Apr 5, 2023 · 1h 33m · news
Mike Salguero: How I Grew ButcherBox to $600M/year in Revenue; Tips for Influencer Marketing | E998 · 20VC with Harry Stebbings
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 20VC, ButcherBox founder Mike Salguero details how he bootstrapped his subscription meat company to $600 million in annual revenue, highlighting the power of lifestyle design, asset-light operations, and disciplined marketing.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 21.9% of the talking time here. How this is scored →
Harry as informed peer 4.4 Guest teaching 5.8 Guest disagreement 2.0 Harry pushing back 3.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 53:56 Mike teasing Harry's pitch as typical VC board meeting distraction
Mike playfully turns the tables on Harry, calling his creative media pitch a classic example of ungrounded VC board meeting advice that ignores operational execution.
Hardest push from Harry ▶ 10:48 Harry interrupting to challenge the three-year vision conceptHarry explicitly interrupts Mike to refuse his premise that founders should build around a three-year lifestyle vision, citing personal counterexamples of unpredictable personal evolution.
Biggest teaching moment ▶ 1:19:15 Mike correcting Gordon Ramsay's and popular myths about frozen meatMike dismantles a common culinary misconception brought up by Harry, explaining the cellular science behind how freezing actually tenderizes grass-fed beef.
Harry holds his own ▶ 49:44 Harry pulling live public market caps and funding numbers for DTC darlingsHarry demonstrates strong financial domain expertise by looking up live market capitalization vs capital raised for Allbirds and Hims to prove the systemic value destruction in VC-funded DTC.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Hiring Hurdles, Red Flags, and the Importance of Background Checks | 2 | 3 | 1 | 2 | Harry asks straightforward hiring questions while Mike shares anecdotes about early hiring blunders, background checks, and red flags in compensation negotiations. | |
| Ditching the Business Plan for Lifestyle Design | 5 | 5 | 3 | 6 | Harry directly interrupts Mike to disagree with his core premise about three-year lifestyle design visions, using his own evolving preferences as a counterexample. Mike reframes the argument by demonstrating how his original vision guided key operational choices even when scale exploded. | |
| The Asset-Light, Partner-First Model of ButcherBox | 4 | 7 | 2 | 4 | Harry questions whether an ops-light partner model destroys gross margins and creates operational debt. Mike educates Harry on meat yield economics, dry ice integration, and how minor packaging weight overages erode margins. | |
| Startup Constraints, Side Hustles, and Unit Economics | 5 | 6 | 2 | 5 | Harry argues from a VC standpoint that early startups shouldn't waste time negotiating tape costs. Mike counters by showing how every dollar saved in operational efficiency flows directly into customer acquisition budget headroom during ad inflation. | |
| The 'Wildcatting for Oil' Marketing & Scale Playbook | 5 | 7 | 1 | 3 | Harry cites marketing quotes and probes subscription retention mechanics. Mike delivers a masterclass on residual affiliate structures, 'dollars per box' unit metrics, freezer psychology, and customer churn dynamics across 30, 60, and 90 days. | |
| The VC-Backed DTC Graveyard and Creative Brand Marketing | 6 | 6 | 3 | 4 | Harry pulls live market caps and valuation data for VC-backed DTC companies, then pitches creative stunts like cooking steaks on Everest. Mike humorously calls out Harry's suggestions as classic VC board meeting distractions detached from unit economic reality. | |
| Distressed M&A, Capital Allocation, and Long-Term Ownership | 5 | 6 | 2 | 4 | Harry presses Mike on capital allocation, secondary sales, and whether he would take a $1B cash acquisition offer. Mike explains internal share tender mechanics and why long-term family-held ownership aligns better with fixing the meat industry. | |
| Economic Recessions, Sustainability, and the Frozen Food Myth | 4 | 7 | 2 | 3 | Harry challenges Mike with culinary objections like Gordon Ramsay's hatred for frozen meat and broader anti-meat climate concerns. Mike educates Harry on meat science, explaining how freezing breaks down cellular walls to make grass-fed beef more tender. | |
| Quick Fire Questions, Personal Routines, and Final Thoughts | 4 | 5 | 2 | 3 | Harry playfully pushes back on Mike's 36-hour and 7-day fasting regimens as unscientific for muscle retention. Mike shares insights on HBS professor board guidance, MDMA therapy for personal development, and achieving $2.8M+ revenue per employee. |
Statements from this episode (36)
Salguero: ButcherBox projects $600 million in revenue for 2023
“We'll do about six hundred million dollars in revenue this year.”
Salguero: Blanket Facebook ads and influencer marketing no longer work
“The old tactics, like we're just gonna blanket Facebook and do influencer. It doesn't work anymore.”
Salguero: Almost no job candidates read or negotiate their equity packages
“Nobody, nobody understands their equity and negotiates for it. Like in, in my career, I've had so few people actually read the document. I, I've probably had like a dozen questions and usually it's on page two of a 75 page document, right? So like nobody reads…”
Salguero: Employers should not risk losing candidates over small salary gaps
“I find that sometimes people anchor around like money. So if somebody really wants a hundred grand, don't come in at 95, just cause like you want to make like, oh, we only had 95 budgeted, like pay them a hundred grand because they have that, that level in the…”
Salguero: Demands for title and CEO reporting lines are top hiring red flags
“The biggest red flag for me would be on title where, you know, you're pretty clear on what you want. And they're like, well, I need to report to the CEO. And it's like, well, that's not available. Like you're not reporting to me. I'm sorry. Like I I'm interest…”
Salguero: ButcherBox reached $100M in revenue within three years with 50 employees
“Three years after I started ButcherBox, we were like north of a hundred million dollars. I had, I don't know, 50 employees.”
Salguero: Early-stage startups cannot outperform century-old incumbents in distribution
“I think it takes a special kind of entrepreneur to think that you can get into distribution and do it better than somebody who's been in business for a 110 years, like right out of the gate. That's not gonna happen, right?”
Salguero: ButcherBox is migrating its e-commerce platform to Shopify in 2023
“We're actually moving this year, we're moving to Shopify”
Salguero: ButcherBox outsources all farming, processing, shipping, and customer service
“We don't own our backbone. So we don't own the farms. We don't own the slaughterhouses. We don't own the cutting facilities. We don't own the distribution centers. We don't own last mile shipping. We don't own customer service.”
Salguero: ButcherBox built and operates two in-house dry ice factories
“We actually two years ago started a dry ice factory. We now have two.”
Salguero: Overfunded startups ignore minor operational details that drive profit margins
“And if you're overfunded, or if frankly, if growth is like big, big, big, you don't actually have the time to look at that stuff. And there's a ton of money to be made in the details of like eliminate waste, relentless improvement, get better.”
Salguero: VC funding precludes building a lifestyle business
“I think if you are hopping on the VC train, like you need to understand that the train that you're hopping on is not one that you can get off of. And it's not one that you can then build lifestyle design into.”
Salguero: Operational efficiencies, not price hikes, offset rising CPAs
“The only way that you can handle that is if you are making incremental progress on one, keeping the customer and delighting them with the product that you have, but two, actually removing some of this way so you can improve your gross margin without just like …”
Salguero: Only 2% of Americans are predisposed to grass-fed beef
“By the way, it's like two percent of the United States are predisposed to eat grass-fed beef.”
Salguero: ButcherBox launched with $215K raised on Kickstarter
“We started with a Kickstarter campaign where we raised 215,000 dollars in pre-orders”
Salguero: ButcherBox grew from $300K to $105M in revenue in four years
“So we did like 300 grand the first year, five million the second year, 33 and then a 105.”
Salguero: Subscription box startups need at least $30 margin per box
“I don't think you can make a go of it if your dollars per box are under 30 dollars per shipment.”
Salguero: ButcherBox customer acquisition payback period is about five months
“What are your paybacks today? They're like five months.”
Salguero: Retaining subscription customers past 90 days secures long-term retention
“The first 30 days is, you know, big churn 30 days, gets a little smaller. If you get them through that first 90 day hump, you have a customer who will stay with you for a very long time.”
Salguero: ButcherBox historically experienced approximately 1% weekly subscriber churn
“Churn-wise, for a long time, we're better than this now, but for a long time, we were about one percent. This is an aggregate, not for a month. Or month or year one. We were about one percent churn per week, and that we thought was really good.”
Salguero: Hiring a specialized buyer reduced ButcherBox's chicken costs by 70%
“We brought in a meat guy a year and a half into the business and we're like, here's what we're doing. And he's like, I mean, I remember the price that we were paying for a pound of organic chicken. He was like, I can get three pounds for the same price. You wa…”
Salguero: Niche influencer leads outperform referral customers in lifetime value
“So referral customers tend to perform really well. Like you'll see an additional, I think it's like an additional box in year one and they stay for longer. The only customer that's better than that is like a paleo keto kind of like influencer related customer”
Salguero: Insourcing everything in direct-to-consumer businesses is a red flag that fails
“In order to do this well, we need to do it ourselves. And that to me, if I were an investor, would be a big red flag because there is oftentimes a company that, you know, yes, are you giving away a little bit of margin? Sure. But you don't have to worry about …”
Salguero: Out-of-home advertising was ButcherBox's worst-performing acquisition channel
“Out of home, the out of home being like billboards and bus wraps and that type of stuff. I think you could argue though, that we didn't give that a fair shot, but That would be the worst performing thing that we've seen.”
Salguero: ButcherBox is looking to acquire distressed perishable subscription businesses
“Yes, we are a buyer. We would love to find distressed subscription, ideally perishable shipment businesses. We are looking for them.”
Salguero: ButcherBox would be out of business if it raised venture capital
“Actually, I think we'd be out of business if we raised money because we would have raised money in 2015 when it was hot with big valuations, we probably would have raised again. And then when all the money like would not had had to build a profitable business …”
Salguero: Direct-to-consumer box subscription models are not VC-backable
“Yeah, I don't think so. I mean, the only way, so again, HelloFresh seems to be bolting on other services and going broader than just like, this is what we do. But I think it's a, I'm not sure it's a VC backable model.”
Salguero: ButcherBox uses profits for annual employee share buybacks
“And so basically what we've done since 2018 is we've run a tender every year where we do a valuation of a four or nine evaluation. We get a price, a share price, and the company says, Hey, we'll repurchase people's shares. We also allow people to purchase shar…”
Salguero: ButcherBox is not pursuing an exit or IPO
“Focus on the exit. Like I'm not trying to sell the company. I'm not trying to go public.”
Salguero: The direct-to-consumer startup economy is falling apart
“And I do believe that the DTC economy is kind of falling apart right now. And Or already has, or is about to, and what we're seeing is more and more distressed companies that raised right after COVID, you know, had their 24 months of runway, are trying to tigh…”
Salguero: Greylock offered funding only if founders accepted a replacement CEO
“We went out to Greylock to convince them to invest in custom made, which they said they would if we moved out to California and worked for the CEO that they were going to place into the business.”
Salguero: ButcherBox used Trump tax policies to accelerate equipment depreciation
“Some of Trump's policies, certainly on the tax side, were very helpful for the business. I think Trump in general, no, not helpful for the business. A huge distraction, a huge amount of, like, social unrest and concern and but from, like hey, were we able to d…”
Salguero: Founders mistakenly assume venture capital is necessary for success
“I don't think most founders think before they start raising money. They think that they have to raise money in order to build a successful business. And I just wish they didn't.”