ButcherBox is a high-quality meat and seafood delivery service that just surpassed $600 million in revenue — a huge feat for a bootstrapped business.
CEO and founder Mike Salguero saw a problem with the way meat and seafood products are sourced, produced, and delivered and created ButcherBox to solve it.
Initial funding for the company came from a Kickstarter campaign in 2015. This is where the company got its first thousand customers and raised enough money to run without external investors. In the past seven years, the company has grown to $600 million in revenue, as Salguero announced during a recent Creative Technologist conference.
ButcherBox is Salguero’s second company. Speaking about his first, CustomMade, he shared that the experience taught him some valuable lessons and made him weary to involve external investors.
“My experience was really bad. We lost everyone’s money, which I felt a lot of shame about,” Salguero admitted. “At the very end, I had diluted myself so much, I owned just 5.5% of the company. The business failed, and we ended up going bankrupt, losing everyone’s money.”
The failure of his first company came amid a personal crisis, as his wife began having health issues that required her to have a specific diet. “While CustomMade was falling apart, I started calling farmers and asking them if I could buy a half-share of meat,” Salguero laughed. This amounts to a whole lot of meat, or as he described it, “basically two trash bags full of beef.”
“I was meeting meat farmers in parking lots, buying a couple of trash bags full of meat — I’m sure that didn’t seem sketchy at all,” he joked. “But it was too much meat for my freezer, so I ended up selling the excess meat to friends or people I was working for.”
Armed with a budding idea of what would one day become ButcherBox, Salguero took a different path to avoid repeating the same mistakes as with his first company. He decided to bootstrap it, with the Kickstarter being the only outside funding he took for the company.
According to him, he approached the new venture with the mindset of it being a hobby, which likely had a hand in its success. He recalled stating that he was “only going to put in $10,000 into this thing.”
That did not happen, Salguero added. He gave equity to both the branding studio and the former head of operations at Omaha Steaks who helped him get his project off the ground.
In retrospect, he admitted that this was a mistake since he had a very low valuation at the time. In fact, his first goal was $25,000 through Kickstarter but instead he raised eight times that amount in preorders.
ButcherBox brought in $275,000 in revenue during its first year in 2015. Revenue skyrocketed to $5 million in 2016, then to $31 million in 2017, and now $600 million in 2022. ButcherBox became a Certified B Corporation in January 2021.
However, the decision to bootstrap the company has shaped its business strategy. A great deal of money goes into maintaining an edge within its customer base — those who highly value how and what they eat — through nutritionists, bloggers, and influencers.
“We created a moat around the entire paleo/keto/CrossFit world with all the influencers,” Salguero explained. “All of those influencers are all still getting checks from us, and some of those checks are $5,000 to $10,000 a month. They’re not going to rep someone else’s stuff, because they don’t want to stop that income stream.”
