How to beef up your business, with ButcherBox CEO Mike Salguero

Introduction to Founders

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1:19Hey folks, Jeff Berman here. I am thrilled to share some of the new names who will be joining us at this year's Masters of Scale Summit. This may be our biggest stage yet. Reed Hastings, Meredith Whitaker, Van Jones, Amjad Massad, and more will be there with us October 20th through 22nd in San Francisco. If you're building something great or you want to build something great, we want you there with us too. Join us at mastersofscale.com slash apply 26.

1:51That's mastersofscale.com slash apply 26.

Building a Team

2:15Maybe they know how to use a compass and then eventually you get to a road. When you get on a road, you kind of need people who know how to drive cars. If you just go for the car drivers, then you lose the hacking culture. Like you're willing to do whatever it takes to get this thing off the ground. This is Masters of Scale. I'm Jeff Berman, your host this week on the show, Mike Salguero.

ButcherBox Founder

2:46Mike Salguero is the founder and CEO of ButcherBox, which he has bootstrapped into a $600 million revenue business. Do I have that right? Yeah, we're hoping to do $6.50 this year. Okay, $6.50 has been D2C and is now in Target stores nationwide. Mike, welcome to Masters of Scale. Thank you. Long-time listener. I'm thrilled to be here. We're thrilled to have you. Let's start at the beginning. Where did your entrepreneurial journey begin, Mike? Well, I had a paper route when I was 10 years old, which wasn't quite entrepreneurial. Should we explain what paper routes are to the younger people?

3:19Paper routes are where you pick up a stack of newspapers, 35 of them, and deliver them every day, six days a week, rain or shine. So you had the bug early. You were out hustling. Out hustling early. I went to school in Boston, and I did a bunch of sales jobs. And I got out of school and started doing real estate rentals, which was a very entrepreneurial, sales-focused thing. And on the side, I started a little t-shirt company. And my first t-shirt was a shamrock, and it said Boston on it, and sold it during St.

3:53Patrick's Day. And I had like 100 shirts that I paid $5 a shirt for, and I sold them for $10 and made $500, like the fastest I'd ever made money. Well, you knew your market pretty well. Yeah, yeah, yeah. Bostonians love St. Patrick's Day. And then I did another t-shirt. This was in 2004 during the George Bush, John Kerry election. And the t-shirt said Buckfush on it. And we sold 17,000 t-shirts over the course of like a two-month period.

4:24Wow. And so, I mean, this is still pretty early days of e-commerce. Yes. So were you selling this through Amazon, through your own website? Mostly like at festivals, door-to-door, set up a booth. I had salespeople. I was in a few stores and had sold all these t-shirts, but I didn't have any money. I was like, where did all the money go? What happened here? Where had all the money gone? I think it went to like, you know, we'd go out at night with backpacks full of t-shirts and go to the bar and sell them or, you know, and then use that money to buy drinks.

4:58And that's where the money went. And so I ended up like having this realization that I didn't know what I was doing and I wanted to go get a real job. So I worked as a real estate developer for three years, got my MBA at night at Babson, which is known for entrepreneurship. And then left that and started my first company. Ran that for eight years. What was the first business? First business was called custommade.com. And we bought this listing service from a woodworker who had built this. He built it in 1996. We bought it in 2008.

5:29And he had 350 of the best woodworkers in the country on this website. And when you talk to them, they're like, I get all my business from that website and I pay $35 a year for a subscription. And so my co-founder and I decided that we were going to try to buy the website, make it better because this was 2008 and the website, you couldn't log in and manage your own profile. So easy things like that, like, oh, we'll just make this. It'll be super easy. And then expand it out of woodworking into other things custom. We raised venture capital and we moved from focusing on a listing service to focusing on

6:05a marketplace where we took a marketplace fee for everything that went through, which wasn't really a good idea. Why not? I mean, it's the eBay, Etsy, right? The challenge with the idea was a custom transaction. Like if you're going to get a custom dining room table, you want to do a tremendous amount of back and forth with the maker. And you think about these makers, they're not necessarily tech savvy. This is like 2011, not necessarily tech savvy, might not even have a cell phone yet. And we're asking them to interface with a consumer on our platform so we can keep the

6:38platform fee. It didn't work. They were just going around the platform. They were going around the platform. They were complaining that they had to be on the platform. They didn't want to pay the platform fee once it was, once the transaction had happened. They thought it was unfair since they had to do so much work. Um, but we had raised money, uh, on that idea. So in 2011, we went out and, uh, we raised money from Google and first round capital and a few other top shelf VCs and, um, they bought into the marketplace concept.

7:10Uh, and it became pretty clear that the marketplace wasn't going to work. Um, but we couldn't like, we couldn't go back because we had already chosen the train of marketplace VC capital. And, and it wasn't going to work because on Etsy, for example, the product choices are limited. There's only so much customization or even on Airbnb, like, you know, you may need to communicate with the host about, can we get an early check-in or whatever it might be, but it was the level of the customization that made it hard. Yeah. If you think about what most people think about with custom, it's like you can monogram the

7:44thing. That's it. Yeah. Um, my co-founder actually still runs custom made. It's now a jewelry website and you can fully customize things. Um, but just in jewelry and they now do all of it themselves. That's a much easier, better way to do it. Sure. We had, uh, 60 people at our height. Um, we were burning like half a million dollars a month, um, and just, you know, flooring it towards a wall that we kind of all saw.

Lessons from Custom Made

8:08Why was there not a pivot available? Like, I mean, if they've pivoted the business or evolved the business sense, what was happening when you were, you were accelerating toward that wall and you could see you were going to slam into it where you couldn't hit the brakes or, you know, jam the steering wheel to the left. It was so attractive, this idea that you could be a marketplace for custom stuff. And that's what we sold our, our venture capitalists on. And we raised about $30 million. Um, because at the time Airbnb, Uber, there are all these like third-party marketplaces that had, had sprung up and they were doing really well.

8:38So when we wanted to go back to a listing service or some sort of other model, uh, we got a lot of pushback, a lot of like, that's not what I invested in. I didn't invest in a listing service. I invested in a marketplace. If I had been older and wiser and better, I probably would have said, I don't care. I'm doing what's best for the business. Um, but that's not how it, that's not how it happens. If an entrepreneur were coming to you today under these circumstances, it sounds like your advice would be like slam the brakes or like grab that steering wheel and twist it. If you know, it's going to fail.

9:10Yes, but it's very hard. So what they don't talk about is the, you know, the phone calls where, um, if you guys don't do what we say, you're probably going to be blackballed. You'll probably won't be able to raise money again. You know, it's a, you're dealing with these powerful venture capitalists and, um, they can get in your head. I just want to spend one more minute on this because I think that this is, um, an under discussed challenge for founders where, uh, they go sell investors on a vision and a dream. That's what the investors buy into your operating.

9:42And as you're operating, whether it's a design problem or a product problem or a business model problem, you realize that something material to what the investors bought into actually isn't going to work. And so how, how does a founder stay in integrity with themselves? How do they fulfill their responsibilities to their stakeholders, to their team members, to their customers and partners while also dealing with potentially some of those powerful VCs in the world saying you do it our way or basically you'll never work in this town

10:13again? Yeah. I mean, um, I think that that's really hard. I would say that I lost my integrity. Um, I knew what was, well, I thought I knew what was better for the business. Um, but when you have, you know, top VCs telling you not, it wasn't always a threat, but it was just like, no, this is the way you should do it. You know, as somebody who was young, was my first company, it was like, okay, well, they must know better than me. I talked to lots of people who are trying to raise money these days and I try to tell them that there is a path of bootstrapping, which, um, I'm happy to talk about, but you

10:47go out, you try to raise money. We, we went on about 75 different pitches, uh, and then we got a check, right? And when there's that dynamic, you don't really think about the person that you're going to be locked to for 10 years, but you don't, you don't go through the whole, you don't really go through the dating process. It's like, oh, they'll give me a check. Okay, great. Like, I'm tired. I should take that check. I need the money. Put a ring on it. Yeah. Let's go. And so you don't really necessarily think about what happens if this goes sideways. Yeah. And we had a lot of, uh, we had negotiated really well.

11:19We had a lot of like rights, like they couldn't overthrow us. They couldn't out vote us. Um, but even still a lot of pressure for us to kind of do what the original plan was, even if it didn't seem like that was going to work out. What happens to, to end your time at custom it? We ended up, um, doing a, um, a transaction with Wayfair, which was another business in Boston. Uh, all of our employees were able to get a job at Wayfair, which was nice. Um, except for me. Uh, and yeah, we, we had a party and, uh, closed the gate.

11:52It was this big iron gate and put the lock on it. And that was it. That was the end of it. And, uh, that was right before Memorial Day weekend of 2015. And I had been, um, buying a lot of grass-fed beef, uh, because my wife and I were trying to clean up our diets. And so then I just started asking the question, like, how would you deliver meat to someone's house? And Omaha steaks had been doing it for a long time. So I knew there was like a way to do it. Just couldn't figure it out. When custom made closed, I took the weekend off and then decided that I was going to start, I was going to spend the summer trying to spin up this concept of delivering meat to

12:27your door. So you gave yourself a whole weekend of a break between the- It was a long weekend. Yeah. Okay. Fair. All right. Three day weekend. Right. Memorial Day. Here we go. Yes. It just felt like that opportunity was like, I needed to like move on immediately. What was telling you? Was this head? Was this heart? Was this gut? Was this, what, what was animating you to say, F it, I'm going to get going? I think it was heart and gut because rationally I was burned out and that was probably a bad idea. I really wanted to like keep doing business, but I wanted to do it differently.

12:59I wanted to do it my way. And so even when I started ButcherBox and to this day, my Fridays, I stayed at home. I was like, I'm not working on Fridays. I'm just going to like hang out with my daughter. And so I tried to build in the breathing time in the space of starting the company. When you start a company, in my, in my experience, at least there's, there's not that much to do right out of the gate. During that time, during that summer, I was working out twice a day. I was spending a ton of time with my family.

13:32I was. I mean, this one's completely counter to most people's idea. And I think a lot of people's experience in starting a company. Yes. Because it's not like you were pre-product, right? I mean, you, you at least had like, you had some of your supply chain teed up. The big unlock for the business was I met, uh, the former head of operations of Omaha stakes, who was like, I can introduce you to some people. And he introduced me to one place in Wisconsin, which cut meat and also shipped it out. So it was like a one-stop shop. Okay. And the summer we spent, um, trying to figure out, uh, what a Kickstarter campaign would

14:04look like. So we launched on Kickstarter. My idea was I'll put $10,000 into this business for, for everything. And if it doesn't work, it doesn't work. And the Kickstarter will tell us if this is something that customers want. Right. We'll get, we'll get some product market fit signal very quickly. Yes. Yeah. Yeah. And when we launched, you know, fast forward to September, we launched in September, we went out to raise 25,000. And I think at the first day we raised 50,000 and did 210,000 within 30 days. So it was like, whoa, there's a, there's a there, there.

14:35Looking back on it, can you see what, what hit? Why did, why did the Kickstarter community leap on this? For one, our timing was incredible. I think that's an oftentimes not talked about thing in entrepreneurship is like timing is, is a big component of your success. Uh, two days before we launched the Kickstarter consumer reports, the cover story was the case for grass fed beef. So it was like pretty good timing. Yeah. Pretty good timing. Yeah. So you launch on Kickstarter, you have this like pretty exceptional momentum. What had you learned from custom made aside from the investors piece, which I want to,

15:09I want to come back to next, um, that informed how you, you built culture and team at ButcherBox? Yeah. So, I mean, the first thing that I did that I think was, uh, really important was I hired an intern. So, uh, on that Tuesday after Memorial day weekend, I had a, um, a college freshman, um, knocking on my door at eight 30 in the morning saying, okay, what are we doing? And he was going to work all summer for me for $10 an hour.

15:44It turns out that Bobby, uh, has now tells the story that the only reason why he applied was I was the only job, uh, that didn't need, didn't require a cover letter. So he's like, perfect. Sent in a resume. I think it was like, I might've been the only resume I got, but I met him. I was like, this will work. And we just, uh, we, we started working together. And I think it's important because I oftentimes meet founders who, uh, they, they believe they have to do everything. And if you believe you have to do everything and you aren't willing to outsource anything to anybody else, um, you will work 24 seven.

16:16Yeah. Uh, the trick I believe, even when you're starting out is to bring people around you, know what you're good at and bring people around you. So I had the benefit of, um, I had been the CEO of a 60 person company. I kind of knew what that was like. I knew what I didn't want to repeat this time, certainly culturally, but also I knew myself well enough that if I had to like, just start working on Tuesday myself, I don't think I would have like launched this thing. I needed energy and people around me to like kind of push me through the doubt and the failure

16:48and all the, all the things I was carrying with me. If the butcher box story we're starting today, would a Bobby GPT be as valuable for you as Bobby the Babson student was? One of Bobby's, um, biggest ahas for the business was, um, so as I said, we were going to ship grass-fed beef in the mail. Um, and I was like, why don't you stand outside of Whole Foods, pretend you're a student and just ask people, would they ever get this delivered to their door? And, uh, he, he came back and was like, yeah, no, like no one's going to spend the, the price

17:23was $129. No one's going to spend $129 a month on beef, but if you offer chicken or pork or seafood, they will. And so all of a sudden we went from like, we're doing grass-fed beef to actually we're doing everything and we're going to compete against the butcher. Uh, I don't think Bobby GPT would have gotten that. Yeah. Um, I think you needed a human being to, to figure that one out.

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18:18Hey listeners, Bob here. If you listen to rapid response on masters of scale, you may be missing half the show because every Friday we release a second rapid response exclusively in the rapid response feed. The guests and topics are just as compelling and timely from Ford CEO to NASA's administrator to the lessons from the devil wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts

18:48and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There's going to be two types of companies. Those are great at AI and those that went out of business because they weren't. How do we build a future that is human-centered? I'm Rana Elkayubi, and on my podcast, Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for

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19:38You said that you started building with cultural principles that included what you learned from custom-made. What was key in terms of what was different there? There's this idea that startups are like hacking through a jungle with a machete. At the very beginning, what you need are people who are willing to hack aimlessly because you don't know where you're going, but just work night and day and just keep hacking until we find a path. And then you're just like, ooh, okay, here's a path. Let's take the path. And then you start needing some people with a little bit more experience.

20:09Maybe they know how to use a compass, and then eventually you get to a road. And when you get on a road, you kind of need people who know how to drive cars. If you just go for the car drivers, then you lose the hacking culture. And not hacking like computer, like coding, hacking like you're willing to do whatever it takes to get this thing off the ground. My first company with custom-made, when we raised venture capital, we essentially turned around to our team and were like, none of you know how to drive a car, do you?

20:43And we have to leave you here in the jungle. And so all these people who had worked for three, four years to help us build something really great and fundable, we left them. And we went and hired people who had worked at AOL and had really fancy resumes. And the reality is you need a mixture of the two. That's the big lesson that I learned at ButcherBox is you don't want to just have people who have a lot of grit and no experience, but you also don't want just people with a lot

21:14of experience because they kind of forget the grit as they go along. Well, particularly if it's big company experience and they're used to like, oh, I did one thing this week. Right. Hierarchy, meetings, process. Process. And it's like we hired people as if we had product market fit and we didn't have product market fit. And so this time around, I was like very focused on taking the people, like taking risks on people. The group of people who started with me, like had no one had any experience.

21:45We had no experience with meat. We were just like, let's do this. And for whatever reason, I sniffed out grit in each of them, whether it was they were a D1 athlete or they had some sort of like some sort of chip on their shoulder. Hired my first meat person, um, a year into the business and he was, um, 65 and had retired. Uh, he had worked at, um, uh, BJ's for 27 years and, um, he represented this like kind of like a ton of experience.

22:16Uh, but what I found with, with older people is, um, which I, I, I still think this is a great way to run a business. What I found with older people is like, there's really no ego. They're not, he's not trying to build his career. He's just like trying to do something meaningful and fun. And so to pair him with somebody with no experience and a lot of grit was like magical. I called it the barbell strategy. So there's like, you know, you have two ends of the barbell and really like nothing in between. There was very few people who were like mid career at the beginning. It was either early career or end career.

22:47It sounds like my, the, the initial thesis, um, none of this is easy, but it is more of a straight line to say we're, we're doing grass fed beef. That's what we're doing. Bobby comes back from his whole foods, you know, survey trip and is like, Mike, like we kind of got a problem here, right? Like we need to do chicken. We need to do fish. We got like, that's what people are saying. They'll buy that. But it feels like that is, um, orders of magnitude, if not exponentially more complicated. How did you approach that expansion?

23:17It doesn't sound easy. Yeah. Um, so the, the question around what's the equivalent to grass fed beef in other species, there's a better way to raise an animal. Um, so people were looking for that back then. Uh, we actually didn't start with seafood. We, we launched seafood maybe a year later because it was too complicated. It was pretty clear what claims people were looking for, but the, the facility in Wisconsin that was doing all of our product was able to do all three of those species. Oh, okay. And so when we launched, launched with a Kickstarter, it was, you could pre-buy a box and we had

23:49some other goodies and prizes as well, but you could pre-buy a box and, and you would choose your species. So it would be either all beef or beef and chicken or beef, chicken, and pork. Um, those are the three options. And because we didn't raise any money, um, the idea was we were just going to send you whatever we wanted to. Um, we were just going to send you what we felt was a great value for your, your subscription. But really the reason why I did that, um, and I believe that, uh, you need to constrain yourself, like constraining yourself is really important in entrepreneurship.

24:20I didn't want to have, Hey, you can just choose whatever you want because then you have to have inventory. And so we had seen blue apron, we had seen the hello freshes and the blue apron lookalikes that were all just shipping whatever they wanted to. And I thought that could, that could work. Um, and so we, yeah, we launched with a, uh, curated box, the butcher selections, um, and all people chose was the species. Right. Right. But it's ultimately was a, you get what you get and you don't get upset. And if you do get upset, then, um, we'll do better next time because for us as a subscription

24:55business, subscription businesses are great because if you delight the customer, you keep them and then you get that revenue next month. And so all we were trying to do was build the best boxes possible so that people stayed. Yeah. I mean, committed monthly recurring revenue is a really beautiful business model. It sure is. Yeah. Uh, it's tough. It's a, it's a tough, it's tough to delight your customer, but it certainly puts your focus on the exact same thing the customer wants. Yeah. Well, and, and, and it's not truly committed, right? I mean, you have to earn it every month. Right. That's right. What happens next?

25:26You, you, you have this successful, successful Kickstarter campaign. You've got money in the bank. You've got a facility in Wisconsin that's able to fulfill. Um, now you got to build and run a business. Yeah. So what, what, what happens next? Yeah. So, um, we, we, the Kickstarter was a 30 day campaign and then we immediately launched our website and it just kind of started working right away. I mean, the first week we probably had, I don't know, 30 people who signed up and then

25:56it was 50 and then it was a couple hundred and, and we shipped out our boxes early to all of our, uh, Kickstarter people, um, and then called them all up, um, which I didn't do. Cause again, I wouldn't have done that. Uh, but I, I found some guy, um, who made 400 phone calls or whatever it was. Uh, and he's like, just checking in. Do you need any recipes? By the way, we're a subscription business. Do you want another subscription? And so he was able to, he was able to convert 30, 30% of them took, I don't know, four or

26:30five months to get a thousand subscribers and a thousand subscribers when you're doing $129, uh, dollars a box is, you know, that's a, you're already over a million dollar business. Yeah. And so at that moment, I have to imagine you've got some investors who are going, well, like, you know, there's, there's some early signs of product market fit here. You got a million dollar run rate and, and growing our, our, our venture capital is starting to, to reach out. Yes, for sure. Uh, including the ones that I had just lost their money. Um, you know, like, uh, I actually, that was like a really, really important moment for

27:06me. Uh, and I think for people to really understand is you talk to these venture capitalists afterwards and they're like, no, don't worry about it. Like most of these go to zero anyway. Like they didn't care at all. Like all this like guilt I felt about how I was losing everyone's money at, they're like, yeah, it happens. Can I invest in your next thing? You know, it's like literally that easy. Um, yes, there was a lot of, uh, external interest, um, in the early years of Butcher Boss. So whose money did you take? I didn't take any money. Oh, you didn't take any money? Yeah, no, no. Why not?

27:37Unfunded. At the very beginning, I had had such a bad experience. I had felt like I got so burned and I lost myself. As you said, I like lost my integrity. I didn't want to introduce that. Um, and then as time went on, we figured out how to build a positive cash cycle, cash conversion cycle. So we didn't need a lot of cash. We were growing well. Uh, we were having a great time. And so it just kind of became like, well, maybe, maybe this is what we're supposed to

28:07do. So, and then you fast forward a few years after that and Blue Apron went public and then they proceeded to, in 2017, so this is two years after I launched, they went public and then their stock crashed. And so any money that was like available for box subscription food companies disappeared. Disappeared. And so I actually, I, I don't think I'd be around right now if I had raised money. Why? Well, I would have raised money in 2015 and I would have been on like an 18 to 24 month, like, you know, runway where I'm supposed to spend all that money.

28:39Right. And so I would have been out looking right when Blue Apron went under. What would you have done with the money such that you would have been in such a hole and not have been profitable two years later? Marketing. That's where most of these, most of the money goes to in these businesses. Um, and so at the time there was Blue Apron and there was like a hundred Blue Apron lookalikes and they were all spending gobs and gobs of money on Facebook. And so if I had raised money, it would be like, where should we advertise? Facebook. And we would have just plowed money in to Facebook. Instead, what we did, again, the constraint helps.

29:12Um, we said, okay, we're making like $20 on every box we're shipping. Uh, so we need to be box one profitable. Meaning the first box that leaves a facility, like I need to have marketed it for less than $20. And so that forced us to find very different acquisition channels. What did you find? Influencers. Um, so we went out to all of these nutritionists and paleo enthusiasts, the people whose blogs I was reading when my wife and I were trying to clean up our diets.

29:43And we said, Hey, like I started this company because I read your blog and then I couldn't find a source for grass-fed beef. Would you send an email to your audience and tell them about this, uh, about this product and here are all the attributes and here's why we're doing what we're doing. And, uh, by the way, we can't pay you up front, uh, but we can pay your residual. So like an affiliate fee, basically. Yeah. But like, instead of an upfront one, it was like every month that that customer, uh, stays, you get a check. Okay. So it was an affiliate fee with a tail. So basically you, you acquire as a customer who's a three, four year lifetime customer or longer.

30:18Yep. You're the money's just going to keep coming. You're getting 10 bucks a month. Yeah. And lots of people said yes to that. First year we did 5 million. The second year we did 35 million and then a hundred million, pretty much up to 50 million. That was our only marketing. And, you know, the constraint of not having money, uh, forced a discipline both on the acquisition side, but also on the operational side where it's like, if we're only making $20, well, how do we make $21? Well, I just negotiated a new box price and it's a dollar cheaper, or I just negotiated

30:51new dry ice, or I just negotiated the price of, uh, the tape that like fixes the box. And so we, we just, um, that's one of the things I still love about the business is it's like, there's a lot of creative marketing stuff and then there's a lot of like hardcore operational where all the money's made, where you, you, you just need to be ruthless about negotiating and dropping costs that don't hurt the customer at the end of the day. The best moves are ones that like you can get the same product for cheaper and you don't

31:23hurt the customer. Really ultimately what we've built over the past 11 years is, um, a brand that people trust. We, we've never cut a corner and we always are like, uh, transparent with our customer. We're just constantly, um, trying to do something different than the meat industry has done. The meat industry is pretty broken in this country. Um, a lot of the labels are just confusing and people don't understand what they're eating and, um, really the industry has been built since the 1950s on cheap food, safe protein

31:58and don't ask a lot of questions about how it's been, what's, what's actually happening behind the scenes. And with a more educated customer, a more health conscious customer that doesn't work anymore. Customers want, um, first of all, they want something that they feel meets the their ethics and their integrity. And secondly, um, they want more information than just, uh, just like, trust us. It's good. It's good. Mike, as you're scaling to $650 million in revenue and beyond, how are you ensuring that

32:29this, we don't cut corners. These are core values for us, um, stays in an organization. Yeah. I think it's easier if I'm in charge still. Um, but if I was to step down or if I was to get hit by a bus, um, that's where I started to get concerned. And so in 2020, we, um, became B Corp certified, which is a rigorous, uh, third party audit of your business, of what you do, of what you stand for, who your partners are, uh, what

33:00your impact on the environment and community, like a whole bunch of different, um, questions. Um, and that is the thing that I, um, fall back on now. So, uh, part of the B Corp certification, you can change your corporate bylaws to specifically state that you are not making decisions just for shareholders. I don't see how a company can be built, a company that wants to do the right thing can be built in the right way. If you are just supposed to make decisions to make people more money. Is going public an option?

33:30Uh, it, it is, but, uh, no, there are very few publicly traded companies that are like B Corp or take, take that path. Uh, I think it's a hard path to take where you are not going to just care about your shareholders. Um, if we did it, it would be really be like a non, a very small piece. But then I, I, I come to the question of like, why, like, why would you, like, why would you sell the company? Why would you go public? Generally, either you're sick of the business, like you're like, get me out of this thing.

34:03Um, or you need liquidity. I just finished reading Eric Reese's, uh, new book, um, which will be out by the time this episode, uh, drops. Um, and he, um, in, in one section of the book, he talks about companies like Patagonia and Costco, um, that because of their high standards and their sourcing, their ethical sourcing, um, they've changed entire industries, um, to your point about the meat industry being

34:33not, not the cleanest in the world. Um, how are you seeing the impact in the overall ecosystem because you all are now generating hundreds of millions of dollars, um, of, of better raised beef? Yeah, it's great. Um, the industry is changing. Um, the large companies are paying attention. Um, like I said earlier, uh, when, when we started, people couldn't find pasture raised grass-fed beef in their local grocery store.

35:04It's actually become easier for people to find that. Um, we still think ours is higher quality. Uh, but the, the, the industry has responded. Um, there's a meat conference every year, uh, which is a fun conference to go to. And it's high stakes, high stakes. Yeah. High stakes. Yeah. Sorry. Dad jokes. Yeah. It's good. Um, the first, I don't know, three or five years that we went to the meat conference, people like had no idea who we were. Now we're being asked to be on committees.

35:34We're being asked to speak. We're being asked to talk about like claims based, why this is important, both important as well as it turns out like a better, more resilient customer. Um, and so a lot of like the industry is changing. Yeah. Um, we like to say that we, we, we want to help small family farmers, like help them grow their business and also guide large companies. And we're willing to work with everybody as long as they're willing to do the right thing. And we can help, we can help smaller people scale up their businesses and we can help

36:06larger people do the right thing. The expansion into retail from DTC, what drove that decision and how has that experience been

Expansion into Retail

36:13for you? Yeah. So retail, um, reality is, so lots of people get groceries online. It's about 14 to 20% of the market, depending on how you look at it. The reality is even our customers go to the grocery store two times a week. The grocery store is where people go to buy meat and, uh, and produce and all the other things they're buying. Um, so if we want to be a brand, like an iconic beloved brand, um, we need to be in retail. That's, that's been the kind of the party line for several years. Um, we, uh, we found an amazing partner in Target.

36:47Um, Target was, is really focused on bringing like well-known brands into the store and highlighting them, um, and so that was a great kind of first step into retail. And, and now we're talking to lots of other retailers who are interested in carrying our product. Um, we actually represent something pretty interesting to the retailer, which is, um, most, most meat companies they deal with sell like chicken. For us, we are a wide assortment of different species and different products, uh, all under

37:18one label. So that's pretty interesting. Um, and the, the thinking is, and is turning out to be correct is, um, Hey, we spend all this money on advertising. We, we do a lot of things to get the word out about ButcherBox. Um, I wonder if that would resonate with somebody who goes to their local store and is like, Oh, ButcherBox, I've heard of this. Let me try it. It turns out it's, that's working really well. So we already have the marketing dollars in the market. Uh, we just need to be closer to where the customer is shopping. Are you seeing an uptick in your subscriptions since you started launching in, in Target and

37:53Costco? Yeah. Hard to track, especially when you go nationwide. Like if we had started in a region, that would have been easier to track, but because we went nationwide, it's harder to track. Good problem. Good problem. Markers that would suggest that people are trying our product and then purchasing are all up. Yeah. Awesome. Um, Mike, thanks for being a master of the skill. Yeah. Thanks for having me. Thanks again to Mike Salguero for joining us. It is incredible to see how Mike took the hard one lessons from his first business and turned them into the fuel and the wisdom it took to build ButcherBox.

38:23I'm eager to see how his thoughtful leadership can help ButcherBox continue to grow and help the broader meat industry evolve. I'm Jeff Berman. Thank you for listening. Thank you for listening.

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