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Hey guys welcome back to the game. Today I have a special episode where I talk with

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Mike Salguero who is the founder and CEO of Butcherbox, a subscription service that

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sends meat to people's doors. They do north of $550 million a year and we

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broke this into probably like two halves. Let's say the first half we talked

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kind of a story of getting there and some of the lessons he's learned along the

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way. Now let's say the second half of the podcast we get really deep on

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tactical stuff that has you know materially and for the business we get some

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of the unit economics. So for this you were a little bit more advanced. I think

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you will probably dig it a lot or hopefully you'll enjoy it as much as I

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enjoyed talking to Mike and with that being said let's dive in.

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Everybody welcome back to the game. I got a special episode for you guys today. I

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am here with my soon to be friend Mike who owns Butcherbox which is a company

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you may or may not have heard of but you will have heard of it very soon as we

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go through a deep dive on the business and so I would say unlike some interviews

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with business people I think a lot of it is narrative. We'll have a little bit

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of that in terms of the story of the business but I want to dive into the

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actual unit economics like how it works how it scales which are casual

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cycle. I want to get I want to get into the nitty-gritty and then as Mike's

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going through it I'll try and kind of encapsulate some of the pieces that I

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think could apply to any business kind of like through lines that anyone can

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use from it so that's the plan and that may not at all happen so we'll find

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out but like welcome. Thank you. So before you had Butcherbox you had another

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business do you want to do a quick like how we got here and some of the lessons

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you learned from that business the failure because I love I love hearing about

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failures because the the lessons that we get from them I feel like every

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entrepreneur is always like building like all of the businesses prior are

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stepping stones to the business you have today and then maybe someday this is

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the stepping stone for the next in the future version of Butcherbox or yeah

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whatever yeah so I mean I could talk about a tremendous amount of failure in

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between college and my first business if we want to go there but my first

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business was a company called custom made.com and my best friend Seth and I bought

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the company we had approached a guy to sell us custom made.com for a hundred

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forty thousand dollars we didn't have any money at the time so we gave him a

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check for twenty five hundred dollars for a deposit and then it had 90 days of

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due diligence which is where you're supposed to figure out what happens at the

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company and we took all that time to go raise money and so we raised five hundred

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grand and the whole okay yeah the whole the whole thing was we were both working in

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real estate and we called it a shack in Manhattan so this is 2008 custom

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made.com got a ton of inbound traffic yeah from the great doing typing in

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custom made and it was filled with woodworkers who had their projects and

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stuff on there and when you talk to these woodworkers they're like I get all my

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money from custom made.com and I pay thirty five dollars a year for my

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subscription and they had to like email the owner to like upload their content

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so we were like this is like a shack in Manhattan we're just gonna buy it we're

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gonna like overhaul it turn it into they can log in and manage their own

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content and jack up the rents. So people you know thought that was a good

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idea and gave us a great narrative for raising money as a sign of just even

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the like as a shack in my head like everyone's like okay I get one through it yeah

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yeah of course this was 2008 and in Boston in real estate and everyone had

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just lost their money because Bernie made off just ran off of everyone's money

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did something happen in 2008 yeah oh no what okay crazy yeah so Bernie made

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off ran off of everyone's money we heard a lot of noise but we cobbled

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together around and then we got going and things were working and we raised

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another five hundred thousand dollars we say things were working what did you

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mean so like you were starting to make more like you were able to grow the

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revenue. Yeah we so we had pivoted the website you could now log in we made

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a ton of mistakes but we built a sales team we had people calling to get

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makers to sign up for like an annual subscription or monthly subscription we

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hit about sixty thousand dollars in revenue month and what was it doing

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prior thirty five thousand dollars a year oh geez yeah so you cry I mean you

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did an amazing job yeah yeah yeah but we were still losing a little bit of

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money and yeah and whatnot also a great frame for me was listening to this is

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the the idea that like I'd mentor say this he's like right before you go to

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take your business to market he's like switch sides of the table and then try

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and say like you just bought your business today what are all the things you'd

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fix about it it's like well maybe just do those first and so I think it's just

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a great like perspective on any business is like if I bought everything to

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day how would I it's like a different lens at least anyways for me it's been

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helpful but please continue yeah so at the time it was like 2010 2011 everybody

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in tech was raising money and so we were looking at tech crunch and looking at

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all this stuff and at that time there weren't like all these accelerator

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programs and all these things that now are exist to help people and so by

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co-founder and I looked at each other we're like we have a good business why don't

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we raise money and so we ran around town again raising money this time trying

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to raise from VCs and we got first round capital which is a very well known

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VC in New York and then we got Google Ventures to invest in our company at

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it was a they we raised 1.9 million at like a 7 million pre-money sure that's

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where things started like falling apart so most people told us no we went to

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raise money and people are like woodworker listing site like hell no and I was

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in I was in a meeting and at this VC benchmark and I said I was like we built

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this function this function where somebody could post a project and makers

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could see them coming in and then they could bid on them and I was like pull up

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the job board and this thing was like live action we wanted to make it exciting

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and they're like these jobs rolling in custom coffee table custom I was like

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all we have to do is stand in between these transactions and will be the

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largest marketplace for custom stuff was 2011 as soon as I said the word

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marketplace everyone wanted in our dealers we went from no no no no no to like

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marketplace you could be the next Airbnb and we're like yeah sure we can be

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whatever you want just give us some money and so we raised the money on the

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premise that we were going to create a marketplace and stand in between a

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custom transaction which wasn't the best premise but people loved it we

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raised 1.9 six months later there was one VC that we left out of the first

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deal we're like we don't want to raise one of the 1.9 so you can't participate

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six months later they're like we'll give you four on 16 we're like okay we'll

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take more money so we took four and then we didn't eat today you've deluded

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because now you're at because you had the 1.9 on seven so you're that was 20

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or 2% something like that right out of the math somewhere there yeah and then

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you did another quarter so 25% yeah with the second round so you're you

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guys are sitting a little bit above 50 yep at that point just from the two

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rounds yeah okay and then we're giving out equity in all of our employees

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okay got it too I'm highlighting this because I know I know yeah I have some

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perspective on where you go there's a different there's a different half yeah so

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and then a few years later we did a 10 million dollar round on 30

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million dollar wait it was actually 18 million it was 10 of equity four of debt

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and four of secondary guys you got some money off the table so we got some money

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off the table you're like reading the tea leaves and you're like you know there's

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no way we're gonna make anything yeah we got all of our all of our original

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investors got three extra money okay they wanted it many cash out okay

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interesting she's like I believe in you yeah thank you to cash out mom but okay

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Julie I took second or like I sold yeah so by the end of it I mean what really

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happened at the company the big lesson I learned is so Google they have like

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incredible services for entrepreneurs so if you're an entrepreneur and they

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invest in you they can help you with a whole bunch of stuff you want to like

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manage your ad words account it's like go talk to the people that run out

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yeah right by the way here's some gift cards and like yes okay you all sorts of

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stuff that's gonna help you yeah they're like do you want us to come and look at

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your website and like get under the hood of your technology and we're like yeah

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of course go come on in and I mean literally the guy did this like week long

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deep dive came out and was like that's the worst website I've ever seen he's

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like I can't believe we invested in this like so our investors how does it even

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like how is this like in these guys like yeah and so what ended up

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happening over the court so immediately we're like we have the wrong tech

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team that our investors were like give the wrong tech and you have to get rid

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of them so we got rid of our tech team and then it was like give the wrong

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product people and then you have to get rid of the product people you have the

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wrong marketing people and when I ended up happening over the course of about

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a year is I took all of the people who helped me build this company to help

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help me like hack through the jungle to get to like the road and we fired

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all that as one does as you know and I was left with a company of new

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hires new hires people that didn't fit the culture I hadn't written down the

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cultural values yeah and I just have this vivid memory of sitting in my car in

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the parking lot being like I can't go in like I can't I don't even want to go

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to work yeah and I had a good salary but by that point with all the

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dilution I owned like 8% of the thing right I could go get a CEO job doing

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something it was just like this like what have I done yeah and I let go of all

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my friends it was it was bad yeah how many years was this eight years of

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work yeah 2015 or sorry 2008 through 2015 yeah so we just we covered eight

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years in a pretty short yeah short short little window just for anyone who's

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listening I bring this up just because like when when you when you hear the

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stories or you watch the the literally the 60 second short about someone's

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career you know you know you you see the highlights in the low lights but a lot

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of it is kind of like the mundane middle of just dealing with the stress of

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every day there's always fires and there's a per a permeating level of

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baseline stress that doesn't really go yeah and so I mean one big lesson was

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like don't listen to investors when I when I started but your box will which

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will get into I didn't want to take investment there was also like I lost

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myself yeah I lost my team and I lost myself and when I looked at the

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shambles that happened it was like I don't want it did you shut it down yeah so

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we we actually foreclosed on it because we had some venture debt there was a

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little bit of debt our bank account got below what we owed and they were like

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we're we're taking it so we actually did what's called a friendly foreclosure

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they took it over my co-founder stayed and is still running it oh it's still

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going yeah is it doing okay it's now a jewelry company and it's just they just

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do everything there's no maker there's no like no marketplace problem that we

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had was you can't like these custom train if you want a custom coffee table or a

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custom piece of jewelry yeah there's like 60 back and forth still yeah there's

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about every thing like yeah right and we had to stand in between that in

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order to get our fee which was like 10% which is a nightmare it was a bad

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business yeah but we because we sold everyone a marketplace yeah when we were

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like this isn't gonna work people are like well that's what I invested in so yeah

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you you need to keep going so doing the other version of so because I so I

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think about this sometimes is like the path not taken so if you it if you had

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not raised really any of the money besides the amount that you needed to kind

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of acquire the business so at that point what did you raise the five you

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raised the five hundred thousand not when you did you didn't go through the

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diligence that period we raised the five hundred what was the what was the

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print or how much equity did you give away for that it was a convertible so

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converted into the next round like a safe round yeah oh great okay so that

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ended up being like five or six percent I mean well a little more than so like

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seven percent of the business yeah which would have been pretty a pretty good

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a pretty good move effectively yeah and if that business at the time said it

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was doing sixty thousand dollars a month right so seven hundred twenty eight

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year-ish in terms of run rate if you had stuck with the original model mm-hmm

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and just been like I'm not I don't have to pursue this not as an insult like

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cockamini uh business model basically billier bus business models what I mean to

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say it probably could have just been a very profitable I mean going from

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thirty five thousand year to sixty thousand dollars a month in like twelve

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months is is is great growth yeah and was it was it was it profitable at that

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point it was almost profit okay like you could have made it if you wanted to

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get out of that profitable only and that's one of the reasons why like I want to

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be here today and I like talking to people like you talk to entrepreneurs

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about a different path yeah raising a bunch of money diluting yourself having

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people who tell you what to do yeah and losing your culture in the meantime and

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losing yourself every business I've had has been destroyed yeah I mean yeah so

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when I started butcher box I so I took the we close a business we let go of

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fifty people shut the doors that literally closed the gate put the lock on

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and your partners like I'm still here though and we're still gonna keep we're

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gonna make it like spun it out and are you guys still friends yeah we're good

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that's what yeah it was a it was a little rocky for years but yeah we're good

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friends I took the weekend off it was Memorial Day weekend so it was a long

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weekend and then I started butcher box okay on Tuesday and I had known in the

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final year at custom made it was very clear to me that we were gonna hit a wall

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and there was like no stopping it my co-founder had become CEO in that last year

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because there was he just like loved the distressed he wanted to be the

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revenue that so we we would only talk about GMV because because it was

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platform so our GMV I think got to like three or four million a month okay but

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you know then we took a 10 percent but actually because of I forget all the

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reasons it was like seven percent yeah so two hundred two hundred thousand a

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month we at our height were burning five hundred thousand a month that is

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yeah healthy burn yeah healthy you're right just like never standing like it

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yeah yeah there's a big down just a road quote from Reed Hoffman I think he was

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talking to Elon or Peter seal or something and he they were they were on the

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roof of the building that they were at for PayPal and he said if we were one at

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a time lighting hundred dollar bills and pulling them off the building he said

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it wouldn't be as fast as we're actually burning money in this company and I

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like I just saw there such a visual of like I could burn one hundred dollar bills

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slower than we're actually burning the money in this business which I thought was

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hilarious yeah you know it's wild I mean you start adding a bunch of people and then

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you add managers to manage those people and then you do a bunch of marketing and

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all of a sudden you're just like losing losing money and when you raise especially

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when you raise something like a 18 million dollar round they want you to spend

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the money as fast as possible and the thing the thing that they don't talk

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about with venture is venture capitalists get paid when they put money out on

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the street they take a management fee and so they have everyone around the

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table has the incentive to like put as much money as humanly possible into

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these deals and so you really when you go like people are like how do I

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figure out what my valuation is it's like no no just tell them how much money

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you can spend over the next 18 to 24 months and just argue for a bigger number

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where like we can blow through 10 million they're like great here's a check

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so yeah it was just counter to how like business works

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yes I know so it's interesting because you're actually it's the collision of two

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different business models and the one who has the voting rights is the one who wins

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but like their business model is deployment of capital and management fees by and large obviously

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there's carries and things like that but there's that component and then there's the business

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model of the actual business but the person who actually calls the shots is the

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the largest the person who makes the most money from the business prevails in terms of

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who is leveraged in in the conversation yeah and we had all the rights so we negotiated

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really really well we had all the rights in our documents my my co-founder says it's just like

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a phenol at that so they couldn't overthrow us they didn't have any management decisions

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etc but it doesn't matter like at the end of the day when they're like you're going to be

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blackballed if you don't like the pressure yeah you know so at the end it was like we're

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going to sell the company we're going to bring in a different CEO we're going to do all these

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things none of which worked yeah I knew the writing was on the wall and so I had been playing around

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with like what am I going to do next and I had a few ideas I had a billboard company I was really

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interested in starting I had a bond company I was really interested in starting and I had this

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like shipping me in the mail interesting and the quick backstory my wife has an auto immune

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disorder we were falling these elimination diets to like clean up our diet we were trying to find

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grass bed beef couldn't find it huh okay and I just got obsessed with like where do you find

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grass bed beef yeah it's just a hard thing to find yeah why is this hard to find and I ended up

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like meeting a farmer in a parking lot and buying trash bags full of meat and being like this is weird

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and I started selling steaks to my buddies because I it was like too much meat yeah and one of

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my buddies was like this would be so much easier if it was delivered to my house yeah I don't

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like eat meat at your house to pick up the meat yeah it was like just ship it to my house and so

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I was like okay how do you ship me in the mail yeah I couldn't figure it out this is all while I was

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like still a customer and then I met this is why you're a customer well it's like the tail end

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yeah you're cutting an affair yeah yeah yeah uh things were closing down um then I reached out to

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the former head of operations of Omaha steaks okay which at the time was like the big

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middle company and he's like yeah like I my non-compete's over okay I can help you that's

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amazing and so he made all these introductions yeah pro tip right here just for everyone listening

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find the person who has built the business yes uh already like it's you know from an entrepreneur's

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perspective I think the beginning is always about how like all you know you're very tactic obsessed

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and obviously I talk a lot a lot about tactic stuff on this channel but um I say beyond a certain

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point it just becomes a lot about who because the leverage is in not having to live the 15

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or 20 years or however long this guy had been in the in the stake business you're like you can either

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like relive his life and then be 20 years older it's like or you can just find that guy and then

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he doesn't have to live your life either and then you combine and everybody wins and so I think in

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the earlier stages of micro I I thought way more what and how than who yeah um also the way that

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I structured it I so I had a whiteboard I had the three ideas and I had like the kill shot like the

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thing that if I didn't figure out this week or this month like it you don't have a business so

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for the bomb thing it was like a legal thing and for the um for for butcher box it was like how do you

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ship it this yeah and so I actually like every time I went to the bathroom I'd be like are how do

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you ship me like reaching out to people trying to get somebody to to help he finally said yes um

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and so fast forward to close the doors at butcher box or sorry at uh custom made and it was pretty

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clear that like hmm why don't I just like spend the summer you're messing around with this idea

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so my intention was to build a hobby business okay like I was I was very enamored by like

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Tim Ferriss for our work week like you know build something that runs in the background and then

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you can go live your life you know passive income um and uh that was like I thought if we had a

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thousand subscribers and we made a $20 profit on each subscriber it's $20,000 you so if you

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be customer service if you outsource that and if you build tech easy like you could have like $10,000

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mhm um and so I built it was like WordPress on top of stripe which nowadays they're Shopify which

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is incredible but like WordPress on top of stripe which um uh we basically ran with it till last

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year when we were to Shopify and then we outsourced everything and it was like okay this is gonna be

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a hobby business yeah I want to apologize something because I think it's such an important thing so

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like I have I have had such a similar experience to I think the what you just walked through from

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a narrative perspective which is that every time I've tried to like build a business it doesn't work

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for me it hasn't and I've failed a bunch of times on businesses that I was like I'm building a

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business when I was like how do I make some money that doesn't take a ton of my time I end up

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building a really good business and so it's just like an interesting again it's these like these

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these frames of questions and I think this at any level you could ask it from a product line

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perspective or new division perspective but it's it's like I have I've had these like romantic

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ideas of like this big thing that I want to have happen rather than like you know I just I just

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want to make some money in a really easy way and then when what's interesting though is that you're

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basically saw I call it solving for zero which is like how do I solve for like no time and profit

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but when you solve that problem when you have no time and profit it also scales a lot easier because

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you already started with the premise of how do I have it put no time not be as risky and be profitable

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so sorry pick back up yeah no that's right if you build something to be a hobby it can remain a

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hobby and I can all talk about our backbone now but yeah it's it's very similar everything is

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third-party we have really tight specs on everything but we took the perspective that

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well I started I started with I want a hobby and nowadays I took the perspective of like

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we're not going to learn how to ship boxes better than a company that's been in the business

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for 75 years like why bother trying to do that so anyway we started with an intern and we decided

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that we were going to do a Kickstarter campaign or as Kickstarter or indiegogo at the time yeah

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this is 2015 also a different way of raising money by the way yeah because listening

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pre-sales yeah so it's not raising money you're just selling your product and you're seeing if

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there's a market and you're getting money up front so my first gym I saved all my money to start

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as soon as I and I wanted to start the gym as fast as you me possible because I thought if I

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started the gym really quickly then I could start making money every gym after that gym I had

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multi-month pre-sales that would pay for the that would finance the entirety of the gym off the

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people pre-buying memberships and pre-buying weight loss challenges and things and so like this

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is definitely like a 101 to 201 entrepreneur like the first one you're you're taking the outside

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capital you're like you know I bet you I could just get my customers to just pay on different

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payment terms and just and then it's also also a great product market fit test if no one wants to

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buy your pre-sale then thank god you didn't like raise money for it or something like that is like

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we actually know people want to buy it and they're willing to pay for it and we exactly that's

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the great thing about Kickstarter is people are used to waiting a really long time to get their

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products and and you know we basically started we hadn't launched yet but we went out and showed

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our page to people and the first thing that we learned was people were like I don't need that

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much beef we only had grass-fed beef right we're trying to sell people 8 10 pounds of grass-fed

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beef for a hundred and twenty nine dollars you're gonna be like I don't need that much beef I

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would never buy this yeah and we're like well what if we put in chicken and pork as well

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yeah they're like oh totally can you make it at the same standard like can you find chicken

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it has like raised better and pork this raised better and really get so we we started with a box

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beef chicken or pork and launched our kickstarter and I think one of the you know one of the things

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that we've done well as a company is found arbitrage opportunities yeah and so the first arbitrage

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opportunity was with kickstarter so back in 2015 kickstarter had this verified badge like if it would

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be like kickstarter verified and so what we did is we watched these campaigns and to see like which

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campaigns got the verified badge and then tried to reverse engineer like how did they get the verified

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and it was one part early momentum you know sales coming in I tried to reach out to all the founders

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and be like oh we're doing this thing did whatever it took um and so we went out to raise 25,000

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in pre or in sales and we ended up selling 40,000 in boxes in the first day oh jeez and then

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we got the kickstarter verified badge and then we ended up doing 210,000 in pre sales which was

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1,100 boxes of meat going you know the first the beauty of kickstarter's if you get that verified

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badge it's no longer you're no longer just asking your friends and your audience to shop it like

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goes to everybody they'll push it out and so it was a lot of random people we didn't know just

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I want to double click on the offer real quick offers part of what yeah so what ancillary benefits

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or bonuses did you give to people beyond just the box I mean was there anything else that they

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got for being you know really good one so we offered the the way that you do with kickstarter is

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you try to activate the people who have bought to like go be your ambassadors so we said if we

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hit a hundred thousand dollars in sales we'll get give everyone free bacon in their first box

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and that like people went crazy like I want the bacon you know and started like promoting it

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putting it on their Facebook pages all of that that was it though that was the offer our

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product should a referral bonus yeah really interesting our product was really hard is still really

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hard to find yeah so we're dealing with people who like want to eat healthier feel guilty about

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the meat that they're eating and we give them an answer to that and so there was it was really

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clear that we had struck a nerve really quickly yeah um and so then during the kickstarter campaign

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so it sounded like 1100 people during the kickstarter campaign the most interesting thing that happened

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was there was a we were like writing on Twitter to anyone who did kickstarter like anyone who talked

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about grass bed beef to get them to talk about us and this one nutritionist so you're like you're

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reaching out to them yeah just like we spoke everybody this is warm outreach or so this is cold

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outreach yeah to affiliates fundamentally that you'd either pay for through sponsorships with

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money or free stuff or both um and then I don't know if you gave them affiliate links or it was

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just like hey just talk about a thing at this point it was just talk about yeah so like I'll

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send you a free box of meat if you just talk about it kind of thing yeah um a great way to get

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started early from from a capital perspective so it's like both of the examples that might

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talk about first is like okay if there's platforms I'll give you free reach figure out what you

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have you know reverse engineer what free reach looks like and they're just getting your customers

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for free and I think some people especially this is weird but like a lot of small business owners

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will like obsess about like they charge 10 percent it's like they charge a commission on customers

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they get you for free right what are we talking about they know um and then with the uh affiliates

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and influencers that that you reach out to another way to basically like if you if you factor in

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the cost it's like literally just the hard cost of the box of meat is your advertising cost and

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everything above that is basically freebie right and so both of these are super low capital ways

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are early on to to to get those initial sales going sorry yeah so um this uh nutritionist in

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California this guy Chris Cressor tweeted like this is an interesting you know I've told you to

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eat grass would be this is an interesting place to get it that's all he did um and we saw a flurry

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of activity from and by flurry I mean there was like seven people who signed up but at the time

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that was like holy like what what just happened and then we were like you know to what you were

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just talking about we're like we need to do more of that yeah like we're we need to go find every

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influencer who's ever talked about grass would beef and get them to promote to promote us

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so we finished the Kickstarter uh and then we immediately and that was the CTA so when you're

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pushing out to them saying hey promote our Kickstarter basically and they could send their

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traffic to your Kickstarter to to you know the seven buyers that came in from that yeah

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the guy did is that how that's how the money came in uh yeah well so kickstartable tell you like

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like where like where did this come from okay so it came from twitter so we're like oh that was

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but that was but that you were still in pre-sale mode for this whole thing yeah okay yeah great um

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because we wanted to be capital-efficient uh the whole idea was we're gonna send you the butcher's

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selections okay so it I didn't want to hold inventory because I don't know how many rib eyes

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we're gonna sell and this is really expected to be inventory so the idea was we'll sell a bunch of

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stuff and then we'll just decide what to put in the box yeah so we sold a bunch of stuff and then

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it was like okay we have eleven hundred boxes we talked to the the place that we were working with

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they created you know these different do they have all types of meat the one place they did so

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wow that was fortunate yeah we started working with this company in Wisconsin that did they

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have a cutting facility and a pick-pack ship facility it was like they did everything so they

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just had it and they had no marketing basically yeah yeah um and so we we shipped out all these boxes

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and then called every we shipped it out really quickly it was like a week they were thrown

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them for Kickstarter yeah wow I got my box already and then we called them hey how are things going

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do you need any recipes yeah would you like to become a subscriber yeah and signed up like 40

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percent of the people amazing so right away we had like you didn't just send an email to eleven

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hundred people wouldn't that have been easier no we had a guy Nikki Graham who picked up the phone

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and just like pounded the phone and he was like ten dollars an hour plus like a five dollar spiff

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I just want to I just want to hit on this just because like these it was nice is that you're

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hitting all these really clear milestones that I feel like are just forgotten um which is like

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just the elbow grease of what I'll consider like unskillable worker unskillable effort is

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there like a lot of times early on everyone's looking for like I don't know that scales um it's like

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well I mean you know we uh we hand wrote you know one thousand eleven hundred cards and we

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manually reached out to every single person and we had conversation with them and we asked

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them if they knew anybody else would be interested just like the basics that everyone's like oh I'm

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sure that would work it's like right but it would just be work yeah um and you did it and obviously

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it worked yeah well and one thing that I think is important is I knew that I couldn't do that yeah

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like if you put me in a room with a phone is it call eleven hundred people no way like the business

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wouldn't have gone anywhere and so it's good to know what you're good at and what you're not good at

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what you're willing to do what you're not willing to do and invest in the areas that you're not

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willing to do because if you believe in the business there's a guy who for ten dollars an hour

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is just like okay we'll just get yeah he's thrilled and he was good at it and like then I didn't

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have to do it but I think too often entrepreneurs um take the approach of like they need to do

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everything yeah and like I mean the business would not exist if we hadn't made those phone calls

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but if it was up to me I would never make those phone calls was there an offer that you gave them

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for the subscription the 40 percent besides like hey want to sign up I don't remember like get

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your next box ten dollars off your next box or you get the you get bacon for free in your next box

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if you they're not there must have been okay I don't I don't actually remember um but what did

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happen yeah was we launched a butcherbox.com so in the background we signed up these people yeah

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and we we realized affiliates was the thing so we you know started working on that yeah we launched

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butcherbox.com to the world and there were many people who were trying to get in on the Kickstarter

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and they let you put up a link so they were coming to our website and they were buying so right

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away we signed up like five subscribers ten subscribers like on the first day yeah and what

406
00:31:32.640 --> 00:31:40.080
happened was um we had a little tech issue so when those new subscribers signed up uh they got

407
00:31:40.080 --> 00:31:45.440
free bacon in their first box because we built a tech to be like bacon's going in every first box

408
00:31:46.320 --> 00:31:50.800
and two weeks in I got a call from the tech guys they're like we have a really bad problem on

409
00:31:50.800 --> 00:31:55.680
our hands it's like what what's going on they're like we've been sending bacon to everybody and I was

410
00:31:55.680 --> 00:32:00.880
like oh my god this is dad and then my marketing guy was like why don't we just tell people sign

411
00:32:00.880 --> 00:32:06.080
up and get free bacon and it was like oh well we can't shut it off anyways let's do the things

412
00:32:06.080 --> 00:32:12.160
broken like we can't fix it so we're just gonna that became the that became the I know that one

413
00:32:12.160 --> 00:32:16.080
and like I knew that before even it like heard of or met you or heard the story from Harley and

414
00:32:16.080 --> 00:32:22.800
whatnot um so again like grand slam offers like and and you know the free box of bacon like I

415
00:32:22.800 --> 00:32:28.960
I've heard of that yeah um and so sometimes it gets broken in your box and then uh two years

416
00:32:28.960 --> 00:32:35.120
in we created this bacon for life offer yes and that really took off that rips that was like that

417
00:32:35.120 --> 00:32:40.000
was a ripper um so you just one up to an already really good offer and said not only do you get it

418
00:32:40.000 --> 00:32:43.920
in the first box you'll get it in every box as long as you stay subscribed as long as you stay

419
00:32:43.920 --> 00:32:48.240
as subscribed right and you know ultimately the bacon costs four dollars and the box you know

420
00:32:48.240 --> 00:32:54.160
you're making your profit off of so it's like you're it's not that big of a deal um and you

421
00:32:54.160 --> 00:32:59.360
require customers for less than four like the arbitrage on cac or you know cost CPA depending on

422
00:32:59.360 --> 00:33:03.520
what industry you're in yeah cost your car customer is significantly higher by basically said

423
00:33:03.520 --> 00:33:07.920
differently if you add bacon for life in your cost your car customer drops by more than the cost of

424
00:33:07.920 --> 00:33:13.040
the bacon uh more importantly they stayed longer really yeah oh because now you have your

425
00:33:13.040 --> 00:33:16.960
free bacon you know when you get rid of your free bacon and so they can't come back well they

426
00:33:16.960 --> 00:33:23.280
yeah that's now you can't if you if you if you if you quit uh you lose your for life offers but

427
00:33:23.280 --> 00:33:28.240
we have that we've built a whole thing around these for life offers our our our top people have

428
00:33:28.240 --> 00:33:32.240
been with us from the beginning have like six or seven for life offers that they get every month

429
00:33:32.240 --> 00:33:36.160
they're like why would I ever go anywhere else to buy my meat like I'm I have all these for life

430
00:33:36.320 --> 00:33:40.960
talks me more about this because it's really interesting so how can they stack multiple for life

431
00:33:40.960 --> 00:33:46.000
offer like if I'm one of the 40% right so I signed up on my subscription and I still have the

432
00:33:46.000 --> 00:33:50.320
tech malfunction so I get free bacon every month yeah how am I getting these other ones well so

433
00:33:50.320 --> 00:33:55.040
pretty soon after I mean this is several years in this was like you know we're fast forwarding like

434
00:33:55.040 --> 00:34:02.000
five years we started offering like okay free bacon for life is kind of getting overused let's try

435
00:34:02.000 --> 00:34:07.280
ground beef for life okay and then people were signing up on ground beef for life but then

436
00:34:07.280 --> 00:34:12.160
our customers our current customers are like what the hell like I want ground beef for life

437
00:34:12.160 --> 00:34:17.520
so then we just started selling ground beef for life to our customers so we're like okay for

438
00:34:17.520 --> 00:34:25.520
$50 we'll sell you one time ground yeah ground beef for life so we just stacked all of these like

439
00:34:25.520 --> 00:34:30.480
offers on top of each other very few people your gross margins went down on some of those people

440
00:34:30.480 --> 00:34:34.960
but like they know they're just they're just the base they just like never we've gotten smarter at

441
00:34:34.960 --> 00:34:41.520
being like it's for a year it's like we've got a lot smarter and you lose them if you leave and like

442
00:34:42.160 --> 00:34:49.600
but yeah bacon bacon really built this but we built this business on bacon so the there's one

443
00:34:49.600 --> 00:34:55.440
one channel well I'll just say yeah there's the influencer channel which we'll we can talk about

444
00:34:56.080 --> 00:35:01.680
the other thing that is so it went Kickstarter arbitrage influencer arbitrage and then Facebook

445
00:35:01.680 --> 00:35:06.080
video arbitrage okay because I want to talk about come guessing paid ads became the next like

446
00:35:06.080 --> 00:35:10.720
yes after influencer yeah so how won't you do so okay I'm I'm gonna retrace the steps

447
00:35:10.720 --> 00:35:16.080
for a quick so we had Kickstarter and then uh then you officially open the site kickstarter had

448
00:35:16.080 --> 00:35:19.120
a backlink to you so that people would go to the Kickstarter because they've got a CEO and get

449
00:35:19.120 --> 00:35:23.120
rank is whatever and so then they'd find you you start getting sales every day you have your mess up

450
00:35:23.120 --> 00:35:28.160
on bacon but you're like you know it's correct let's give everybody bacon um and so the influencer

451
00:35:28.160 --> 00:35:31.120
strategy worked well for the Kickstarter so you kind of double down on that and say how do we get

452
00:35:31.120 --> 00:35:35.360
every influencer on the planet to talk about but your box yes that was said did you go like Instagram

453
00:35:35.360 --> 00:35:40.480
Twitter like you just want to cross the different channels for influencers no so what we did was

454
00:35:40.480 --> 00:35:46.560
we figured out that there's a company thrive market um they're a big like online um thrive had

455
00:35:46.560 --> 00:35:52.640
done this um had done this thing where they they had all these influencers and they they gave a lot

456
00:35:52.640 --> 00:35:58.320
of them equity in the company to like actively promote thrive they were like kind of the first

457
00:35:58.320 --> 00:36:03.840
ones unlock influencer okay and so first we reached out to like everyone who mentioned grass

458
00:36:03.840 --> 00:36:09.200
would be for and then we realized that there's like a lot more people in health and wellness and so

459
00:36:10.000 --> 00:36:17.840
we uh like thrive markets url was like slash partner slash one okay and then slash two slash three

460
00:36:17.840 --> 00:36:23.600
and so we just like concatenated all the urls and just like took every single person and then found

461
00:36:23.600 --> 00:36:27.680
their website and their contact information oh so you didn't go to thrive you just reverse

462
00:36:27.680 --> 00:36:32.320
engineer to thrive we reverse engineered all their influencers got a got a lead list of 400

463
00:36:32.320 --> 00:36:37.280
people and then the like I think you'll like this part like cuz I like that part the offer that's

464
00:36:37.280 --> 00:36:41.520
a good one that's a good way to get your warmly it's well I got my first leads for gym launch

465
00:36:41.520 --> 00:36:50.160
was um paid a VA to go to crossfit's website sorry crossfit um and literally look up every single

466
00:36:50.800 --> 00:36:55.440
affiliate the affiliate box that they had yep and so because and gym owners usually put their personal

467
00:36:55.440 --> 00:36:59.520
stuff on numbers their personal email as they're actual like uh thing on the on the crossfit set

468
00:36:59.520 --> 00:37:02.240
but they wanted to get listed because they're paying three thousand dollars you to get the listing

469
00:37:02.240 --> 00:37:07.120
of saying I'm an official crossfit but for me I got like at the time this is super early you know

470
00:37:07.120 --> 00:37:11.920
we have like 1600 names on this list but it was enough for Facebook to make a look like

471
00:37:11.920 --> 00:37:16.880
audience off of that and that single look like audiences like what built gym launch like I didn't

472
00:37:16.880 --> 00:37:20.480
cool like I tried to hit all these ever audiences and nothing worked as soon as I hit the ads

473
00:37:20.480 --> 00:37:25.200
that audience it was like ding ding ding I was like oh my god yeah that's amazing so amazing so

474
00:37:25.200 --> 00:37:29.440
you reverse engineer your list also elbow grease for eat both of these right like let you just

475
00:37:29.440 --> 00:37:33.280
look to the side look to the directors and manually like paste this stuff over yeah but again

476
00:37:33.280 --> 00:37:38.400
you know like you used a VA I used a VA as well I used somebody in the Philippines who for like

477
00:37:38.400 --> 00:37:43.440
20 cents a record it's just like here you go and you sleep and it's like there that's day exactly

478
00:37:44.080 --> 00:37:49.040
so the way that we reached out to these influencers I thought was pretty genius so we had this box

479
00:37:49.040 --> 00:37:54.080
right we're shipping a box of me and at the time there was like blue apron and hello fresh

480
00:37:54.160 --> 00:37:57.600
all these companies and they all even know really was gone right or they're

481
00:37:57.600 --> 00:38:03.600
five twenty fifteen they were hot yeah I remember that yeah blue apron is now was purchased by

482
00:38:03.600 --> 00:38:09.520
Mark Laurie who did jet.com and they're trying to like make it specific and then hello fresh was

483
00:38:09.520 --> 00:38:14.000
Adarling a little later than that yes and hello fresh is still around there okay yeah I'm not

484
00:38:14.000 --> 00:38:20.880
wrong so at the time blue apron and hello fresh would include a recipe in the box okay and our

485
00:38:20.880 --> 00:38:25.040
customers were like this is really great but I'd love a recipe yeah and so what we did is we

486
00:38:25.040 --> 00:38:30.480
reached out to these influencers and we're like hey we started this company on grass-fed beef

487
00:38:30.480 --> 00:38:36.640
because we believed in like eating grass-fed beef and you talk you've talked about grass-fed beef

488
00:38:36.640 --> 00:38:42.160
and but we didn't see a source of where to buy it so we'd like to be a resource and by the way

489
00:38:42.160 --> 00:38:46.480
we're shipping out all these boxes and we don't have any recipes and what we'd like to do is

490
00:38:46.480 --> 00:38:53.600
include your recipe on and the VA would like you know find talkable yeah steak whatever

491
00:38:54.320 --> 00:38:59.680
and we we'd love to include that in our box and so these influencers who like should you trade

492
00:38:59.680 --> 00:39:04.080
on influence are like of course yeah use my recipe no problem are you gonna like link to my

493
00:39:04.080 --> 00:39:07.520
website and all that stuff and we're like yeah yeah they're like by the way what's butcher box

494
00:39:07.520 --> 00:39:13.920
yeah we're like perfect let's talk so that was like that was like we called it the Trojan horse

495
00:39:13.920 --> 00:39:18.960
because it was like not only do you get the recipes for free but you also get you know you get

496
00:39:18.960 --> 00:39:22.960
in contact with all these you get them to reply to you and as soon as they replied to us then it

497
00:39:22.960 --> 00:39:27.600
was like let's talk about butcher box so I want to double click on that real quick so if you're

498
00:39:27.600 --> 00:39:31.440
dealing with influencers you have to think about the currency they care about most and a lot of

499
00:39:31.440 --> 00:39:36.560
influencers care more about fame than they do about money and so you were able to deal in the currency

500
00:39:36.560 --> 00:39:41.760
they preferred and so just as like for any any businesses like is there a way that we can do this

501
00:39:41.760 --> 00:39:46.320
that's that's real that like actually provides real value to them in the way that they want to get

502
00:39:46.320 --> 00:39:50.880
value which I think is actually like a really brilliant like little nugget this is 2016 so this

503
00:39:50.880 --> 00:39:55.840
is a long time ago yeah at the time the influencers especially in the health among the space like

504
00:39:55.840 --> 00:40:01.440
didn't really know their value yeah and so we were able to go to those influencers and say look like

505
00:40:01.440 --> 00:40:05.280
we don't have any money we can't pay you upfront I'm not paying you like five thousand dollars to

506
00:40:05.280 --> 00:40:11.440
send an email what we can do is we'll pay you ten dollars or fifteen dollars per subscriber

507
00:40:11.440 --> 00:40:17.360
for every month that they remain a subscriber so for life yeah that's great making for life

508
00:40:17.360 --> 00:40:22.720
yeah commissions for life for missions commissions for life and people said yes they started yeah

509
00:40:22.720 --> 00:40:28.800
I'll do that I'll do that and so we figured out that you know tweets didn't work Facebook posts didn't

510
00:40:28.800 --> 00:40:34.480
work the thing that worked was a dedicated email blast where they would be like here's butcher box

511
00:40:34.480 --> 00:40:39.760
let me introduce this to you and then ideally with a last chance like a last chance thing and there

512
00:40:39.760 --> 00:40:45.440
was always an offer twenty dollars off free bacon whatever it was and because we're only paying

513
00:40:45.440 --> 00:40:52.400
these influencers ten dollars or fifteen dollars a month we could do all of this and be box one

514
00:40:52.400 --> 00:40:57.200
profitable meaning we still made money because we started with a twenty dollar profit we still made

515
00:40:57.200 --> 00:41:03.040
money on that first box or at least it was like we made a penny is the is the so I would let's

516
00:41:03.040 --> 00:41:08.320
talk about now that we're here let's talk about the box economics yeah so your profit on box one

517
00:41:08.320 --> 00:41:14.720
which if we're juxtaposing this with uh custom made yeah right um I I always fund him like

518
00:41:15.600 --> 00:41:19.280
there are some business it's basically I think there are significantly fewer businesses that

519
00:41:19.280 --> 00:41:24.320
actually rely on outside capital to to work then people like if you want to build rockets it's

520
00:41:24.320 --> 00:41:29.280
probably yeah tough but like you probably have to do that yeah but so I see a lot of businesses

521
00:41:30.080 --> 00:41:33.680
like even that that hit me up and they're like hey you know I'm raising capital for my

522
00:41:34.240 --> 00:41:37.120
insert normal business and I'm like have you considered just making money

523
00:41:37.440 --> 00:41:42.640
um right no but like real right it's just like the perspective right and so um box when you're

524
00:41:42.640 --> 00:41:47.360
profitable so walk me through like with the the standard box like that most people you know with

525
00:41:47.360 --> 00:41:53.200
the cost is and and all the cost associated I know you really obsess about the box yeah so um

526
00:41:53.200 --> 00:41:57.360
the Omaha Steaks guy who introduced us to the place in Wisconsin that we worked with

527
00:41:57.440 --> 00:42:01.760
which massive by the way the one nugget yeah you like open the whole business that's why I was

528
00:42:01.760 --> 00:42:08.080
like I need to start now um the one nugget he left me with he's like listen all we care about

529
00:42:08.080 --> 00:42:14.480
at Omaha Steaks is dollars per box what does that mean yeah he means everyone at the company knows

530
00:42:14.480 --> 00:42:19.760
when a box comes off the line how much money are we making off the box and so that's how I built

531
00:42:19.760 --> 00:42:24.320
the business I started the business right so we were charging a hundred and twenty nine dollars

532
00:42:24.320 --> 00:42:28.480
we were trying to make a twenty dollar profit yeah we were only shipping from Wisconsin which is

533
00:42:28.480 --> 00:42:32.960
a nightmare for California but it was like so we were losing money on California but we're like

534
00:42:32.960 --> 00:42:39.040
whatever it averaged out to twenty hey guys real quick this podcast only grows from word of

535
00:42:39.040 --> 00:42:41.920
mouth quite literally there's no other way to grow a podcast in word of mouth if there's some

536
00:42:41.920 --> 00:42:45.600
element of this that you think somebody else should hear or be relevant to them it would mean

537
00:42:45.600 --> 00:42:50.480
the world to me if you share this via text via Instagram via DM via whatever way you like to share

538
00:42:50.480 --> 00:42:57.120
stuff with the people you love thank you um and it kept our focus so like when I and when I talk

539
00:42:57.120 --> 00:43:03.040
about twenty dollars a box I mean like all in because we put all the costs associated with it yeah

540
00:43:03.040 --> 00:43:07.280
so you like fully loaded the box in terms of cost so it's twenty dollars per fee and profit yeah

541
00:43:07.280 --> 00:43:12.880
rather than gross profit per box uh we're seeing gross profit gross profit okay got it because we

542
00:43:13.040 --> 00:43:20.320
again it was hobby business so like it wasn't our labor it wasn't our so this is a pick pack

543
00:43:20.320 --> 00:43:24.800
yeah so like putting all the stuff in from our distribution center into a box yeah the cost of the

544
00:43:24.800 --> 00:43:29.840
meat yeah uh the cost of the box yeah the cost to ship the box the cost of the dry ice that goes

545
00:43:29.840 --> 00:43:35.760
in the box uh the credit card processing fees the tape that goes on the box like all those things

546
00:43:36.560 --> 00:43:41.760
and because we we just became doggedly focused on dollar from our box and what I love about this

547
00:43:41.760 --> 00:43:48.400
business even to this day is that we we get to focus on like you know the minutiae like like

548
00:43:48.400 --> 00:43:53.440
negotiating the price of tape yeah and the super creative like how are we going to get our next

549
00:43:53.440 --> 00:43:59.280
you know five hundred thousand customers um and we got to do both but uh we we just started with

550
00:43:59.280 --> 00:44:04.320
the DNA of like we're going to negotiate every single line item in this box so what is the gross

551
00:44:04.320 --> 00:44:11.360
margin percentage per box currently or that oh both sure uh like thirty percent is a healthy

552
00:44:11.360 --> 00:44:16.960
gross margin okay yeah we we definitely want to be around or above thirty percent got one of

553
00:44:16.960 --> 00:44:21.120
the challenges that we have as a business is that uh at least currently so we're looking at

554
00:44:21.120 --> 00:44:26.560
pricing model changing currently you pay a hundred sixty nine dollars and you choose six items in

555
00:44:26.560 --> 00:44:32.800
the box okay and so it's kind of an inflationary disaster because the prices of meat fluctuate

556
00:44:32.800 --> 00:44:39.760
all the time so if you stack it with rib eyes you're way less than a thirty percent gross margin

557
00:44:39.760 --> 00:44:44.560
if you stack it with really cheap stuff you're way more than a thirty percent gross margin that's

558
00:44:44.560 --> 00:44:49.920
an area where um I feel like we're in like not an alignment with our customer so I want to change

559
00:44:49.920 --> 00:44:54.400
that over time yeah uh but yeah currently we're looking at a thirty percent so uh what are net

560
00:44:54.400 --> 00:45:01.040
margins they're like six okay got it got it we did like six and a half last year

561
00:45:02.080 --> 00:45:07.200
and it's certainly not a content business yeah yeah yeah yeah wait six and a half what's

562
00:45:07.200 --> 00:45:11.680
million oh yeah I was like that is okay that was that was that's my true and you did and the big

563
00:45:11.680 --> 00:45:17.680
the big line at them so um these businesses like I've seen so many of them uh thirty percent

564
00:45:17.680 --> 00:45:24.720
gross margin yeah um you got ten percent to operate the place that salaries uh technology

565
00:45:24.720 --> 00:45:29.680
so it's very good to opt of your gross margin yeah uh and then you got twenty percent left over

566
00:45:29.760 --> 00:45:38.800
for marketing and EBITDA like or in profit right and so uh these businesses at scale what they do

567
00:45:38.800 --> 00:45:43.360
what you do is you market market market market market market for years build your name and then just

568
00:45:43.360 --> 00:45:48.080
try to collapse your marketing and take it all in and hopefully get enough word of mouth

569
00:45:48.880 --> 00:45:53.520
you know from from those customers that it can at least uh stave off turn yeah that's the like

570
00:45:53.520 --> 00:45:58.720
the CPG playbook um and that's what a lot of these top companies are doing it's a tough business

571
00:45:58.800 --> 00:46:03.840
it is a tough business like it's I mean it's so it's interesting because in so many ways it's like

572
00:46:03.840 --> 00:46:07.440
software yeah with the exception of like rather than doing with development you're doing with supply

573
00:46:07.440 --> 00:46:11.920
chain that's your big like as a like I'm sure I know there's more fires but like if I'd if I

574
00:46:11.920 --> 00:46:16.160
just simplified them to like the big buckets most of the time I feel like that's where um won't you

575
00:46:16.160 --> 00:46:22.160
tell me uh that that's yeah no I I agree I mean so um you know that was a blue aprons whole thing

576
00:46:22.160 --> 00:46:26.080
that raised a whole bunch of money and it was all like work we should be valued at a software

577
00:46:26.080 --> 00:46:30.800
multiple yeah nowadays box subscription companies are not valued as software multiple because

578
00:46:30.800 --> 00:46:37.440
there's like actual physical product being sold um and yeah there's sick is as high um as like uh

579
00:46:37.440 --> 00:46:42.240
I don't know well a consumer you know consumer tech company like shopper for example they have 60

580
00:46:42.240 --> 00:46:50.560
percent annual retention for like new new customers right um I would imagine that if if that in

581
00:46:50.560 --> 00:46:56.400
the consumables business that that would be unbelievably good yeah yeah what's your retention on

582
00:46:56.400 --> 00:47:03.200
like a year one customer gosh it's not how we look at it okay interesting yeah probably around 60

583
00:47:03.200 --> 00:47:07.040
percent okay yeah that's like best I mean that's those are like best in class numbers I mean those

584
00:47:07.040 --> 00:47:11.120
will reason that you're doing yeah yeah yeah six hundred now that you guys are doing yeah well it's

585
00:47:11.120 --> 00:47:17.280
like five fifty okay um yeah the six hundred has been out there but it's really five fifty uh so yeah

586
00:47:17.280 --> 00:47:23.680
we're yeah five hundred fifty million um profitable since day one and you and seventy percent yeah so

587
00:47:23.680 --> 00:47:30.320
I uh I gave equity to most employees like early on like a software company yeah like a venture

588
00:47:30.320 --> 00:47:37.680
backed one is like oh this is what you do you give out equity um which uh in many ways yes like the

589
00:47:37.680 --> 00:47:42.000
people who helped me build this business the people who helped me hack through the jungle yeah

590
00:47:42.720 --> 00:47:48.400
are all millionaires um and you know that's cool that's like really neat uh but also

591
00:47:49.280 --> 00:47:57.360
we have um it if you don't want to raise money yeah which I don't and you don't want to go public

592
00:47:57.360 --> 00:48:01.680
right which I don't and you don't want to sell which I don't it's like how do you catch people out

593
00:48:01.680 --> 00:48:08.240
yeah right um that has been that is a concern of mine all the time is like so every year we've

594
00:48:08.240 --> 00:48:14.240
actually done a uh we've taken profits and repurchase shares so that people have no one who wants

595
00:48:14.240 --> 00:48:19.600
it yeah and so then you basically set the valuation every year actually we do yeah we there's a

596
00:48:19.600 --> 00:48:24.000
there's a four or nine a value somebody comes in and does evaluation yeah we also have done this

597
00:48:24.000 --> 00:48:28.240
thing which is I don't know if your listeners are interested but we we've done this year which is

598
00:48:29.040 --> 00:48:34.320
reverse Dutch auction okay so we are like we're gonna allocate this much money to buy shares

599
00:48:34.320 --> 00:48:39.440
yeah and then we people can say what they're willing to sell at and then we we bottom that way

600
00:48:39.440 --> 00:48:44.000
which is pretty interesting that's awesome yeah that's very interesting yeah it's right it's a really

601
00:48:44.000 --> 00:48:49.360
it's it's actually more common now um and it's a really great way to get like what the actual market

602
00:48:49.360 --> 00:48:56.080
value is because when you do a valuation it's like not it's a huge makes it up right um so yeah

603
00:48:56.080 --> 00:49:02.080
so I mean you know just on that point uh what did you what what was the reverse Dutch auction

604
00:49:02.080 --> 00:49:09.040
valuation of the business it was like 50% of the what the um four and eight was what was the four

605
00:49:09.040 --> 00:49:13.680
and I know they have one valuation and then they do this control premium that they take off but

606
00:49:13.680 --> 00:49:19.920
the the valuation is about a one one for one with revenues okay so like one X okay got it uh which

607
00:49:19.920 --> 00:49:25.680
is probably low uh who knows yeah I mean it doesn't matter yeah I'm not trying to like yeah one

608
00:49:25.680 --> 00:49:29.760
for one with revenues is what people yeah I'll give one dollar so that you have a trillion dollar

609
00:49:29.760 --> 00:49:36.000
really yeah yeah yeah point zero zero zero percent thank you yeah so you know the 30% that other people

610
00:49:36.000 --> 00:49:40.960
own is uh it's a hundred fifty million dollar problem it's yeah it's a big problem yeah do you see

611
00:49:40.960 --> 00:49:48.000
this a problem uh I I don't I mean you have to get comfortable uh with um telling people to be

612
00:49:48.000 --> 00:49:53.440
patient right right it's like look uh we're not gonna spend a hundred fifty million dollars here

613
00:49:53.440 --> 00:49:59.840
know this is super relevant for me yeah and uh you know so during covid the covid was we grew the

614
00:49:59.840 --> 00:50:03.920
business tremendously and we almost shut off marketing so I mean which made so much profit

615
00:50:04.640 --> 00:50:09.040
and then we bought all these shares and we just started buying and buying and buying but then

616
00:50:09.040 --> 00:50:14.720
inflation took over and so our inflationary disaster like our margins just got super compressed

617
00:50:14.720 --> 00:50:20.560
we went from like a 30% gross margin to a 25% gross margin after doing two price increases

618
00:50:20.560 --> 00:50:25.680
after two's so it was like there was no money yeah um and we never like ran out of money but

619
00:50:26.240 --> 00:50:31.200
you know we're all looking around being like dude we just like did a share buyback like for 20 or

620
00:50:31.200 --> 00:50:35.280
30 million dollars over the past like three years yeah I'd really love that money right now yeah

621
00:50:35.280 --> 00:50:41.600
that'd be nice so hey can I yeah yeah in no Indian version do you want some shares yeah all right well

622
00:50:41.600 --> 00:50:46.720
did you so with so this is this is a great follow question so do you take regular distributions

623
00:50:46.720 --> 00:50:50.640
from the company or would have you just been like kind of like you took once or twice and that's like

624
00:50:50.640 --> 00:50:57.360
my you know my family set and now everything's still like me personally yeah yeah um I take a salary

625
00:50:57.360 --> 00:51:06.160
okay um and a bonus and then um very early on because we started as an LLC I owned all of the

626
00:51:06.160 --> 00:51:11.440
technology and employed everybody okay and the company bought that from me and so there's been

627
00:51:11.440 --> 00:51:15.520
distributions to cover that and controlled both companies so you got to pick what that was

628
00:51:15.520 --> 00:51:22.720
value uh that had to be third party oh was it okay well gotta be fair to this yeah yeah okay

629
00:51:22.720 --> 00:51:28.000
so when you've been doing the buybacks um were you at like 50 50 and then over time you've

630
00:51:28.000 --> 00:51:33.440
kind of like bought your way back to 70 30 or yeah I think I think yeah I think it was like 60 and

631
00:51:33.440 --> 00:51:40.480
now it's well originally yeah the uh the Omaha steaks guy mm-hmm and there's also a brand guy

632
00:51:41.440 --> 00:51:46.800
they this my biggest mistake when I started the company was I value the company at a stupidly

633
00:51:46.800 --> 00:51:52.720
low rate and so I just raised 10 million dollars on a 30 million dollar valuation right I started

634
00:51:52.720 --> 00:51:57.440
this and I'm like it's gonna be a hobby this isn't gonna be anything so the Omaha steaks guy's like

635
00:51:57.440 --> 00:52:02.640
I can make all these connections I can do all the stuff and it's a 75,000 dollars worth of work

636
00:52:02.640 --> 00:52:05.840
but I'm like well I don't have that so it could be equity and he's like okay great how much is the

637
00:52:05.840 --> 00:52:10.640
company worth I was like 750 grand so he took 10 percent of the company so he's what he's a

638
00:52:10.640 --> 00:52:15.840
10 percent sickle not anymore okay uh and then there was a brand guy which was the same thing 10

639
00:52:15.840 --> 00:52:22.160
percent of the company and as we got going it was like I that that's like way too much and they're

640
00:52:22.160 --> 00:52:27.360
not doing anything right yeah they did one time work it's like one time work right uh and so we

641
00:52:27.360 --> 00:52:32.560
bought them out we bought them out when the valuation was 48 million well I'm sure they were through

642
00:52:32.560 --> 00:52:37.760
and it was yeah two they got 200,000 dollars a month for two years okay um I'm sure you're still

643
00:52:37.760 --> 00:52:42.880
thrilled yeah right probably more than you made it oh totally yeah way more one one good phone call

644
00:52:42.880 --> 00:52:48.960
for him yep right a little bit of work yeah except for life man there's so many directions I

645
00:52:48.960 --> 00:52:55.280
want to go but uh to put a button on on on the story and then I want to go back and kind of unpack

646
00:52:55.280 --> 00:53:00.720
some numbers and things yeah yeah if you're not gonna IPO yep and you're not gonna sell the company

647
00:53:00.720 --> 00:53:07.840
and the CPG playbook is that at some point you turn off the marketing when is that yeah um not

648
00:53:07.840 --> 00:53:13.040
anytime okay so you just want you want to grow for a minute yeah so um give a goal like a

649
00:53:13.040 --> 00:53:19.360
billion year in sales or I mean a billion uh I'm very goal oriented so I do have a billion

650
00:53:19.360 --> 00:53:24.800
on my whiteboard but I recognize that before that I had a million and before that a 10 million

651
00:53:24.800 --> 00:53:31.200
and then a hundred million so it'll be enough for sure yeah totally then it'll be enough yeah

652
00:53:31.200 --> 00:53:37.760
yeah just they'll be happy and walk away happy you know just totally yeah exactly I would like I

653
00:53:37.760 --> 00:53:42.480
think running this to a billionaire revenue would be a lot of fun uh I don't know how fast that's

654
00:53:42.480 --> 00:53:48.080
going to be uh we've definitely learned that is it's it's gotten a lot harder like as you grow you

655
00:53:48.080 --> 00:53:53.200
just don't worry people and you you know it's just harder yeah one percent on how many customers

656
00:53:53.200 --> 00:53:57.600
you have right now like four hundred and thirty thousand yeah so one percent on four hundred and

657
00:53:57.600 --> 00:54:01.680
thirty thousand it's like oh all of a sudden that's just you know forty three hundred customers

658
00:54:01.680 --> 00:54:05.280
that we just have if we lose one percent it's like okay that's a decent amount of customers and

659
00:54:05.280 --> 00:54:09.040
you're like well if it's ten percent churn annually yeah and you said I think you were keeping

660
00:54:09.040 --> 00:54:14.400
well sixty of your one or so I mean our churn is like three percent a month right yeah so that's

661
00:54:14.400 --> 00:54:19.200
thirty-eighth percent or whatever you mean you have to sign up twelve thousand people a month before

662
00:54:19.200 --> 00:54:25.120
you stop trading while just a chill just yeah yeah so it's like it's it's those numbers just get

663
00:54:25.120 --> 00:54:29.040
this four hundred a day yeah just like they're leaving they're leaving yeah they're being the other

664
00:54:29.040 --> 00:54:32.960
following that right don't leave people yeah they have a great product did you have bacon for life

665
00:54:32.960 --> 00:54:38.320
what are we talking about yeah you're losing your for life offer yeah like I really do love the um

666
00:54:38.880 --> 00:54:44.160
the lifetime the lifetime offers um yeah I have a book that's coming out that talks about this

667
00:54:44.160 --> 00:54:49.600
this particular offer structure so yeah a lot of yeah lifetime offer people getting a box of meat

668
00:54:49.600 --> 00:54:54.640
um seemed really magical like it was like wait wait this is gonna show up it's gonna be frozen like

669
00:54:54.640 --> 00:55:00.000
I don't trust it so uh money back guarantee like no questions asked we'll just we'll just refund you

670
00:55:00.000 --> 00:55:03.200
let me let me talk to some of the fears of business owners around money back guarantees because

671
00:55:03.200 --> 00:55:08.400
I talk about them want to um what percentage of customers do you get uh who ask for refunds

672
00:55:08.720 --> 00:55:14.240
oh my god I don't need like so small I don't even know the number right and the conversion

673
00:55:14.240 --> 00:55:20.640
increases certainly worth having for sure for sure also like um you know one of our core values

674
00:55:20.640 --> 00:55:25.600
is being customer obsessed yeah like we actually want to deliver you an amazing product right and

675
00:55:25.600 --> 00:55:31.520
so if we fail at that you should get your money back yeah um that's like and it's like well I'm

676
00:55:31.520 --> 00:55:36.720
worried about that we'll fix your product right make your product better like spend time obsessing

677
00:55:36.800 --> 00:55:42.160
over your product so and you you you'll do very well with money back it's like dollar per box

678
00:55:42.160 --> 00:55:46.720
and then also like happiness per box like yeah oh my god besides like your delight per box totally

679
00:55:46.720 --> 00:55:51.600
yeah I mean it's all about your what with the metric that is commonly used is the net promoter

680
00:55:51.600 --> 00:55:56.560
score so it's all about your satisfaction with the and we're constantly asking what you're in

681
00:55:56.560 --> 00:56:01.680
P.S. right now uh it's like a 63 that's great yeah yeah we're pretty happy with that we we want

682
00:56:01.680 --> 00:56:08.560
a perfect experience every time yeah and when you're shipping multiple species you know you had 12 to

683
00:56:08.560 --> 00:56:13.520
15 yeah we do see food how did that how did you get was that just a whole another had to find

684
00:56:13.520 --> 00:56:20.480
another supplier yeah we really use any of that um so basically we got going we'll go all the way

685
00:56:20.480 --> 00:56:26.000
back we we got going we're shipping out boxes we're making $20 a box the influencer thing is working

686
00:56:26.400 --> 00:56:31.920
that's about 6,000 subscribers and it was clear to me that we had no idea what we're doing

687
00:56:32.560 --> 00:56:37.920
it was like okay we've been faking it that's great but like we need somebody who knows how to buy

688
00:56:37.920 --> 00:56:43.040
the adult yeah we need an adult right there um and so again I went to LinkedIn usually well on the

689
00:56:43.040 --> 00:56:52.800
toilet uh and I reached out to this guy who lived in Boston and um ran meet and see food at one

690
00:56:52.800 --> 00:56:59.760
of these big grocery chains uh but he had retired and so I was like interesting background

691
00:56:59.760 --> 00:57:05.440
let's talk yeah pull them out of retirement and he came and started purchasing yeah meet and see

692
00:57:05.440 --> 00:57:10.800
food for us meet and then see food yeah and I mean the saving my whole thing was okay we're

693
00:57:10.800 --> 00:57:16.320
shipping 60,000 pounds of meat I've got all I have to believe is that somebody can save me like

694
00:57:16.400 --> 00:57:22.640
25 cents a pound and this is like worth it right so um he came in and just he's like

695
00:57:23.200 --> 00:57:28.480
you guys are paying there's like second days like you guys are paying enough and chicken breasts

696
00:57:28.480 --> 00:57:32.240
that you could send people three pounds instead of one pound do you want me to do that?

697
00:57:32.240 --> 00:57:37.440
not like yeah that'd be great yeah 25 cents was the target and he was like I can give you a buck

698
00:57:37.440 --> 00:57:44.000
in a hand yeah I mean multiples of his of his salary back um and you know I think it's really

699
00:57:44.000 --> 00:57:48.480
important to that you hire experts in certain areas at the right time but in certain areas

700
00:57:48.480 --> 00:57:53.840
I want it so I want to hit on on the the meta part of this which is like all right like the big the

701
00:57:53.840 --> 00:57:58.080
big turning points because I like I like like what are those those inflection points in the business

702
00:57:58.080 --> 00:58:02.080
so it's like all right you switch from raising money to pre selling that's probably I feel like

703
00:58:02.080 --> 00:58:07.120
that's like setting yourself up on the right path okay so that was number one number two um is

704
00:58:07.120 --> 00:58:13.280
you realize this influencer thing has some legs to it and then you go hardcore on getting influencers

705
00:58:13.280 --> 00:58:17.120
you also reverse engineer somebody else's database which I highly recommend if you're trying to reach

706
00:58:17.120 --> 00:58:22.080
out to people um to find the high like I call me chvts but uh high value targets like how do we how do

707
00:58:22.080 --> 00:58:27.360
we find the chvts and then and then grab them okay so you do that um you have a happy accident with

708
00:58:27.360 --> 00:58:34.160
free bacon that ends up being a core component um of the offer and then later um you turn on the

709
00:58:34.160 --> 00:58:39.040
lifetime version of that and then you do that across kind of horizontally across the box you obsess

710
00:58:39.040 --> 00:58:43.600
about gross margin per box or whatever your unit economics are of the business you got super

711
00:58:43.600 --> 00:58:47.760
dot on that and just want to make every single every single penny count because it up you know

712
00:58:47.760 --> 00:58:53.600
you're on the same side of the table figuratively as the customer you got experts um in at the

713
00:58:53.600 --> 00:58:59.200
right times the branding person up front the homostates guy later the meat purchasing guy um that

714
00:58:59.200 --> 00:59:03.680
all came in at key points to like unlock you know levels of profitability and growth what's what are

715
00:59:03.680 --> 00:59:07.120
some of the other ones that that that might have been skipped over in the cheese man that's good

716
00:59:07.200 --> 00:59:14.960
just like boil it down in a good way um I think working like so our backbone today we still

717
00:59:14.960 --> 00:59:19.920
don't own our backbone so uh distribution we don't do we don't own our own farms we don't own

718
00:59:19.920 --> 00:59:26.480
our do you want to no okay um because we believe that it's better to work with partners it's kind

719
00:59:26.480 --> 00:59:31.520
of like the Toyota approach work with partners yeah hold them hold their feet to the fire hold

720
00:59:31.520 --> 00:59:36.960
them to a tight spec uh have them do things they're not doing for anyone else but trust that they

721
00:59:36.960 --> 00:59:40.960
know better than me yeah i don't know anything about farming i don't know anything about slaughterhouses

722
00:59:40.960 --> 00:59:47.360
like that's a bad place for me to spend my time uh the only piece of our entire backbone that we

723
00:59:47.360 --> 00:59:53.120
control is dry ice we have two dry ice plants um and that's because if you don't have dry ice you

724
00:59:53.120 --> 00:59:58.080
can't ship a box yeah and so we were like we should it's like a great insurance policy yeah

725
00:59:58.080 --> 01:00:03.840
everything else if you lose that revenue goes to zero yeah right everything else is like not um i

726
01:00:03.840 --> 01:00:09.920
don't think it's worth us us taking and so and i think that's like one common mistake in box

727
01:00:09.920 --> 01:00:14.000
subscription companies in overfunded companies and just with entrepreneurs in general it's pretty

728
01:00:14.000 --> 01:00:19.520
clear yeah you need to you need to like own everything you need to control all of it and uh that

729
01:00:19.520 --> 01:00:25.520
has been a huge it's actually been a huge um part of our success well then let's so because

730
01:00:25.520 --> 01:00:30.160
i'm sure you've had partnerships that didn't go well yep and you've obviously been really good at

731
01:00:30.160 --> 01:00:35.680
building these relationships so to the greatest degree possible do you have any kind of

732
01:00:35.680 --> 01:00:42.400
test for how you judge a partner's ability to fulfill on their promises before you've

733
01:00:43.520 --> 01:00:46.320
started working with them because obviously you know you're bringing a huge amount of business

734
01:00:46.320 --> 01:00:50.960
there's a significant risk that you take on by having a but you know a partner do something bad

735
01:00:50.960 --> 01:00:54.480
there's obviously with food there's huge liabilities of a whole you know a whole state has

736
01:00:54.480 --> 01:00:58.480
brought me it's like i mean it's a it's more of a PR nightmare it took Chipotle years to

737
01:00:58.880 --> 01:01:04.880
to live down the salmonella issue that they had as a micro example yeah so i mean on the on the

738
01:01:04.880 --> 01:01:10.880
meat side we do robust safety audits and you like we're not working with you unless we've done a

739
01:01:10.880 --> 01:01:16.480
whole bunch of audits on the other partner side uh we're generally trying to work with the best

740
01:01:16.480 --> 01:01:20.800
best people like best in class so you just look at an industry and say okay we we want to find

741
01:01:20.800 --> 01:01:26.320
okay so all the different farms in the US that are grass fed who's the biggest and the best

742
01:01:26.400 --> 01:01:31.600
and you just trying to deal with them yeah i mean you you you try to balance like um helping small

743
01:01:31.600 --> 01:01:37.920
farmers right um and working with big farmers because a small farmer might have 50 head and we

744
01:01:37.920 --> 01:01:44.000
might need like a hundred thousand head right so we can't work with two thousand small farmers

745
01:01:44.000 --> 01:01:49.360
we work with we generally work with collectives that would then work with the farmers so we're

746
01:01:49.360 --> 01:01:53.040
working with that collective saying this is what we want this is our spec this is how we want

747
01:01:53.040 --> 01:01:58.160
it raised and then they go and find the farmers um and again it's like we don't want to be on the

748
01:01:58.160 --> 01:02:04.400
ground you know i love meeting with farmers and doing all that but like i that we that can't be

749
01:02:04.400 --> 01:02:08.800
what we do inspecting host is probably yeah so it's like really important to know what you're good at

750
01:02:08.800 --> 01:02:13.120
and what you're not good at and anything that you're not good at including picking up the phone

751
01:02:13.120 --> 01:02:17.680
eleven hundred times yeah like just don't do try to get someone else to do it because you can't i

752
01:02:17.680 --> 01:02:21.520
don't think you can build a business unless you're feeling that flow and you're feeling like

753
01:02:21.520 --> 01:02:25.680
really engaged and that can only be done in the the work that you're really good at you've

754
01:02:25.680 --> 01:02:29.760
been really good at picking those people though so like what it what's your obviously there's

755
01:02:29.760 --> 01:02:33.440
the reputation of the company yeah right but like also you're really good at picking like

756
01:02:33.440 --> 01:02:37.840
the almost takes guy and the branding guy that you picked out and even Nick who did those first

757
01:02:37.840 --> 01:02:42.080
you know eleven hundred calls like it's it's an uncanny trait like even really good at it just

758
01:02:42.080 --> 01:02:45.840
i'm just like listening to the story i haven't you haven't mentioned i'm sure there were some

759
01:02:45.840 --> 01:02:51.440
horror stories like um it seems like you've had a huge amount of success and i feel like if i had

760
01:02:51.680 --> 01:02:56.880
a different entrepreneur in the chair i would have i could i could totally hear the total other side

761
01:02:56.880 --> 01:03:00.880
of the story i went to a couple partners early what i learned is you got to control everything if you

762
01:03:00.880 --> 01:03:05.200
want you know like i've you didn't mean like i've heard that side and so you're obviously

763
01:03:05.200 --> 01:03:10.160
better at picking partners than most people so like what do you think about and trying to isolate like

764
01:03:11.040 --> 01:03:17.440
this person will work i mean so early on when you're talking about your first employees um i

765
01:03:17.440 --> 01:03:22.720
i have this analogy i think i'd install it from someone but like uh building a company is like

766
01:03:22.720 --> 01:03:27.680
hacking through the jungle with machetes and so you're just like there's you're just dropped in the

767
01:03:27.680 --> 01:03:31.920
middle of the jungle you have a machete you're like uh i don't know where we're going yeah at that

768
01:03:31.920 --> 01:03:36.160
point you need people who are just gonna hack day and night with you like you just and it's great

769
01:03:36.160 --> 01:03:40.160
yeah so i'm looking for athletes i'm looking for people who have failed at something i'm looking

770
01:03:40.160 --> 01:03:44.800
for people with a chip on their shoulder you know daddy issues all of that because i've got all

771
01:03:44.800 --> 01:03:51.520
that so like you know i i want to you know that's all great men do yeah i uh that's the type of

772
01:03:51.520 --> 01:03:57.760
person i want and then as you grow uh you realize that like okay we need some experience here and how

773
01:03:57.760 --> 01:04:01.920
do we get experience one thing this doesn't totally answer your question but one thing that we did

774
01:04:01.920 --> 01:04:07.760
that was like i think pretty um i thought was pretty smart is uh i call it the barbell strategy

775
01:04:08.560 --> 01:04:14.000
we hired people like out of retirement okay because there were so far along in their career

776
01:04:14.480 --> 01:04:20.160
and we found that the middle like so really young and really old worked incredibly well i would say

777
01:04:20.160 --> 01:04:24.640
personally i've had a lot of experience with that too yeah and the middle is like they're super

778
01:04:24.640 --> 01:04:28.400
busy they've got kids they've got all these commitments they want this to be like the one mark on

779
01:04:28.400 --> 01:04:32.400
their career career the career like careerists right out of them people who want to do the work

780
01:04:32.400 --> 01:04:37.200
hunger hunger yeah it's interesting because the people at the beginning want to work all the time

781
01:04:37.200 --> 01:04:41.120
because they want to learn a lot the people at the end want to work because they have nothing

782
01:04:41.120 --> 01:04:45.920
else to do and they want to in some ways like if have their experience be used like the you they

783
01:04:45.920 --> 01:04:49.680
want to be useful legacy right and that both of those are actually concerted on the work itself

784
01:04:49.680 --> 01:04:54.800
rather than the label ascribe to the work totally and everyone a lot of times people in the middle are

785
01:04:54.800 --> 01:04:59.280
it's like you're three years on my resume uh and i want to you know just leverage this

786
01:04:59.280 --> 01:05:04.720
brand new to go from director to vp and then i did this and i need this and and yeah we just found

787
01:05:04.720 --> 01:05:11.040
that people on the ends were just like so grateful and and so like my title obsession yeah

788
01:05:11.280 --> 01:05:18.320
yeah my my knee guy i just remember this uh dinner i was at and it's like i my meme guy and uh

789
01:05:18.320 --> 01:05:22.880
blue aprons meet guy i was there and blue aprons meet guys like 32 years old and like skinny jeans

790
01:05:22.880 --> 01:05:28.480
in a nice best and my knee guys is like grizzled like 65 year old it's like who do you think's buying

791
01:05:28.480 --> 01:05:35.760
chicken for cheaper yeah like like why does it look like me yeah yeah yeah i mean so i don't really

792
01:05:35.840 --> 01:05:40.560
like i don't really know what's happened here like i like to say like the the business wanted to

793
01:05:40.560 --> 01:05:47.040
be something way bigger than i expected interesting and i just honored that as like some of these people

794
01:05:47.040 --> 01:05:54.560
just kind of fell into my lap um but i i definitely my first company i i knew people were off culture

795
01:05:54.560 --> 01:05:59.200
and i hired them anyway and this time around we wrote down our core values and we're like okay this

796
01:05:59.760 --> 01:06:04.320
this is what we're hiring for um one of our core values is relentless improvement

797
01:06:05.280 --> 01:06:11.360
and uh to your question about partners um any partner you work with there's gonna be problems

798
01:06:11.360 --> 01:06:16.960
sure and we're just not afraid to talk about them we do quarterly business reviews we're like

799
01:06:16.960 --> 01:06:21.120
you know auditing we're doing a whole bunch of stuff and telling you what you're doing wrong

800
01:06:21.120 --> 01:06:25.040
so you can fix it because most partners don't want to like just they want to fire the relationship

801
01:06:25.600 --> 01:06:28.640
knock knock talk to you it's like no let's just keep getting ready let's just get better like we

802
01:06:28.640 --> 01:06:33.760
want to lock arms with you and get you better and so we're also because we're trying to build a long

803
01:06:33.760 --> 01:06:38.560
term thing like we're just locking arms with partners and trying to just move forward with them

804
01:06:38.560 --> 01:06:43.840
talk to me so given the growth rate that you had so it was like was it it was like five million

805
01:06:43.840 --> 01:06:49.040
was the first like your second year i think of business right yeah so we started in september 2015

806
01:06:49.040 --> 01:06:54.400
and we did like 200 in the kickstarter we did like 500 grand and then we did five million

807
01:06:54.800 --> 01:07:02.160
and then 33 million and then 105 million 220 then COVID hit we went to 450 yeah and then you had

808
01:07:02.160 --> 01:07:11.200
well like 500 and then 500 is the next year 450 550 550 550 and then last uh two years ago so

809
01:07:11.200 --> 01:07:16.560
2023 we went down for the first year okay which was pretty heartbreaking for a team that

810
01:07:16.560 --> 01:07:21.120
you know provides ourselves on growth so it talks to me so yeah this last year we started growing

811
01:07:21.120 --> 01:07:26.640
again okay it's good so i have two five so first one is talk to me about rush like what's your

812
01:07:26.640 --> 01:07:31.920
because like you you were really fast yep and then you were essentially flat for like basically four

813
01:07:31.920 --> 01:07:36.320
years yeah how does your perspective on where you want to take the company affect how you run the

814
01:07:36.320 --> 01:07:43.760
company with regards to growth's rate yeah and like rush around goals yeah i like talking about

815
01:07:43.760 --> 01:07:47.600
rush a lot because i think it's where all mistakes happen and you are really fast without the

816
01:07:47.600 --> 01:07:54.560
intention of growing really fast yeah which i find has happened to me multiple times yeah you

817
01:07:54.560 --> 01:08:04.960
know i think that we so we grew obviously we grew incredibly quickly um the biggest mistake

818
01:08:04.960 --> 01:08:12.480
that we made the biggest rush that we made was we it um the wheels kind of felt like they were

819
01:08:12.480 --> 01:08:21.280
falling off the bus yeah at like 450 and we decided to bring in a whole bunch of people to help

820
01:08:21.280 --> 01:08:26.800
like fix the wheels we need bodies we need bodies we need bodies and we need managers yeah we need

821
01:08:26.800 --> 01:08:31.600
people in the middle the middle right yeah what was head count just drive context what was head count

822
01:08:31.600 --> 01:08:38.560
at that at at like i mean going into cover where 85 people uh it's been doing 200 going into

823
01:08:38.560 --> 01:08:45.920
COVID with the head count at 80 yeah that's right and then coming like uh end of 21 we were at like

824
01:08:47.360 --> 01:08:55.520
to like one maybe 160 and then we got to a height of 240 yeah uh with designs on you know

825
01:08:55.520 --> 01:09:00.720
all our workroom be like 300 people yeah and now i'm like you know what like 150 sounds really good

826
01:09:00.960 --> 01:09:08.320
right yeah yeah um yeah we currently have we have 25 associates in our driest facility and then

827
01:09:08.320 --> 01:09:15.360
like 170 people outside of that and so the rush was we hired a lot of people and what what happens

828
01:09:15.360 --> 01:09:19.680
to companies and apparently i've learned now that this is a classic 500 million dollar shop so you

829
01:09:19.680 --> 01:09:25.040
can add a book to your your thing later the 500 million dollar trap is something bad happens you

830
01:09:25.040 --> 01:09:31.520
hire a bunch of people because you don't know enough and the everyone starts saying no yeah and you

831
01:09:31.520 --> 01:09:37.600
go from um capital E entrepreneurship like a bunch of pirates like very little process we're just

832
01:09:37.600 --> 01:09:44.160
going and growing and like to like oh we need we need process like we need capital P process and

833
01:09:44.880 --> 01:09:48.880
entrepreneurship needs to come way down yeah and that's what happens you guys are a bunch of kids

834
01:09:48.880 --> 01:09:53.120
we're a bunch of kids like you Mike are like you know have all these ideas and like we need to

835
01:09:53.200 --> 01:09:59.840
we're blessing you and um and that's what happened and at the mean time i broke my arm like my

836
01:09:59.840 --> 01:10:05.200
big everything in my life kind of fell apart at the same time and uh it was it was a slog

837
01:10:05.200 --> 01:10:10.080
yeah and i'm i'm really proud like last year we grew like six percent and i'm like fuck yeah

838
01:10:10.080 --> 01:10:19.680
like we'll take it yeah um and you know so sometime along the journey um i went from like this is a

839
01:10:19.680 --> 01:10:25.200
hobby to i'm gonna just flip this thing like let me build this up and sell it for a hundred million

840
01:10:25.200 --> 01:10:30.080
dollars and i went on a couple meetings and i was like yeah it just doesn't feel right

841
01:10:30.080 --> 01:10:37.440
who's your son and then i just it just kind of over time came to me of um the meat industry is broken

842
01:10:38.400 --> 01:10:43.040
animals are not being treated well in this country and that's like hurting the health of like

843
01:10:43.040 --> 01:10:49.040
people who are eating it and it's like i just wish there was a company that like wasn't funded

844
01:10:49.040 --> 01:10:53.920
had no one breathing down their neck who could just take the play the long ball yeah and just like

845
01:10:53.920 --> 01:10:57.920
this might take 25 years it might take a hundred years but who cares like wearing it for the long run

846
01:10:58.560 --> 01:11:02.240
and then after a while it was like after pointing out everyone else who should be doing that

847
01:11:02.240 --> 01:11:08.240
it's like oh maybe that's me yeah um and so i have no idea if this is what's going to happen

848
01:11:08.240 --> 01:11:16.000
but the the plan is to build a multi-generational long-term hold um if you look at food companies in

849
01:11:16.000 --> 01:11:22.400
the u.s many of them are family controlled multi-generational long-term holds um and so that's

850
01:11:22.400 --> 01:11:28.800
kind of like that's how i've built since the past few years yeah uh while reinserting myself

851
01:11:28.800 --> 01:11:36.480
and becoming becoming a pirate organization again does it feel better yes yeah i mean we um we

852
01:11:36.480 --> 01:11:43.840
did a lot of work in the middle layer like a lot of directors a lot of yeah yeah at our header hey we

853
01:11:43.840 --> 01:11:52.240
had 230 people and um 85 managers so like the average person had like one person underneath them

854
01:11:52.240 --> 01:11:57.920
i just equated to um like the restaurant worker where the receipt comes out and they grab it and

855
01:11:57.920 --> 01:12:03.600
they're like where's the chicken farm yeah yeah on their phone like chicken pot you know it's like

856
01:12:03.600 --> 01:12:09.440
dude what do you do all day yeah um and so we've done a lot of work and like retasking people

857
01:12:09.520 --> 01:12:15.120
and just making sure that people are in the right seats doing things doing things and uh it feels

858
01:12:15.120 --> 01:12:21.760
much better we're moving much quicker we're growing we're yeah so you're losing 12 000 customers a month

859
01:12:21.760 --> 01:12:27.840
yeah something like that yeah do you have any idea what the split is of new customers per month in

860
01:12:27.840 --> 01:12:34.160
terms of where the sources of customers come from and is there a an acquisition channel that you

861
01:12:34.160 --> 01:12:40.640
have not mentioned so far that has that majorly contributes to that yeah so uh right now we're

862
01:12:40.640 --> 01:12:48.000
we're heavily on referral and heavily on meta those are like the two ads and refer like mad as

863
01:12:48.000 --> 01:12:55.920
referrals um what's the split uh we're like 30 percent referral okay uh and then i don't know

864
01:12:56.000 --> 01:13:01.040
meta is because it's you know there's also organic and google and whatnot um say

865
01:13:02.000 --> 01:13:07.680
30 percent meta yeah 20 percent organic yeah affiliate all the other yeah influencers are

866
01:13:07.680 --> 01:13:14.320
10 or whatever it is yeah um referrals been really interesting uh we now if you're a member you can

867
01:13:14.320 --> 01:13:20.400
uh refer a friend for a trial box and it costs 20 dollars um and we've just seen that work

868
01:13:20.480 --> 01:13:26.080
really well does the refer what does the refer or get uh nothing okay yeah uh we try to hold

869
01:13:26.080 --> 01:13:30.720
a bunch of different things that you get $50 you get this you get that what they what they like the most

870
01:13:30.720 --> 01:13:34.320
is giving their friends a box that's almost free they just pay for shipping and handling

871
01:13:34.320 --> 01:13:38.720
i was like a free plus shipping basically since like boxes free it's $20 for shipping and handling

872
01:13:38.720 --> 01:13:44.480
yeah exactly interesting that's another offer yeah and uh that's worked really well like the you

873
01:13:44.480 --> 01:13:48.160
obviously get a lot of people who just take get one box they're like sweet free meat and then the

874
01:13:48.160 --> 01:13:54.400
cancel but um you know executed well you see a lot of people stay and then they just become great

875
01:13:54.400 --> 01:14:00.480
customers and if if you yeah if you like a referred customer is a better customer um and so we've

876
01:14:00.480 --> 01:14:04.880
really leaned into that as a firm because it compounds at scale which is why it's so great yeah

877
01:14:04.880 --> 01:14:10.880
exactly um yeah we've shipped a box to 1.7 million 1.75 million households in this country

878
01:14:11.680 --> 01:14:17.360
and so at a certain point you're like how do we inspire those people to do the sales on our

879
01:14:17.360 --> 01:14:25.360
behalf rather than us trying to like you know retarget people and meta yeah so um there's there's

880
01:14:25.360 --> 01:14:32.000
two two things that i wanted to get into so one is the ad strategy and second is if i'm not

881
01:14:32.000 --> 01:14:36.480
mistaken you guys did a media play correct recently yep yep yeah i want to talk about that

882
01:14:36.480 --> 01:14:40.800
okay so i think that's really cool so let's do media play first okay yeah yeah we bought a company

883
01:14:40.800 --> 01:14:45.360
called truffle shuffle uh these two two guys uh ones actually in Vegas we're gonna see them tonight

884
01:14:45.440 --> 01:14:51.920
for dinner um and they they raised money on shark tank and during covid they decided that they

885
01:14:51.920 --> 01:14:56.480
were gonna sell truffles direct to consumer these little mushrooms that are hard to get and then

886
01:14:56.480 --> 01:15:00.880
once they started selling truffles they realize that no one knows how to cook them um and so they

887
01:15:00.880 --> 01:15:04.640
started doing these instructional videos that you have my dejorno and i'm just putting my truffle

888
01:15:04.640 --> 01:15:10.560
tops exactly people are like how do i what do i do with this uh and that took off and this is like

889
01:15:10.640 --> 01:15:17.280
covid yeah where everyone's at home trying to support all these corporations are trying to like

890
01:15:17.280 --> 01:15:21.760
treat their staff well and different stuff and whatnot so so they they ran a pretty interesting

891
01:15:21.760 --> 01:15:27.680
business for a while great content thousands of classes where they're teaching people how to cook

892
01:15:27.680 --> 01:15:34.000
and it's live people live interesting also recorded but live yeah um and they just like

893
01:15:34.960 --> 01:15:44.080
that their experts at hosting a live class to cook yeah it's virtual yeah our biggest

894
01:15:44.080 --> 01:15:48.080
challenge as a company if you look at our churn the people we're leaving our biggest challenge

895
01:15:48.080 --> 01:15:52.720
as a company is how do i inspire you to take the meat out of your freezer yeah they put it in

896
01:15:52.720 --> 01:15:56.240
there and then they're oh i've got two months worth like i don't need any right and people think

897
01:15:56.240 --> 01:16:00.480
of their freezer is like a savings account rather than a like it's so when you say what's for dinner

898
01:16:00.480 --> 01:16:05.360
you open your fridge yeah and look outside or you look on your phone or something so how are we

899
01:16:05.360 --> 01:16:12.320
gonna like inspire you well one way to do that is if we do cooking classes so we um you know

900
01:16:12.320 --> 01:16:18.240
really like the founders Jason etyler and just decided that it was a good fit we got it for you

901
01:16:18.240 --> 01:16:25.040
know like a good price and uh we ended up yeah ingesting them and so now we're doing cooking classes

902
01:16:25.040 --> 01:16:29.360
for our members we're doing that's included in the subscription yeah including in the subscription

903
01:16:29.360 --> 01:16:35.040
do you do so how much of it is public and like available for people who are not buyers we're trying

904
01:16:35.040 --> 01:16:40.800
to figure that out okay um because i'm so like yeah because yeah i don't know how big of a media

905
01:16:40.800 --> 01:16:45.040
company in terms of like you know impressions they do but like like because my whole my whole my

906
01:16:45.040 --> 01:16:51.360
whole business model around content is just demonstration right it's just like show don't sell

907
01:16:51.360 --> 01:16:55.040
yeah and then the selling will occur yeah and so like whenever you have the opportunity my opinion

908
01:16:55.040 --> 01:17:01.040
that's the that's the most elegant you know way of of selling yes um and so like these you know

909
01:17:01.040 --> 01:17:05.200
high-end chefs having these really engaged the high-end you know i mean obviously they are

910
01:17:05.200 --> 01:17:10.960
relatable yeah they're high-end yeah um because on one level there's the retention piece

911
01:17:10.960 --> 01:17:15.840
but i have this theory around the idea that this is this i don't have a double blind placebo test

912
01:17:15.840 --> 01:17:22.480
here but this is Alex's opinion i think that you retain customers that pay for a subscription

913
01:17:22.480 --> 01:17:28.720
with free content hmm that's available for everyone for a couple reasons number one a lot of

914
01:17:28.720 --> 01:17:32.880
people don't log in the stuff it's just like you're not like oh i'm gonna go log in what's my

915
01:17:32.880 --> 01:17:37.120
past and then it's already you're already like gone it doesn't it's not gonna happen so the

916
01:17:37.120 --> 01:17:41.440
reason that i have like all my questions on my side are all free and also available with no log in

917
01:17:41.440 --> 01:17:47.600
is for that purpose and it's certainly been a significantly better thing than me trying to hide

918
01:17:47.680 --> 01:17:52.880
it behind even an optimal just to collect people's emails um you can watch them and then at the

919
01:17:52.880 --> 01:17:56.960
halfway point or whatever it just says hey you can opt in if you want you can also not opt in

920
01:17:56.960 --> 01:18:04.000
and keep watching the video yeah um and it's been exceptional for lead generation and um so the

921
01:18:04.000 --> 01:18:09.280
thing one is that uh i don't think a lot i think the utilization is not as high as i would like it

922
01:18:09.280 --> 01:18:13.920
to be um even when you make these really high-end things the second is that it certainly doesn't drive

923
01:18:13.920 --> 01:18:19.120
i think that you will drive more not you but like one anybody will can drive more sales with making

924
01:18:19.120 --> 01:18:24.240
the media available to everyone it also makes it more shareable um and i think that spins the

925
01:18:24.240 --> 01:18:29.200
referral machine you get the media machine from platforms um and that will drive top of funnel

926
01:18:29.200 --> 01:18:35.120
sales and awareness um and i think that maybe you put a handful of them behind a people if you

927
01:18:35.120 --> 01:18:40.640
want to as a as a membership benefit i'd be curious to know if because if we're thinking about like

928
01:18:40.640 --> 01:18:45.760
how do we solve the problems are this is me like they give like like how do we solve the problem of

929
01:18:47.120 --> 01:18:52.160
the customers i have bank too much meat and don't cook it because they're not inspired enough to cook

930
01:18:52.160 --> 01:18:57.120
so it's like okay so we want we're trying to maximize on consumption in two ways consumption of meat

931
01:18:57.120 --> 01:19:03.520
but consumption of meat cooking so that it leads to consumption of meat right and so if you were to

932
01:19:03.520 --> 01:19:10.480
pre-educate right where people watch some show about some truffle meat dish and then purchase

933
01:19:10.480 --> 01:19:15.840
they're purchasing with intention to make a specific dish and i think it's almost like it

934
01:19:15.840 --> 01:19:22.240
it like colors them a different type of customer but is their consumption experience was pre-framed

935
01:19:22.240 --> 01:19:28.000
with recipes versus i'm going to buy meat because this is good quality meat and it's a good deal

936
01:19:28.000 --> 01:19:33.440
and i'm getting free bacon um just this is me just i'm totally spitballing here but like that

937
01:19:33.440 --> 01:19:37.440
would that would that would when hardly told me that you bought that media business that was

938
01:19:37.440 --> 01:19:42.240
immediately where i guessed or where i where i thought you were going it's like that's that's

939
01:19:42.240 --> 01:19:47.360
brilliant like good well push as much of that is seemingly possible out incorporate the product

940
01:19:47.360 --> 01:19:53.280
into everything way more eyeballs come in existing customers still attribute the benefit of their

941
01:19:53.280 --> 01:19:59.680
subscription to the show because they're still going to consume the meat right and so you still

942
01:19:59.680 --> 01:20:06.160
get the the positive brand association even if it's free for other people right and that was

943
01:20:06.160 --> 01:20:12.080
something that actually like i stumbled upon that so because i've i've had media businesses right

944
01:20:12.080 --> 01:20:17.440
and um there's always this big fear in anything media related especially if you have

945
01:20:17.440 --> 01:20:23.600
memberships and things behind paywalls that what if i give away too much for free that i upset my

946
01:20:23.600 --> 01:20:29.280
paid customers but i in my experience it hasn't been the case at all one because basically no

947
01:20:29.280 --> 01:20:35.040
belongs into anything um as big you know big thing you know big point number one um but second

948
01:20:35.040 --> 01:20:41.920
early that i think the human brain has a very hard time uh attributing whether the content they

949
01:20:41.920 --> 01:20:47.680
watched was behind a paywall or not behind a paywall i think we zoom out and say has butcher

950
01:20:47.680 --> 01:20:53.040
box provided a hundred and twenty nine dollars of value to me this month and you think about the one

951
01:20:53.040 --> 01:20:58.400
meal that you cooked whether from a recipe that you found whether it was your recipe that was behind

952
01:20:58.400 --> 01:21:02.240
a paywall and not in behind a paywall or just that they saw on a cooking show and used her meat

953
01:21:02.800 --> 01:21:07.360
right that wasn't even associated with the um the truffle hustle is that what it was truffle shop truffle

954
01:21:07.360 --> 01:21:14.400
shuffle yeah um and so anyways that's that's my that's genius two cents yeah that's more than two

955
01:21:14.400 --> 01:21:18.880
cents probably that was probably worth more than two cents i'll come back in a couple of years and

956
01:21:18.880 --> 01:21:25.280
well you know i'll cross off the billion still won't be enough but uh yeah i mean that's um that

957
01:21:25.280 --> 01:21:30.160
that's the beauty of owning content is uh pushing it out more doing more with it serving our

958
01:21:30.160 --> 01:21:35.360
member but i think um that gives me a lot to think about terms of like how are we pushing it to

959
01:21:35.360 --> 01:21:40.720
non-members because we we've definitely been careful we've been like well this should be a benefit

960
01:21:40.720 --> 01:21:44.480
for our members yeah i would just i'd be curious because i think that because there would be because

961
01:21:44.480 --> 01:21:50.720
the math problem right is is solvable of does the increase in conversion and retention on members

962
01:21:50.720 --> 01:21:55.040
with this added benefit which i'm sure you've measured like now that we added in the box has it

963
01:21:55.040 --> 01:22:00.640
measurably reduced churn or has it measurably increased conversion rate on the page whatever um

964
01:22:00.640 --> 01:22:08.240
versus the amount of new customers that come in with first second third touchpoint via content

965
01:22:08.240 --> 01:22:12.960
yeah and it my bet would be that you would this is my bet i was like i don't know i don't know but my

966
01:22:12.960 --> 01:22:17.200
bet would be that it'd be more on the on the top end and then from the ads ads perspective because

967
01:22:17.200 --> 01:22:22.000
i know you run a ton of advertising i'm sure it's like i feel like that kind of content taking them

968
01:22:22.000 --> 01:22:26.480
because if if you have it public then you can let the algorithm tell you which pieces are the the

969
01:22:26.480 --> 01:22:34.320
fire fire pieces of content um of the cooking and then push that out as top of funnel awareness ads

970
01:22:34.320 --> 01:22:40.320
you know retarget people who are at you know do 50% 75% whatever it is um with now your conversion

971
01:22:40.320 --> 01:22:45.440
stuff but they have positive brand sentiment because like now they're like they're in they're in

972
01:22:45.440 --> 01:22:49.440
the market you know i mean they just consume this they're literally they were washed enough to be

973
01:22:50.000 --> 01:22:53.440
they were inspired enough to watch and so now we just want to see if they're inspired enough to buy

974
01:22:53.440 --> 01:22:58.800
hmm love it just love it yeah there's uh there's a there's a book called how brands market and yeah

975
01:22:58.800 --> 01:23:03.040
what they've what they found was they put up all these ads like billboards and stuff trying to get

976
01:23:03.040 --> 01:23:09.760
new customers but they found that it actually drove more repeat orders yeah um and so that's

977
01:23:09.760 --> 01:23:14.080
similar like if we if we put out content to the they'll be reminded to eat yeah they're meat

978
01:23:14.080 --> 01:23:19.040
that's right right i think it's brilliant and i think that like i'm really excited to see what you

979
01:23:19.040 --> 01:23:24.000
do with it how long it was the acquisition uh we bought it in June of last year okay so it's

980
01:23:24.000 --> 01:23:27.680
brilliant yeah it's still pretty recent yeah uh we just launched a spice line with them we've

981
01:23:27.680 --> 01:23:34.320
done a bunch of uh social content um but yeah i think um you know making more of it public would

982
01:23:34.320 --> 01:23:39.360
probably be a good thing um and so uh the the the last piece was the ad strategy for Facebook so

983
01:23:39.360 --> 01:23:43.440
what do you what's been your thinking process for generating probably the amount of creative i'm

984
01:23:43.440 --> 01:23:47.200
assuming i mean you've got to prop i mean yeah you probably have to put out 50 pieces a day

985
01:23:47.200 --> 01:23:52.640
yeah yeah yeah kind of and you probably have gotten a crash course on running ads if you're the

986
01:23:52.640 --> 01:23:59.360
sea of this business yeah um so we've we've gone all sorts of different ways uh we have um had

987
01:23:59.360 --> 01:24:04.880
ad agencies work on our stuff um so buyer ads and you know update and whatnot we've done in

988
01:24:04.880 --> 01:24:10.480
in house we've gone back and forth uh we're currently outsourced on our ad buying interesting um

989
01:24:10.480 --> 01:24:14.400
so outsourced media buyers who does the creative uh they do as well they do the creative too

990
01:24:14.400 --> 01:24:18.960
yeah we do we do sound we give them guidelines but they do it the reason why was we weren't moving

991
01:24:18.960 --> 01:24:25.280
fast enough um so it has become as you said yeah it has become a game of it's like an arms race

992
01:24:25.280 --> 01:24:30.880
that you got to like be changing your creative all the time you got and we um we noticed that

993
01:24:30.880 --> 01:24:36.160
there were multiple multiple multiple meetings to like talk about and obsess about all these things

994
01:24:36.160 --> 01:24:43.040
is like we this this isn't gonna work we can't do this so we you know we've made a hard pivot um

995
01:24:43.040 --> 01:24:47.440
i imagine at some point we'll come we'll be like okay we're paying way too much we need to like do

996
01:24:47.440 --> 01:24:52.400
it in house but the speed the charge percentage of aspen yeah they do yeah but so when you're spending

997
01:24:52.400 --> 01:24:59.600
a lot that's a lot of money um and that's based in the cat that's based into the cat yeah yeah um

998
01:25:00.480 --> 01:25:04.720
have you have you've done multiple different agencies over time or is it we have i mean there's

999
01:25:04.720 --> 01:25:09.120
certain agencies that work well and as small as size and certain ones that work at a bigger size

1000
01:25:09.120 --> 01:25:15.440
uh we have we haven't been able to grow with like one agency okay um you've had multiple at yeah

1001
01:25:15.440 --> 01:25:20.160
at different times okay where are we we have one right now it's not like you have four

1002
01:25:20.160 --> 01:25:24.080
running one yeah got it okay is that a buddy who had a really big company and he had four

1003
01:25:24.080 --> 01:25:29.760
different agencies working at the same time and he was like yeah the world's big all i need all

1004
01:25:29.760 --> 01:25:35.760
of them just fully focused and i was like are you worried about like crap like well yeah and that

1005
01:25:35.760 --> 01:25:40.160
was the kind of the response was just like well there's 300 million americans yeah there's a lot

1006
01:25:40.160 --> 01:25:45.120
of america i'm not giving them no one's getting any other access besides like pixel traffic and so

1007
01:25:45.120 --> 01:25:48.720
they can make their own look alike software whatever they think is gonna gonna convert and if there

1008
01:25:48.720 --> 01:25:52.560
is some overlap there's probably overlap with a ten other thousand companies that are also

1009
01:25:52.560 --> 01:25:56.960
advertising and so it's more because i think the deficit like the the constraint is more the creative

1010
01:25:56.960 --> 01:26:05.520
power and mental and mental bandwidth and attention and skill then um then really anything else and

1011
01:26:05.520 --> 01:26:10.160
so like one like one team and you probably know this from the from the companies the earliest you

1012
01:26:10.160 --> 01:26:15.040
experienced this the same way i have um there's this law i can't remember what it is Tom bill you

1013
01:26:15.040 --> 01:26:20.160
talked about it but he basically the square root of every company does 50 percent of the

1014
01:26:20.160 --> 01:26:24.080
valuation so it's like if you have a hundred employees ten people do 50 percent of the value

1015
01:26:24.880 --> 01:26:29.520
and i like i thought about it i was like that sounds about right um in terms of like where's the

1016
01:26:29.520 --> 01:26:32.880
the contribution towards revenue and all that kind of stuff and so when you think about that for

1017
01:26:32.880 --> 01:26:37.760
them from the from the agency owner perspective it's like i'm getting these four really good people

1018
01:26:37.760 --> 01:26:41.600
from this agency on my stuff but i also want the four really good people from this company and the

1019
01:26:41.600 --> 01:26:45.440
four really good people from this company so when i was just like uh interesting this you had you

1020
01:26:45.440 --> 01:26:50.000
have one agency that runs all of it they're doing i can't believe they're doing they're doing really

1021
01:26:50.080 --> 01:26:54.800
everything so how like they're going on some stuff internally yeah but they're going to like

1022
01:26:54.800 --> 01:26:58.960
so they're like going to forms and capturing stuff now we have all that b-roll because you have

1023
01:26:58.960 --> 01:27:04.400
b-roll we have all that um so they're not they're not really taking any they're not going all the

1024
01:27:04.400 --> 01:27:11.040
shooting we have all that content um and uh yeah i mean i think um

1025
01:27:12.320 --> 01:27:17.680
the facebook has been a wild place for the past few years it's like either working really well

1026
01:27:17.680 --> 01:27:22.640
or not working at all we've also had more competitors come into our space uh hello fresh launched

1027
01:27:22.640 --> 01:27:27.840
company um that is like hello meet uh hello meet yeah is it really no i was i was i was like

1028
01:27:27.840 --> 01:27:33.680
i don't know i don't even want to mention their name no no free press yeah no free press for them um

1029
01:27:33.680 --> 01:27:39.200
but you know everyone's copying us everyone's advertising against us which i think is a good thing

1030
01:27:39.200 --> 01:27:43.680
but it's like here's why we're better than butcher box you know and it's it's uh it's a different

1031
01:27:43.680 --> 01:27:48.400
world you know i think there's been a lot of conversation about this on twitter recently around like

1032
01:27:49.120 --> 01:27:54.800
facebook is great for retargeting somebody comes to your website great top of the funnel

1033
01:27:54.800 --> 01:28:00.480
little bit harder top of the funnel meaning like you're you're exposing your brand to new eyeballs um

1034
01:28:00.480 --> 01:28:06.640
that's where i think you know in order to grow from to just continue the growth we have to do we have

1035
01:28:06.640 --> 01:28:13.520
to do we have to have 12 to 15 thousand people a month like at least yeah um we just need a lot

1036
01:28:13.520 --> 01:28:19.280
more top of the funnel awareness and one of the challenges i've had is uh driving top of the funnel

1037
01:28:19.280 --> 01:28:25.360
awareness has been really hard it makes sense for the media acquisition that's why yeah yeah yeah

1038
01:28:26.000 --> 01:28:30.880
so we've we've done other things like we've we've tried to do a lot of like brand top of the funnel

1039
01:28:30.880 --> 01:28:35.760
stuff that has not worked yeah i'm hopeful on the media thing um but really we're trying to like

1040
01:28:35.760 --> 01:28:41.200
get the word out about what we're doing we're trying to change the industry um but the uh yeah

1041
01:28:41.200 --> 01:28:45.920
facebook has been i mean you could see it in our numbers we're like grow grow grow grow grow grow grow

1042
01:28:45.920 --> 01:28:51.440
yeah and then there was the ios change in 2021 and it's just like yeah and then inflation yeah

1043
01:28:52.160 --> 01:28:59.200
yeah made for it yeah super easy super easy super easy super easy yeah yeah i mean i think that like

1044
01:28:59.520 --> 01:29:06.080
um focusing on the fundamentals is so important for people uh like you broke down the business

1045
01:29:06.080 --> 01:29:12.080
into like these moments and fundamentals along the way and um you know yeah business is hard

1046
01:29:12.080 --> 01:29:15.920
it can be really challenging but if you just focus on the things that matter and know the things

1047
01:29:15.920 --> 01:29:21.680
that matter um it can be a lot easier and i think oh a big this is me just saying from outside

1048
01:29:21.680 --> 01:29:26.960
perspective i think a big part of the success has also been that like you haven't had a mental

1049
01:29:27.040 --> 01:29:32.320
option for pulling the report you know um and so when problems come it's like

1050
01:29:33.200 --> 01:29:38.080
or i'm not going anywhere so you just kind of take it one bite at a time you know and i think

1051
01:29:38.080 --> 01:29:44.080
that when you when it's almost like in a marriage if you like if divorce is an option in your mind

1052
01:29:44.080 --> 01:29:48.240
then maybe you don't feel like having the conversation it's like you you're like you know what

1053
01:29:48.240 --> 01:29:54.720
it's through this right um but if it's just never an option and you just like um i'm in right under

1054
01:29:54.720 --> 01:29:58.640
that hypothetical guys or premise then it's like that's the that's the premise that you approach

1055
01:29:58.640 --> 01:30:05.280
all the problems within the business it's like well i either die or we keep going so we keep going

1056
01:30:05.840 --> 01:30:10.560
i'm still alive therefore we will solve these problems one at a time yeah um yeah it is really

1057
01:30:10.560 --> 01:30:15.440
interesting with the top of funnel component um i feel like i feel like the content is the ultimate

1058
01:30:15.440 --> 01:30:20.160
is the ultimate top of funnel because it's the you know you can harness the algorithm

1059
01:30:20.240 --> 01:30:24.480
finding all this because it'll serve the your meet stuff to the people who really want

1060
01:30:24.480 --> 01:30:28.240
meet and you don't have to figure out what the like the perfect look like audiences like they'll do

1061
01:30:28.240 --> 01:30:34.240
that and then then you have this massive retarding audience where you can spend the amount of money

1062
01:30:34.240 --> 01:30:39.600
you're spending now but it's all warm traffic because you're getting a billion impressions a month

1063
01:30:39.600 --> 01:30:44.800
on uh on all this all this content being pumped out which i think is so cool i think it's i think

1064
01:30:44.800 --> 01:30:49.920
it was just a brilliant acquisition thank you so yeah i think i can say on behalf of all the

1065
01:30:49.920 --> 01:30:54.640
entrepreneurs to listen to the game thank you so much for sharing uh the story of a bunch of box

1066
01:30:54.640 --> 01:31:06.000
bookstore box to a billy uh and beyond um thanks so much man yeah thank you thank you