Sep 5, 2017
Michael Salguero is the CEO of Butcher Box, a meat packaging and shipping company which started in Sept 2015 as a Kickstarter campaign. Butcher Box manufactures grass-fed beef, pork and chicken and brings it to the doorsteps of thousands of consumers. They ship hundreds of thousands of meals per week and have been growing at an astonishing rate of 20%, month over month. Tune-in as Michael gives listeners an inside look at the operations of Butcher Box. He discusses what it’s like to work with influencers, how he drives operational efficiencies and saves on costs and shares the struggles he’s faced while growing the incredibly successful, Butcher Box.
Time Stamped Show Notes:
- 02:35 – Butcher Box clocked a revenue of 3.25 million dollars last month, shipping 150,000 meals per week
- 03:25 – Michael was contemplating a business with minimal infrastructure when he started his entrepreneurial journey
- 05:18 – Butcher Box has zero outside funding at the moment
- 30 – Michael raised 30 million dollars in his last venture and realized that some businesses do not really require that much money
- 05:40 – Self-enforced constraints on fund availability has fueled growth and led to new marketing avenues
- 06:27 – Michael spent a lot of time on brand building in the initial stages
- 06:45 – He went shopping for an investment banking deal—not with the idea of raising funds but to eliminate all objections
- 07:26 – Michael might consider selling out to a company that is able to source and cut at a cheaper rate, selling out to a private equity player is another alternative
- 08:42 – The best time to sell is when you don’t need to
- 09:00 – Michael’s five year dream is to develop a pipeline of several brands using the current Butcher Box backbone
- 09:57 – Venturing into dog food is a possibility
- 10:23 – Lean Cuisine is also an alternative
- 11:04 – Tracking the Amazon success story
- 11:04 – When Amazon was valued at $11 billion in 1998, quite a few detractors thoughts it was grossly overvalued
- 12:25 – Amazon leveraged their success through a very strong backbone for their products and Butcher Box is attempting to do something similar
- 13:10 – Build a platform to sell products and drive down fixed costs
- 14:44 – Michael divides his time equally between coming up with a marketing strategy and driving operational efficiencies
- 15:05 – Butcher Box’s Trojan Horse Marketing Strategy
- 15:05 – He received kickstarter signups after connecting with an influencer who is a paleo diet enthusiast
- 16:06 – Work with a kickstarter influencer and include their headshot and description on the recipe card
- 16:50 – Michael replicated this strategy with other influencers in the paleo space
- 18:38 – Understanding Butcher’s Box strategy of paying commission to propels sales further
- 21:00 – Similarities and differences between Influencer marketing and affiliate marketing
- 21:55 – ButcherBox has 400 affiliates at the moment, 40 or 50 affiliates are responsible for driving the majority of business
- 23:30 – The larger affiliates manage to sign up 100 people in one email blast
- 23:35 – The biggest campaign resulted in 500 signups
- 24:52 – Driving operational efficiencies at Butcher Box
- 24:52 – Growth results in opening up of different avenues of cost savings
- 25:09 – Saving a penny per pound will have a magnified effect, which can result in thousands of dollars in savings
- 26:35 – Streamlining your supply chain can result in better value for the customer, lower the costs to gain higher profits
- 28:18 – With intense competition from grocery stores and farmer’s markets, arriving at operational efficiencies is of paramount importance
- 29:48 – More distribution facilities have resulted in cutting down 4 days of shipping to 1 day shipping
- 31:50 – Overall meat consumption is rising, but beef consumption is stagnant; grass-fed beef, though is extremely high in demand
- 31:58 – There are two kinds of customers: An urban, quality-conscious customer and another one who lives in a “food desert” in the middle of nowhere
- 32:58 – A quality discerning customer against eating beef has warmed up to this new way of eating beef
- 33:28 – Reformed vegetarians are also pushing up demand
- 34:25 – What are the struggles that you went through?
- 34:45 – Walking in with a ton of “baggage” since his previous company, CustomMade folded
- 35:16 – Noone in the “bunker”; no co-founder or partner to help manage the company
- 35:43 – Wrestling with inner demons and maintaining confidence
- 36:37 – “It is grit. It is going out and doing it again and again and again till you get the right shoes to take you up the right hill”.
- 38:56 – Boxers or Briefs
- Keys or Pickup? – Pickup
- Jeans or Khakis? – Jeans
- Steak, Chicken or Fish? – Steak
- Mountains or Oceans? – Mountains
- Dog or Cat? – Dog
- Sailboat or Power? – Power
- City or Country? – City
- County, Rock and Roll or Pop? – Country
- 40:21 – Connect with Michael on his email
- 41:36 – Write down the culture and values of an organization
3 Key Points:
- There are a lot of different businesses do NOT require a lot of money upfront.
- Influencer marketing or affiliate marketing is a cost-effective way to market your product.
- A small adjustment with your pricing can be magnified to thousands of dollars in savings as your business scales.
Resources Mentioned:
- Butcher Box – Michael’s company website
- Lean Cuisine – possible partnering company
- Built to Sell – Michael’s Top Business Book