How ButcherBox booted to $600 million in revenue • TechCrunch

How ButcherBox booted to 0 million in revenue • TechCrunch

Some of the The best companies only arise because they found a problem worth solving.

For Mike Salguero, CEO and co-founder of ButcherBox, the problem and opportunity in the extraordinarily fragmented space of meat production and distribution simply could not be ignored. Armed with an idea of ​​how to do things differently, the company executed a Kickstarter campaign back in 2015, which caught the attention of its first thousand customers. From there, the company has continued to grow.

At the recent Creative Technologist conference organized by the venture capital fund Baukunst, Salguero shared that the company has seen $600 million worth of revenue without taking a penny of outside investment and spoke about some of the lessons he learned along the way.

a rocky start

ButcherBox is not Salguero’s first rodeo. His first venture 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 he raised, the company was not successful. “My experience was really bad. We lost everyone’s money, so I felt a lot of shame,” recalls Salguero. “In the end, I had become so diluted that I owned only 5.5% of the company. TThe business failed and we ended up bankrupt, losing everyone’s money.”

After that, Salguero decided to walk a very different path with his next company, which he started after facing a very personal problem. His wife has thyroid disease, and in the process of going on an elimination diet to find out what foods she might be intolerant to, they learned about grass-fed beef. However, this type of meat was hard to find in Boston supermarkets.

“WWhile CustomMade was falling apart, I started calling the farmers and asking if I could buy half the meat,” laughs Salguero. That’s a lot of meat, and he describes it as “basically two garbage bags full of meat.”

“I was meeting meat farmers in parking lots, buying a couple of garbage bags full of meat; I’m sure that didn’t seem incomplete 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.”

Some of his buyers repeatedly told him that it would be much better if the meat was delivered to their homes, and thus the basic idea of ​​ButcherBox was born.

meat in the mail

“I became obsessed with the idea and started researching how to send meat through the mail. I had no idea how to do it. But I’m a big believer in finding people who have done something before and then asking them for help. It skips a lot of the hard work,” explains Salguero. “I found the former COO of Omaha Steaks, which was the big mail-order steak giant at the time. 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 beginning.”

Then everything started to happen at once. Salguero was fired from CustomMade and although he had aspirations to take 100 days off, go on a silent meditation retreat and recharge, he threw himself into building 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 raise money again. There would be no need to raise funds, he thought to her, since he wanted to do this as a hobby and not as a big business.

I’m only going to invest $10,000 in this,” Salguero recalls deciding, adding that he promised to keep things light and easy. “I gave stock to the Omaha Steaks guy, and I gave stock to the brand studio, which in hindsight was a mistake, because it was too low-valued.”

Mike Salguero, CEO of ButcherBox

Mike Salguero, CEO of ButcherBox, speaks at the Baukunst Creative Technologists conference. Image credits: Haje Kamps / TechCrunch

All aboard the rocket

“We agree with vegetarians.” Mike Salguero, CEO of 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 soon converted many of the pre-order customers into subscribers, and the rest is history. The company went from revenue of $275,000 in 2015 to $5 million in 2016, then $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 signed up for delivery services like there was no tomorrow. In 2019, the company had revenue of $225 million, but tailwinds from the pandemic nearly doubled its top line to $440 million. In 2021, the company registered $550 million and this year, Salguero is optimistic that his company will surpass the $600 million mark.

“All this time, I’ve been on a rocket ship,” says Salguero.

Beyond the numbers, the company has stayed true to its original mission of trying to make a difference.

ButcherBox became a certified B company in January 2021joining the ranks of other companies at heart like Allbirds, Ben & Jerry’s, King Arthur Flour and Patagonia, and further strengthening its aspirations as a company that takes a stand.

Grow without external investment

Figuring out how to build and grow a business without outside investment is an exercise in scrapping, but Salguero’s team had a few tricks up its sleeve, starting with the Kickstarter campaign and various communities that cared deeply about how and what they eat.

The company figured out how to grow its path to success by turning to bloggers and nutritionists. “You said eat grass-fed beef,” the company would tell them and created an affiliate model to help incentivize them to promote their products. “WWe don’t have any money, so we can’t pay you up front, but we’ll pay you for every box that person gets, and we’ll make sure they get like $10 or $15,” Salguero said. .

Much has changed since the early days. Today, the company is paying much more up front to gain access to clients.

“The decision not to raise money forced us to make those kinds of moves. We created a moat around the entire paleo/keto/CrossFit world with all the influencers.” Salguero remembers. “All of those influencers are still getting checks from us, and some of those checks are $5,000 to $10,000 a month. They’re not going to represent someone else’s stuff, because they don’t want to stop that stream of income.”

The company basically stumbled into influencer and affiliate marketing, staying nimble in the process.

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