PETS. SPECTACULAR DIGITAL FAILURE OR MODEL FOR PUBLISHING INNOVATION?

Iain Langridge, VP, Digital Media, Discovery Communications

@EenL

* Estimated size of the U.S. Pet industry in 2013 from 2012 APPA Pet Ownership Survey

ComScore (12me April 2013)

The size of each data point is proportional to the Unduplicated Annual Reach of each property (UVs)

Petfinder (Current)

Petfinder

eHow Pets

PawNation Petco

Purina

Purina

Petango AdoptAPet

Answers (Animals)

Pet360

0

4

8

12

16

1.0 1.5 2.0 2.5

ENGA

GEM

ENT

(Ave

rage

PVs/

Vist)

Frequency (Annual visits per UV)

$0

$2

$4

$6

$8

$10

$12

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

IPET Stock Price (From IPO (02/2000) to Delist (01/2001)

Animal Shelters

Rescue Groups

Foster Groups

Humane Societies

Petfinder Members

3rd Party Shelter Management Software

Pet Adopters and Pet Lovers

New Pet Owners

8,5MM

175,000

Petfinder Users

Pet Owner Data

Pet Data

Admin System

Petfinder.com

Adoptable Pet Database Member Web

Tools & Services

Adoptable Pets Listed 365,000

Adoption Event Data

14,000

Adoptable Pets 6MM

300MM Impressions

Between

30,000-130,000 Registered Owners (est.)

30,000-180,000 Registered Pets(est.)

TECHNOLOGY STACK

A Month in the Life of Petfinder

Obviously, everyone wants to be successful, but I want to be looked

back on as being innovative,..

Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create

wealth

1.  Purpose is key (and money is not a purpose)

2.  Break-through by surrendering

3.  Finding the Win-Win-Win drives innovation

4.  Bring innovation back to the model

5.  Don't build your organization around an innovation. Build it to innovate

Petfinder-Proven Rules for Digital Innovation

got purpose?

TABLE A-1

Investment performance of Firms of Endearment* companies versus the S&P 500, 1996 to 2011

Fifteen-year Ten-year Five-year

Return Cumula- tive

Annual- ized

Cumula- tive

Annual- ized

Cumula- tive

Annual- ized

FoEa 1,646.1% 21.0% 254.4% 13.5% 56.4% 9.4%

S&P 500b 157.0% 6.5% 30.7% 2.7% 15.6% 2.9% Note: company returns are total returns with dividends reinvested and compounded a.  Companies from Firms of Endearment, updated by authors b.  Standard & Poor’s index of five hundred U.S. companies

*The eighteen Firms of Endearment companies are Amazon.com, BMW, CarMax, Caterpillar, Commerce Bank, Costco, eBay, Google, Harley-Davidson, Honda, JetBlue, Johnson & Johnson, Southwest Airlines, Starbucks, Timberland, Toyota, UPS, and Wholefoods Market.

Source: Sisodia, Wolfe and Sheth, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, Pearson Prentice Hall, 2007, updated 2011

Creating responsible pet owners from adoption throughout a pets life

SURRENDER Success, however unlikely, requiring however much innovation is inevitable !

if you give in to what your purpose is telling you to do

Adoption Options

Before After

Generate as many ideas as possible about: •  Who to target •  What to offer •  How to organize to

do all this efficiently

Evaluate these ideas and decide what to do and what not to do

Implement the choice(s) selected while remaining flexible enough to adjust to changes in the environment

Exhibit 10-1 The Process of Crafting Breakthrough Strategy

Question the organization’s mental models. Facilitate this questioning by creating a positive crisis

Create a questioning culture

Create variety in the thinking processes used during formal strategic planning sessions

Experiment with new definitions of who, what, and how

Find ways to make the strategy development process democratic and participative

Replicated from ‘All the Right Moves, by Constantinos Markides, HBS Press

Petfinder-Proven Rules for Digital Innovation 1.  Purpose is key (and money is not a purpose)

2.  Break-through by surrendering

3.  Finding the Win-Win-Win drives innovation

4.  Bring innovation back to the model

5.  Don't build your organization around an innovation. Build it to innovate

Purpose + Surrender + Win-Win-Win + (Expectation of Change + Stakeholder focus)

= Innovative (Digital) Business

@EenL