Some of the best companies come about because they are able to solve a problem.
The problem and opportunity in the broken space of meat production and distribution can't be ignored. The company ran a Kickstarter campaign in 2015, which drew the attention of its first thousand customers, thanks to an idea for how to do things differently. The company has grown over time.
At the recent Creative Technologist conference organized by venture capital fund Baukunst, the company has seen $600 million worth of revenue without taking a penny of external investment.
Butcherbox isn't the first rodeo for the man. He started his first company, CustomMade.com, which raised $30 million in venture capital from First Round Capital and others.
The company didn't succeed despite all the money raised. The experience I had was bad. I felt a lot of shame because we lost everyone's money. I owned less than 5% of the company. We went bankrupt after the business failed.
After he was confronted with a personal problem, he decided to start a new company. He and his wife learned about grass-fed beef after doing an elimination diet to find out what she might be allergic to. It was hard to find this type of meat in Boston.
"W hile CustomMade was falling apart, I started calling farmers and asking them if I could buy a half share of meat." He described it as two trash bags full of beef.
He said that he met meat farmers in parking lots and bought a couple of trash bags of meat. I sold the excess meat to people I was working for because it was too much for my freezer.
Former ButcherBox execs leverage meat shipment expertise into new D2C startup
The basic idea for ButcherBox was born when some of his buyers told him that it would be better if the meat was delivered to their homes.
I began researching how you ship meat in the mail. I didn't know how to do it. I like to find people who have done things before and then ask them for help. It doesn't skip much of the hard work. The former head of operations of Omaha Steaks was discovered by me. He said that his non-compete was over. I will be happy to assist you. At the beginning, he put all the pieces together.
Everything happened at once. Even though he wanted to take a 100 days off after being fired from CustomMade, he decided to build ButcherBox instead.
In order to never raise money again, he hired an intern and launched a campaign on the platform. He thought that he wouldn't need to raise money as he wanted to do this as a hobby.
He promised to keep things light and easy, and decided to only put in $10,000 into the project. It was a mistake to give equity to the branding studio because I had a low valuation.
The CEO of Butcherbox is speaking at the conference. The image was created by Haje Kamps.
“We agree with vegetarians.” Mike Salguero, CEO, ButcherBox
The company had a goal of $25,000, but it raised eight times that amount. A lot of the preorder customers became subscribers. The company went from $275,000 in revenue in 2015 to over $30 million in 2017:
When COVID-19 hit, the meat-packing industry didn't fare well, but ButcherBox's revenue kept growing as people began to subscribe to home delivery services like there was no tomorrow. The company had revenues of $225 million in 2019. In the last two years the company has recorded $550 million and $600 million.
The man says he has just been on a rocket ship.
The company has not deviated from its original goal of trying to make a difference.
In January 2021, ButcherBox became a certified B corp, joining the ranks of other heart-forward companies such as Allbirds, Ben & Jerry's, King Arthur Flour and Patagonia, and further fortifying its ambitions as a company that takes a stand.
Figuring out how you build and grow a company without external investment is an exercise in scrappiness, but Salguero's team had a few tricks up its sleeve.
The company figured out how to growth-hack its way to success by tapping 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 its products. “We don’t have any money, so we can’t pay you up front, but we will pay you for every box that person gets, and we will make sure that you get like $10 or $15,” went their communications, Salguero said.
There has been a lot of change. The company is paying more for access to customers.
We made those kinds of moves because of the decision not to raise money. The entire paleo/keto/Cross Fit world was created with all the influential people in mind. Some of the checks are as high as $10,000 a month. They won't rep someone else's stuff because they don't want to stop their income stream.
Staying lean in the process is what the company stumbled into.
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