Mike Salguero has been involved in building two startups in Boston.
One raised nearly $30 million from some of the country’s top venture capital firms, including Google Ventures and Boston-based NextView Ventures.
The other he began with $10,000 of his own money.
The first company cratered, and never managed to get much past $1 million in annual revenue. The second company topped $10 million in revenue in 2017, its second year in business, is profitable, and is growing revenues at more than 300 percent annually.
The first company ran an online marketplace for custom-made items, CustomMade.com.
The second business, ButcherBox, sells meat by mail.
Let’s start in 2015, when Cambridge-based CustomMade, as Salguero puts it, “imploded.” (His co-founder bought the assets in foreclosure and restarted the website, which now focuses only on custom jewelry.)
“I was married, with a 6-month-old at home,” Salguero says.
He hoped to create a new business that wouldn’t be so reliant on venture capital to get off the ground. “With CustomMade,” he says, we got caught up in venture fever.”
Because the company had been based on an infrequent kind of purchase — how often do you have someone design a custom dining table for you? — he wanted his next business to have a consistent monthly revenue stream.
Salguero had been buying meat through cow share programs, which let independent farmers sell directly to consumers, and he was selling some of the excess to friends. That led to the idea for ButcherBox. He decided to launch it on the funding site Kickstarter, inviting people to pre-order a $130 box of assorted grass-fed beef: sirloin cuts and tips, short ribs, ground beef, enough for 15 to 20 meals.
“If ButcherBox launched to crickets, and failed, I thought I would be seen as a failure,” Salguero says. “I figure I would’ve had to leave town.” But the first three days of the campaign pulled in $80,000 in pre-orders, and by the time the monthlong campaign ended, more than 1,000 people were in line for a box o’ beef.
There are environmental benefits to eating meat that was not raised on a factory farm, but Salguero says for most ButcherBox customers, “it’s mostly the health benefits, about themselves and their families first.” The company has also benefited from fitness and diet fads like CrossFit and the meat-centric paleo and ketogenic diets.
The core of the company’s marketing strategy has been connecting with bloggers and social media “influencers” who were already talking about the merits of eating grass-fed beef. The ideal target is a blogger who has a large e-mail list of readers and is willing to plug ButcherBox’s subscription service. (A mixed box, including chicken, pork, and beef, costs $129 a month, though there are also add-ons like bacon and breakfast sausage.) In return, a blogger gets money for every customer who signs up. “The most successful of our influencers are earning $15,000 or $20,000 a month” from the referral fees, Salguero says.
At CustomMade, Salguero remembers standing up in front of his employees and talking about the goals for the current quarter, or the year. “We would just never hit them,” he says. Now, at ButcherBox, “we put up these goals and think, ‘This would be nuts,’ and we blow through them.” One example: in early 2017, he laid out the goal of getting to 35,000 ButcherBox subscribers. “I said, ‘Let’s pick some amazing prize,’ ” Salguero recalls. “If we hit these, we’re going to go to Mexico.” By October, they’d reached the goals. Taking the entire company to Mexico “was very cathartic for me,” he says.
The company now has nearly 50 employees, and offices in Cambridge and Peabody, where ButcherBox has built a test kitchen and video production studio. Salguero explains, “We felt we needed to show people what to cook with our product, so we have a chef who is full time and does our videos,” instructing subscribers on how to make a marinade or a dish like rib-eye with sweet potato hash.
ButcherBox has been growing so fast that Salguero doesn’t want to be specific about the current revenues. “We’re quietly building something really big,” he says. “The longer we stay off the radar, the better.”
Salguero isn’t the only meatrepreneur trying to connect with customers without putting a product on grocery store shelves. A New Bedford startup, Brothers Artisanal, collected $46,000 on Kickstarter earlier this year for boxes of uniquely flavored beef jerky. Like ButcherBox, it focuses on grass-fed beef, but also uses organic turkey and heritage breeds of pork. Flavors include a Thai-inspired turkey jerky and ginger dumpling pork. And as with ButcherBox, the goal is to get customers onto a monthly subscription plan (ranging from $75 to $150.)
Brothers Artisanal CEO Phil Beauregard previously ran two tech startups that proved to be more paper airplane than rocket ship. As a result, he says, “I feel stronger, like I’m wearing the scars of a tremendous amount of experience on the field.” He says the new venture has required between $850,000 and $1 million of startup capital, and that he likes the more hands-on nature of the work — dehydrating pork instead of trying to motivate software developers. “I get to slice and dice, use knives, let people taste the product, ask them what they think about it, and get that instantaneous feedback,” he says. His older brother, Pierre, is the company’s chef and “main jerkologist.”
Walden Local Meat Co., another relatively new startup, has 50 employees in Billerica and Danbury, Conn. “When we started a few years ago,” explains CEO Charley Cummings, “there were a lot of websites marketing meat from far-flung places, but there wasn’t a way to help New England farmers, who were doing everything right from a sustainability perspective.” Walden works directly with about 75 different farmers, contracting with them to raise animals that it owns, and it manages all of its own delivery with a fleet of vans that roam from New Jersey up to Maine, Cummings says. The company has raised “several million dollars of capital” from investors, he says, “all of whom are long-term oriented and are passionate about the mission we’re trying to achieve.”
The company delivers to “several thousand customers each week,” Cummings says, declining to share revenues. “One of our company values is confident humility,” he says.
Jen Faigel is the executive director of Commonwealth Kitchen, a Boston nonprofit that supports food entrepreneurs. She says it’s a rather active time in the industry. “How people are buying food is changing, and what they’re buying is changing,” she says. Consumers are also more willing to try a product from a brand they’ve never heard of — if they can understand what’s in it and feel it’s an “authentic” product, she says.
That creates opportunities for entrepreneurs — some of whom can find success with thousands of dollars, rather than tens of millions.