In early 2018, long-time friends Jaron Lukas and Yo Sub Kwon were blockchain industry pioneers traveling around the world to speak at conferences and close million-dollar deals along the way.
The two had been active in the crypto space for many years, previously co-founding the Coinsetter exchange, one of the earliest venture capital-backed bitcoin exchanges in the US.
But then, as Jaron puts it: “A series of intertwining events had me rethinking my life purpose. I wanted to do something that had both a positive and physical impact on people’s lives.”
The end result was Yumwoof Natural Pet Food, a dog food company focused on extending the health span of all dogs, but it didn’t happen overnight.
“I spent a year in meditation during which time I gained insight on what a fulfilling venture would look like, and then I spent the next six months learning how to run Facebook Ads. Having gone on the keto diet during that period, I knew the answer would be a healthy food startup.”
Jaron and Yo teamed up with their long-time friend Raymond Bailey, a New York City chef trained at the French Culinary Institute, later turned software developer.
“We were primarily looking at two markets of interest to us: pet food and keto snacks,” according to Ray. “I had personally developed a fresh pet food that healed my own dog Willy when he was having health issues, so this was a direction I was familiar with and very passionate about.”
The problem? The pet food industry is rife with fresh food competitors including the likes of Farmers Dog, Ollie, NomNom, PetPlate, and many others. Yumwoof had to find a way to differentiate itself in the market.
“My core belief is that differentiation is the most important aspect to creating a successful business. It’s much easier to gain customer interest when you’re offering something unique that stands out,” said Jaron.
In this competitive $90 billion market, what was missing at the time was a dog food brand that had all the benefits of fresh food but didn’t require refrigeration. This combination would allow high-quality food to be sold at a more affordable price.
The team’s technical backgrounds paid off. Their primary challenge was converting Chef Ray’s fresh dog food recipe into a shelf-stable product without the use of any artificial preservatives. This, they say, was the innovation they made in their first product: a shelf-stable, soft dog food called Perfect Kibble.
To fund the product’s launch, the co-founders sold a significant amount of crypto to pay for product manufacturing and Facebook Ads.
“I really believed in what we were doing, so I was confident in making the investment,” according to Yo Sub Kwon. “I was buying fresh dog food at the time and found it irritating to use, so I was solving a personal pain point.”
After a year in product development, their new idea turned out to be an instant success generating $26k of sales in the company’s first month.
Now on the tail of Perfect Kibble’s success, the team is bringing their next product to market, which they believe will be an even bigger hit with customers.
That product, Perfect Dog Food Mix, could be viewed as something like “Betty Crocker for dogs.” It’s an easy-to-use dry mix that lets dog owners easily make homemade dog food with a variety of proteins. Interestingly, they’ll even have a vegan recipe for it.
“Perfect Dog Food Mix is really a reflection of my own evolving interests and learnings,” according to CEO Jaron Lukas. “Research studies show how dangerous processed foods really are. I wanted a way to feed my dog a low-carb, homemade whole foods diet—essentially a paleo diet for dogs. This product fills that gap in the market.”
While the company is tight-lipped about other products they have in the works, they expect to launch another seven SKUs by the end of 2021.
What do Yumwoof’s co-founders believe is the primary reason for their success to date? All three unanimously agreed it was pre-market testing. Before launching any new product, the company has been running in-depth tests to ensure there’s high demand before moving forward.
“Our initial market tests for Perfect Kibble in April 2020 showed a $7 CAC and 3.7x ROAS. Once we reached 100 orders in less than a month, we had enough positive market data to feel confident in greenlighting it,” Jaron told us. “We’re using a similar strategy for the other products we’re bringing to market.
For instance, we had an 8% conversion rate on our tests for Perfect Dog Food Mix and have already pre-sold hundreds of units.”
Entrepreneurs with digital assets take note: it may be worth selling some of your crypto to fund a new consumer products company. Yumwoof Natural Pet Food is an example of how the ethos of disruption can also be applied to other industries outside of traditional tech.