Reposition as lost pet insurance, with differing rates based on type of pet, age of pet, whether or not pet has a homeagain RFID implant, etc. Perhaps also offer a standard response or a premium response, where the standard includes robocalls, craigslist posting, notification to local pet shelters/SPCA/dog catcher; premium level includes posting 'lost dog' flyers in local area using craigslist-recruited 'street teams.'
Sell it through vets, a PetCo partnership, dogster.com, etc. $29/year or something affordable like that. Get a special tag and everything "this pet protected by Pet Guardian" or whatever. See also AAA, TowBoat/US, Lifelock for insurance programs that target unlikely bad things like broken down car, grounded boat, or stolen identity.
"Do you care enough about your doggie to protect him with Pet Guardian?"
Market size is big: 60% of American households own pets. If just 0.50% of these pet-owning households bought lost pet insurance @ $29/year, that's an $8mm/yr business. If you got 3% of the market, it's $50 mm/yr.
At $29/year you'd have to hope that only 1 in 5 (perhaps even less) owners actually used your service in a year. What about that lady down the road who's dog gets out each week?
I agree that "insurance" is the way to pitch this for maximum profit. People, including mostly rational people, will pay a [relative] lot to make themselves feel better about the chances of recovering their pet should it ever become lost.
I've been a member for 17+ years, and the convenience way outweighs the price.
How effective would: "Your neighbour "Buy lots of Acme products" has lost their dog." be?
LostMyDoggie.com, LLC is classified and registered as an exempt organization by the DNC, thus we can phone your neighbors who are on the Do Not Call List.
also, since a lost pet is probably roaming around quite a bit vs. a missing person that is lying in a ditch, they are probably quite hard for another dog to track reliably.
This class of startup is really interesting. From what I've read MagicJack could do $100MM in revenue and WebKinz is a cash factory throwing off $750MM per year. Both utilize software, but it isn't the lead aspect of the service.
These companies really fly under the radar relative to the other hot startups of the day. ReadWriteWeb covers them to some degree, but it is an area that deserves a LOT more coverage.