20VC: The Memo: Scaling to $600M Revenues with No Venture Funding, The Most In Detail Breakdown of Consumer Subscription Unit Economics & Why D2C and Consumer Subscription is Not a VC Backable Model with Mike Salguero, Founder @ ButcherBox

Mike Salguero is the Founder and CEO @ ButcherBox, the meat delivery subscription service that he has scaled to $600M in revenue, 215 employees and the national leader in the space. All of this achieved while raising $0 of venture capital. Prior to ButcherBox, Mike was the Founder & CEO @ CustomMade, an online marketplace that, unlike ButcherBox, raised millions in venture funding from prominent VCs.

In Today’s Episode with Mike Salguero We Discuss:

1.) The Makings of a Great Entrepreneur:

• How did Mike’s father not being present in his childhood impact the type of leader he is today?

• How does Mike’s fear of abandonment show itself in his leadership style?

• What does Mike know now that he wishes he had known when he started?

2. Consumer Subscription is Not a VC Backabale Business Model:

• Why does Mike believe consumer subscription D2C businesses are not VC backable?

• What are the biggest challenges of running a consumer subscription business?

• Why did all the D2C food prep and delivery companies fail? What did they do wrong?

• What happens to all the heavily funded D2C subscription companies of the last 5 years?

• Why does Mike believe now is the hardest time ever to do D2C consumer subscription?

3. The Secret to Efficient Marketing:

• How did ButcherBox scale to $50M in revenue with just one marketing channel working?

• When should founders think about the second channel? How should they choose which one?

• Why does Mike not like “brand marketing”? How did ButcherBox burn $8.5M on brand marketing? What are Mike’s biggest lessons from doing this?

• What emerging channel does Mike see as having the biggest potential over the coming years?

• Why does customer acquisition increase with time? Why do elections cause it to increase?

4. The Economics of a $600M Revenue ButcherBox:

• How much does it cost ButcherBox to acquire a customer?

• What is their payback period on that customer? How has this change with time?

• What is the single metric that drives the profitability of ButcherBox?

• What are the single biggest points of margin in the business?

• What is the lifetime value of a ButcherBox subscriber?

• What are the single biggest points of churn in the customer lifecycle?

5. Venture Capital: To Raise or Not to Raise:

• Why did Mike never raise venture capital for ButcherBox?

• Has Mike ever sold secondary? Why not?

• What would Mike most like to change about the world of venture capital?

• What are his biggest lessons from raising VC with CustomMade? How did that impact how he approached building ButcherBox?

• What does Mike believe all founders need to know about raising VC?