Some The best companies only show up because they’ve found a problem worth solving.
For Mike Salguero, CEO and co-founder of ButcherBox, the problem and the opportunity in the extraordinarily broken space of meat production and distribution simply could not be ignored. Armed with an idea of how to do things differently, the company launched a Kickstarter campaign in 2015, which caught the attention of its first thousand customers. From there, the business grew steadily.
At the recent Creative Technologist conference hosted by venture capital fund Baukunst, Salguero shared that the company made $600 million in revenue without taking a penny of outside investment and talked about some of the lessons he learned along the way.
A difficult start
ButcherBox isn’t Salguero’s first rodeo. His first company was CustomMade.com, which raised $30 million in venture capital from First Round Capital, Google and Atlas Ventures in a series of funding rounds.
But despite all the money she raised, the venture did not succeed. “My experience was really bad. We lost everyone’s money, which I was very ashamed of,” Salguero recalls. “At the very end I had diluted myself so much that I didn’t own than 5.5% of the company.The business failed and we ended up going bankrupt, losing everyone’s money.
After that, Salguero decided to follow a very different path with his next company, which he started after facing a very personal problem. His wife has a thyroid condition, and while following an elimination diet to find out what foods she might be intolerant to, they discovered grass-fed beef. However, this type of meat was hard to find in Boston supermarkets.
“WAs CustomMade collapsed, I started calling farmers and asking if I could buy half a slice of meat,” laughs Salguero. That’s a lot of meat, and he describes it as “essentially two trash bags full of beef.”
“I was meeting meat producers in car parks, buying a few trash bags full of meat – I’m sure it didn’t sound suspicious at all,” he said. “But it was too much meat for my freezer, so I ended up selling the excess meat to friends or people I worked for.”
He was repeatedly told by some of his buyers that it would be much better if the meat was delivered to them, and that’s how the basic idea for ButcherBox was born.
meat to mail
“I became obsessed with the idea and started researching how to mail meat. I had no idea how to do it. But I’m a big proponent of finding people who have already done something. thing and then ask them for help. It saves a lot of the hard work,” says Salguero. “I tracked down the former COO of Omaha Steaks, who at the time was the big juggernaut of meat in the mail. And he just said ‘Oh, yeah, my non-competition just ended. I’ll be happy to help you. He put all the pieces together at the start.
Then it all started happening all of a sudden. Salguero was fired from CustomMade and although he longed to take 100 days off, do a silent meditation retreat and recharge his batteries, he set out to build ButcherBox less than a week later.
He hired an intern and launched a Kickstarter campaign in September 2015, a decision made out of desperation to never fundraise again. Fundraising wouldn’t be necessary, he thought, because he wanted to do this as a hobby rather than a big business.
“I’m only going to put $10,000 into this thing,” Salguero recalled, adding that he was committed to keeping things light and easy. “I gave equity to the guy at Omaha Steaks, and I gave equity to the branding studio, which in retrospect was a mistake, because I had way too low a valuation.”
All aboard the rocket
“We are ok with vegetarians.” Mike Salguero, CEO, ButcherBox
The company had a goal of $25,000 for the crowdfunding campaign, but ended up raising eight times that amount in pre-orders. It quickly converted a large number of pre-order customers into subscribers, and the rest is history. The company grew from revenues of $275,000 in 2015 to $5 million in 2016 to $31 million in 2017 and continued to grow.
When COVID-19 hit, the meatpacking industry didn’t do well, but ButcherBox’s revenue continued to grow as people started subscribing to home delivery services. home as if there was no tomorrow. In 2019, the company made $225 million in revenue, but tailwinds from the pandemic nearly doubled its revenue to $440 million. In 2021, the company recorded $550 million, and this year, Salguero is optimistic that his business will surpass the $600 million mark.
“All this time I’ve just been on a rocket ship,” Salguero says.
Beyond the numbers, the company has stayed true to its original mission of trying to make a difference.
ButcherBox became a Certified B Corp in January 2021, joining the ranks of other forward-thinking companies such as Allbirds, Ben & Jerry’s, King Arthur Flour and Patagonia, and further cementing its aspirations as a company that takes a stand.
Growth without external investment
Understanding how you build and grow a business without outside investment is an exercise in scrappines, but the Salguero team had a few tricks up its sleeve, starting with the Kickstarter campaign and a number of communities that cared deeply about how and what they ate.
The company discovered how to successfully grow by using bloggers and nutritionists. “You said eat grass-fed beef,” the company told them and created an affiliate model to entice them to promote its products. “WWe don’t have any money, so we can’t prepay you, but we’ll pay you for every box that person gets, and we’ll make sure you get about $10 or $15,” Salguero said. . .
A lot has changed since the early days. Today, the company pays much more to gain access to customers.
“The decision not to fundraise forced us to do this kind of thing. We created a divide around everyone Paleo/Keto/CrossFit with all the influencers,” recalls Salguero. “All of these influencers are still getting checks from us, and some of those checks are between $5,000 and $10,000 a month. They’re not going to represent someone else’s business, because they don’t want to stop that revenue stream.
The company basically fell on influencer and affiliate marketing, staying lean in the process.