Taylor Wallace·November 1, 2022

Why I Quit Tech and Bought 2 Doggy Daycares | Taylor Wallace

Taylor Wallace is a former tech nomad who spent a decade at startups and as a remote consultant before co-acquiring two doggy daycares in Tampa, Florida under the brand Paws and Rec. After burning out on startup life and being laid off from Magic Leap during COVID, Taylor reconnected with his former roommate Mike — an experienced daycare operator — and together they acquired their first independent daycare for high six figures at roughly 3.5x SDE. The pair's complementary skills (Taylor in marketing, finance, and growth; Mike in dog operations with 10 years of franchise-system experience) let them immediately double capacity at the first location and reach a seven-figure run rate in about five months, eventually growing to roughly 2.2x original revenue in year two from that single location. A second acquisition, roughly double the first in size and price, followed about a year later using a refined playbook. At the time of recording they were breaking ground on a third greenfield location. Taylor is an outspoken ETA evangelist to the tech community, arguing that buying into existing product-market fit and optimizing operations is more satisfying — and more impactful at the community level — than endlessly chasing startup hockey sticks.

Deal facts

purchase price: high six figures (less than $1m) for first; roughly double that for second
multiple: ~3.5x SDE for first; higher multiple for second
sde ebitda: ~$300k SDE for first (implied by ~3.5x on high-six-figure price)
revenue: first location: grew to ~$2.2x original revenue in year two; original target was 7 figures in year one, achieved in ~5 months
notes: Two acquisitions total. First: independent daycare in Tampa, high six figures, ~3.5x SDE. Second: roughly double the first in size and price, higher multiple. Third location is a ground-up build (greenfield). Partners are Taylor Wallace (business/marketing) and Mike (operations, 10 years industry experience). No mention of SBA or seller financing structure.

Why this business

Taylor reconnected with his former roommate Mike, who ran a doggy daycare, and they had spitballed the idea for years. Simultaneously Taylor was being recruited by a PE firm in the pet tech space, which got him researching the pet industry. He and Mike explored franchises but couldn't agree on a system, and concluded they had all the pieces themselves — Taylor with fundraising, sales, and marketing; Mike with dog operations. An independent business fell into their lap that checked the boxes, and advisors confirmed it was easier to buy than build from scratch.

What's working

Doubling capacity at each facility by applying Mike's 10 years of franchise-trained operational expertise — moving dogs more safely and efficiently than prior owner-operators who 'winged it'
Immediately raising employee wages after acquisition to win goodwill and set new expectations
Normalizing and increasing pricing after acquisition
Replacing a semi-custom ERP with off-the-shelf software, reducing development overhead
Building a documented playbook from acquisition one that made acquisition two faster and cheaper to integrate
Leveraging brand equity from the first location when rebranding the second
Complementary co-founder pairing: Taylor handles marketing, finance, and growth; Mike handles dog operations and facility management
Strong customer-service culture as a differentiator against both too-small and too-large competitors
Network-driven deal sourcing — both acquisitions found via warm relationships, not brokers

What's hard

Finding additional acquisition targets has been difficult because COVID dog adoption caused daycare businesses to perform well and owners are reluctant to sell
A third target fell through when they could not make the pre-existing landlord relationship work — lesson: get landlord involved earlier
Revenue is capped per facility by physical space; can only fit so many dogs, so growth requires additional locations or new service lines
The intellectual contrast from tech work (documenting SDKs and APIs) to small business reality (handling calls about a dog breaking a toe, installing fences) can be jarring
Going from geographic freedom as a nomad to being anchored in Tampa requires a lifestyle adjustment
Second location ramped more slowly because it was less convenient for the core customer base, though growth in surrounding area is catching up

Notable quotes

Through ETA it's like you step into product market fit — it's already there. It's a very different experience as an entrepreneur to try to invent something versus try to optimize and grow something.

I was documenting SDKs and APIs for augmented reality systems at my last job. And today I was handling a call because a dog broke a toe.

I was tired of trying to get astronauts to the Moon. Most of these tech startups I've worked at have been like we're going to change the world with our widgets. I got a little burnt out on that endless optimism without a lot of actual impact.

If you know how to do something better than what the prior owner was doing, don't hesitate to do it better.