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How ButcherBox Reached Nine-Figure Annual Revenue Without Investors

how-butcherbox-reached-nine-figure-annual-revenue-without-investors

Founder Mike Salguero started ButcherBox, a meat and seafood delivery subscription service, as a hobby. He himself struggled to find high-quality grass-fed beef, so he set out to help others source meat as well. 

But Mike jokes that he sort of failed at keeping it a side hustle. His hobby business turned into a full-fledged subscription service that’s disrupting the meat industry. Last year, ButcherBox brought in more than $550 million in revenue and is on track to do more than $600 million in 2022.

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Those are staggering numbers, considering ButcherBox hasn’t taken any outside investment to date. Mike says self-funding has given ButcherBox the ability to think more long-term — like 25 or even 100 years — about how they can change what consumers eat and how farmers raise animals.

“If we’re actually set on disrupting meat, that’s a big undertaking and that is not something that can happen overnight,” Mike says. “It’s gonna require patience. It’s gonna require a long-term time horizon. And I’ve yet to meet an investor who has the appetite for that type of hold.”

But because ButcherBox didn’t take outside funding, it had to be profitable from the very beginning. Here’s how Mike and his team did it.

1. Crowdfunding

ButcherBox’s Kickstarter campaign in 2015 was wildly successful. Within the first 24 hours, they had already exceeded 3x of their goal of 25,000 pre-orders.

“And so right from the start, from that first day, it was like, ‘Wow, I think we might be onto something here,’” Mike explains. “I had been running a company for about seven years before I started Butcher Box. And with that company, things never seemed to work. Like we would try really hard, we’d launch a feature, we were really excited about it, and then it would be crickets. And so it was just a totally different feeling to feel like the snowball was rolling down the hill and we were part of the snowball.”

It wasn’t just luck though. Mike knew there was a special badge for Kickstarter campaigns that would unlock promotion. Campaigns with that badge would be featured on the Kickstarter homepage and in emails. Mike essentially reverse engineered his way to getting a badge, and it worked. Kickstarter did the rest.

2. Get the subscription model right

butcherbox delivery
One of ButcherBox’s first challenges was figuring out how to sustainably package meat and seafood for delivery. ButcherBox

For all the talk about consumers being oversubscribed, it’s still a good model for some businesses. 

Mike says he couldn’t give away a free first box like some other subscription services, but he found other ways to make subscribers stick around. One of the most memorable was a “Free Bacon for Life” campaign, where customers would receive a free package of bacon in every box.

“Where I see a lot of people fail in subscription businesses is they spend a lot of time on how to drive down acquisition costs, but not a lot of time on how to increase lifetime value,” Mike says. “Increasing lifetime value is by far the easier one to do.”

3. Use influencer marketing

Mike started using influencer marketing early on, but not on Instagram or TikTok like you might expect. He noticed a paleo diet blogger told his audience to eat grass-fed beef, but he didn’t tell them where to buy it from. The ButcherBox team got the blogger to mention the Kickstarter campaign, which resulted in a bump in sign ups.

“Try to deconstruct things and don’t just use the playbook everyone else has, but really come up with your own,” Mike says.

4. Rely on third-parties so you can focus on your product

Mike fully admits that his company isn’t a shipping company or a tech company. It’s a meat company at its core and he believes that everything else should be outsourced.

“The way that we built this company and did it in a capital efficient way was to partner with third parties everywhere that we could,” Mike explains.

To this day, ButcherBox partners with third-party farms, processing facilities, cutting facilities, distribution facilities, shipping, customer service, and tech. That’s a big reason the company uses Shopify for its online store.

“For us, moving with a company like Shopify enables us to kind of offload the things that we’re not best-in-class at so we can focus on the things that we are best-in-class at.”

Take a listen to Mike’s full interview on Shopify Masters to find out more about how you can build a company that’s profitable from the start.

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This originally appeared on Shopify and is made available here to cast a wider net of discovery.

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