How ButcherBox Ate $600 Million While Putting Impact First

This post is a part of our series on “How to work on big ideas that impact millions,” in which we speak with leaders and entrepreneurs who have built enormously successful companies by focusing on having an impact.

Mike Salguero understood that his next firm would be constructed quite differently after his previous company failed, despite raising close to $30 million in venture financing.

Custom Made was a corporation that operated a marketplace where customers could purchase handcrafted objects created by artisans. The issue was that, despite raising tens of millions of dollars, the business had not been able to produce the kind of growth that investors required after six years.

Acknowledging that this endeavor would not be the one in which he would establish his reputation as an entrepreneur, he made the tough choice to delegate the CEO position to his co-founder while he considered his options.

Disqualifying concepts for businesses

Mike started by coming up with the ideal concept. Furthermore, because he was no longer striving to raise capital from investors, he was not constrained to “investable” concepts, which frequently entail developing technology that can swiftly scale to millions of clients.

Mike was clear that he wanted to build a company whose influence on the world he supported, one that would offer him the kind of authority over the enterprise that lets you administer it the way you want, without having to follow the rules set by a board of directors or investors.

After doing some calculations, he determined what his family’s comfortable starting income would be and came up with a quite low amount.

His goal was to create a subscription-based business that would enable him to earn $20,000 every month. After coming up with three distinct ideas at first, he set himself a straightforward task for the following few months: come up with one action to take each week to try to put an end to one of the concepts.

He also thought about creating a brand-new kind of financial instrument. But because starting a business in the financial services industry comes with a lot of legal and regulatory obstacles, that would probably require venture capital backing. He also abandoned that notion, having come to the conclusion that he wanted to demonstrate to himself that he could create a successful company without outside funding.

Locating a mission-driven company concept

He had the idea for a monthly delivery service of grass-fed beef percolating in his head since his wife was diagnosed with an illness that made access to grass-fed beef crucial for her diet in 2015. At the time, subscription box companies for things like makeup, razors, and meal kits were already well-known.

It was difficult to get good meat, and he remembered a time he had to carry pounds of grass-fed beef in a trash bag after meeting a local farmer. There must be an alternative method. Delivering frozen beef was the biggest obstacle this business needed to overcome, but Mike thought he could solve it.

Making a dramatic debut

Salguero approached former Omaha Steaks operations head Mike to take equity in a boxed meat shipping company, ButcherBox. The retired executive agreed to charge his consulting rate instead, which led to ButcherBox buying back the equity stake for $4.8 million. This allowed ButcherBox to establish logistics for fulfilling orders.

Mike validated demand for his business idea by launching a Kickstarter campaign, avoiding the mistake of investing in well-produced videos. He wanted to make as much noise as possible, avoiding disappointment when orders don’t come.

A small team raised $25K on Kickstarter to be featured in a featured category. They utilized Kickstarted’s verified badge and “projects we like” section, preparing their supporters’ email lists, placing pre-orders, and setting a low initial funding goal to ensure visibility.

The company doubled their pre-order goal to reach $50K in 24 hours, then increased to $210K within 30 days. The campaign led to 40% monthly subscribers, generating 100s of repeat customers, indicating a high demand for their product, a reliable method for healthy meat delivery.

The advantages of a startup with a mission

Timing was crucial for their success and growth to $600M in annual sales. Subscription boxes became an accepted way to buy online, and consumers became aware of animal welfare issues. Consumer Reports covered grass-fed beef just days before launch.

A mission-driven company focused on changing the meat supply chain made recruiting top talent easier. Mike and his team re-invented their marketing channels, paying organic food influencers for sponsorships and investing in Facebook video advertising. This led to massive sales and increased customer engagement, proving successful in their mission.

ButcherBox, a subscription box company, has grown to 415,000 members and delivers meat to 1.5 million households over 8 years. Despite facing customer churn, founder Salguero remains committed to the mission, aiming to build a generational company from a modest monthly income of $20,000.

The company offers grass-fed, organic chicken, pork, and seafood, as well as healthy pet food. Entrepreneur Mike finds success in his business, which he believes is priceless. He values a business that he can work on for the rest of his life.