This is an installment of Startup Year One, a special series of interviews with founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
Pet adoption numbers continued to surge over the past year as more people stayed at home. Not only do many of these people have more time to care for a new pet, but pets offer great companionship—especially during rough times—as well.
As a result, many pet care and accessory brands are seeing their sales figures soar, with pet owners looking to upgrade their furry friends’ necessities. Among them is Fable, a New York–based startup producing pet gear that marries design with function. The brand’s dog crate, which would look right at home alongside a mid-century love seat in a CB2 catalog, has generated a 5,000-person wait list, according to a company spokesperson.
Fortune recently spoke with cofounders and siblings Sophie Bakalar and Jeremy Canade to learn more about Fable’s first year in business, the boom in the pet industry during the pandemic, and the brand’s second year.
The following interview has been condensed and lightly edited for clarity.
Fortune: Tell me a bit about your backgrounds. What were you doing professionally before launching Fable?
Bakalar: I was investing in consumer brands and e-commerce businesses at a venture capital fund in New York called Collaborative Fund.
Canade: I was at Jet.com and then Walmart.com leading e-commerce retail strategy, planning, and business development.
Fable has a particularly modern, design-forward aesthetic. What inspired the launch of Fable? Has social media had any influence in the design and product development process?
Canade: Fable was inspired first and foremost to solve problems. We felt that pet gear hadn’t evolved to keep up with the customer in this category. As much as we all love our pets, they come with a lot of inherent pain points—cleanliness, separation anxiety, et cetera—particularly in urban areas where there’s limited space and a culture of multitasking. We wanted to create products that directly address those problems through thoughtful, innovative designs.
The aesthetics are somewhat secondary, but we also felt like the market was saturated with really cheap, low-quality products that didn’t mesh with our personal styles. We are definitely design nerds and really appreciate minimalist, sleek lines. There’s no reason your pet gear can’t fall into that category. If you spend time and effort styling your home or outfit, you don’t want them spoiled by some plastic neon dog toys on the floor or a garish nylon leash.
One of Fable’s products—a dog training crate that is so stylish it could double for a coffee table from CB2—has a wait list of more than 5,000 interested customers. Who is your target demographic, and how do Fable’s pet care products better serve pet owners than what is already on the market?
Canade: We originally designed the crate for our own demographic: urban millennials who need to maximize space in tiny apartments and reduce anxiety by creating a more “den-like” environment.
But we quickly found that everyone wants their pet gear to be multifunctional and look great in their home, so the target market expanded much faster than we anticipated. Hence the long wait list.
The crate is a good example of one of our key values: marrying form and function. We don’t just want our products to look sleek; we want them to solve specific problems—in this case, maximizing space—and be the best, most comfortable option possible for pets.
Pet care is a space that is typically recession-proof, but the industry soared last year with so many people at home adopting pets in record numbers. How has that trickled down to Fable? Has there been any trouble in meeting a surge in demand?
Bakalar: The boom in the pet market has definitely impacted us. We did have some trouble keeping up with demand in 2020, particularly because the pandemic really obstructed global shipping networks and timelines, but we’ve tried to get ahead of the surge going into the new year by investing in extra inventory.
Unlike some other categories that have seen tailwinds resulting from COVID-19, we don’t expect a reversal when the pandemic is—finally, hopefully, eventually—over. We believe the shift towards working from home and the need for increased emotional support will continue to drive the increase in pet adoption rates. And once someone has a pet, they don’t return them, hopefully. So they’ll continue to need gear going forward, which creates a great opportunity for differentiated products.
That said, raising capital is no easy feat in normal times, and certainly not during an economic crisis. What has it been like to secure funding for Fable? Is it primarily self-funded, VC-backed, or some mixture of both?
Bakalar: It’s a mixture of both. Given my background in venture capital, the process for raising funding was a little less opaque than it might be for other founders at this stage, but the high level of economic uncertainty last year definitely created capital constraints.
Fortunately, we have some incredibly supportive investors who know the consumer space really well and understand the realities of this industry, including inventory shortages, excess demand, and global shipping delays. So they were willing and able to weather a little volatility with us.
We also really hunkered down at the beginning of the pandemic and focused on reducing costs and investing in strengthening our fundamentals (i.e., getting to free cash flow positive).
Looking forward, beyond the pandemic, where do you want to take Fable in the next year? Where do you see the company in five years?
Bakalar: We’re really energized by solving concrete problems and want to continue to address the biggest pain points faced by pets and their humans—tracking dirt inside, excess fur around the home, high levels of anxiety—by completely rethinking products from the ground up. We want to make it easier for every person to take care of a pet and hope in five years (or sooner) every pet will be using at least one Fable product.
More must-read lifestyle and entertainment coverage from Fortune:
- The 10 best business books of 2020
- Congress COVID-19 relief bill includes $15 billion for Broadway, small music venues, movie theaters
- “The Mozart of fungi”: For ages, truffle hunting has been one of the most challenging pursuits on earth. Then the pandemic hit
- From pet adoptions to DIY home improvement to sweatpants: 10 COVID-fueled consumer trends that will endure
- How Hawaii’s COVID-19 testing program could serve as the blueprint for a broader reopening of international travel
