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Bootstrapping a Perishable Meat Business To Significant Scale: ButcherBox CEO Mike Salguero (Part 4)

Posted on Sunday, Mar 29th 2020

Sramana Mitra: What is the logistics of packaging this? What format are you shipping this in?

Mike Salguero: It’s basically pre-portioned. If you get a 10-ounce Ribeye, you’re going to get it in a frozen package. Right before Kickstarter, we realized that people didn’t just want beef. They wanted chicken and pork as well. We started offering all three.

We made the decision of what was going to go in the box. The customer didn’t make the decision. We curated what we thought they would like and then we shipped it out.

Sramana Mitra: What is the complexity of shipping frozen products? How do you package that?

Mike Salguero: It’s hard. It’s frozen. We ship with dry ice. Dry ice burns off at about 5 pounds a day in transit. You can put in 15 pounds and have it last three days. When we started, we shipped in styrofoam coolers which were ugly and very bad for the environment.

We never intended to have that be the last thing we would ship in. One of the things I tell aspiring entrepreneurs is to be an entrepreneur, you have to be okay with being bad at a lot of stuff. That’s just an example of us knowing that we knew we were going to fix someday. 

Sramana Mitra: Right. You had to get going with something that works.The Kickstarter campaign was a $21,000 campaign. How many customers did that bring you?

Mike Salguero: 1,152. 

Sramana Mitra: Those were potentially repeat customers also, right?

Mike Salguero: After we shipped out the first box, we then called everybody. We were like, “Hey, did you like your meat? We’re doing a deal right now where you can keep your subscription going.”

We ended up signing up 37% of the people who initially had signed up. We launched our website. This business has just been amazing in terms of all the amazing things that have happened.

The day we launched our website in The Today Show, Today.com had bought a box from us. They did a blind taste-testing of our product versus the top butcher or some butcher in New York city. Our product won hands down. We got all these signups right away.

Sramana Mitra: When did you launch the website and get this coverage?

Mike Salguero: October 15. 

Sramana Mitra: Then what happens next?

Mike Salguero: Then we just start growing. Pretty early on, a few large nutritionists and bloggers endorsed us. That just turned into a lot of early adopting customers and a lot of people who were interested in what we do.

Sramana Mitra: What is the value of an annual subscriber?

Mike Salguero: We don’t do annual. It’s $129 a month. That equals about 25 meals; sometimes more. What we’re trying to do is be a couple or a small family’s meals for the month. We’re trying to be your meat for the month.

Sramana Mitra: In 2016, which was your first full year of selling, how many subscribers did you have?

Mike Salguero: Our initial goal for 2016 was 3,000 subscribers. We ended with 10,000.

Sramana Mitra: What was the revenue level in 2016?

Mike Salguero: A few million.

Sramana Mitra: So in your first year of selling, you were well above a million dollars?

Mike Salguero: Yes. With 10,000 subscribers at the end, we were essentially doing a million a month by the end of that first year.

Sramana Mitra: What is the next inflection point? Are there major highlights in 2017?

Mike Salguero: A lot has happened. The business has been growing really well. We are laser focused on not only growing the company but doing so responsibly, and in also reducing and eliminating waste in our system.

We’re always thinking about how to increase margins and pass that margin back to our customer. I don’t think we’ll be doing any of this if we were funded. That’s super fun. That’s a really interesting problem space that we get excited about fixing. 

Sramana Mitra: What was your monthly run rate at the end of 2017?

Mike Salguero: We stopped disclosing our monthlies around that time.

This segment is part 4 in the series : Bootstrapping a Perishable Meat Business To Significant Scale: ButcherBox CEO Mike Salguero
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