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

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0:53 Hey 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 Masad, 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.

1:20 Join us at masters of scale dot com slash apply twenty six. That's mastersofscom slash apply. Twenty six. 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 like work night and day and just keep hacking until we find a path. And then you you're just like, ooh, okay, here's a path. Like let's take the path. And then you start needing like some people with a little bit more experience. Maybe they know how to use a compass. And then

1:53 Eventually you get to a road. When you get on a road, you kinda 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 Burman, your host This Week on the Show Mike Salguero.

2:20 Mike Salguero is the founder and CEO of ButcherBox, which he has bootstrapped into A six hundred million dollar revenue business. Do I have that right? Yeah, we're hoping to do six fifty this year. Okay, six fifty has been D to C and is now in target stores nationwide. Mike, welcome to Masters of Scale. Thank you. Uh longtime listener. Um thrilled to be here. We're thrilled to have you. Let's start at the beginning. Um where where did your entrepreneurial journey begin, Mike? Well I had a paper root when I was ten years old, um, which wasn't quite entrepreneurial, but uh Do we should we explain what paper roots are to the younger paper roots are where you pick up a stack of newspapers, thirty five of them, and deliver them uh every day, uh six days a week, um rain or shine. So you you had the bug early. You were you were out hustling. Out hustling early. I went to school in Boston and I did a bunch of sales jobs and uh I got out of school and started doing uh real estate rentals, um, which was a very entrepreneurial sales focused thing. Um and on the side I started a little t shirt company.

3:20 Um, and my first T shirt was a Shamrock and it said Boston on it. and sold it during uh St Patrick's Day. And I I had like a hundred shirts that I paid five dollars a shirt for. And I sold'em for ten dollars and made five hundred dollars, like the fastest I'd ever made money. Well, you you knew your market pretty well. Yeah. Uh spostonians love uh Saint Patrick's Day. Um and then I did another t shirt. Uh this was in uh two thousand four during the uh George Bush John Kerry election.

3:50 The teacher said buckfush on it. And we sold uh seventeen thousand T shirts. Um Over the course of like a two month period. Wow. And so I mean this is this is still pretty early days of e commerce. So were you selling this through Amazon, through your own website? Mostly like at festivals, door to door, set up a booth. Um I had salespeople, I was in a few stores. And had sold all these t shirts, but I didn't have um I didn't have any money. I was like where did all the money go? That what happened here? Um Where where'd all the money go? I think it went to like, you know, we'd we'd go out at night with uh

4:26 backpacks full of T shirts and go to the bar and sell them or, you know, and then use that money to buy drinks and That's where the money went. Um and so I ended up uh like uh 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. Yep. And then left that and started my first company. Um, ran that for eight years. What was the first business? First business was called CustomMade.com. And we bought this uh listing service from a woodworker who had built this

5:00 He built it in nineteen ninety six. We bought it in two thousand eight. And uh he had three hundred and fifty 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 thirty five dollars a year for a subscription. And so my co founder and I decided that we were gonna try to buy the website. Make it better because this was two thousand eight and um the website you couldn't log in and manage your own profile.

5:24 So easy things like that. Like oh we'll just make this. It'll be super easy. Um and then expand it out of woodworking into other things custom. We raised venture capital and we moved from focusing on uh a listing service to focusing on a marketplace where we took a marketplace fee for everything that went through?

5:44 Which wasn't really a good idea. Why not? I mean the it's the eBay Etsy, right? The challenge with the idea was a custom transaction. Like if you're gonna 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, um, they're not necessarily tech savvy. This is like two thousand eleven, not necessarily tech savvy, might not even have a cell phone yet. Um, and we're asking them to interface with a consumer on our platform so we can keep the platform fee. It didn't work. Um they were just going around the platform at the time. They were going around the platform. They were complaining that they had to be on the platform. They didn't want to pa pay the platform fee once it was Once the uh transaction had happened, uh they thought it was unfair since they had to do so much work.

6:28 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. Uh and it became pretty

6:46 clear that the marketplace wasn't gonna work. Um But we couldn't like we couldn't go back because we had already chosen the the train of marketplace, V C capital. And and it wasn't gonna work because on Etsy, for example, the product choices are limited. There's only so much customization. Or even on Airbnb, like

7:05 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. I if you think about what most people think about with custom, it's like you can monogram The thing. That's it. Yeah.

7:21 My co founder actually still runs Custom Aid. 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 sixty 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. Why was there not a pivot available? Like I mean if if they've pivoted the business or evolved the business since What was happening when you were You were accelerating toward that wall and you could see you were gonna slam into it.

7:53 Where you couldn't hit the brakes or yeah, 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 thirty million dollars. Um, because at the time Airbnb, Uber, they're all these like third party marketplaces that had had sprung up and they were doing really well. So 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. Yeah. Um, but that's not how it that's not how it happens. But if an entrepreneur were coming to you today under these circumstances, It sounds like your advice would be

8:39 Like Slam the brakes or like d grab that steering wheel and twist it. If you know it's going to fail. Yes. But it's it's very hard. So w 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 you're probably gonna be blackballed, you'll probably won't uh be able to raise money again, you know, is a uh you you 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 underdiscussed challenge for founders where Uh, they go sell investors on a vision and a dream. That's what the investors buy into.

9:15 you're operating and 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 investor is 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.

9:39 w while also dealing with Potentially some of the most powerful VCs in the world saying You do it our way, yeah, or basically you'll never work in this town again. 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

10:01 you know, top V Cs 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 talk 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 go out, you try to raise money. We we went on about seventy five different pitches. Uh and then we got a check. Right. And W when there's that dynamic, you don't really think about the person that you're gonna be locked

10:33 two for ten 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. 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. We had a lot of like rights. Like they couldn't overthrow us, they couldn't outvote us. Um, but even still a lot of pressure for us to kinda do what the original plan was, even if it didn't seem like that was gonna work out. What happens to to end your time at CustomMid. We ended up um doing a um A transaction with Wayfair, which is another business in Boston.

11:16 Uh all of our employees were able to get a job at Wayfair, which is nice. Um, except for me. Uh and yeah, we we had a party and uh closed the gate. It 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 twenty fifteen. Okay. Yeah, 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 have been doing it for a long time. So I knew there was like

11:49 a way to do it. Just couldn't figure it out. When Custom May closed, I took the weekend off and then decided that I was gonna start I was gonna spend the summer trying to spin up this concept of delivering meat your door. So you gave yourself a whole weekend of a break. 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 it 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 gonna get going. I think it was heart and gut.

12:25 'Cause rationally I was burned out and that was probably a bad idea. I really wanted to like keep Doing business. Um, but I wanted to do it differently. I wanted to do it my way. And so even when I started ButcherBox and to this day, uh my Fridays I I stayed at home.

12:41 I was like, I'm not working on Fridays. I'm just gonna like hang out with my daughter. Um, and so I tried to build in the breathing time. in the space of um Starting the company. When you start a company, uh, 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 um working out twice a day. I was spending a ton of time with my family. I 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.

13:12 Because it's not like you're pre product, right? I mean, you you at least had like you you had some of your supply chain teeth 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 look like. So we launched on Kickstarter. My idea was I'll put ten thousand dollars 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. We'll get we'll get some product market fit signal very quickly. Yeah. Yeah. And when we launched, you know, fast forward to September, we launched in September We went out to raise twenty five thousand and I think at the first day we we raised fifty thousand and did two hundred ten thousand within thirty days. So it was like Whoa There's a

14:08 There's a there there. Looking 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 have you learned from custom made, aside from the investors piece, which I wanna I wanna come back to next. um that informed how you you built culture and team.

14:51 At Butcher Box. Yeah. So I mean, the first thing that I did that I think was uh really important was I hired an intern. Mm-hmm. So uh on that Tuesday after Memorial Day weekend, I had a um a college freshman um knocking on my door at eight thirty in the morning saying, Okay, what are we doing?

15:14 And he was gonna work all summer for me for ten dollars an hour. Okay. It 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 I might have 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.

15:44 And if you believe you have to do everything and you aren't willing to outsource anything to anybody else, um you will work twenty four seven. Yeah. 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

16:11 If I had to like just start working on Tuesda 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 and all the all the things I was carrying with me. If the butcherbox story were starting today. Would a Bobby GPT be as valuable for you as Bobby the Babson student was? What about Bobby's Um biggest

16:37 Ahas for the business was um so as I said, we were gonna ship grasshood 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

16:55 No one's gonna spend the the price was a hundred twenty nine dollars. No one's gonna spend a hundred twenty nine dollars 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 gonna compete against the butcher. Uh I don't think Bobby G G P T would have gotten that. Yeah. Um I think you needed a human being to to figure that one out.

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19:12 You said that you uh started building with culture principles that included uh what you learned from custom made. What what was key in terms of what was different there? There's this idea that um 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 like work night and day and just keep hacking until we find a path.

19:36 And then you you're like, ooh, okay, here's a path. Like let's take the path. And then you start needing like some people with a little bit more experience. Maybe they know how to use a compass or they know, you know, and and then Eventually you get to a road. And um when you get on a road, you kinda need people who know how to drive cars. If you just go for the car drivers. then you lose the hacking Culture.

20:00 Mm-hmm. And not hacking like computer like like coding, hacking like you're willing to do whatever it takes to get this thing off the ground. My first company with Custom Aid, when we raised venture capital, um we essentially turned around to our team and were like None of you know how to drive a car, do you? Mm-hmm.

20:18 We're w we have to leave you here in the jungle. And so all these people who had worked for your for three, four years to help us build something really great and fundable. Um, we left them. Yeah. And we went and hired people who had worked at AOL and had big really fancy resumes and Yeah. And and the reality is you need a mixture of the two.

20:39 That's the 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 of experience because They kind of forget the grit as they go along. Well, particularly if they've if it's big company experience and they're used to like oh, I did one thing this week. Right. Hierarchy meetings. 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. I I the the group of people who started with me, like had

21:17 N no one had any experience. We 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 D one athlete or they had some sort of like Some sort of chip on their shoulder. Hired my first meet person um a year into the business. And he was um sixty five. Wow. And had retired.

21:39 Uh he had worked at um uh B J's for twenty seven years. And um he represented this like kind of like A ton of experience. Uh, but what I found with with older people is um Which I s 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 that the barbell strategy. So there's like

22:13 Yeah, you have two ends of the barbell and really like nothing in between. There's very few people who were like mid career at the beginning. It was either early career or end career. It sounds like my the the initial thesis. Um, none of this is easy. But

22:26 It is more of a straight line to say we're we're doing grass fed beef. That's what we're doing. Yeah. Bobby comes back from his Whole Foods. You know. Survey trip and he's like, Like we kinda got a problem here.

22:39 Right. Like we need to do chicken, we need to do fish. We got like that that's what people are saying they'll buy. Yeah. That it feels like that is um Wards of magnitude, if not exponentially, more complicated. How did you approach that expansion? It 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.

23:04 Uh we actually didn't start with seafood. We we launched seafood maybe a 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. And so when we launched, launched with a Kickstarter, it was you could pre buy a box and we had some other goodies and prizes as well. But it you could pre buy a box. And y and you would choose your species. So it would be either all beef.

23:31 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 gonna send you whatever we wanted to. Um we were just gonna send you what we thought was a great value for your your subscription.

23:47 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. I 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's selections, um, and all people chose was the species.

24:20 Right, right. But it's ultimately you get what you get and you don't get upset kinda flip. And if you do get upset, then um we'll do better next time. Because for us as a subscription business, 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 it's tough. It's a it's a tough it's tough to delete 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. You you you have the successful successful Kickstarter campaign. You've got money in the bank.

25:05 You've got a a facility in Wisconsin that's able to fulfill Um now you gotta build run a business. Yep. So what what what happens next? Yeah. So um we we The Kickstarter was a thirty day campaign and then we immediately launched our website and It just

25:24 kinda started working right away. I mean, the first week we probably had, I don't know, thirty people who signed up and then it was fifty 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 call 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 four hundred phone calls or whatever it was.

25:49 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. thirty, thirty percent of them took

26:03 I don't know, four or five months to get a thousand subscribers. And a thousand subscribers when you're doing a hundred twenty nine 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.

26:26 Are you are are venture capitalists starting to to reach out? Yes, for sure. Uh including the ones that I had just lost their money. Um You know, like uh F I I actually that was like a really a really important moment for me, 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.

26:49 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 many did you take? I didn't take any money. Oh you didn't take money? No. Why not? Unfunded. At the very beginning, I had had such a bad experience and 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

27:25 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 kinda became like, Well, maybe maybe that's what we're supposed to do. Yeah. And then you fast forward a few years after that and Blew everyone went public.

27:47 And then they proceeded to in in twenty seventeen, so this is two years after I 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. Yeah. And so I actually I I don't think I'd be around right now if I had raised money. Why?

28:06 Well, I would have raised money in twenty fifteen and I would have been on like an eighteen to twenty four month like you know, runway where I'm supposed to spend all that money. Right. 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 yeah 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'd 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, um, we said, Okay, we're making like twenty dollars on every box we're shipping.

28:51 Uh so we need to be box one profitable. Meaning the first box that leaves the facility, like I need to have marketed it for less than twenty dollars. 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.

29:17 And we said, Hey, like w 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 hear 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.

29:36 So every 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's an affiliate fee with a tail. So basically you you acquire as a customer who's a three, four year lifetime customer or longer. Yep. You're the money should keep coming to you. You're getting ten bucks a month. Yeah. And lots of people Said yes to that. First year we did five million, the second year we did thirty five million, and then a hundred million. Pretty much up to fifty million. That was our only marketing. And you know, the constraint of not having money.

30:09 uh force to discipline. Both on the acquis, but also on the operational side. Where it's like If we're only making twenty dollars, well how do we make twenty one dollars? Well, I just negotiated a new box price and it's a dollar cheaper. I just negotiated

30:26 New dry ice, right? Just negotiated the price of uh the tape that like And so we we just Um That's one of the things I still love about the businesses, it's like there's a lot of

30:37 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 the best moves are ones that like you can get the same product For cheaper. And you don't hurt the customer. Really ultimately what we've built over the past eleven years is

31:02 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, try trying to do something different than the meat industry has done.

31:16 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 nineteen fifties on Cheap.

31:31 Food safe, protein. And 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

31:42 That doesn't work anymore. Customers want um First of all, they want something that they feel meets their ethics and their integrity. And secondly, um, they want more information than just uh Just like Trust us, it's g it's good.

31:57 My cause you're scaling to six hundred and fifty million dollars in revenue and beyond How are you ensuring that this 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

32:18 That's where I started to get concerned. And so in twenty twenty 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 your 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.

32:45 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. Uh it it is, but Uh no.

33:09 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 gonna just care about your shareholders. Um, if we did it, it would be really be like a non a a very small piece. But then I I I come to the question of like Why?

33:29 Uh 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. Um Or

33:39 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

33:55 Um that because of their high standards in their sourcing, their ethical sourcing. Um they've changed entire industries. Um, to your point about the meat industry being Not

34:09 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.

34:26 Um, the large companies ha 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. It's actually become easier for people to find that. Um We still think ours is higher quality.

34:43 Uh but The the the industry has responded. Um, there's a meet conference every year, uh, which is a fun conference to go to. And high states. Yeah, yeah. Dead eggs. Yeah. It's good. Um

34:59 The first I don't know, three or five years that we went to the Me Conference, people like had no idea who we were. Now we're being asked to be on committees, we're being asked to speak, we're being asked to talk about like claims based, why this is import 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

35:25 We wanna help small family farmers. 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 larger people do the right thing. the expansion into retail from DTC. What drove that decision and how has that experience been for you?

35:48 Yeah, so retail, um reality is so lots of people get groceries online. It's about fourteen to twenty percent of the market, depending how you look at it. The reality is even our customers go to the grocery store two times a week. The grocery stores 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

36:14 party line for several years. Um We uh we found an amazing partner in Target. Um, 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.

36:37 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 one label. So that's pretty interesting. Um and the the thinking w is and is turning out to be correct is um

37:01 Hey, we spend all this money on advertising. We s 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. 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 Cosmo? 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.

37:41 Are all up. Yeah. Awesome. Um Mike, thanks for being a master of the skin. Yeah, thanks for having me. Thanks again to Mike Selguero 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. I'm eager to see how his thoughtful leadership can help Butcherbox continue to grow and help the broader meat industry evolve.

38:05 I'm Jeff Berman. Thank you for listening. Masters of Scale is a wait what original. Our executive producer is Eve Tro. Senior Supervising Producer is Trisha Bobida. Associate producer is Masha Makatanina. Video editor is Noah Walstein. Senior town executive is Stephanie Stern. Mixing and mastering by the audio boys, Aaron Bastanelli and Brian Pew. Original music by the legendary Ryan Holiday. Our head of podcast is Le Tal Malad. Visit mastersofscale.com to find the transcript for this episode and to subscribe to our newsletter.

38:42 And Be sure to check out her YouTube channel.

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