Salguero: The direct-to-consumer startup economy is falling apart
Mike Salguero · Mike Salguero: How I Grew ButcherBox to $600M/year in Revenue; Tips for Influencer Marketing | E998 · 20VC with Harry Stebbings · Apr 5, 2023 · at 1:12:27
Mike Salguero is the founder and CEO of ButcherBox. He assesses the macro climate across direct-to-consumer brands post-COVID.
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“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 tighten their belts, but really there's not a lot of excitement, and they're generally smaller than they were at the tail end of COVID.”
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More from Mike Salguero
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: 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 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: 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.”