The Pomp Podcast - #1121 Mike Salguero | The Founder Who Bootstrapped To $500 Million In Revenue

Episode Date: November 15, 2022

Mike Salguero is the Founder & CEO of Butcher Box. In this conversation, we discuss his journey from failing at his first business to bootstrapping a $500M business at Butcher Box. We also talk about Mike's methods to building businesses, interacting with his executives, and how he structures his day. ======================= Valour (formerly DeFi Technologies) represents what’s next in the digital economy -- providing simplified, trusted access to crypto, decentralized finance and Web 3.0 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, through a single stock purchase on a regulated exchange. Currently listed on U.S. (OTC: DEFTF) and Canadian (NEO:DEFI) exchanges. For more information or to subscribe to receive company updates and financial information, visit our website at valour.com ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit https://compassmining.io/ to start mining bitcoin today! ======================= Arculus is the next generation crypto & NFT cold storage wallet that combines one of the world’s strongest security protocols with the easiest to use form factor and app. Arculus requires 3-Factor Authentication to ensure only you have access to your digital assets – something you know – a PIN, something you have – the Arculus Key Card, and biometrics. Learn more and buy it now on getarculus.com. Use promo code POMP to save 15%. Remember, with Arculus, it’s your keys, your crypto. ======================= Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. With its focus on design and user experience, Exodus has become one of the most popular and loved cryptocurrency apps. It’s supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone. Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= Amberdata provides the critical data infrastructure enabling financial institutions to participate in the digital asset class. We deliver comprehensive data and insights into blockchain networks, crypto markets, and decentralized finance. Download our Digital Asset Data Guide at https://www.amberdata.io/pomp ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Mike Salguero is the founder and CEO of ButcherBox. In this conversation, we talk about how he failed at his first business, and then he bootstrapped a $500 million revenue business in ButcherBox, what exactly he did to build the company, how he interacts with his executives, how he structures his day and much much more i really enjoyed this conversation with mike and i hope you guys enjoyed as well once you get done listening jump on twitter let us know what you liked and what you didn't like what you agreed with and what you disagreed with we really

appreciate the feedback all right let's get this episode with mike i hope you guys enjoy this one anthony pompliano runs pomp investments all views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of pomp investments you should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Mike here. You've built a business that you bootstrap, raise no outside money to over $500 million in revenue, which makes you seem like an absolute genius. And a bunch of people are like,

how the hell did you do that? We'll talk about that in a second. You also previously raised $30 million for a company that you learned a lot of, uh, uh, things not to do doing talk a little bit about kind of that first big experience, trying to build a business, raise a bunch of money and like it not work out and kind of how you thought about, Hey, where do we screw up? And like, what lessons did we learn? So that then it set the ground for butcher box to eventually become this huge business. Yeah, for sure. Um, so I was 26 years old. Uh, my co-founder and I were best friends and we wanted to do something. We didn't know what we were going to do, but we had to find something to start or to run. Get rich. Yeah. Uh, get rich. That's right. Um,

and it was like a very financially motivated, very much American dream. Like we want to like do something ourselves, make money, stop having a boss. And, uh, my, my co-founder loved custom woodworking. He had just bought a coffee table on this website, custom made.com. And he's talking to the, the, the woodworker who made his table and the woodworkers, like I get all my work from custom made and I pay $35 a year for my subscription. This is like a $2,000 coffee table. And so we're like, this is great. Like everything you search for around custom furniture, if you typed in custom-made bookshelf or custom-made desk,

custommade.com showed up first, and these guys were cleaning up. So we bought the website off of a guy for $140,000. Why did he sell it for so cheap? That was four times revenue. So I had been transitioning out of a job, and I had written him months prior. And then when I left the job, um, my last job that I worked for someone, he wrote me like two, two days later and was like, I'll sell. And so we didn't have $140,000. We, uh, put down $5,000 and had 90 days due diligence where we ran around town, uh, ran around Boston trying to convince people to give us money. Um, and this is like 2008, right? When Bernie Madoff just ran off with everyone's money in Boston. So it was like, it's a tough time to be raising money. um it's funny that you say 2008 bernie madoff not global financial crisis like like the bigger thing was bernie madoff in boston i mean like if you were the the people we were connected to and

trying to raise money from in boston had like just just been personally impacted by bernie madoff jesus and they're pissed or like they're like real pissed like uh yeah all my money went to him and now it's gone um and so we bought this website and we started this subscription business where these, uh, woodworkers would pay an annual fee to be on the site. And we tried to like upgrade the site, but just, I mean, we made so many mistakes on that website. How many of the mistakes are on the website where, uh, you're young and didn't know versus like you had this theory of we'll make more money or it'll be a better product if we do X. And like your assumption was just wrong. At the beginning, it was really like, we're young and we didn't

know. Like, you know, I look at entrepreneurship now and, um, I think it's a lot better resource than it was. Like if you don't know how to build a website, you can find that information in 2008. Like I didn't feel like there were a lot of people out there who could explain to us like, here's what you do and here's what you don't do. There's podcasts, there's blogs, there's Twitter, there's like all this stuff. And then you also like know many more of the people who've been doing this for now, you know, a decade plus after 2008 that you can reach out to and ask. Right. And so we didn't have any of that. We built a website that was really bad. Um, and you know we had all these makers calling and complaining about how all their work dried up

the seo dried up we just like it was a nightmare it was a nightmare and it kept crashing and is there a moment where you're like all right we raised some money we bought the website we thought we were improving it oh shit we may have actually been destroying it like is there like a one moment where that like hit you uh that that was pretty much every day i mean we just we just did our best to just destroy all the value we purchased um so then we we raised a little more money all this was friends and family at this point so we had gotten up to like a million dollars of raised capital mostly people that we had worked with before in real estate and then we decided you know everyone's like raising money from vcs like

we should go raise money from vcs of course yeah so we go out in like uh what was it it was um the summer of 2011 so we go out in 2011 and we're going around with like hey we're a woodworker listing service. And every VC is like, hell no, woodworker listing service, not in a million years, like not a venture thing. This won't work, blah, blah, blah, blah, blah. But nevertheless, like we were really good at persistence and sales. So we just kept going, kept going, kept going. And I remember this moment, like vividly, uh, we, we built this feature called the job board where, um, a customer could like, say, I'm looking for a custom bookshelf in, um, Lake Placid, New York. And then a local maker could like bid on it and say, Hey, I could do that for

you. And the reason why we built it is because when, um, when we would call these, these woodworkers and say, Hey, we have this, it's like, there's all this work on here. You should join. They were like, well, how do I know there'll be work? And so we built this publicly facing job board that we would say, Oh, here's your zip code. Look, there's been three posts today that you could respond to anyway. So I'm in this VC meeting and I'm like, pull up the job board and pull it up. And I'm like, all we have to do is stand in between these transactions. And they're literally like coming in. It's like, boom.

Oh, so it's like working. It's working. Yeah. People are posting stuff. You ever seen a live demo that worked? And we're like, all we have to do is stand in between these transactions and we'll have the largest marketplace for custom stuff. And as soon as I said the word marketplace, everything changed.

Like the VCs went from like, no, no, no. To like marketplace. You could be the next Airbnb. I'm like, yeah, of course. Yeah. That's what it's going to take. like no problem yes we could be the next airbnb and they're like great we're in and so we're in right marketplace on the top of the website well and i think you know it's like um i have a lot to

say about vcs in my experience but one of the things that's really important is that the vcs are pattern matchers right so if you're out raising money um the more that you can point to this being like part of a pattern that they're currently very interested in like they say yes that's just how it works so in 2011 everyone was trying to chase the next marketplace uber had just gone out airbnb like people are like i can't miss the next marketplace and that that worked so we raised like two million dollars uh five months later we raised another four and then a year later we raised 18 um and so it went from like nobody wanted to touch this thing to like everybody wanted to touch this thing now the problem was that the business that we were selling people

on this marketplace where we were going to stand in between a maker and a buyer it didn't work like nobody wanted to actually transact that way so like so there were lots of people interested in projects but they generally were very fickle they'd fall apart the maker would pull them off off platform because it was easier for them and for a whole host of reasons it just like i was interested in the custom bookcase until you told me it was twenty thousand dollars i'm not yeah exactly like i want ikea prices but i want it to be custom and so we had a really hard time vetting people and building a liquid marketplace but because we had raised all this money and because we had said the word marketplace and because that's what people invested in

it was very hard to unwind it and be like hey you know what we're just gonna be a subscription business now like we couldn't be and so we had this subscription business that was like a pretty decent business before we raised a bunch of money and we just like we we got stuck and then it became I'm like, OK, well, it's got to be your team. That's the problem. So we had Google. So Google was one of our investors. They're like, hey, do you want us to send our engineers around just to, I don't know,

poke around, do an audit of what's happening on your site? And we're like, yeah, of course. Google, that's awesome. They come in. They're like, yeah, this is bad. You guys need to scrap this whole thing and rebuild it. And we're like, oh, shit. OK.

And so over the course of a year, we- Thanks for your opinion. But go back to Google. Well, I didn't have the confidence to say that. That's what I should have said. Yeah. Right? What did you say?

What I did instead is I was, we're going to fix this. And we ended up basically firing everybody. And so I heard this analogy once of a startup being like you're hacking through the jungle with machetes. And you're just looking for a trail somewhere. And what you need is people who just have, you know, are relentless at hacking and finding a trail. And then they find a trail. And maybe that trail leads to a dirt road. and in in the custom-made business um we got to this dirt road there was a nice shiny google

funded bus on the dirt road and i was like i don't think you guys know how to drive and i left them all in the jungle all of them so all my friends all the people who like built this thing from the beginning all the people that were in the trenches with me we left them all um and that is by far my biggest regret of the whole experience were they pissed yeah i mean yes and no it depends some of them actually are now working for me at butcher box which is cool um some understood it they understood like the pressures we were under but yeah a lot were super pissed yeah because they helped me build this thing and then at the very at the very moment where it became like oh we we attracted outside investment because of all the things you

did we're like you're not good enough um and uh i mean it's never it's never easy to let people go and to do it on your terms instead of theirs so yeah so you do that how do you get from like we've raised whatever 30 million dollars whatever it ends up being to like okay this doesn't work like it's over so it went something like this first it was the circular firing squad like this must be an engineering problem this must be a product problem this must be a marketing problem like basically every department department by department it's their fault it's their fault is their fault everyone's problem but google's everyone's everyone's problem except like the investment thesis might not have been the right one then it became our problem so my co-founder

and i uh it was like we don't think you guys are the right people it was like okay uh so then they made us like wave wave rights and you know kind of um did it get nasty yeah a little a little nasty can uh whatever you're allowed to say uh you can take out names whatever but like i think there's a lot of people who only see the positive side of like interacting with investors. Like what can you tell me about the nasty part of it? Like, did they pressure you guys to do things? Like how did that work? Yeah. So the nastiest thing that happened was we had negotiated as, uh, all should do that despite the fact that we had investors that when it came to management decisions, um, including, uh, replacing ourselves, that that was up to us. Right. And so if you have, if you're

raising, if you're raising capital and it's competitive, you can get something like that put in there. Uh, most founders don't even know that they should negotiate for that. So we negotiated for that. And, uh, at the end it was like, you need to waive that because we're going to try to replace you and we want you to waive that. So if we find someone great, like we can replace you. And we were like, no, like, what do you mean? You already, like you already negotiated for that. And, and they basically were like, we're going to blackball you we're gonna make sure you don't raise any more money and you'll be dead yep you're gonna erase it and we're like okay like sure you know you you back down pretty fast yeah at least we

back down pretty fast now you know uh if you could go back to that moment now knowing everything you know what would you have done like just on the fuck off well the the problem with the business was we were we were like look we're burning five hundred thousand dollars a month five hundred thousand dollars a month a lot of money we're like this business isn't we're not going to make it like there's a wall we're going to run out of money we're not going to make it we need to like dramatically reduce staff change our business model do something different like and and our our investors were like no um i got it you know like basically at first it was well we're going to try to replace you guys as ceo or you as ceo mike uh and we want a new cfo ceo to see like

a full company of people that was the reasoning and then after that it was like well we're going to try to sell and we want the new company to see like lots of people and like neither of those were very good investment philosophies but nevertheless we kept burning money um and so at the very end we had taken a um small venture debt line as part of the 18 million and that bank was like your bank balance is below what you owe us and none of your investors are willing to pony up anymore we want to do uh what they call a friendly foreclosure so they basically did a foreclosure um friendly they just throw that in for yeah yeah just to make it sound better just to make you like you know smile while they do it no as i understand it like um you know a

lot of these venture banks work kind of on the side of venture capital firms right so they they have lots of deals together and so it's basically like they're playing a long-term game with each other they're like look we we're the debt provider we come out first there's not enough debt here like we don't get the big return you're the equity provider kill this deal and we you know on the next one we'll take care of you um and so ended up getting foreclosed on we uh fired everybody um then my co-founder uh the relentless bastard uh went back took it out of bankruptcy took four of the people who were still there and is still running the company but but did everything we wanted to do pivoted it you know leaned out the team did all the things and wiped all the equity

holders so everyone got zero none of the original investors benefit correct post uh and neither was the debt yep got it so the only saving grace of the whole thing on investment wise is uh as part of the 18 because the the deal was so oversubscribed um we were able to do secondary so we were we were able to offer all of our original like friends and family three extra money we were able to take some off the table small but like we were able to take some off the table uh that was the only saving grace otherwise i would have been seven years lost everyone's money and had nothing to show for it how many of the friends and family took the secondary most okay not my mother that's well that's bad but that's better than i have faith in you it's like yeah no mom please don't

next time it's like mom this is it take it uh but like what's interesting to me is obviously secondaries became very popular especially last year in 2021 and uh every single mathematical formula you could think of outside of this is the next facebook this is the next airbnb this is the next one i mean not even airbnb but like you know these big companies you should take some yeah of the money off the table uh even if it's just 1x what you invested so you don't lose money on the deal right now you're playing with house money whatever but because it's been so celebritized and like it's so sexy to be the seed investor or whatever in like the next unicorn that becomes the like 100 plus billion dollar company nobody was taking secondaries except for many of the founders

were taking secondaries right but none of the early investors were because like oh my god you know such and such firm or this firm or this firm is like coming in like they're smart so like i'm is going to ride. Right. And so it's very fascinating because like, actually the math tells you to take the deal or at least part of the deal, but like psychology takes over and humans are dumb and we're just like, ah, screw it. Let's let it ride. Well, one way that companies manufacture that, um, is that they, they, they make it all or nothing on secondary. So they say you have to sell your entire position, um, or nothing. And so in a lot of cases, then people are like, well, do I want to sell everything? But in the cases where you're actually able to

sell a piece, like I don't see any reason why you shouldn't be selling a piece, especially because, you know, I think what the past year has taught all of us is like, uh, everything looks great when you're riding high, but when the tide goes out, like you want to make sure you have a little bit of liquidity in your, in your back pocket. So you get into bad times. Yes. Thankfully, friends and family for the most part are okay. Yes. They wanted the grand slam. They got a single fine. Uh, how do you go from that to ButcherBox? Yeah. So, um, I actually had all of these designs to take a hundred days off. Um, I had a five month old daughter at the time and, uh, she's not five months anymore. No. Yeah. She's grown up a little bit. She's eight now. Um, yeah. So I had

a five month old daughter and I was like, you know, I'm just going to like, I'm going to take a hundred days off and just like lick my wounds and maybe go to a meditation retreat and like figure out what's what uh i ended up taking the weekend off and then starting butcher box um and uh i did because that's so gracious of you you took a whole weekend memorial so it was a long weekend it was got an extra day there um so i i had been so my wife uh has a autoimmune, uh, condition, um, thyroid condition. And we were following all of these, um, elimination diets, like anti-inflammation diets to like help her with her, uh, with her condition. And they all said, eat grass fed beef. And, uh, we couldn't find it. Um, couldn't find

it in the grocery store or maybe there'd be ground beef, but there wouldn't be anything else. And I just became obsessed with this. Like, well, how do you get grass fed beef? And I ended up like in the last year as custom made was failing, I ended up starting to buy cow shares from different farmers, local farmers. What is that? Cow share is where you buy like half a cow. And so you get like two massive trash bags full of meat. That's all different cuts from a cow. And so the cow share was too big to fit in my freezer. So I started selling it to like my friends. So I basically like, you know, split it up like a drug dealer and get my little head stash for, you know, for free. Uh, diluting. Yeah. Yeah. Diluting. Exactly. Um, and so, you know, somebody was like,

somebody who was in my office was like, this would be so much better if it was just delivered to my house. And I was like, Oh, you were like saying like, Hey, you can come by it, but you gotta like come to my house. Well, no, they were, um, I would bring it to work and it was like people from work who would buy all these shares off of me. Um, and he's like, this would be so much better if it was delivered to my house. I was like, yeah, that would be better. And at the time I was looking for, uh, I wanted to run a hobby business and I wanted it to be like modeled after like the Tim Ferriss four hour work week. I'm going to be living in Argentina. I'm going to pick up my laptop, look at it for 10 minutes, close my laptop, go about my day. And I thought

a subscription business, especially because of my experience with custom made that a subscription business would be like much better because, um, there is recurring revenue. So once you get it going. It's just like, it just feeds on itself. And so I just got this crazy idea that my hobby business was going to be like sending grass fed beef to people's houses. Um, and so I, uh, I didn't know how to like put all the pieces together. I didn't know how to, I mean, I ate meat, but I knew I'm not a meat guy. Um, I didn't know how to buy me. I didn't know how to ship me. I didn't know like the first thing about any of it. Did you, was this on it before we kind of get all the way into what you did you're doing this for like a year just kind of poking around buying this is

like uh uh me plus leftovers yeah right did you like run actual tests like did you like set up a website or anything or was it like oh this sounds cool it could be a hobby business like we're starting a business yeah so the idea was so first of all i didn't know how to do anything and then i met i i hunted down the former head of operations of omaha steaks which at the time come to like your house and like try to sell you steaks uh they they do that very rarely but yes they do do some of that but it's a you know it's a 500 million dollar gift giving business um been around for 100 years uh catalog and direct mail and all that um and so he was the guy who like knew how to buy the product how to ship the product interesting so i reached out to him on linkedin and he's like

yeah my non-compete ended like i'll help you out and so then pieces started coming together it's like oh okay here's how you do it he's like here are some farms and here's like the shipping facility and like so things started to coming coming together and so when i was leaving custom made um to me it was like i could either wait and like kind of lick my wounds and figure things out or i could just get started on this new venture as fast as possible it's like a rebound yeah and um because i didn't think it was going to be very big like i was i was literally like if i have a thousand subscribers and i make twenty dollars per subscriber it's twenty thousand dollars in gross profit i'll outsource some stuff to like a couple filipinos and i'll probably be able to

bring like ten to twelve thousand dollars a month and like cover my nut that was it that was like that was it that's the dream for like a lot of people i like to say that i failed miserably at that dream like i did that is not what happened um but and the other thing was i thought that so the way i wanted to start was via kickstarter because with custom made it was a two-sided marketplace so there's a buyer and a seller and so as ceo of custom made i went to school on like marketplaces and marketplace dynamics and um and there's this there's these points of time in marketplaces where they they reach like saturation on the internet and then there's huge opportunity for people who know to how to play by the rules um so early days ebay it was

like there used to be stores where they would sell your stuff for you because they knew how to like write good descriptions and take good photos nowadays ebay's figured out how to like make that all part of like the app and that opportunity is gone but it was it was a big opportunity for a long time amazon marketplace etsy marketplace people are taking advantage of these arbitrages I thought Kickstarter was like rife for that. And it was. So, um, our whole, our whole thing was to, uh, get the Kickstarter verified badge because we, we noticed that Kickstarter verified put you on the homepage, put you on the top of

the food page, put you in search. Um, Kickstarter would send a tweet about you. Like they would do all these things. And so we tried to deconstruct, how do you get Kickstarter verified? Which was one part like blowing through your goal on the first day and one part momentum and like we just how did you deconstruct that so like you realized okay this stuff we just started analyzing all the ones that were yeah we like look at things that um went live and like oh look they got the badge oh they got the badge like right after they did xyz so just kind of like became

students of what was happening on kickstarter and so we launched in september so i took off Memorial day weekend. And I actually had an intern, um, who I paid $10 an hour, start with me on the Tuesday after Memorial day. Uh, cause I was really worried about starting a business by myself. Like I didn't think I had, I'd had the discipline to like actually work all the time. Um, so, uh, but I knew if somebody was there, like, I know I can't take more than four days off, but like, I'm actually worried I can't do the work. Yeah. No, I just, I just thought I would just like sit on the couch and like, you know, um, not work. But I knew if somebody was there being like, all right, what's the next mic? I'd be like, uh, okay, do this. And that's how we got

going. Um, an intern is much better than a co-founder at that. Yes, absolutely. I mean, I, I, yeah, I, I think, um, you know, a lot of businesses fail because of co-founder dynamics. Um, I'm blessed to still be very close with my co-founder from my first company, but I never want to have a co-founder again. Great guy, but. No, awesome guy. It's just like when the decision has to be, like there needs to be somebody in charge.

Yeah. Even if they're a co-founder, you need to figure out like, okay, who's in charge here though? And I think most great businesses, even if there are multiple co-founders, three, four, five, whatever, if you even ask them, like who has the final say?

Yeah. They all defer to one person if the business ends up being great. Because if not, there becomes all kinds of issues. And I've also seen companies that said, okay, we're going to draw a line in the sand. All the decisions that relate to X, this co-founder decides.

All the other ones, this co-founder decides. And even that's a little messy sometimes, but at least there is some final decision maker that everyone agrees on for that specific topic. Yeah, we had a card. So ours was like the decision card. So if we were at a impasse and could not make a decision together um then somebody who started my co-founder started with

a card it was like he could be like i'm pulling the card and then whatever the decision is like we go with what he wants to do yep but then i get the card oh that's slick yeah so it's like you better use it on something good because then i'm gonna have the card and you're not gonna have the card he actually never pulled the card so you never got the card either yeah i never got the so i don't know if it worked or didn't but uh we we ended up um being able to settle all disputes um with uh just a lot of arguing all right so you got butcher box you're is it do you know what the name of this thing is at the beginning or yeah well i started with meet with a name.com which would have been really bad meet with a name meet with a name because like

the animal has a name because it's being well cared for uh and then i'm glad you did yeah no that would have been bad. Then a buddy of mine was like, what about butcher box? Uh, and butcher box.com was taken, um, by, uh, we got it, uh, two years into the business. It was a butcher in McLean, Virginia. And, uh, he had built it cause he wanted to do butcher boxes and ship them out. And, um, so we, we had get butcher box.com for a long time or for a few years. And then I just kept harassing him. And finally he's like, I'll sell you a fine. Um, how much? I think we paid 10 grand for it and at that point it was like that's a no-brainer let's do it yeah yeah yeah so uh we came up with the name butcher box the first thing that happened was we i sent my

intern out to like whole foods to talk to people about uh how much meat were they buying per per visit or per month how much did they pay for different types of meat um how much did they know about grass-fed beef um and what we learned within one day of just surveying people is um our model which was going to be we were going to ship a box of grass-fed beef was just not going to work because people don't eat that much beef in a month and so people are like i would definitely sign up for something if it had chicken and pork and beef but i'm not going to do it for just beef got it and so we immediately were like okay butcher box is not just beef we're going to do beef, chicken, and pork. Our Kickstarter was, um, beef, chicken, and pork, and you could choose

which box you wanted, like all beef, beef and pork, beef, chicken, and pork. Um, were you worried that that introduced complexity either on the user side or on like the operation side? Yeah, it, well, it definitely increased a little bit of complexity on the operation side because now you're dealing with like three different species instead of one. And you have to figure out like what the grass-fed equivalent is for pigs or for chickens or whatever um but it was definitely what the member wanted and i wanted to be able to ship a box every month to the member and it just wasn't going to work if it was beef so it just it just got more you had to do it yeah but the thing that we did uh so again so we start i'm like i'm only going to put ten thousand dollars into this company

i'm not raising any money because it's supposed to be a hobby and like all right ten grand i can recoup that this will work um and so less than 10 grand to start the company uh kickstarter all that and the other thing that we did because we didn't have any money is um we sent out a what we call the curated box so if you chose beef and chicken we're gonna send you beef and chicken but we're gonna send you whatever we want like you don't get a choice as the customer um we've since changed that now we have like a custom box and you can choose from like 50 different products and whatnot But at the time, in order to not have to carry any inventory, we basically were like, we're going to send you whatever. So the January box would be like, here are the cuts that are going to be in the January box.

So we could bring in the inventory, run through the inventory, bring in more inventory for February and keep going. This episode is brought to you by Valor, which represents what's next in the digital economy. They provide simplified trusted access in crypto, decentralized finance and Web3 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, all through a single stock purchase on a regulated exchange. They currently are listed in the U.S. under the DEFTF stock ticker and on the Canadian NEO exchange under DEFI. For more information or to subscribe to receive company updates and financial information, visit their website at valor.com.

That's V-A-L-O-U-R.com. This episode is brought to you by Compass Mining, the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. You can do it at home or in one of their 23 hosting facilities around the world. All you need to do to start mining your own Bitcoin is go to compassmining.io today. Again, if you want to get into Bitcoin mining, go check out compassmining.io today. So this is interesting because you raise no money.

Yeah. so for those that don't know normally you would have to raise money you then would go spend a bunch of money on marketing acquire customers and then those customers would almost be like just-in-time customers because you may get them on Tuesday and ship a box out on Wednesday and like you're playing an inventory game which you're talking about here because you weren't holding any inventory did you tell people like hey you have to be subscribed by like January 14th to get the box that ships on like January 21st like how did you operationalize not being overextended not having to put a bunch of money in we um so we did hold inventory we just ran it so tight that um

so boxes were always going out okay and um the place that we started with had a cutting facility attached to the shipping facility smart so we were able to like move stuff uh pretty pretty quickly pretty just in time um and they were actually i mean what you know one of the things that i say but people are like how did you grow the business without raising money like i'm stuck with inventory what do i do uh and one of the things was the company that cut our meat was actually remarkably bad at invoicing us for the meat so you know it's like a thirty thousand dollar order of new york strips they like forgot about for a month and then would bill us for it just so happens you got thirty thousand

dollars of customer revenue yeah exactly exactly so we um we yeah and then find dumb vendors who have bad operations as a key component to building a self-sustaining business. Bad operations, yeah, so our bad billing department. And then we ended up, over time, we've actually financed the inventory using debt. How does that work just for people who spend all the time in the software world?

How do you finance what would be inventory? Well, so it's a physical good, right? So it's a hunk of meat. And so that has a value to it. And so there are lending institutions that will lend against inventory um and yeah so we uh we actually started with our fulfillment center was like did a program where they would finance our inventory and then there are lenders who will finance against inventory uh and you can get a pretty low rate because if you default

they get all your inventory and that has like you know they can get 70 cents on the dollar or something like that for, for selling it. Um, so as we got operations up and showed that we were like profitable and like a real thing, uh, we were able to do that. Um, which is, yeah, I mean, inventory from my experience in, uh, our business, as well as mentoring lots of other people, inventory is an area where I think a lot of people like start thinking, well, I need to raise money, uh, to fund inventory. And it's really a debt problem. It's not an equity problem. And I think a lot of people too, that's the point where they're like, okay, I'm going to go raise money, um, versus trying to figure out different options, different funding options to, uh,

finance it. So Tuesday after Memorial day, when you started this thing, uh, you know, none of this, you're like emailing or LinkedIn, uh, with Omaha state person. Uh, and you have an intern. How do you go from, I don't know, a stranger and an intern to like, okay, we're live on Kickstarter. And like, we get the verified badge and like game on. Yeah. So what do you do there yeah so first we had to um you know i had been playing around with kickstarter for a while trying to figure out like what what's happening here um and so we you have to have like a plan of what you're going to do with kickstarter so for us it was like first of all i want to be able to ship out these boxes like pretty much immediately i guess so our our our kickstarter

was like september 9th through october 8th and we were shipping out boxes by like the 20th because we wanted to like get product in people's hands and then roll them to a subscriber um so we just built a plan of like here are all the things that we need to do here all the people that need to say stuff and then it just became you know we're we're into um the lean startup book and just running kind of trying to trying to figure out how to like run tests uh understand what our customers would like so we did a lot of surveying a lot of like going to whole foods a lot of like just getting in front of people and asking them questions um and came up with like all right we can launch this Kickstarter campaign, which you need, obviously you need, um, a video for which

I had a friend who did stuff at custom made for us. Uh, you need like a brand, which I had another friend who, uh, ran a branding firm that helped us with. Um, so I just compiled all these people that kind of like help with the, the original unveiling. And, um, yeah, we, uh, I, I didn't want to spend a lot of money because i wanted it to be a hobby business and so really everything went through that lens it's kind of like yeah we can't do that because it's too much or we can't we can't focus on custom buying customers or and during kickstarter that like this we had this big aha moment where um we had reached out to like anybody on twitter who had mentioned grass fed before being like hey we're launching this company could you give us some some press when we do

and there was this nutritionist uh this paleo nutritionist called chris chris chris kresser uh he's a doctor in california with a huge following and um he tweeted when we had when we launched on kickstarter he tweeted about it he was like i tell you to eat grass-fed beef and this is like a great great place to go to get it and we just saw all of these signups happen like right away, like tons of activity on Kickstarter. And we were like, that's interesting. Let's do more of that. Um, and so no grand boardroom plan of influencer marketing. It's like Chris, the doctor from California got a subscriber. Notice the signals. Who's Chris number two. Yeah. Yeah. Yeah. Notice the signals. Yeah. I mean, okay. So here's what I think about like in general with

entrepreneurship, I think people spend way too much time on a business plan, uh, and no time on a lifestyle design and i think one of the like most incredible things about being an entrepreneur is you get to actually define what you want your lifestyle to look like and so what i encourage people to do is to go do like a visioning exercise of your three years in the future like what does your lifestyle look like what time are you getting up what are you doing do you have kids are you hanging out with them in the morning are you like are you doing a hard workout like you know what does that lifestyle look like um i'm not a big believer in business plans because uh every time i've written one like they change like right away they're complete bullshit for a business that's

starting because to your point like you could have written the whole business plan then you went literally went to whole foods you're like oh shit it's wrong right totally and it anchors you on the wrong stuff and then you're like kind of like our first business you're like well this is what we said we were going to do um and so in this business it was like no we're just going to like observe and then make decisions based on our observations and then just keep going with this relentless pursuit of like helping the customer get what they want um yeah and so influencers it was like i guess we're doing influencers and then we went hard after influencers and um what do those deals look like in the beginning are you just stroking checks to them or how's it yeah no so

we didn't have any money so uh we couldn't stroke checks um so what we did is we reached out to these influencers. And the way we reached out to them, uh, we used to call it our Trojan horse is we were like, we were sending this box of meat and it was curated and we would like to throw in recipes about the things we sent. So if we send you a back ribs, pork back ribs, like, and here's a recipe on how to cook them. And so what we did is we went out to these influencers and we're like, Hey, we saw this back ribs recipe, this whole 30 back ribs recipe, uh, we're ButcherBox, we'd like to include it in our box and put your name on it and a link to you and all this stuff. Would you be okay with that? And everyone said yes, because influencers trade on

influence and free marketing. And they're like, oh, by the way, what's ButcherBox? And we're like, oh, let us tell you what ButcherBox is. And we're like, oh, we're the service. Yeah, it probably aligns really well with your audience. By the way, we can't pay you to send an email, but what we can do is pay your residual so every month that that subscriber maintains their membership we can give you ten dollars or we can give you fifteen dollars or whatever the whatever the deal was at the time what's the most that anyone was making oh geez i mean we still have people uh north of twenty thousand dollars a month so there's some people who are as a influencer slash distribution partner whatever yeah uh for butcher bots are making a quarter of a million

a year yeah that's fucking crazy amazing right yeah and so for them it was it was amazing for them yeah and we backed into this like you know unbeknownst to us we backed into this really interesting moat because there there have been other companies that have come along and and sold meat in the mail um but what is the motivation of that influencer to go like work with them when they're already like getting this like residual income stream for they don't even have to do anything else yeah they don't have to do anything else and that's right i just don't get my twenty thousand dollars as long as my people don't leave so are you really gonna like go hawk some other product and and destroy that income stream probably not yeah so we yeah we just like

stumbled upon this like pretty sweet thing and we went hard after uh if you were like in paleo hole 30 crossfit keto like you almost definitely wrote about about butcher box at some point and we actually were like i don't i want to make sure it's not like oh we gamed everything like we actually provide a product that people were looking for and their audience was looking for so it was like a win-win on both sides how much of it was the gamification slash marketing and you guys are smart there versus like not even if we weren't good at that stuff like the people wanted this box. And so, uh, we would still have a pretty good business even with just the box without being experts on the market. Yeah. I think the, to start with, it really was that

people really wanted the box and the, uh, this is true today as well, but the, the industry for what, what we call claims-based meat, but like meat raised better, we can get into all the, what, what that means. Um, in 2015 and 16 and 17 was really nascent and people had like read, Michael Pollan's Omnivore's Dilemma or had like read some of these blog posts that I had read and were like, I want to make a change. Okay, where do I go?

And there's like nowhere to go. And then all the farms that you could buy from were really inefficient because they would sell like half a cow, which is two massive trash bags full of meat. Like where are you going to put that? Or there'd be farms that would ship direct, but they would have to,

you'd have to like get it overnighted. So it was like $150 in shipping to send you like $20 worth of meat. you had to be a hardcore yeah and like big time believer with big dollars behind you in order to do kind of the traditional way you guys basically brought a lower cost option to the that's right that's right uh and then as we've scaled the industry because at our size we're now like scaling the industry uh we've we've continued to do it more and more efficiently to drive a better and better value to people so that they can actually afford to eat this way whereas like

five years ago that was not the case so we're like screwing around we're like oh yeah it's like small thing with an intern whatever like you make over 500 million dollars a year because of race outside capital right 500 million dollars in revenue per year is a fucking crazy number thank you uh how do you go from like oh we were at whole foods and like somebody told us like go include chicken yeah 500 million dollars a year in revenue yeah so what does that scaling look like so our revenue path was uh so we did about three hundred thousand dollars in the first uh year um 2015 we launched kickstarter in september so we did the kickstarter and then we had like some follow-on subscribers so three hundred thousand dollars then we did five million then we did 33 million

so like those are five x the business six or six x the business you know 33 million then 100 million then 225 million um and then covid hit so we went from 225 to 450 so we didn't think we were going to double but then we doubled the business again and then we did 450 to 550 last year so like slowing down a little bit you can't triple and double yeah it turns out you can't um and then this year we don't know where we'll end up uh we were hoping to be north of six but I think that's going to be pretty tough just given the, um, just the environment will definitely be above last year, but it's going to, um, so 300 to five is a big fucking leap, right? From any founder that's out there. It's like, I got to 300. They're like, okay, maybe this works. Maybe

like you're still have questions. Right. Five is like, I got a business, right? Uh, is that all influencers no so influencers was like really got us to like 35 uh and then and then we started doing well hold on how about how do you get from 300 to 5 you get 300k to 5 million yeah so that's influencers okay all right 5 to 30 5 to 30 whatever you said deep influencers that's like a stupid jump yeah right if you had investors they would be like in the lp update you're the first company right they're like hey this butcher box went from 5 million to 30 million yeah look how smart we are yeah that's all influencers too yep so you basically got a 30 million in revenue in two years ish yep uh just going to people and being like do you want to be included in the box and like can

you tweet about yeah that's wild yep and we i mean we we we built a very large program very quickly we were maniacal about like reaching out to everybody um and you guys are profitable this entire time yeah always been pretty much from day one yeah so when we got to 33 though um it became harder and harder to scale um and so what we did we thought we had enough cash flow coming in what we did is so every every single subscriber that we signed up for the first two and a half years had to be what i called box one profitable which means we had to make money on you as a customer that first box fully loaded. So we'd call it dollars per box.

So we knew the amount of dollars that we were making off of every box. Let's say it's $25. And so we knew that we had $25 to acquire you as a customer. And then if we acquired you for less than $25, when you resubscribed, which 90% of the people would or whatever, it's all gravy from there, right?

And so that's how we built the business. So then you've got this bolus of subscribers who are starting to fund the business and you're profitable on the first customers. after a while we were like this isn't going to work anymore we need to dip into month two so then we it was like okay we'll spend the profit of box one and box two on acquiring that customer because we had a little bit more cash flow and we're like not feeling like we're suffocating all the time and you also understood better about the retention that's right like we so you knew hey

if they buy the first box you're probably gonna buy the second yeah we we were then understanding our lifetime value curves how long a customer would stay for what they were going to buy how we can influence that and improve that um and so yeah i mean we fast forward to now we're spending way deeper than two months in because we know what the customer we know the right customers to try to purchase and then we know um yeah we we we know how to keep them when you start to get the machine going how many people are working at the business at this time it's just like you the intern the omaha stakes person and like another person or are you at like 25 people 50 people like no yeah we were we were pretty we were pretty uh lean for several years so

uh and and mostly with uh interns people who didn't people who had a chip on their shoulder something to prove and didn't really have any knowledge of what we were doing um and so we uh So, yeah, we brought in Juan, who came in today, was like a freshman at Bentley and was looking for something for the summer. And, like, we brought on people like that. And then we just try to keep people going. The first, like, real hire we made was on Halloween of 2016. So we had been in business for, like, over a year. And it was a meat guy, this guy Mike Billings.

and, um, I use LinkedIn once again. And, uh, I reached out to him and was like, Hey, I've got this business. Uh, he had retired. He, he, he ran meat and seafood at BJ's, which is like Costco on the East coast. And, uh, he had retired. He was like day trading on the beach and was bored. And I just somehow stumbled upon his thing, wrote to him and he's like, yeah, I'll come talk to you. What are you searching for on LinkedIn? I've done this many times. like okay that's what finally you and i are very similar that's what finally happened like you're just searching like what is this shit that i could search that might be in their linkedin profiles i could find this person who's been doing this for 35 years to get on a phone

call so i could talk to him for an hour and take all the knowledge and and you say shit because like uh i've been asked like well where'd you find this guy i was like yeah i was pooping i was just like looking on the internet for this guy you know i was like i was like all right let me just type in meat and he his his linkedin said experienced meat executive he was waiting for someone he literally was waiting for someone to search meat i got on linkedin so this guy comes in and he's he's like expensive he's like i went you know my last company i made over 200 grand like i don't need to make that much because i'll take some equity but like he he needs money and at this point we're shipping like 10,000 pounds of meat a month. And I'm like, okay. So that's like a few

thousand boxes. And I'm like, we, at this point, it feels like if we bring in somebody who knows what they're doing, uh, they can probably make up their salary. And we were also like, we were not sending a great product. Um, there was like, we did this group on one time and there was like green meat that we shipped out and stunk and like we had to give all these refunds and like i had we had no idea what we were doing we needed like a professional so this is he was the first professional yeah but this is interesting because you're like hey i had a bunch of like interns young people and like people like chips on their shoulders stuff but like omaha steaks guy yeah right totally mike billings right retired meat executive those people are like pretty experienced

so it's almost like you kind of sound like i don't want to give you too much credit but like You sound like you knew when to like, hey, we need just hungry people who are like young and willing to just work, you know, nonstop versus like the experience. It's like, how did you know when you needed which one? So I called this the barbell strategy. Okay. So what I've found is actually the further people are in their career, the more they act like the young, hungry people.

Oh, interesting. And so like you got like a 70 year old who had a 30 year brilliant career, but now is like super bored and knows freaking everything. all they want to do is come in and like teach younger people so these young hungry people are like hey can i learn from you they're like yeah great like sit down let me tell you everything you know um where where we've tended to have more trouble and i don't want to say like for those on my team who are listening this isn't as big of a problem but like it's kind of that like late 30s to early 50s crowd where um really want to make a name for themselves need to be moving up within

the company also want to coach soccer all of which all this stuff is great but like when you have somebody who's super young and hungry and you can pair them with somebody at the end of their career either they had retired and are doing another one or like are about to retire that's where magic can happen it's the extremes it's like um i've seen this over and over again so it's interesting the way you're describing it but it's like uh a lot of times venture capitalists which we'll talk about whether you like them or not uh we'll talk about like you want to find a founder who is amazing at one thing like if they're amazing at sales or they're amazing at technical ability or amazing at whatever they don't need to be this super well-rounded person

a lot of times it's just like be amazing at one thing really what you're talking about here is like oh this person has so much knowledge that it's on the extreme end because they're at the end of their career or like this person is willing to go above and beyond and work so many hours and like be so tenacious that's on the extreme of the spectrum the people in the middle are actually the most well-rounded people because they still kind of sort of work hard right they kind of sort of know what they're doing. Like, but it actually is like this very weird middle ground, which, uh, sure there are plenty of outliers, but like, that is maybe not the best place if you want to have extreme outcomes like you guys have had. Yeah. Yeah. And if you remember before I was talking

about like how my first company, I left all the people who helped hack through the jungle, uh, in the jungle, uh, this time around, it was really important to me that, um, I was going to take all of these uh interns or you know they're kind of like the younger people and teach them as we were going so that they could they would be able to drive a bus by the time that we needed them to drive a bus and so that was really important to me is to like pair them with with older people grow them help them to understand where like where they might be blocked so that they are prepared to take on big pieces of our organization and one of the coolest things about running a company especially a company that has like grown as much as we have is watching people's careers just like

skyrocket you know you come in as an intern and then you're running a division of the company and like it's just been really humbling to see i forget who wrote this uh a while ago but i read a blog post and it's like what do you do if you're like graduating college right and the argument was like don't go work at the big tech companies right you're just going to be one of 20 000 people or whatever uh and actually if you're reading this blog post like you shouldn't start a company because like you would have already done it if that was who you were the best thing to do is like go join like a series b company that is already heavily de-risked but still has growth in front of it and so if you were like early ish at uber or early ish at airbnb or whatever like you get

the brand uh um kind of recognition of the company because of what it becomes eventually you also learn a lot because you're getting thrown so many different things and if you're good you can move up in the organization that you're describing. It's like, it's this very unique place to go, uh, where you still do get the benefits of like growth in a business, but you don't have to take the founder risk. Yep. And so like, I always thought that was like pretty good advice, uh, in terms of like these young people where they should go. And you guys pretty much for the last three years, like fit that almost perfectly. Yeah. Um, I totally agree with that advice. Although I would say that I personally believe that, um, people should go into sales

first. Um, I just think getting your ass handed to you every day, having somebody say no to you time in and time out is really valuable. Um, and so if there's any, uh, some people have sales experience growing up, like, uh, for example, Mormons, um, have to go spend two years on mission being told no over and over and over. Um, but I think having time in your life where you are, uh, trying to sell something and being told no constantly is, is, is pretty important. I've never told this story, I think on this podcast, but you want to know one of the first things I ever did in my like professional career, me and three friends from high school started a business and we were getting local small businesses to sign up for almost like a

Yelp type product for local schools. And you know how we acquired customers? I don't know why I never thought of this before. We would go to a shopping center, like we'd like look on the map and be like, all right, cool. Like you two go to this shopping center, you two go to this shopping center. And we would just like go store to store and we would just walk in and be like, Hey, is the owner here? You can imagine like two 22 year old kids walking in no uniform, no, like just like off the street, like as the owner here and the people at the cash register are like, uh, do you have a weapon? Right? Like, who are you? Uh, and like, yeah, in hindsight, like you learn how to talk to people, right? Even if you're not successful, like you definitely learn how to

communicate with people. You learn very quickly, like, Oh, they're interested in this to your point about like going to whole foods. Like they don't want just beef. They want these other things or whatever. So I guess that's actually pretty good advice of like, just get in front of as many people as possible and get the reps to learn. Yeah. I think, um, you know, when, when we went out to raise venture capital, we must've been in 50 meetings where people are like, no, definitely not. I'm not going to invest in that. Uh, I, there've been several times when I tried to get a job in commercial real estate, I was sleeping on couches and like, you know, just pounding the pavement being told no. When we first raised money while Bernie Madoff ran off with everyone's money,

we were just told no um and you know it just builds this thick skin where you're just like whatever i'll just keep going like i don't care somebody's gonna say yes we'll just we'll just keep going until someone says yes as you think of the business today like where is this going yeah right most people be like all right cool you get to five million they would just be like don't break anything right like just like let the fucking thing roll uh 35 million they'd be like oh definitely don't break anything everyone chill out a hundred now you're over 500 million wherever you guys end up this year uh do you just like run it for cash flow do you uh try to get to a billion do you take it public do you sell it do you raise cat like how do you think about the various options

because it's a great position to be in a profitable business doing half a billion dollars in revenue yep but also sometimes like having a lot of options actually can be tough because you might not know what the right kind of clear path is. Yeah. Um, so for the first few years I was really enamored with the idea of building this company and selling it as fast as possible. Um, so I did like, you know, go talk to some grocery stores and try to put together a deal. And like there was a moment, um, probably three years in where I was like, I'm going to sell this. Uh, and also there have been two moments where I got almost a term sheets with, uh, venture capital, um, who were interested in investing and I was like, okay, great. And I could get some secondary and

like, you know, whatever. So, and every time it's fallen apart generally because I've, I've trusted my gut and I'm like, I, this doesn't feel right. Like I just need to back out. Um, and where I won't make you name who it is. Yeah. Uh, thank you. Um, where I sit now is, um, I think we're in a really unique position. We have no outside investors. We have no one breathing down our neck. we can kind of do what we want. Um, and I believe that, uh, what I believe in, like what I believe the opportunity is, is I want to build an iconic brand in meat. If you think about the brands that you know in meat, like you probably don't know very many and most people know brands and they're like, yeah, I don't need that. I know spam, but I don't need that. Um, Tyson, Tyson, I don't know

if you eat that or not. Um, but so I'm grass fed. Yeah, good. Right. Exactly. So you're like, I know that but I won't eat it right and so a brand Tyson executives watching this like fuck pop yeah he said it not me just to be clear just kidding I'm just kidding um a brand that's like stands for doing things right in meat is sorely needed it's a massive market and I think that that is like what we have the opportunity to do but like if you look at iconic food brands like the coca-colas of the world and the oreos of the world and whatever like they've been around for a hundred plus years are the brands iconic because they've been around so long or are they around so long because the brands were iconic from early on i don't know okay but if you if you start to go to

school on like what do these companies look like even even tyson like no tell me i'm in school right now yeah what they what they look they all are very closely held okay family controlled okay multi like you know multi-decade if not 100 plus years old um and so that appears to be the playbook is that a key component to making it last so long and being iconic is that there aren't a lot of cooks in the kitchen and it's like one family usually behind these things i don't know maybe i mean some of them have gone public but like the family still controls it um i i have no idea but when you look at it you're like okay there's a pattern here you know mars huge company privately held um cargill also a huge meat company privately held um so there's just like

there's just a number of these and i got really like okay i think that meat is needs to be transformed in this country and i'm kind of like i've gone from being like all right let me sell this as fast as possible to like i think this might be my life's work like if i could like spend my life trying to change an industry where there's a tremendous amount of suffering in terms of the animals the environment like the farmers there's just there's a lot to fix if i could spend my life doing that while running a big profitable company like fuck yeah that'd be awesome this episode is brought to you by arculus arculus is the next generation crypto and nft cold storage wallet that combines one of the world's strongest security protocols with the

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dude i hear this like life's task or life's work or whatever that's bullshit i just want to make money or uh the thing i want to do is like serve my customers but like i've got 20 other ideas that i want to like go build companies with whatever maybe five years from now they're like oh this is my life's work or whatever but like the transition it's the same company yeah right you didn't start out like this is going to be my life's work you kind of were like the opposite of the spectrum and you're like oh this hobby business oh maybe i could just like flip it for money. And then like it grew into your life's work. So like, how do you think about that in hindsight? Is that actually the like more sustainable path for it to potentially be

your life's work? Or do you think that, no, you could start out from the beginning and be like, this is my life's work and then just go, uh, or you can do what you did. Like how important is it to almost like have low expectations? And I'm, I recently read a book and it says happiness is, uh, expectations minus reality. And so like, if you had like hobby and it turns into $500 million in revenue, like you pretty much exceeded expectations. So like, how important is that? Um, so, uh, there's a really great book. It's, it's out there. It's called the way of the superior man by David data. Okay. The way of the superior man. Yeah. It's, I mean, just as a disclaimer, it's like um very graphic very sexual um pretty misogynistic but but there's some good content

in there it's really good um one of the things that he talks about is uh purpose okay living with purpose he talks about men in particular i think he's wrong that it's just like really a men thing i think it's men and women but um men with purpose right and one of one of the images in the book is like this idea that your purpose is like peeling back an onion and so you might be on purpose like my first purpose was like i'm gonna prove that i can start a hobby business and not raise outside capital chip on my shoulder and then you get to a point where you're like okay that's done what's next and it's like oh here's another purpose inside of it and for for me with butcher box like butcher box has always revealed like another deeper more important maybe not more

important, but deeper purpose for me to be going for. So it went from like build a hobby business to build a huge company that I can make money to like, okay, like, I guess I'm just supposed to go try to transform meat, which seems like a really big undertaking. Um, and I think that, you know, oftentimes people, they want to think about this like purpose way out in the future. Like this is what I'm looking for, rather than like peeling back one piece of that onion. You know, one of the things David Data says is like, if you need to pee, your purpose is like, you need to go to the bathroom. Like you need to be on mission to go to the bathroom. Okay, great. You've gone to the bathroom. What's your next like purpose in life? And thinking about that, like some purposes

can be really fast. Some purposes can take years. But being on purpose, living on purpose is far better, at least for me than the alternative and not knowing where you're going. So this is fascinating because Ranjay Gulati, who's a Harvard business professor, has a whole book, podcast, et cetera, around purpose. They went and did a big study. Companies that have a clear purpose drastically outperform businesses that don't. Then if you read Robert Greene, many of his different books, but something like Mastery, he talks a lot about life's task, right? Like you got to figure out what that is and then you're off to the races. uh if you then go and you look at um maybe somebody like uh so you have uh ranger you've

got robert maybe you could even look at somebody like a vivek uh rama swami i don't know if you've seen him strive asset management uh all of these c suites and board uh of directors etc are becoming very like esg centric and all the stuff and he basically shows up and he's like listen the purpose of this business to make fucking money right and so like cool i get that other shareholders wants you to do other things that aren't actually what makes us money as shareholders but like here's my letter to the board go make money and his whole thing is like you can't serve you know five different masters as a purpose like you have to have one and is it to make money or it's not whatever and so like there are these different data points throughout

I think business and society in general around purpose but most of them are talking about purpose it's like a singular thing what you're talking about here is like the purpose can almost evolve. And in some way your purpose got bigger. And I wonder how much of that is like you gain confidence because you're like, Oh, the business is bigger. Oh, there's more profit. Like, like I, I actually have the potential to do more. Whereas if, you know, if you were sitting there a Memorial day weekend, you're like, I'm going to change the meat industry. The intern might not even come work with you. Right. And so like how much of it is like the success of the business almost gives you more confidence to like, can I go a step further? Yeah. It gives you like permission to

say uh my purpose is bigger yeah uh yeah so i um you know going back to the very beginning i definitely started searching for grass-fed beef because i thought it was a much better option environmentally for the animal for the end consumer etc um and so i guess right from the start i i knew that the industry was broken and needed to be fixed i just guess i didn't think that i would actually make a dent in a massive super entrenched in industry uh but that's changing like that's actually literally changing how big are the other companies like the cargills or whatever i mean cargo is 100 125 billion dollar privately held company 125 billion but they do a lot of ag like valuation or revenue revenue yeah jesus they're the largest or second largest privately held

company in the world they're okay how big do you think their meat business is i mean meat is a multi-hundred billion dollar industry in the united states yeah just in the united states but like the large is cargill the largest uh there's the big five so uh tyson national beef jbs um cargill and i'm forgetting one of them i'm sure there's nice people that work on all this oh totally when texas slim came on the uh show he said a lot of nasty things about all of them not about the people but about uh the way the businesses are run all these issues that you're talking about so when you think about 500 million dollars of revenue yeah does that make you a top 10 uh player uh top 50 top 100 like i mean certainly top 100 um i i don't know about top 50

but when when okay so the the the industry is um so grass-fed beef is two percent of the overall beef consumed in the united states okay two percent out of a hundred percent right so um it's tiny uh and then that is pretty much the case for the other species like at the level that we're doing so we do humanely raised antibiotic and hormone-free pigs and we do free-range organic chicken and we have a whole bunch of wild-caught seafood and all this other stuff but each of those markets are tiny compared to the conventional market right and so um we uh We are a big portion of the claims-based market, as we call it. What does that mean?

Claims-based. It's like meat with claims. So grass-fed beef or antibiotic hormone-free or pasture-raised or non-GMO or whatever those claims are. That's just an easy way of saying meat raised better. so we are a very a large portion of the meat raised better market but it's still like two percent of the overall market so the people who are really big in this space are the ones that are like um using confined feeding operations uh using massive feedlots using massive chicken houses like all the stuff that you see the you know undercover videos for um that is uh how most animals in this

country are raised i got a lot of questions about this first is are they playing both sides are they like any one of the big five are they like oh so here's like the regular stuff and then oh by the way we also have grass-fed well this is what's trying to play the game this is what's interesting is like no so um most most of those large companies have um not really built out any programs any like grass-fed programs or claims-based programs because they don't believe that there's a market interesting however watching us and now that we're like a little more open about our revenues like watching us literally us they're like oh wow there there is a market here and so we're actually getting like reached out to by those large companies being like do you

want to partner with us like would you be if we raised animals to this standard would you be a buyer which is fascinating it's like would you yeah if it met the standard yeah because we'd actually be changing the industry you know i was asked recently like what do you do what would happen if we're like 10 years in the future and these big companies like all partner with you and they all build out their own programs and now they're bigger than you and they've like squeezed you out and you go out of business and i'm like i don't know if i could get all those companies to like actually change their practices and do things the right way like i think i've acted like i've done my mission like i did it like that's fine put me out of business like whatever um i'm sure

I'll figure out something else to do. So start another hobby. It's okay. I'll start another hobby. It's fine. Um, so I, I just, I'm, I I'm really encouraged by, you know, we like to work with two types. We like to work directly with small farmers and help them to like grow their business, which takes capital. It takes us, um, cutting purchase orders saying like, Hey, if you raise your animals to the standard, we will purchase from you. And we're also really interested in talking to big companies and helping them to like figure out how they can like actually do this at scale. And if we have to be the anchor tenant for them to scale a program, like we're, we're, how do you make sure that they actually meet the standard? Like it sounds dumb, but like

you can't talk to the meat, you know, interestingly, how do you, how do you make sure? Interestingly. So there's a whole bunch of third party stuff you do, especially around the humane certification stuff. So all of our stuff is like certified humane. You need to like make sure that it's raised to the right standard there's a few certified humane certification agencies um antibiotics and hormones are an affidavit it's written there's no test so you can say like yep wasn't fed a hormone wasn't fed an antibiotic um uh does that need to change like do you think that they should have a test we've talked about like random sampling uh our our product uh but what i was gonna say is interestingly like unfortunately oftentimes it's the smaller

players who get in trouble who start cutting corners it's it's rarely the large players because they just have too much to lose and i i know like you look at big ag and you look at the way they treated animals and maybe that sounds backwards like that sounds like you know i'm giving them a pass and like but if you're if they're if they're gonna sign their name on something that says this animal was treated this way the bigger you are the more you have to lose right and so i've unfortunately and we've worked with these people like we've definitely had stories of farmers like their herd gets sick right and you you got to understand when you're a farmer and you're raising 50 head of cattle and you got a loan and you're raising them to a grass-fed

standard and they get sick and so you give them an antibiotic to like keep the cow alive but now they're not supposed to be in the program anymore because they were fed an antibiotic and we're never ever antibiotics so what what do they do sometimes they are forced to lie yeah um and i'm not saying that that's like a huge thing in our business but it's definitely um yeah yeah so so there's you have to do careful monitoring of everybody uh what they're doing and i and i think we can do a much better job of this uh using technology which is really nascent everything's done on paper it's a huge industry where like millions of heads of different animals trade hands and it's all done on paper and i mean what's crazy about this is like

ancient rome right like people were literally trading livestock doing all this stuff and like sure we have like i don't know we've printed paper right but like like not that much has changed from like the pure like transactions now people laugh they go all this other stuff change, whatever. But like, yeah, the basic idea of you're going to raise an animal and you're going to sell it to somebody else. It's like still pretty archaic. Yeah, very. Um, and there's, there's really not a lot of tracking, not a lot of, uh, there's, there's not a lot of data going back and forth. There's not a lot of, um, you know, I think that there's a, this area is rife for disruption. Um, I, first of all, the, the, so every cow starts out exactly the same. It's

cow calf for six months and then it's a cow living on pasture for a year and then after eight so 18 month old cow you know 98 of them go to a feedlot for the last six months and the problem with the feedlot is when you're that farmer who generally they buy the cow at six months old and raise it for a year the problem with the feedlot is um the feedlot is going to put corn into the cow and grow it to be as fat as possible in six months whatever the price of corn is is going to dictate what they're willing to pay that farmer. So the farmer is actually like at the whim of the commodities market and they're just trying to like raise animals. And so, I mean, for years, the farmer has lost money on every herd that they put through their farm. Like that, that person grass fed is

like, Hey, don't sell to the feedlot. Just keep it on grass. They could conceivably do it on their own grass or they could like they, that, that is absolutely could be a program. The problem is that the farmer's loan is due from the bank so they in order to get the next herd they have to pay off the first herd and so they actually can't keep the animal for an additional six months nine months just eating grass because they have to get another herd and like this is a problem that i think how big are the loans oh millions of dollars yeah because if you have 50 head of cattle you know it's or i mean that's a small herd um yeah you're talking about a couple thousand dollars per animal um they can be big yeah um and so i i actually think it's a really interesting application for

like bitcoin or for uh for crypto to like because there's there's an increasing value of that animal as it goes along and if you can like marry all these subscribers that we have who want something raised differently and you can marry that with like this animal that we just need to break it through that last stage you could have something really special yeah is that something you guys want to actually do yourselves lately or partner with somebody. Yeah, for sure. Um, and as you continue to do this, can you eat into, or do you have interest in eating into other parts of people's grocery bill or is it just meat? Uh, we've, we've, we've started eating into other parts of the grocery bill. So we ship frozen in the mail. Um, and we really are looking at

anything that is, uh, frozen. We've, we've moved, but not ice cream, not ice cream. We do sell smoothies on our site uh we are talking about doing dessert at some point ice cream is tough to keep frozen in the in the mail okay um which is why it wouldn't be like my first product um we uh have an egg like eggs egg bites and butter coming out soon we've moved into jerky so we're like we're doing kind of things in the periphery but we haven't done like frozen vegetables um and is that because there's like a health angle to it or that's because like literally it's hard to keep frozen or something like that um it's really a capacity at this point uh we actually are um going to be doing uh pet treats this year um which is has been highly sought after from our

customers and it is it really helps balance the animal it uses pieces of the animal that don't get eaten normally by humans um so it helps us like balance kind of all the all the cows we're using. So as you're like watching this continue to grow, you get increased confidence. Kind of, I just think of like, it's working, it's still working. Okay. Shit. Like maybe we have a business, right? Um, you can do all kinds of crazy stuff, right? Like, like you've cash and you're not beholden to anyone. How do you evaluate what to do and what not to do? Yeah. How much of it is the customer? How much of it is like, we want to do this. Like, like we're excited about it. How much of it is like an economic decision? How much of it is something else? Like, like just

what's the framework? Yeah, that's a good question. So I think, so we have a, we have a purpose and we have a mission. Our purpose is really more of a feeling. And it's this idea of being able to confidently feed yourself and your family, like something that you trust, right? That you put this, you put ButcherBox in front of yourself and you're like, I know that they went to the nth degree to like make sure that this is the best possible quality, the best possible price. And they, they did all the vetting that I don't have time to do. The mission of the company is to transform meat. Um, so when we, when we decided on moves to make or things to change or like things to invest in or money to give away to, we're really looking at that mission and that purpose and deciding like,

does this help us transform meat? Um, or, you know, so that's like kind of the purpose mission side or um how does this help us be more sustainable so we can live for another year by helping us improve gross margin or improve like the fundamentals of our business so we actually uh last year the past two years uh we opened a dry ice facility uh so we opened a dry ice facility in oklahoma city and we're opening another one in iowa and the reason why we did dry ice was um first of all the machines are comparatively cheap and they'll put you on like a five to seven year like zero percent down thing and you can depreciate the entire thing in year one so that's like pretty good financially um and secondly if we don't have dry ice we can't

ship a box like if we don't have bacon and you have bacon in your box we can ship you the box and be like sorry we ran out of bacon here's your box but if we don't have dry ice we can't ship And so it was this critical bottleneck where we were really looking for, like, what are the critical assets that might be hard to get in the future or that we'd want to control in the future? You think, like, the big meat players would, like, go squeeze you with the dry ice? Well, actually, dry ice got really squeezed over the past two years. Why? so at the beginning in during the pandemic um so dry ice is made from co2 co2 is generally a byproduct from manufacturing the number one thing manufacturing thing that is a byproduct

from is ethanol because of the pandemic nobody was driving their cars there was a lot less gasoline being consumed so there was a lot less ethanol being produced so there was a lot less co2 being produced then coca-cola and anheuser-busch and all these other guys were like trying to buy it all up uh and so because they need dry ice they need co2 for their drinks oh got it right so co2 became like hard to get um and then all the dry ice uh when the vaccine started shipping uh they were all being shipped frozen and on dry ice and so then there was just a huge a huge influx of dry ice demand with like small amounts of dry ice capacity and so we were one of the few companies that shipped on dry ice that like didn't really have a problem i mean why didn't

you have a problem because we controlled our own destiny we had our own tanks we had our own co2 we had our own agreements with people already like when they put in the tanks that they were going to fill them at some sort of interval and so where some some places even in the facilities we were shipping out of were like we can't ship this week we don't have dry ice we just kept shipping um because we were able to control our own destiny what else are you scared of that somebody could like take away from you oof like what about the boxes those are plentiful uh yeah they're i mean we ship in a cardboard a fully uh recyclable corrugated cardboard box um let's see what are we scared of that people could take away plastic bags well one of the interesting one of

the interesting uh challenges that is going to come up is california just passed this law prop 12 um where uh it's a animal confinement uh specifically pigs um and what that is going to require is for pigs to be raised differently because california is a massive meat market we helped to push prop 12 forward knowing that it was going to hurt our supply in the short term okay because why did you do that uh because it just transforms the it it's like it it's where meat needs to go shoot yourself in the foot to yeah push the industry yeah and and so like that's like kind of a window into how we would make a decision like should we support this and it's like if if you thought about it just like if let's say we were publicly traded and we're like well that

might mean that we're gonna reduce our gross margin and pork for the next five years is like the industry heals itself you could see where you're like yeah let's let's actually go on the other side let's like let's let's be against the regulations our shareholders may force us to yep exactly like because you have that fiduciary duty to your shareholders um if you are private uh without outside investors you can kind of be like well what's the right thing to do here well we think ultimately the reason why we started this company is because we think that pigs should be treated better so like let's be on the other side of that yeah even if it hurts our supply in the short term what's your day-to-day like like you you plus your employees own 100 of this business

you sleep till like 11 o'clock in the morning yeah just kick my feet up relax like what is like a like a normal day look like totally um okay so i have three young girls i have uh two six-year-olds and an eight-year-old uh so my morning usually i'm trying to get up before they get up because once they get up it's i'm like shorter to cook and preparing their lunches and doing all the other stuff. It's just chaos. Yeah. So if I can get up, I have a one-year-old and it's already chaos. Three girls, six and eight. I'm good. Yeah. So like, if I can get up with something like, like, like five, uh, spend some time meditating, stretching, just like writing, writing in a journal. Um, that's a good day. It doesn't always happen, but that's a good

day. Uh, then they get up and from six to seven 45, I am like on demand. Yeah. You're dead. Uh, Yeah. Just every request possible getting thrown at me. And then they're off to school. And so I'm now trying to figure this out. We just opened an office. I'm trying to figure out like, what does my daily routine look like? You didn't have an office before. We shut down our office during the pandemic. And then we had a temporary space, but I wasn't going very much. And now we have like a permanent space that we have a long-term lease for. And you're like going. And now I'm going. yeah so i'm gonna be going at least tuesday wednesday thursday going to the office uh and then monday friday i might stay at home and just have like more thinking walking whatever during

the pandemic i would just be taking phone calls and just walking laps of this pond near my house dude it was the greatest thing ever i know it was amazing like i don't know why i enjoyed it so much but the ability to like do the call and no one judged you for like being outside yeah was amazing yeah i still do that i can't stand being on zoom or teams or whatever and i try as much as possible to just like be in person or be outside i banned teams in one of our companies for you i was just like look it's too hard in the calendar invites there's no phone number to call in easily so i'm out yeah i'm out um all right so what time you go to the office uh so yeah so i i work out with a trainer monday wednesday friday um if i if i'm doing the gym

So I work out with my old CrossFit coach, and we do both boxing, which I'm really bad at, but learning quick, and just strength training. Just try to beat myself up. You do that in the morning? Yeah, I do that in the morning, three times a week. And then on the off days, I'm usually doing some sort of cardio, whether it's a run or in Boston, Harvard University has a really old stadium.

It looks like the Coliseum. And you can do the stadium where you, like, walk up the stairs and walk down, which I try to do several times a week. I played football at Harvard, not going to Harvard, but against Harvard. And I remember just being like, holy shit, this place is, like, different. There's no other stadium in all of college football like that. Yeah, it's really cool. Yeah. Okay, so you go to the office 9, 30?

Yeah, I would say, like, 9. I try to be home in time for dinner. Okay. Dinner is usually, like, 5.15 at our house. Okay. um i have an away message on my uh well it's like a in in my the footer of my emails that says that uh i try to be off the grid between 5 p.m and 8 p.m okay and then sometimes i get back on to check emails but like uh if i kind of if i reach out to you it doesn't mean you have to reach out

back out to me just like it's just when i do my work um so i try to be like kind of present between five and eight just to be like with the girls and uh enjoy that what do you do during the day like so you're there from nine to five let's call it what are you doing mostly meetings um so i have a executive team that i work with and then i have other projects that i'm working on um the innovation bucket uh goes up through me because i really love that stuff um and i try to make a lot of time for like ad hoc stuff especially now that there's an office like quick 15 minute like hey let's talk about this or let's do this um and then i just spent a bunch of time trying to get the word out about what we're doing whether it's being on podcast or writing or just trying to like push

it forward um but you know i would i would say it comes and goes like productivity for me comes and goes in waves like i don't think right now i'm nearly as optimized as i have been on the productivity front uh i think i've got some work to do to like get what's the biggest thing that You're like, I know I'm doing this, but, like, I got to change this. Whatever you just thought. Browsing TikTok. I was going to say, whatever you just thought. Thinking I'm working.

No, or even, like, even, like, just, like, or even Twitter. I mean, it's, like, I don't know. When the pandemic first hit, my social media, like, usage went way up. And there was a time where it really felt like I was, like, working. because I need like all this information was flowing. It was just like, I need to be doing this. And it now just feels a little bit more like a luxury and not like necessarily like as much work.

The other thing is, so there's this, I learned from this great CEO, he has like a rule of 10, which is that he will only allow himself to do 10 things at any given time. And he writes them down, only 10. and so i've started reinstituting that i've done that at other times in my in my career as well where it's like okay here are the 10 things i'm willing to work on um and you know so one for me is leading leaders which means like i have an executive team and i need to lead my executive

team so like what are the initiatives that i'm doing this week on that or thought leadership like what are the initiatives i'm doing on that uh and so i think when i'm not in the space then i can just have this big to-do list and it's like okay it all seems important and i don't know what to like work on first and i think prioritizing especially especially like when things are tougher prioritizing is a really good thing to do yeah this episode is brought to you by amber data if you're a financial institution entering the digital asset class you'll need access to granular on-chain and market data from multiple venues to power research trading risk management and compliance. Amber Data delivers comprehensive data and insights into blockchain networks,

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technology means that LMAX Digital is the market leading solution for institutions across crypto trading and custodial services. LMAX Digital, secure, liquid, and trusted. Go learn more at lmaxdigital.com slash POMP. Again, that's lmaxdigital.com slash POMP. I recently read The Practice of Groundedness. This guy, Brad Stolberg. And one of the things he talks about is we live in the state of hyper alertness, right? And he even says that used to be a really important thing because you didn't get killed by the predator. But now hyper alertedness is something that like our ancestors could have never imagined we're just like touching an electronic every five seconds uh and he's like and somehow as a society we've like convinced ourselves that

the more notifications you get or the more emails the more whatever like the more important you are and he's like actually the people who like really win the game are like the people who realize like that's bullshit yeah and like how do you separate but to your point uh i got a lot of friends who run a lot of different types of companies and the people who i think make the best decisions are it's not all the time but like maybe once a week maybe half a day whatever they can do they can step back and just be like where are we going are we are we like going in the right direction am i like doing the things that i need to unlock the team the product whatever and like it's counterintuitive but like i think people are waking up to just how important it is yeah

yeah well i didn't mention this but uh i have uh tried not to work every friday since i started of the company. Really? Yeah. Um, it started as like, uh, a way that I was going to hang out with my girls. Uh, cause my, my daughter was five months old when I started. Um, but now they're in school and I'm kind of like, I don't think I want to like just load myself up with meetings. So it was my thinking day. Like it's the day that I'm able to like really process things, put things together. Like, you know, and when I'm with the girls, it's like, I'm painting with them or I'm like playing with blocks so I'm like being childlike and also thinking and I think um I think it's important um when you're a CEO or when you're starting a company I think it's important to

give yourself time to think um because you don't need to be scheduled up to the gills and you will be if you don't protect your time like it's just the nature of the beast Friday I do a very similar thing but I call it output day and I try to do no meetings or calls it's like nothing that's like coming inbound and it's just like i know when i get to the end of the week there's a bunch of shit i didn't do yet and it's like i can just mow through it and sometimes it takes me all day sometimes it takes four hours whatever uh but i can focus on the things i think are most important right um and what i found is uh it's great because like mentally you go into the day thinking very differently and now i violate the rule all the time but like for the most part try

to do it um but the first four days of the week get fucking loaded up yeah and so like i've always gone back and forth on like, should I actually have that dedicated day where it really puts more stress on the other four days? Because I know that I'm not going to have any of the meetings or calls on Friday. Uh, or would you be better off kind of like spreading it across five days? And I, I don't know what the answer is. Um, but then I also have a friend who now Thursdays, he's doing something similar. I'm like, dude, come on, like, like line up the days, right? So then like, if I need, so I can call you. Uh, and so it's like funny because I think again, And it's, it's some of it's thinking, but also some of it is just like, if you're in

meetings all day, like you don't, I laugh all the time. Like I don't do my email. Right. And then you're like, shit, it's, you know, five, six o'clock. And you're like, I have, you know, X number of email that I have to go do. And you feel like you didn't do anything all day. Right. But you're like, I've been in meetings and now I have to do this.

And if you don't answer, then, you know, people get blocked or whatever. Like it gets complex pretty quickly. If you don't have a good plan, I think to kind of take on a responsibility. Yeah. and I think that we actually do this poorly as a company as well like I think um so we're about we're over 200 people now and um I think as you grow as a company you don't necessarily prioritize like efficiency and so I hear all the time about people just in meeting after meeting after meeting and they're like when do I have time to actually sit down and think do any work and it's like what

responsibility do we have as a company to like help people navigate that you know I know what like works for me but i need to like kind of bring solutions to a larger organization um it's one of the things i well we really want to work on for next year is like uh efficiency because there's just too many meetings with too many people who don't need to be there who are just wasting time the executives um how many of them were previously executive somewhere else versus like this the first time they've been an executive it's like split uh most of them have been at this point most of them have been an executive somewhere else okay and your relationship with them are like are you doing like one-on-ones

and like weekly check-ins and all that type of stuff or are you just meeting with them as like an executive team together like how does that work um both so we meet as an executive team once a week um and then i do one-on-ones it depends on like how long i've been working with you for we have a new cmo and a new cfo who i'm meeting with at least once a week um but then for some people who I've been with for a long time. It could be every other week or something like that. Yeah, it's really just making sure that we're coordinated. Like, are we in sync?

Are we coordinated? Do I know what's happening? Explain that more because I think this is something I see, even I do it, but a lot of first-time founders, they'll set up meetings because they want information. Yeah. And it's like, this is an information meeting. This is not like an action, you know,

we're not getting an action coming out of this meeting. And, uh, some of them, maybe like the async type communication companies have gotten really good at like, Oh, there's this doc. And like, I can just go there and see it and I don't have to bother anyone. But like definitely companies in office, I still see it all the time where people like set up a meeting and it's like, okay, tell me what you're working on or tell me what's going on. Right. And maybe they have an obstacle or a problem that needs to be solved. But for the most part, it's like literally one person transferring information to another person. Yeah. Like, have you solved avoiding that or not really? Yeah. Well, I think the best solution for that

problem is um yvonne chenard uh who's the patagonia founder had this thing called the 15-5 sometimes called the 515 um but basically it's a weekly update that you have your executive team or whoever is in your direct line takes this supposed to take them 15 minutes to write and you five minutes to read the biggest thing you have to work on is making sure it's only 15 minutes because sometimes people like write a whole book and you're like dude no it's 15 minutes like set a timer. Um, but you know, it basically is a list of like, here are all the things that are happening. Here are the bottlenecks. Like, here's what I need your help on. And they do it every week. And, uh, so Yvonne Chouinard and his book, um, let my people go surfing, or I think that's

what it's called. Um, that's what it was all about is like the only way that I can go surfing and my staff can go surfing is if we have a common understanding of like, here's how you're going to report upon your work. Here's what's going to happen. You know, like that has worked. Um, I don't use that with my executive team now, uh, because, um, kind of people do that ad hoc. Like I don't feel like I need to have like a structured 15, five. Um, but that, that has worked in the past, um, at this company and my previous company. So I get weekly reports from, I don't know, a number of different people about different

things. Uh, and what I've found is like, it's helpful for me cause I obviously get the information or whatever. It's more helpful for them. Yes. because it helps them. They have to sit down. They have to write like, Hey, here's what's going on. Yeah. Totally. Right. Um, and, and some of them are like, it's mutually beneficial. And then sometimes I literally tell them, I'm like, by the way, like I met with you on Wednesday. I know

what's going on for the most part. I'm gonna be with you next Wednesday. Right. Like write it down because you're going to come up with, here's the problem. Here's two potential solutions. And what I've noticed is the best people who do it, they don't do it in 15 minutes. So maybe that's something we should work on. Uh, but the specificity. Yeah. Right. Like you can go back and you can look week after week after week and it's like it started out and it was like things are great right and then it's like you know x things shipped and then it becomes like an actual metric that moves week over week progress like you can literally see the improvement uh and it just clarifies thinking yeah which i think is super important right so it's like how do you get

informed but also if you can help clarify the thinking your whole team's better yeah yeah the other thing that we've worked hard on is our our executive meetings or our leadership team meetings where um i don't just want it to be like if i'm going to meet with you or if i'm going to get an update from you i don't want to then sit in the room with all these other people and like i know all the information it's like this isn't worth it to me like you guys meet i'll just you know do something else um so it's like how do you get like above and beyond just the update into like what's really holding us back what are the big decisions to be made and how do we like collectively think through that stuff i won't do the update uh meetings like in a group because i get it's

just like becomes a clusterfuck yeah yeah right uh but the other thing too yeah it's boring but also um i always want like an agenda beforehand and i know it i know people get annoyed but i'm like listen like again the agenda and i'm almost like a little ocd about i'm like well we're supposed to go to this next point like why are we going over here and uh what i found is that like the process is uh so important if you want to be able to not be in the meeting at some point like you know it's being run correctly and uh the single biggest unlock i think i've ever taught any of the different teams how to take notes like it's like so stupid right but like every team i've ever worked with whether i'm an investor whether i start the company whether i'm like brought in

to help or whatever. If you have 10 people or six people or whatever in the meeting and nobody takes notes, I'm like, Hey, you should just take notes and just email it to everyone afterwards. Yeah. And it's like so stupid. But then what you realize is like, Oh, that's really valuable. Yeah. And it's same thing. Like another one is in the investor updates. It's all the founders. I'm like, listen, just put a section that says how you can help. And if there's nothing to help with say no asks. Right. But like investors are stupid and they scroll through. And if they don't see that they don't know right they're not gonna do anything they might not even respond yeah the last thing i want to talk about is investors you had vcs now you don't yes what

what why not what is your evaluation yeah i mean you almost dated them again but then yeah i didn't um so to the altar yeah got super close to the altar um well first of all i think like i think venture capital, uh, as really important for certain businesses. Like if you're doing deep tech stuff or, you know, building hardware, like there's a lot of businesses where it makes sense to go raise money. It's also a great way to learn if you're a young founder and you don't know what you're doing. And if you can get people to give you money to like go learn on their dime, that's awesome. Just know what you're signing up for and what you're signing up for is like you're on the venture capital train. And you don't call the shots anymore. Like you have a boss. And so a

lot of people like it goes back to kind of like, what kind of lifestyle do you want? They get into a business because they're sick of working for somebody else. They, you know, work on it for a little bit and then are like, well, people are raising money on Shark Tank, so I should raise money. And then they go and raise money and then they get diluted. And then they're not performing and their investors are mad at them and are up their ass and they're like, I'm now working for someone else that's just an investor. I didn't raise money, plain and simple,

because my first company failed and I was like, I'm just going to do a hobby business and I don't need to raise money for a hobby business. And then it got bigger and it was like, well, I just don't think we're growing this business. I don't think venture capital is going to help much. You didn't have money problems at that point. Yeah. We, I mean, we've always had money problems, but I have felt like the money problems have kept

us sharper. Um, and so, you know, as I was saying before, like our, our whole marketing strategy was born out of not having money. If we had money, we would have, we probably wouldn't have found influencers. We probably would have just like started roasting through money on Facebook, like every other box subscription company did. And so it really like that, like the decision to not raise money really shaped the company that we have. And I'm so glad that we didn't because if we had, I don't think we'd be here anymore. I think we, um, when blue apron went public and started trading really poorly right after going public, all the capital for box subscription companies just dried up immediately. And so if you were one of these businesses that was running

like unprofitably and like just hoping for the next VC round, uh, once, once that hit you were, you were done um and so like i'm an lp in several venture capital funds i like am an angel and a bunch of deals like i i'm cool with people raising money and i think um you know you find the right funds you can have huge returns and if you find the right companies it can be great um but i think i just it feels like entrepreneurship has become a lot hotter of a space in the past 10 years and I think some of the things that people believe about entrepreneurship are just not true you have to raise money in order to be successful

that's not true, you can build an amazing business I know lots of people who have bootstrapped boring businesses that are crushing it and I just think that's not really taught as an option another one is lifestyle design like I was saying before as an entrepreneur you get to choose the lifestyle that you want to have and this whole idea that you need to like just be all about hustle culture and like

bust your ass 24 7 365 is the only way to get ahead it's like bullshit it's like i mean i don't know the first time i held my daughter i was like okay i gotta like reprioritize here this is because my first company i worked my ass off i you know i was in every saturday i was like working late i was first one in last one to leave like and it didn't work like it all that like it didn't work it's just like no matter how hard I tried to push the boulder up the hill the boulder wasn't going to go up the hill and this business I'm like all right you know I'm going to like let go of that I'm going to hang out with my daughter I'm going to prioritize my health I'm going to like do other things and that's worked really well and so I think like I don't know I just feel like the

the the entrepreneurship as it's being taught right now is very much about like you need to raise money and then you need to like go bust your ass to like make good on the people that invested in you. And I, I just, I think it's a road to like anxiety and depression, which is unfortunately a reality with a lot of founders. It's a road to diluting yourself. And I, I just wish people would, um, do a lot more consideration before they just go and raise money. Yeah. I think that there's a lot of people who are learning the lesson the hard way. Yeah. Uh, but also, um, one other aspect is when you said raise money and learn on other people's dime, I do think that especially young people, uh, they learn a lot from the right VCs. So there's plenty

that are absolute idiots and everyone knows who those are for the most part. Um, but there is this idea of like, they, like basically they're paying you to some degree now, not really, but like they're paying you to teach you and so uh what's fascinating is that there's very few young founders who bootstrap and i don't know why and like there are outlier examples or whatever especially like 10 20 30 years ago but like today if you think of i don't know you and i probably could rattle off 10 or 20 companies that we know that are bootstrapped it's almost always the second or you know third fourth fifth company it's people who've cut their teeth and i don't know if it's like oh i did the vc thing so like now i know not to do it for this type of business i don't know

if it's like i learned how to build a business and so like on the third attempt you know now here we go i don't know what it is but it's always fascinating to me that like a lot of young you know young 20s let's call it founders they don't bootstrap and is it because they're being told to go raise money or is it because like there is something about having already run a business that makes you better suited to to scale without the venture capital i don't know yeah that's a great insight i mean i do think that it's helpful um if you're young and starting out and people are going to give you money like just take the money you know um uh just understand what you're getting onto you know a lot of people will be like oh i'm gonna i'm gonna raise money but this

is the last round i'm gonna do is like that's not how this works like once you're on the vc train you're on the vc train you're losing money every month you're eventually gonna run out right the The other thing I've thought a lot about, if you look at many founders, not all, like Zuck doesn't fit this, Bezos doesn't fit this, but there are, Elon fits what I'm about to say. They have a small, like a single or a double. Then maybe they had like a double or a triple.

And then they have some big thing. And it may be the fourth, fifth, sixth, whatever company. Every founder I've ever talked to is like, this is going to be $20 billion company. and you're like i can go count how many there are out there like there's just not that many 20 billion dollar companies uh so maybe like yes but like would founders be better off just saying like hey i'm gonna go try to build a you know 100 million dollar company and uh along the way if somebody wants to buy it for 30 million i'm gonna sell it i'm gonna put you know 10 million

dollars in my pocket and like i'm a fucking genius hard to do if you raise money exactly especially if you get into the a's and the b's i mean it's hard to do because people people give you money at high valuations and then like selling for 30 million dollars is like not really an option anymore when you just did five on 20 or whatever it's just so and and forget to negotiate like that you get to make the call at the end of the day if you sell the company or not because sometimes the vcs are the ones making that call and they're like no hold on to it um and so yeah you you end up backing yourself into a corner pretty fast versus if you can keep it small if you just do like a seed round uh if you need money or if you try to just bootstrap um

it's an easier way to get that stand-up single yeah it makes sense where can we send people to find you on the internet if uh they want to learn more i feel like you're a wealth of knowledge when it comes to some thank you uh okay so um they can follow me on twitter at mike salgaro um and uh yeah anyone can uh email me as well ceo butcherbox.com all right don't give out your phone number somebody recently did that so yeah call my office give me a call i was like no please don't do that all right thank you very much i appreciate it i think people really learned a lot from this we'll do it again yeah thanks for having me thanks so much for listening to today's episode i really hope you enjoyed this one make sure you're subscribed on apple spotify or your

favorite podcast player and if you're looking to transition into a brand new job in the bitcoin or crypto industry we've got you covered head over to thecryptoacademy.io my team and i have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75 of the world's best Bitcoin and crypto companies. Go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io. If you enjoyed today's episode, make sure you share it with your friends, and I'll see you all for the next episode.

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