Entrepreneurs

Amazon Prime Day helped this young couple bring in millions selling dog cameras online

Victor Chang and Maggie Cheung with their 10-year-old toy poodle Gobi.
Courtesy of Furbo Dog Cameras
Victor Chang and Maggie Cheung with their 10-year-old toy poodle Gobi.

For the past week, Victor Chang and Maggie Cheung have been losing sleep.

The married couple and business partners, both 31, were feeling a mix of nerves, excitement and exhilaration as they prepared for what they hoped to be one the most important days of the year for their business: Amazon Prime Day, the e-commerce giant's annual sales event for Prime members, which is currently underway until Tuesday night.

As of now, it looks like the couple can rest easy: Chang and Cheung's Furbo Dog Camera jumped to a No. 1 bestseller in Amazon's Pet Cameras and Monitors category.

Last year on Prime Day, sales of the camera were 500 times higher than average, pushing the product to be the No. 1 bestseller in Amazon's pet supplies category. The duo anticipate Prime Day 2018 to be even bigger.

"We're expecting this year to be more," Chang tells CNBC Make It. "Maybe around 1,000 times [average daily sales]."

Furbo smartphone-controlled dog cameras — which pet owners use to watch, talk to and toss treats to their dogs while away from home — typically cost $249. On Prime Day 2017 (July 11), they sold for $169, and this year, they are selling for $139, a 44 percent discount.

A visual representation of the Furbo Dog Camera tossing a treat.
Courtesy of Furbo Dog Camera
A visual representation of the Furbo Dog Camera tossing a treat.

In preparation for the event, Chang and Cheung stockpiled product. "This year, I prepared ... way, way more inventory for Prime Day," Chang says. The company temporarily doubled its manufacturing staff and added more customer support representatives to cover two weeks after Prime Day, when new buyers will be calling in with questions.

The success on Prime Day in 2017 allowed the company to double its employee count to 60 (as of early July). Although Cheung and Chang decline to share exact revenue, they say the past year's sales for the Furbo Dog Camera surpassed eight figures — tens of millions of dollars.

Prime Day success has also helped turn the product into a bit of a cult favorite. In May, Wired magazine named Furbo its No. 1 pet camera. Over 155,000 people follow the brand on Facebook, and 10,000 Facebook users are in a closed group called Furbo VIP Club to share reviews, feedback and pet stories.

Using artificial intelligence, the Furbo camera can detect if your dog is barking or jumping on furniture and will send users "smart dog alerts." Once notified, users can open the Furbo app to check in on their pet and even have it toss a treat to entertain the pet.

Some customers literally watch their dogs sleep for hours a day, while others have more poignant stories.

One Furbo user bought the product to give a loved one deployed overseas in Bahrain the ability to check in on her dog from afar.

"The first night I had the Furbo I was awoken several times in the middle of the night by high pitched squealing and giggling of glee from my [girlfriend] not being able to contain herself," the buyer wrote on Amazon. "She was so excited to see him, talk to him and give him treats."

Another Furbo user reported the device saved their dog's life, according to Cheung. After receiving alerts about her dog's barking, the owner opened the Furbo app to see her apartment filling with smoke, and the dog barking at a fire, says Cheung. The owner was able to race home and save her pet.

Chang and Cheung first had the idea for Furbo Dog Camera about four years ago.

The couple, who have been married for six years, have a 10-year-old toy poodle named Gobi. Cheung says she always felt anxious and guilty leaving their furbaby home alone when she left for work in the morning.

“I’d be so worried about him all day,” she adds.

Furbo Dog Camera co-creators Victor Chang and Maggie Cheung's 10-year-old toy poodle, Gobi.
Courtesy of Furbo Dog Camera
Furbo Dog Camera co-creators Victor Chang and Maggie Cheung's 10-year-old toy poodle, Gobi.

Chang and Cheung realized that if just a fraction of the estimated 60 million dog owners in the U.S. felt that same tug at their heartstrings upon leaving their pets, building a product to solve the problem could spell success.

Chang, a serial founder who studied entrepreneurship at Babson College in Boston, and Cheung, who has years of experience in marketing, had previously worked together to develop a social media app. But Chang says it wasn’t bringing in enough revenue to be sustainable. Still, the pair liked working together to build new things: “I always wanted to start something with Maggie; she’s a great digital marketer, and I’m kind of the inventor,” Chang says.

So they set their sights on pet parents.

First, they surveyed 1,000 random pet owners to see if others did in fact feel the same anxiety about leaving their dog. The survey asked what their No. 1 problem was, and in response, “85 percent said, ‘I worry about my dogs at home alone,’” Chang explains.

To them, that validated that the idea was a good one. They came up with a plan for a device that included not just a camera to watch the dog at home, but also a speaker and a gizmo that would toss a treat. That way, owners could comfort their dogs — not just watch from a distance.

Furbo Dog Camera founders Victor Chang and Maggie Cheung.
CNBC
Furbo Dog Camera founders Victor Chang and Maggie Cheung.

To test the idea further, the couple brought in dog parents to get feedback. Although they didn't have a working prototype, Chang and Cheung set up a rigged camera and speaker so owners could talk to their pets from another room to experiment. Then, Chang, hiding behind a couch, would toss a treat to the dog at the owners' request.

The response was joyous, he says.

“[Owners] would just go nuts over it, so then we had that proof of concept,” Chang says. “Once the users showed us that there was that great demand, we were all in.”

The couple spent months sourcing engineering help, 3-D printing components and building an app to allow the internet-connected piece of hardware to be run via a smartphone. It wasn't easy: "[Hardware] is one of the toughest things you can possibly do, especially if it is an IoT [internet of things] device that connects to the internet," Chang says.

The couple had been running the operation using family savings, but decided in April 2016 to launch a crowdfunding campaign on Indiegogo.

“Indiegogo was the first time we were showing ourselves to the world, and the feedback was just incredible,” Cheung says. “In the first six hours we already hit our funding goal, and that’s when we knew, ‘Wow, there’s something there.’”

By the time the Indiegogo campaign closed on June 26, 2016, the Furbo Dog Camera had raised more than $511,000.

Their campaign was so successful, it caught the attention of Amazon.

"There is a team at Amazon called Amazon Exclusives that focuses on looking at successful crowdfunding campaigns," Chang explains. "Once they saw Furbo, they were really quick to reach out to us."

Being a member of Amazon Exclusives means brands can't sell their product with other retailers, but Cheung and Chang decided partnering with the e-commerce behemoth would be a smart way to get their product in front of more consumers, "once we realized who our customers were," Chang explains. "They were about 25-year-old to 45-year-old dog mom and dads who shopped online frequently."

It took about three months for supporters on Indiegogo to start receiving their Furbo Dog Camera products. Then it was time to ramp up production for Amazon. "Immediately after we finished, Amazon was working with us to launch the product [there]," Chang explains. By October of 2016, the product was available for purchase on Amazon's platform.

The timing worked out perfectly, Cheung laughs — it was just in time for the holiday season.

"A lot of dog parents actually buy Christmas presents for their dogs," she says. "That was a really, really amazing season that we had."

But nearly two years later, the company still has challenges to overcome: Some buyers of the device report connectivity issues and sound quality issues. While Furbo Dog Camera holds a four-out-of-five-star rating on Amazon, the device's correlating app in the iOS app store only has a two-and-a-half-star rating out of five stars, with customers often describing trouble connecting to WiFi.

To focus on customer service, Chang has set up an automated system to alert every single member of the company anytime a negative review of the product is written on Amazon. "So we all have to suffer it together," Chang says. "I used to look at it myself, and I got lonely and sad about it so I started sending it to the whole company."

An obsession with customer satisfaction is something Cheung and Chang have adopted from working closely with Amazon.

"At the end of the day, it's [about] the people that are using it," Cheung explains. "They are the ones that can give you the feedback, sometimes painful, but honest feedback that you need to push forward."

For example, when a customer wrote a negative review about Furbo's connectivity on Amazon, the technical support team reached out.

It turned out he was "using a rare, outdated Android phone," Cheung says. "Instead of ignoring the comment, our team went out and purchased the same phone model that he had to troubleshoot the setup process. In the end, we managed to contact the customer and fixed his problem."

For Cheung, finding solutions for pet owners is the reason the company exists.

"The problem we set out to solve is to help dog parents," she says. "This is a group of people we love to serve."

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