See the March issue of Business2.0 magazine for a great article by Tom McNichol about how we’ve been able to succeed on no budgets where Pets.com failed so spectacularly with millions. The online version is up at CNN Money.

Dogster has found a way to turn its mistakes into better features. With virtually no promotion, Dogster (along with sister site Catster.com, launched in August 2004) has become a leading social network for pet lovers, boasting more than 275,000 human members, 340,000 photos and profiles of dogs and cats, and a stable of blue-chip advertisers such as Disney (Charts), Holiday Inn, and Target (Charts).

Dogster has even done something Pets.com never came close to doing: it has turned a modest profit.

It’s true. We’ve made plenty of incorrect assumptions, but we made mistakes we could afford to make. Our goal was to make something that was enjoyed forever and around forever, which isn’t such a common mantra is the business world anymore. For years, we’ve been following the in-vogue strategy of failing fast, so we were making a monthly profit before we had even personally sunk in as much money as the average closing fees on a VC funding round.

I should point out the numbers are a bit out of date. We have 325,000 members, 365,000 dog and cat profiles and 1.8 million photos.