the network, and the friends that I have over there.
Nathan: Yeah. That’s crazy, man. So, I’m curious because I really want to talk about CreativeCubes and everything you’re up to here now you’re back in Melbourne, but I want to go a little bit deeper on Pet Loo and everything few and far between. So, predominantly, was it an online business or you sold to distributors, or…?
Tobi: So, it started off as a really traditional business. We would manufacture products at plants, package them up, and then sell them through retail and distribution, both domestically and globally. So, distributors would be buying product by the container load, and then selling it through their distribution networks, and that was really, really, really strong business.
E-commerce wasn’t really strong in 2003 when I first started and, sort of like, the threat to retailers of starting your own e-commerce business after you…you know, 100% of your revenue was generated through retail and distribution, sort of, the becoming of e-commerce was a threat to some of these retailers.
Like, if you sell direct, we’re going to discontinue you. So, I never really got to a great e-commerce business. I had a good e-commerce business. I did set up an e-comm business which sold directly, but it didn’t sell directly in markets that we had retail and distribution in. It sold in markets where we didn’t and, like, it was a good business but, you know, the product was a big product, so shipping was quite expensive.
And so, really, I was kind of stuck. I really had these aspirations of running this awesome e-comm pet business, but the reality was, like, because I had 100% of my income, or call it 99% of my income coming through brick and mortar, you, kind of, never want to bite the hand that feeds you, and so I never set up e-comm.
I did sell through Amazon, SkyMall, [inaudible] I’ve sold through e-comm retailers, or e-tailers, but direct-to-consumer was a very, very small business for us just because, I guess, the age in which we were born and the way in which the business was set up. And the disruption of the internet for us was not something that we did direct, but it’s something that we…I mean, we sold millions of dollars through Amazon, and catalog companies, and a bunch of really cool players, but the business was very traditional.
Nathan: Yeah, got you. So, can you talk me through, like, so you started in Melbourne, you said you were manufacturing in a plant. Like, how did you go about producing that product and getting it right? Like, you obviously had the idea. Were there any other…because I don’t really know this space, like, were there any other players with this idea, or you’re…like, this product was completely new, unheard of, it was just basically like an invention?
Like, can you talk me through that?
Tobi: Yeah. So, I guess we got ourselves known in the market through the television show, “The New Inventors,” which was on the ABC back in those days.
Nathan: Yeah. Wow. So, how did you get on there? So, what happened?
Tobi: You know, it’s a really cool story. We eventually moved from a one-bedroom apartment to a two-bedroom apartment and, as part of the facade of creating a business, I had a P.O. box, because we didn’t have an office. Well, I did, but it was my spare bedroom. And so, I used to walk the dogs in the afternoons up to the P.O. box and, you know, get an ice cream or do something and check the mailbox, mostly for checks, believe it or not, which retailers would send me for a product that we had shipped them the week before, or a month before, or whatever their terms were.
And, I applied for “The New Inventors” like anyone else would, I think via their website, and I ended up getting a letter in the mail…in the P.O. box to say, “Thank you for your application. You know, we get hundreds of thousands of applications and, well, we’re enthused about your…” Is very generic. “It’ll take us several months, if at all, to come back to you.”
I’m literally, like, scrunching this piece of paper. I’m going like, “How many other thousands of people got this?” And my phone rang, in LA. “Hello.” He’s like, “Hi, this is so-and-so. I’m from ABC TV. I read your application.” I’m like, “Oh, really?” “Yeah, I got your letter.” Like, really just dismissing really, sort of, like, blase about it and they’re like, “What are you doing on Friday?”
I’m like, “It’s Wednesday.What do you mean what I’m doing on Friday?” They’re like, “We want to fly you to Sydney. We want you on our show on Friday night.It’s going to be our 99th episode.” And, we got on the show, and ended up winning the People’s Choice Award. People voted me in, I guess, much like “American Idol,” or “Australian Idol,” if that’s still relevant today, and we won.
We won the People’s Choice Award, and from there we went on to win the Australian Pet Product of the Year. And then, we won a bunch of International Design Awards, and a whole bunch of things. But, really, to answer your question, it was very inventive, it was very ground-up. So, I came up with an idea, was not really looking at sell it, was just looking to solve my own problem. The problem that I solved, people that were coming to our apartment were like, “This is incredible. You should sell it.”
I’m like, “Really?” And then, sort of, like I said, that entrepreneurial instinct just took over and I started, you know, 10 pet stores a day, five days a week for months at a time, and built it into a, you know, multi-million-dollar business over the course of a couple of years, and then grew it exponentially globally from there.
Nathan: I see. So, when you said, like, five pet stores a day, what do you mean by that?
Tobi: Literally putting the Pet Loo…do you remember these old bag trolleys back in the day, used to have these, like, bungee cord, you’d strap your suitcase or your bag to it and…?
Nathan: Oh, yeah.
Tobi: I literally had one of those. I would strap the Pet Loo to it, because this thing was, like, just under a meter by a meter, was, like, 90 centimeters by 90 centimeters, strap the Pet Loo to it and literally carted it from store to store, neighborhood to neighborhood across Melbourne.
Nathan: And you just pitch?
Tobi: Just pitch. And then, I got into a large chain, PETstock, Shane Young and David Young founded that business. I think they’ve got, you know, a couple hundred stores today, but at the time they had 12. And, I literally 12 customers, and I met Shane Young. And he was like, “Yeah, I’ll give you a go, mate,” and I literally doubled my store account from 12 to 24.
And then, not so long after that, I visited Petbarn, which is now close to 300 stores across Australia. I think they had 10 stores, and I became part of what they called Core. So, I pitched to this guy called Jim Watson, and Jim basically said, “I want to put this as part of our Core range.”
And, what that meant was, to every new store that would open, I would get X amount of units ordered and product ordered, and I’d be part of their core range. So, as they opened up 10 new stores a month, or 10 new stores every two months, I’d get 10 new customers. And then, that grew into the hundreds because my product was selling off the shelves, and they liked it, they liked me.
And, yeah, sort of, like, from there I then got into big chains like Petco, who have, you know, 2000 stores, or 1500 stores across the U.S., plus a raging e-commerce business. And then, the numbers just started to stack a lot of faster, and then I had a bit of a reputation for, you know, delivering good-quality products for a good price but, you know, I delivered on my word at every time.
So, yeah, does that, kind of, answer your question?
Nathan: Yeah, man. I’m curious…so, a couple things that I wrote down. Tell me about your pitch, like, in the early days, because, I think, one thing it’s intimidating sometimes is when you come up with a product, or you have an idea, you’ve got to be able to try sell it. Like, how did you pitch? When you said you walked to store by store, like you did five stores a day, what did that look like?
Like, anything that people can learn?
Tobi: There was nothing magical about it and, to be honest with you, my first pitch, I think I cut my finger opening, like, one of the…like, edge of the Loo. Like, I cut my finger open. But, every store that I visited, my pitch became refined, refined, refined because the person that I was seeing at 9:00 a.m. was a different person at the 10 a.m., which was different person at the 11:30.
And so, the conversations that I had between 9:00 and 10:00 helped shift and change the pitch between 10:00 and 11:00, and so on and so forth. But, the reality of how I went is I sold the product based on value. I never sold product…and I still don’t sell product on price. I’ve just never have. I’m, sort of, potentially allergic to price from a consumer perspective.
The reality is, in my world, I really don’t care, and obviously I don’t have unlimited funds, so I can’t be stupid about it, but I don’t care what it costs. If you’re going to make a difference and it’s going to solve a real pain point for me, like, I’ll throw everything that I’ve got at it, you know what I mean? So, I sold on value.
I sold on convenience. I sold on, you know, being a good person. I sold on quality. I sold on everything but price. And the reality…even though my product was a 200-US-MSRP, and that’s a big number for a consumer product, the reality is that people were spending, you know, 5 to 10 times that amount per year on pee pads, which are messy, grotty, you know, bad for the environment, super-expensive over time, consumable aspect.
So, like, I was able to benchmark ourselves against that, and then started serving ads, you know, not digitally, but by print media to, like, this is how old this business is now.
Nathan: Direct mail, man, yeah.
Tobi: Yeah. I would start, say, like, you know, a pallet high of pee pads versus one little box, and then show you would spend, you know, $2,000 a year on pee pads and you can spend 200 bucks once-off with us, so like, you know, “What are you thinking?” And, sort of, like, I was able to, like, create a new category in the market, and continue to execute and create happiness, and loyal customers would refer.
And, even today…like, even today, someone…Facebook messaged me the other day going, “What type of dog do you have, and where can I get a Pet Loo from?” I’m like, “Dude, I, like, sold this company, like, eight years ago.” But, it’s amazing. It’s still going on. Probably the company is bigger and better than ever.
It’s in amazing hands with PetSafe, you know, a real large conglomerate for, you know, pet product manufacturing, and it still exists. And, my daughter, Maddie…her name is Madison, she’s six, she thinks I’m famous because I’m on the back of the box still, and I still look like I’m…- Oh, wow.
Yeah, I still look like I’m 28, or 23 when I first started the company. So, she thinks I’m famous in that regard. And, when you ask her…I’m like, “Why do you think I’m famous?” She goes, “Well, you’re on the back of Pet Loo.You’re on the back of the box of every Pet Loo, and that’s sold all over the world, so everyone knows who you are.” I’m like, “Yeah. I, kind of, wish that was a reality, but it’s not.”
Nathan: Well, that’s crazy, man. So, few more questions before we switch gears, I really want to talk about CreativeCubes, and how that all came about, and Orangetheory, and things you got going on there. But, how much do you know on how much to give retailers? Like, if someone right now is selling a physical product, what’s your recommended, kind of, percentage-wise to sell to retailers versus RRP?
Tobi: So, here in Australia we’re not allowed to tell retailers what to sell for, because that’s considered price-fixing, you know, and I’m not a lawyer, so I don’t want to go too deep into that.
Nathan: Of course.
Tobi: But, you know, if I look into the U.S., you know, we have MSRP, or what they consider MAP, manufacturer’s advertised pricing, and MAP is a big thing for e-commerce. Like, you can turn off a retailer for violating MAP, manufacturer’s advertised pricing. The general rule of thumb is, sort of, like, depends who you are, but like works out like this.
If you manufacture something for a dollar, and your cost of goods is a dollar, you know, I think once you take in your overhead and all the rest of it, you know, your overhead and running cost might be another dollar, so you sell for, like, three dollars to a distributor. A distributor would then buy in container loads, or bulk loads, or pallet loads, or they would have to buy at larger quantities than onesies, single-SKU items.
They would buy it for $3, and then sell it to their retailers for $5, and the retailer would sell it for $10, at $9.99. That’s, sort of, like, really rough numbers. You know, you could argue that, you know, it cost you a dollar, so you sell it for $2, which would then sell it for $4, it would retail for $8.
But, sort of, like, you want to make money, so you, you know, make…call it 100% markup. The retailer only wants to make, sort of, like, 30%…oh, sorry, the distributor only wants to make 30% and the retailer wants to make 100%. And so, it really comes down to COGS, cost of goods, and then the success, it doesn’t really matter.
I mean, if you say it’s a $10 item and you’re moving one a week, it’s not really a $10 item because the market’s not responding favorably to the way you priced it, or what your product is. You know, and then you’ve got to work out, “Well, if I can produce it for $1 and sell it for $2, and it retails for $8, will I get a 30% lift?”
So, then you’ve got to play the volume game, and it’s starts to become complex, and you’ve got algorithms, and market adaptation. There’s a whole bunch of things. But, I think if you manufacture for $1, you sell for $3 through distribution, and $5 to a retailer, and $10 to consumer, you have an opportunity to be an omni-channel as well, so you could sell across all three channels, as
Today. So, I would be…let’s take myself back to Pet Loo days, I’m here in Melbourne, Australia, I’ve got a distributor in Canada. I would say, “Okay, Mr.Distributor, you can buy it for $3 and you can sell it for $5, and it would retail for $10.” But, here in Australia I have a direct relationship with retailers, so I would sell it straight for $5.
But then I’ve got the additional expense of the overhead in running that sales rep through the street, and gas, and all the rest of tat.
Nathan: Got you. Okay, that makes sense. Thank you for sharing. You mentioned that your business had a recurring revenue model like a printer cartridge model. So, basically, people would set up Pet Loo at their apartment, or their place, that doesn’t have a backyard, and effectively there was some sort of other components of the product that would be reusable and you would offer a subscription for that?
Tobi: Yeah, totally. So, we had a bunch of consumable products. Like, the four areas that I constantly got asked was, “Love the product.How do I train my dog? Doesn’t it smell? And, how do I clean it?” And so…I know they’re only three components, but the fourth was, “Replace the grass.”
So, the first was, we created a product, this is all time…I love this. We created a synthetic urine, or, for your American viewers, synthetic urine. And what that was is…pets, by nature, are very territorial. So, if you’re…I don’t know if you’ve got a pet, but, to the listeners out there, the dog sniffs around…even if you go to the park or walk down the street, the dog will sniff, sniff, sniff, sniff, and it will smell another dog’s peed or pooped in that area and from a dominance and territorial thing, they’ll mark over the top.
So, what we did was we created a synthetic urine, it was the most hideous product, but it was my number-one selling product, and basically we helped train the dog by basically simulating that another dog had gone there.
Nathan: Wow. That’s crazy.
Tobi: So, you can imagine, like…and that was, like, a $9.99 bottle of urine. This thing sold like nothing else, because so many people with new dogs, or dogs in general, or new environments, wanted to train a dog either on the Pet Loo or not on the Pet Loo, to go in a specific spot. So, the product was called Skip To My Loo, as in, ♪ “Skip to my Lou, my darling.” ♪- Yeah.
Nathan: Wow. That’s genius.
Tobi: And, Skip To My Loo, basically, was an additional $10, or $9.99 at retail, which you could buy, which would help you train your dog how to go and where to go. The second question was, “Doesn’t it smell?” The products it was made out of were non-porous, so nothing got into the product, and then inside of the catchment reservoir that I had…so what happened was the dog did their business on the grass, which looked and felt like real grass but it wasn’t, it was fake grass, it would train through to a collection reservoir via this…it’s, kind of, like the George Foreman Grill, although definitely do not recommend you eating off of it.
But, it would then land in this receptacle, this little, like, 1.5, 2-liter jug.
Nathan: Too much detail, man.
Tobi: I know, I’m sorry. But, you know what? Actually saying that took me back to 2008 when I used to pitch this at trade shows, so I’m, kind of, finding my old flow. But, what happened was, in the caption reservoir, I created this thing called the Pee-Pod, which was basically a biodegradable container which had super-absorbent polymer in it, which was also eco-friendly and disintegrated.
It’s, kind of, like the stuff you’d find in a nappy or a diaper, but it was untreated, it was eco-friendly, it was all natural. And so, when the dog peed and the stuff landed in this reservoir, the Pee-Pod would turn it into a solidified gel, and so you wouldn’t be able to smell the urine because everything would be trapped, and all the pathogens, and all the bacteria would be trapped.
So, we sold Pee-Pods. Pee-Pods were probably our biggest revenue generator because we strategically placed them, seven Pee-Pods into a packet. A Pee-Pod would last, sort of, like, two to three days, the two being, “Hey, this is now a 2-week spend,” a three being, “Hey, this is now a 21-day spend.” And so, it was $20 at retail, but people were buying two boxes of that a month.
And so, my printer was now spitting out $40 of recurring revenue every month, or, you know…that’s at the top end, $20 a month at the low end to every Loo that was in market. We then developed a cleaning solution which was chemical-free, biodegradable, and eco-friendly. It was non-harmful. There was no chemicals in it. It was totally safe for both the people, the pets, and the planet, and it wouldn’t also…a lot of people got into cleaning their Loos with, like, Ajax, and, like, these chemical and actually would deter the dog from going back to that spot.
What we did was it took care of the germs and the bacteria, yet it didn’t harm the pet or deter the pet from returning to a place, and if it did, if you did use another product, you would then apply Skip To My Loo to get the dog back on. And then we had replacement grasses. People were buying, you know, two or three replacement grasses a year, which wasn’t a big revenue for us, but it was still revenue.
And so, you couldn’t go anywhere else. You know, all that stuff was patented, trademarked, protected, and so I created this nice little ecosystem…before we talk about ecosystems, you know, before we talk about the most famous ecosystem being Apple, and iTunes, and now it’s iCloud and device, this was a real ecosystem within itself.
And, you know, we had hundreds of thousands of Loos being sold in the market every year, you can start to see how that revenue starts to stack up quite quickly.
Nathan: Yeah, man. It’s pretty impressive, dude. So, it was recurring revenue, but not, kind of, like people would sign up for a subscription per se, but people who were in the ecosystem, they would come back?
Tobi: Yeah, they would. They would come back, but the reality is that, you know, Amazon started subscription. There was Wag.com, which was owned by Quidsi. There was, kind of, e-comm retailers that had these products on subscription, so, while I wasn’t selling consumer-direct, these consumers were signing up via their preferred retailer, and that retailer was then… you know, they’d run subscriptions through that retailer.
Nathan: Got you. That makes sense. So, it sounds like an amazing business, dude. So, what happened? Like, why did you decide to sell it? And, like, did you have an office in LA? Like, what exactly happened there, man?
An office in Melbourne, or what?
Tobi: Yeah. Kind of, the segue into where I’m at today is very different to where I was back then, but it’s all part of the same path and the same journey. So, we had a warehouse manufacturing facility, warehouse and office here in Collingwood, in Australia, in Melbourne, and when I moved abroad, I basically loaded my product into 3PL, third-party logistics centers.
In my case, my product was in Reno, Nevada, and Winchester, Virginia for the East Coast, and I was in Los Angeles, California. To save costs, and as much as we were a very established business, I went to the U.S., and you can read about it, it’s out there, the story is out there. “Inc Magazine” did a story on it. You know, I basically went to the U.S. I decided that the dollar…when I decided to move to the U.S., the dollar was, like, 97 cents USD to 1 AUD, so it was very strong. I called it dollar-for-dollar. The peak of the global financial crisis, I land in the U.S. and the dollar dropped to 58 cents USD. So, I had 300,000 AUD to invest into my U.S. business, and just converting my cash, I ended up with, like, 164,000 USD, or 154,000 USD, something like that.
Nathan: Oh, my God. Wow.
Tobi: So, I was basically…I was up shit creek without a paddle, so they say. And so, I tried to keep costs lean and so, even though we’re a great business over here doing, you know, a few million dollars a year in rev, at a healthy profitable margin, I basically entered the U.S. market as a startup.
And so, I basically operated my business…even though my product was in Virginia and Nevada, I operated my business out of my spare bedroom in Venice, California, or Venice Beach California. And so, I didn’t need to see product because, you know, I would know how much inventory via the, sort of, ERP system that we had, what inventory was on hand, in which warehouse.
I was EDI compliant, so there was constant telecommunication between…or EDI parts passing between the two businesses…or between warehouse and my laptop, or my software, NetSuite. And so, you know, I started basically working from home again. And, we had a three-bedroom apartment in Venice Beach, and one of the bedrooms was my office.
And so, over a period of time, it just became harder and harder to work from home. You know, we lived abroad, and Simi was like…we’re just, like, running to the bedroom, go, “Hey, do you want to go do this? You want to go do that?” I’m like, “Yeah, I totally want to go and do that, but, please, like, right now I’m working.”
She was like, “Yeah. You know, you’re working on…” I’m like, “No, no. Like, let’s say I’m shit-scared.That’s for starters because, like, I just lost $160,000 in conversion. Secondly, I don’t know customers and, thirdly, like, I have to get back to grassroots. I got to get back to the hustle. I got to get back to what made the business successful in Australia.”
I had to basically repeat those steps, you know, six, seven years later. And so, it became too hard to work from home because Sim only had me there, and we were this young couple that were living abroad, as well as working abroad, and, sort of, trying to…I was trying to balance out both sides of the life.
I feel like I was on this treadmill during the day trying to, like, pound out the pavement and then, kind of, crank up more orders and new business, and then I’d finish and be, like, completely depleted, and then Sim would be like, “I’ve been wanting you to come home all day. I want to go here. Let’s go there.” And, like…not in…like, just in an adventure, and being someone that was really keen on the adventure.
And, as her husband, I was, like, a super…I also wanted to do that, but, like, you know, burning it at both ends, basically. And so, it got to a point where I felt like it was unhealthy for me, personally, to live and work in the same apartment. I felt like it was unhealthy for the relationship as a new married couple, not that anything was bad, I just felt like I was going through a lot of the processes, and it wasn’t fair to her.
I was also going through the grind as an entrepreneur and, like, the last thing I wanted to do was, sort of, like, close the door, and so I change my frame of mind, like, “Honey, I’m home,” sort of thing, when I’m literally like, I’ve been home since 6:00 a.m. grinding it out anyway. So, given that I didn’t have a need for product or storage of product, I found a co-working space in Santa Monica, California called ROC, Real Office Centers.
It was created at the former Google headquarters in Santa Monica. Google moved to Venice, and this guy came in and took over the old Google headquarters, and basically created a co-working space. And, it worked out to be cheaper for me to get a two-bedroom apartment, and have my office in the co-working space than it was to have a three-bedroom apartment.
And so, that just changed everything for me. It changed everything because I was in the heart of Silicon Beach, and for some of your listeners, you know, you’re part of Silicon Valley. Silicon Beach is, sort of, like the Santa Monica neighborhood of the tech world. It’s the third-largest tech sector in the United States. And, I was surrounded by all these amazing entrepreneurs, like and Uber were born not far from there, and actually had a office literally, you know…now that you’ve been to CreativeCubes, it’s, sort of, like, one side of building to the other. You know, Uber’s pumping away. “What the hell is Uber?” “It’s a tech startup. You know, they may not make it, so you may not hear about them.”
But, you obviously know about them today. So, I got surrounded by these types of people. I was going to an event every Saturday where…so the founders of Google and sort of, like, you know, Evan Spiegel and, like, all these amazing talents and big names known today, but they weren’t big names back then.
And, sort of, like, I fell in love with the co-working landscape and I, sort of, fell in love with collaboration, and I fell in love with community, and it’s something that was so refreshing to me as an entrepreneur, you know, even from my Australian business where I had an amazing team of 15 employees, but we’re all talking about the same thing, the Pet Loo this, Pet Loo that, dah-dah-dah, this retailer, that retailer.
Pushing myself into a co-working space, I was the only guy in pet, not in tech but, you know, people next door and two offices down the road was like, “He’s an outsourced CFO. He’s an outsourced PR media…here’s an outsourced CTO.” You know, like, all these people were in this building, and all this incredible talent, and I was like, “Holy, shit, this is amazing.”
And so, in 2013, I sold my company and then started another company, a dog-walking business, which didn’t last very long, and got acquired very quickly.
Nathan: Oh, really? How come it got acquired really quickly?
Tobi: There was a bunch of reasons. We were running out of money, so we didn’t have much of a choice but to get bought, but there was also this threat that some of these other digital tech companies got way more money than us, and were going to squash us, so we might as well just sold to them, and, sort of, have had an exciting adventure with some wins, but not the big wins.
But, all of that was born in this co-working space, and that company today is called Rover.com, just for reference. It’s an incredible business. They are in the dog-sitting market, and they want to get into dog walking, and, you know, they’re led by a phenomenal entrepreneur, Aaron Easterly and Brent their COO, but my point is that, sort of, like, while I was doing Pet Loo, I was really, like…I feel like I’d come alive in this co-working space.
And, while I am the most loyal person, hopefully on the planet, that’s how loyal I regard myself, the co-working space was very much like a mistress to my pet business relationship. I, sort of, like…I’m not falling out of love with pet, and an investor in the pet business is doing exceptionally well globally, called WAG, Watch & Grow dog food, product made here in Australia.
It’s now exporting to the U.S. and Canada. But, while I love the pet landscape, I really, really love community, and collaboration, and surrounding myself with like-minded people that want to win. And so, really, in 2013, before I decided to come back to Australia in 2016, I called my business partner, Andy Fernie, and I said, “Andy, like, come to LA. I want to show you some things.”
And, we agreed in 2013 we would start a business called CreativeCubes.
Nathan: Oh, wow. So, 2013, that’s a while back, man.
Tobi: Yeah. But we both got distracted. I started a dog-walking business, which was then eventually plugged into Rover.com, and Andy was growing a business, and about to take an exit, or a partial exit in his supply chain logistics business. And so, timing wasn’t right. My kids didn’t want to come back to Australia just yet.
My wife wasn’t ready. Like, there were a whole bunch of reasons why 2013 we didn’t launch CreativeCubes. But, in 2016, March 2016, I called Andy and said, “Mate, just sold. I’m about to come back to Australia. Do you want to still do this?” Like, we had been talking for a long time, and he was like, “Yeah, man.Get on the next plane. Let’s do this.” And so, in December of 2016, we signed our first building in Cremorne.
We’ve got our second building under construction. We only launched the business in true to consumer or to members September 11, of all dates, 2017, and so we’re, like, seven months old right now in our first building, and we’ve got our second building under construction in Hawthorn, right opposite Swinburne University, and we’re building an incredible community.
I mean, I hope you can testify to that.
Nathan: Yeah, man. I really love what you guys got going on and I really like, as well, like, your level of attention to detail. I’m just curious, like, if someone wants to start a co-working space and do it at just like such a high quality that you guys are doing it, like, just everything, where does that come from, because you’ve never done it before?
Is it come from just seeing like, you know, how it goes down in the States, or what?
Tobi: No. So, not even that, man. This is all personal. So, Nath, one day, I’m going to have you over to my house and you’ll probably say to yourself, “Man, this feels like CreativeCubes.” But, like, I mean, genuine, I’ll say that but, you know, like, I want to always deliver the best.
I want my customers, my members, consumers of my product to know that when they’re interacting with something that I’m involved with, that it’s second to none. And so, the attention to detail is really a pride thing, and it also comes from an area where I can’t expect you to buy it if I’m not prepared to buy it myself.
And so, the attention to detail that goes into it is really me making sure that if the tables were turned and I was walking into…if CreativeCubes was, you know, the Foundr product, and me walking in, I want to be wowed. I want that consumer to just be, sort of, like… not in an arrogant way, but like, “Shut up and take my money.”
And so, I don’t really focus on the profit aspect of the business, although the business is profitable, and at-scale becomes even more profitable. I’d focus on delivering the best, making people happy and then, from there, I’m successful. But, if I can’t deliver the best and I can’t make people happy, it doesn’t matter whether it’s co-working or it’s creating my own sneakers, or a dog toilet, if I can’t execute on the one fundamental, which is delivering a good-quality product to my customer, then I don’t deserve to be in business, in my opinion.
And so, that’s where it comes from. There’s nothing like this in the U.S. There’s nothing…like, I’m not replicating something. I was never a consumer of WeWork, and I was a consumer of co-working before WeWork came to the West Coast, but the aspect of it is, sort of, like, it’s more like a hotel, it’s more like the Four Seasons, Ritz-Carlton from a service and experience perspective, when nothing we can do is of bother…nothing that you could ask is ever a bother to us, whether it’s big or small.
It’s all about just delivering…we never say no to our members. I think the worst thing you can say when you’re in, sort of, like hospitality, which is really where I think we are, is no. Like, I go to a café, and I say, “Can I get a glass of water?” Like, “Yeah, just go help yourself over there.” Like, you would never get that experience here. It’s like, “Can I get you a glass…?”
Like, we’re always on the front foot, and that’s because that’s the way I want people to be treated, and it’s the way I want to be treated as a person as well. So, really proud of the execution aspect of it, but it’s not something that we’re replicating. This is all very unique and very us. Our DNA is all over this thing.
Nathan: So, like, you talked about the best…and we have to work towards wrapping up, man, but you talked about the best. How do you know what the best is?
Tobi: It’s my best. It’s from me to you, from me as a creator to you as a consumer, this is the best that I have to offer. – [Inaudible] always get better though, man?
No, no. I don’t say that we’re stuck. The ball is always moving. The journey and the path is always…and sometimes, if you’re on that treadmill as a true entrepreneur, you know it gets faster and faster in terms of, like, the challenges and the shit that gets flung at you on a daily basis. No, we’re actively proactive daily, across everything, but, right here right now, the product that we have on offer today, in this minute, is the best that we can offer.
Next week or the week after, or even later this afternoon, there’ll be adjustments, but we’re always…like, I think that, for us, we’re less focused on the financial outcome. We look at financial outcomes as a by-product of delivering everything else.
And, if you look at our reviews, all of those are sincere people that have written reviews. We know them well. You know, like, they’re members here. We see them every day. We’re talking to them about their businesses. “How can I add value?How can I help?” You know, like I always ask you all the time, like, “Man, where do you need me to be? What can I do for you?” It’s not of a self-serving position
It’s that, if I can help you become better, then I become better. And so, that’s what we’re doing at CreativeCubes.
Nathan: Yeah. Amazing, man. Love it. So, two last questions. First of all, I just wanted to ask, like, you know, obviously there’s a big difference between a physical product business and, you know, a co-working space, which is, like you said, in as many aspects, it’s, kind of, like a hospitality business.
My question around that is, I guess, how do you plan to scale, and do you plan to scale out CreativeCubes? And then, the last question is, where’s the best place people can find out more about yourself and your work? And we can wrap.
Tobi: So, do we plan to scale? Absolutely. How big do we plan to scale? We’ll only ever grow as big as our ability to be able to continue to live equality. So, I’m not in the business to try and scale to 50 locations. If my product starts to fray at 10, and I am unable to deliver what I consider to be world-class service at Building 10 or 11, if I can’t, then I’m going to stop there.
This is not about scaling for the sake of scaling and having a watered-down product with each building that you open. In terms of the how we tend to scale…like, everything here is process driven. As much as that doesn’t sound great, we have incredible team. We have incredible talent.
We will continue to recruit incredible talent because we have a process and a standard in which we execute out. So, I’m not overly concerned about that in terms of the scaling aspect. The capital expenditure, or the capex is significant, so we’ve got to be performing at our first several locations in order to be able to scale, because if we’re not full, or we’re not delivering the quality that I am telling you we’re delivering at all times, you know, that sort of falls on our shoulders.
But, I’m confident in our performance, man. Like, I’m confident that what we have going on here, our DNA, the people on the leadership table, the people at the ownership… that own this business, crazy talent, crazy, cool talent. And so, you know, what we have here is…you know, the reality of our product which, by the way…you know, we definitely are in hospitality, but our product is received by the consumer the minute they walk into the door.
And so, the way you’re greeted, the way you’re spoken to, the hospitality that we have, the lengths that we will go for you, the spaces that you can reside in, the environments that, you know, foster and drive creativity and thought and taking people to the next level, that’s our product. All of that is our product.
It’s not just, “Slap some paint on the wall and put some desks in a room,” there are co-working spaces that are like that, but that’s not what we’re doing here. We are curating our community. If you show up with some money to become a member of CreativeCubes, and you’re not a good person, or you’re not the right fit, you won’t get in the door.
And, I don’t say that with arrogance. I have an obligation and a responsibility as a leader of this company, and of this community, to make sure that the people that are in here are positively going to impact other people that are in here, and not the opposite. So, there’s a lot of things that go into it, and the reality is I built this business based on what I wanted when I was, sort of, like, peddling my Pet Loo business.
I wanted this type of environment which would take me to the next level. I wanted to be surrounded by people. I wanted to be around the venture capitalists and the startups, and everyone in between, and that’s what we have here. You know, we have tabletop businesses which are trying to find their way, all the way up to frequent visits from the group at Foundr, from you guys at Foundr, all the way up to, you know, full-time residents in Uber rides and Uber Eats, and everything in between.
And so, you know, grabbing a glass of water or, you know, sitting around the kitchen having those conversations fosters growth and that’s part of our product. That is our product. So, from that point. In terms of how to get ahold of us, like, very simple, creativecubes.co, or CreativeCubes.Co on the web, and every social channel as well.
So, Instagram is probably our most favorite because we’ve got beautifully designed spaces, and Instagram allows us to promote that art, but we’re also on Facebook, and Twitter, and LinkedIn, and all the rest of it. And, you can always hit me up, as well, at Tobi Skovron, T-O-B-I S-K-O-V-R-O-N on Twitter.
Always try to make myself available, man.
Nathan: Awesome, man. Well, look, thank you so much for your time speaking today, man, and it was great to get to know more about you and your background, and all the gold that you’ve shared with us. So, thank you so much, man.
Tobi: I appreciate your time. Thanks, Nath.