"In the service industry, it's really about providing great service at the right price whenever, wherever people need it and being able to clearly articulate and promote their brand as much as possible to everyone," Mann says. "No matter where you are or when you need us, you've got a sitter available."

Pepperdine's Nolan adds that understanding what channels your product or service will be best sold through is "equally if not more important than knowing whether your product or service compares favorably to your competition. With this knowledge you can honestly asses how you will or will not succeed in the field."

PetFlow.com is filling a need by offering premium and specialized pet food through home delivery it says will save owners time, money and hassle.

Unlike other online pet suppliers that failed, including Pets.com, the 1-year-old supply company is seeing an opportunity to keep customers coming back by offering automatic refills.

"This industry is unlike many others and the reason for that is it lends itself well to an auto-replenishment model," co-founder Alex Zhardanovsky says. "The customer needs a regular, stable supply of similar or identical products on a regular interval."

"If we have competitive price, have the product and actually get it to their door, that would mean we would keep that customer on average for the life of the pet. The lifetime value for us is significant," Zhardanovsky adds. "There are not enough businesses in this space taking advantage or even promoting the concept of auto-ship. It's an afterthought."

Whereas Pets.com carried practically everything needed for your pet, Petflow.com narrowed its product to premium and specialized food. Even so, its product line has expanded to more than 100 brands of pet food, Zhardanovsky says.

The offering is a win-win. Consumers are paying more attention to what they feed their pets, and margins are higher for premium products. Add in a recurring revenue stream by making sure customers are satisfied the first time around and it could be business gold.

The idea is so promising that this month the company got a $10 million investment from private equity firm Lightspeed Venture Partners.

"Once that 30-pound bag of dog food shows up at your door the first time, you're never going back to the store -- unless they have a huge discount, which is usually not the case," Zhardanovsky says.

-- Written by Laurie Kulikowski in New York.

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