Playing to pet peeves

How Phil Blizzard squeezes a profit out of anxiety-ridden animals.

By Laura Baverman

Phil Blizzard understands your apprehension. He felt it, too. “Most people’s initial response to ThunderShirt is very similar to my own initial response when I first heard the idea of using a snug wrap six years ago — ridiculous,” he says. “How is a shirt going to alleviate my dog’s fear?” But wrapping his 50-pound Goldendoodle with a T-shirt and tape — sort of like swaddling an infant — during thunderstorms erased her anxiety.

It was 2008, and Blizzard, a Triangle developer mired in the worst real-estate market in decades, was looking for his next opportunity. He vetted veterinarians, seeking a solution more refined than his T-shirt-and-tape one. Finding none, he pulled out a sewing machine. Six years later, thousands of pet owners have paid $39.95 for a ThunderShirt. (He won’t disclose the private company’s sales.) The wraps are sold by national retailers, online and at hundreds of pet-specialty stores. “The terrific enthusiasm of the initial dog owners, trainers and veterinarians that tried ThunderShirts built our momentum,” Blizzard says.

Getting there wasn’t easy. Many admirers admit they were skeptics at first. A typical review on Petco.com reads, “I put off buying this because I just couldnt imagine it working ... but it does!” Marketing experts say Blizzard, 47, accomplished a feat few new product developers have — turning something perceived as a gimmick into a profitable business. It helps that he has capitalized on prolific trends in the pet industry, which has grown to an estimated $58.5 billion in the U.S. this year from $17 billion in 1994, according to American Pet Products Association. “If you can show a direct health benefit to the pet or that you will have more flexibility or freedom in your life because the pet is well cared for, that is the most successful marketing,” says Bob Vetere, the Greenwich, Conn.-based trade group’s president and CEO. Vets prescribe it because it’s cheap and can’t hurt, says Rob Manchester of Hayes Barton Animal Hospital in Raleigh. “ThunderShirts don’t work for every pet, but because there is no downside to trying it, we do recommend it.”

Durham-based Thundershirts LLC — it does business as ThunderWorks — was profitable after its first year and, according to Blizzard, has been an acquisition target of many of the largest companies in the industry. It employs 25 people in a former car dealership in downtown Durham. A private-equity investment in 2011 financed expansion into new markets and products, furthering Blizzard’s vision of turning ThunderWorks into a globally respected brand.

 

Blizzard grew up in a Chicago suburb in a family with an entrepreneurial bent — his dad owned a civil-engineering company and developed real estate. After earning a bachelor’s in mechanical engineering from University of Illinois at Urbana-Champaign and working briefly for telecom MCI Inc., he returned to his alma mater for an MBA. His first job out of grad school was at Ford Motor Co. in Detroit, where he worked on product development for the Expedition and Mustang. Before leaving in 1998, he was business-planning manager at a components-manufacturing division with more than $1 billion of annual sales. His experience with Ford taught him that good design overcomes most problems. “It’s always the same approach: ‘What is the issue? What are the constraints of the physical environment you’re working in? And what materials are available? What are you trying to achieve?’”

He moved to North Carolina after his fiancée, Patricia, received her MBA from Duke University in 1999. The couple wanted to be entrepreneurs, so Blizzard joined NextAudio Inc., a Chapel Hill dot-com. (His wife opened a high-end hair salon, which she still runs.) He helped create MyAudio, a predecessor to Pandora, with online radio stations customized to users’ tastes. But funding ran out, and the Internet bubble burst in 2001. Between then and 2008, he developed office buildings in Cary, a doctors’ office in Fuquay-Varina and other commercial projects in Durham.

With the recession looming, Blizzard began talking to vets and trainers about his dog’s issues with thunder — panting, shaking and refusing to sleep or let anyone else in the house do so. Most prescribed sedatives or expensive training. Neither option was guaranteed to work, affordable and safe. A friend suggested a wrap, a therapy practiced by a dog-training group called Tellington TTouch and based on the findings of Temple Grandin, an autistic animal scientist who built a hug machine to calm her anxiety. Pressure from the wrap supposedly releases endorphins. “It was like flipping a switch,” Blizzard says. “She laid down, and her panting went away. I was amazed.”

He taught himself to sew, trying dozens of iterations before arriving at the flagship ThunderShirt. Made from a cotton-polyester fabric with Velcro fasteners, it closes snugly around a pooch’s chest and stomach. Blizzard’s background in product development prompted him to secure patents for its design and functionality. Six sizes of shirts fit anything from a 3-pound Chihuahua to a 300-pound Mastiff.

In late 2008, Blizzard decided he needed partners to mass-produce the shirts, so he recruited three Durham poker buddies whose company made handbags in Mexico. They became managers as well as investors: Jay Mebane handles finances, Chris Ng Cashin directs advertising and marketing, and Ben Feldman oversees sales. As lead designer, Blizzard works with the factory to develop prototypes. “Phil is that rare combination of engineer and salesperson,” Mebane says. “He is always looking for a more eloquent solution and is very good about soliciting feedback, taking the feedback to better design something, testing and retesting it until he’s got it the way he wants it.”

They spent less than $1,000 to launch a website in May 2009. It failed miserably. It looked bad and didn’t explain the product’s virtues. Only one visitor bought something. Were they wrong about the shirts? They blamed their execution and relaunched it with a better explanation, endorsements and testimonials from vets and trainers and offered a money-back guarantee. They needed to convince people the shirts worked.

They attended the American Veterinary Medical Association’s annual convention that summer, demonstrating the product for thousands of veterinarians. Then they hit the annual dog-trainers conference, where Blizzard met Mychelle Blake. “There were a lot of people prior to ThunderShirt who came up with a similar product but didn’t execute nearly as well as Phil did,” says Blake, CEO of the Association of Professional Dog Trainers, a trade group based in Greenville, S.C. “If I brought it to clients, they would say, ‘OK.’ It was something they were willing to try.”

Website sales increased mostly through vet and trainer referrals. But the partners needed sales in pet shops to experience significant growth. San Diego-based Petco Animal Supplies Inc. and Phoenix-based PetSmart Inc. were long shots because both were shunning one-product vendors in favor of companies with full lines, Blizzard says. So ThunderWorks targeted independent pet stores, which make up about 40% of industry sales, according to Melbourne, Australia-based IBISWorld, a market-research company.

Sales still weren’t growing as much as the men hoped. Blizzard blamed it on ineffective packaging and display. A shirt to calm dogs during storms wasn’t a product pet owners were looking for — or knew existed. Boxes were redesigned, featuring a cartoon dog. Signage near stores’ front doors or at the register asked, “Does your dog have anxiety?” “One of the many things that Phil has done well,” Mebane says, “was recognize that in order to sell the product, you have to educate people on it.”

 

Expanding distribution became a priority as sales slowly grew in 2010. Most pet companies advertise in trade magazines and journals, but ThunderWorks bought ads in Southern Living, Reader’s Digest and Good Housekeeping. In January 2011, it began airing short infomercials. QVC, the West Chester, Pa.-based home-shopping network, selected the company to appear on a show, buying inventory like a retailer would. After selling 7,000 ThunderShirts in 12 minutes, the company was invited back 40 times in the next 18 months, Blizzard says.

In June 2011, San Francisco-based Encore Consumer Capital bought a majority stake in ThunderWorks. Encore specializes in small consumer products and owned Zuke’s, a manufacturer of healthy dog treats it sold to Vevey, Switzerland-based Nestlé SA, the world’s largest food-maker, for an undisclosed price in January. “We recognized that given our resources and skill sets, we were starting to hit a lull in growth,” Mebane says. “We’d put a lot of money back into the business to fund the growth. Wouldn’t it be nice to take a little off the table, to mitigate our risk in the future?” ThunderWorks did not disclose the size of the investment.

Encore partner Kevin Murphy joined the company’s board. “When we first heard of ThunderWorks, we said, ‘Wow, that’s kind of ridiculous.’ But the product was novel, a solution to a problem that’s much bigger than most people would think before presented with the evidence.” His goal has been to help the company enter major retail chains and expand overseas. Petco and PetSmart started carrying ThunderShirts later in 2011, and ThunderWorks now has distributors in 25 European markets.

It also introduced a ThunderShirt for cats. (Some felines calm down, Blizzard says. Others get annoyed.) In 2013, the company released ThunderCoat and ThunderSweater. It paid another company to develop a calming spray, toys and treats made of lavender and chamomile. But Blizzard is most excited by ThunderLeash. He wanted a less abusive way of controlling a pet, so he bought a welding machine and began tinkering with chains and buckles to design a leash that puts pressure on a dog’s chest instead of its throat. “You don’t have to do a harness or head collar. There’s no training with it. It gives consistent feedback, and over time the dog really learns.”

ThunderWorks now has a full display for all its products at the end of aisles in Petco and PetSmart stores. And Blizzard is constantly fielding product ideas (for acquisition or licensing) and dreaming up his own. Last year, he invested in a Durham startup called ColoWrap LLC, the creator of a pressure wrap that fits around a patient’s abdomen during a colonoscopy to keep the large intestine from looping. It has some interesting parallels to ThunderShirt, he says. It uses an innovative pressure wrap to solve a common problem and requires intellectual property and sophisticated design. Even though some might consider it ridiculous.