Opinion
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.”
Insight
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?”
What-if
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 …”
Opinion
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…”
Disclosure
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.”
Insight
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.”
Insight
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.”
Disclosure
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.”
Insight
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.”
Insight
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.”
Insight
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 …”
Insight
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.”
Assertion Not checkable as stated
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.”
Insight
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 …”
Disclosure
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.”
Assertion Not checkable as stated
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…”
Prediction Open · timeframe Apr 2028
Salguero: ButcherBox revenue will top $1 billion within five years
“I think we'll be north of a billion in five years, but I'm not sure I'll be like, okay, I'm done.”
Prediction Held up
Salguero: ButcherBox projects $600 million in revenue for 2023
“We'll do about six hundred million dollars in revenue this year.”
Assertion Not checkable as stated
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…”
Insight
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…”
Insight
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…”
Assertion Supported
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.”
Disclosure
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.”
Assertion Supported
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.”
