Latest / The Founder's Journey with Fexingo: First-Time Entrepreneurs, Failures, and Lessons Learned / How a Rejected Retail Deal Built a 50M Pet Food Brand
Transcript
- Lucas: You know, Luna, one of the most common pieces of advice we hear is that rejection is redirection. But I don't think it ever feels that way when you're in the middle of it. Luna: Yeah, especially when the rejection comes from someone who could have made or broken your distribution. We're talking about a 'no' from PetSmart, right? Lucas: Exactly. Samantha Reyes, the founder of Bark & Bowl—a premium pet food company now doing about $50 million a year—spent months pitching her natural-ingredient kibble to the big pet retailers. PetSmart was the final domino, and they passed. Lucas: If these conversations have moved your work forward in some small way, consider supporting the show at buy me a coffee dot com slash fexingo. Listener support is what keeps this podcast ad-free and independent. Luna: It really does make a difference. And it's a simple way to say thanks if you've gotten value from these episodes. Lucas: So back to Samantha. That PetSmart meeting in 2018 was supposed to be her big break. She had samples, a pitch deck, margins all figured out. But the buyer said their shelf space was full and they didn't see room for another premium brand. Luna: And instead of going back to the drawing board, she decided to cut out the middleman entirely. Lucas: Right. She launched a direct to consumer subscription model. At first it was just a Shopify site and a Facebook ad budget of a few thousand dollars. Within six months, she had five thousand subscribers. Luna: Was it purely the distribution channel that worked, or did she change the product too? Lucas: Great question. The product stayed mostly the same. But she realized that without a retail shelf to explain the value proposition, she needed to communicate it through copy and video. So she invested in content—videos showing how the food was made, sourcing transparency, vet testimonials. Luna: So the rejection forced her to build a direct relationship with customers, which later became a moat. Lucas: Exactly. By 2020, Bark & Bowl had thirty thousand subscribers and revenue was hitting seven figures. Then COVID hit, and online pet food sales exploded. They were perfectly positioned. Luna: How did they manage to scale without burning through cash on customer acquisition? Lucas: That's where the unit economics really shine. Their average customer lifetime value is about $600, and they acquire customers for around $50. That's a twelve-to-one ltv to cac ratio, which is stellar for a subscription business. They also use a referral program—current customers get a free bag for every friend they bring in. Luna: So word of mouth became a growth engine. That's so much cheaper than paid ads. Lucas: Right. Today they have over 200,000 active subscribers and the business is profitable. But here's the part I find fascinating: Samantha says that if PetSmart had said yes, she might have ended up with a small retail presence and never built the DTC engine. Luna: It's like the rejection actually optimized her business model for the long term. Lucas: Yeah. And that's the redirection part. She didn't just pivot—she leaned into a model that gave her control over pricing, customer data, and loyalty. Luna: What about the product itself? Did they ever try to go back to PetSmart after hitting scale? Lucas: They did get a call back in 2022. PetSmart approached them with a partnership offer for a limited test in 200 stores. By then, Samantha had the negotiating power. She agreed, but only on the condition that they maintain the subscription pricing parity. PetSmart accepted. Luna: So she ended up with both channels on her terms. Lucas: Exactly. And that's the lesson: sometimes the rejection saves you from a path that would have capped your growth. If she had gotten that initial 'yes', she might have been stuck as a niche product on a shelf. Instead, she built a brand that customers seek out. Luna: I think there's also a lesson in timing. PetSmart's rejection came before the DTC boom, but she was early enough to ride the wave. Lucas: Right. And she had patience. She didn't panic and try to get into every store. She built the business for the customers she had, not the ones she wished she had. Luna: Any advice from Samantha for founders facing a similar door-slamming moment? Lucas: She says: 'Don't ask for permission to serve your customer. If one gatekeeper says no, find another route. The customer will tell you if the product is good enough.' Luna: That's a great line. Lucas: It is. And I think that's what this whole series keeps coming back to. The rejection isn't the end of the story—it's just the inciting incident.