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🔑 Key Takeaways

  1. Identifying a niche and providing convenient access to it is the key to success in the subscription economy, where businesses can tap into predictable recurring revenue streams.
  2. Engaging with customers, being lively, and prioritizing doing good can significantly increase sales and impact the business world, while learning to navigate and influence the system.
  3. Sales skills are crucial in business as they help in dealing with rejection, honing sales abilities, and linking hard work to earning potential while prioritizing customer satisfaction.
  4. Small choices can have a profound impact, connections can lead to transformative experiences, and embracing chances can lead to finding unexpected treasures in life's journey.
  5. Starting a business without proper knowledge and experience can result in financial challenges, but setbacks can be valuable learning experiences that pave the way for future success.
  6. Custommade.com's success was fueled by dominating search results and continuously improving their website, ultimately leading to higher revenues and profitability.
  7. Success in the tech industry requires perseverance, adaptability, and a commitment to one's vision, even in the face of setbacks and rejection.
  8. Designing a successful marketplace platform requires understanding user needs and limitations, as highlighted by the challenges faced in creating a marketplace for custom products.
  9. The company's flawed business model, limited capacity of makers, and excessive staff hires resulted in financial troubles and doubts about the team's abilities.
  10. Building a successful business requires persistence, adaptability, and a willingness to change strategies. Failure should not be taken personally, as success often requires perseverance and the ability to adapt to circumstances.
  11. Failure is not the end; it is an opportunity to learn, grow, and pivot. Resilience, perseverance, leadership, and a positive mindset are essential for achieving long-term goals.
  12. Mike Salguero's determination to provide convenient access to high-quality grass-fed beef challenges traditional beef rating systems and highlights the demand for healthier meat options.
  13. Seeking the guidance of experienced individuals and incentivizing them with equity can be crucial for the success of a new business venture.
  14. Starting a business with a limited budget is possible with the right support system and leveraging expertise. Building a strong network and utilizing connections can lead to unexpected opportunities and cost-effective solutions.
  15. Butcher Box found success by using a Kickstarter campaign to generate pre-orders, offering curated boxes to minimize inventory costs, and adding recipes to provide value to their customers.
  16. By tapping into nostalgia and forming partnerships with influencers, Butcher Box was able to generate funding, attract long-term subscribers, and achieve profitability with limited resources.
  17. ButcherBox's success can be attributed to its strategic use of influencer marketing, targeting niche communities and catering to their specific dietary preferences, resulting in exceeding its subscriber goal.
  18. ButcherBox's business model prioritizes profitability by maintaining control and being capital efficient, while also addressing environmental concerns and aiming for sustainability in meat production.
  19. By adopting sustainable practices and focusing on smaller quantity, ethically-raised meat, we can create a more environmentally friendly system that benefits both animals and the planet.
  20. Mike Salguero's decision to stay independent and focus on sustainable growth has led to the success of his billion-dollar business and his dedication to transforming the cattle industry.
  21. Building an iconic brand requires not just hard work, but also the right timing and a stroke of luck. It may take decades or even a century to achieve that status.

📝 Podcast Summary

The Rising Demand for Subscription Services and How to Succeed in a Saturated Market

The subscription business model is booming and offers a predictable source of recurring revenue for businesses. According to a survey, the average American household spends nearly $240 a month on subscriptions. While some may argue that there is subscription fatigue, the model has experienced significant growth over the past decade. Subscription businesses grew more than 500%, outpacing the revenue growth of S&P 500 companies. However, to truly succeed in a saturated market, businesses must find a way to stand out and offer something that people truly want. Butcher Box, for example, found success by tapping into the demand for grass-fed beef and providing a convenient way for customers to access it. Ultimately, identifying a niche and making it easily accessible can be a recipe for success in the subscription economy.

Lessons from Magic Shops and Stadiums: The Power of Human Interaction in Sales

Mike Salguero's experiences working at a magic shop and at stadiums in Boston taught him valuable lessons about sales and the power of human interaction. He learned that being lively and engaging with customers can significantly increase sales and even earn tips. These experiences also sparked his passion for sales and helped him realize that he wanted to pursue a career in the business world. Additionally, his participation in protests against globalization and corporations made him realize that he could make a greater impact by being on the other side of the fence and running companies that prioritize doing good. He believed that to change the system, one must learn how to navigate and influence it.

The Importance of Sales Skills for Business Success

Sales skills are essential for success in business. Mike Salguero's experience as a realtor taught him the importance of dealing with rejection and honing his sales abilities. He realized that everything in running a company revolves around sales, whether it's selling to clients or persuading others within the company. Sales also offers the unique advantage of directly linking hard work to earning potential. Unlike many jobs where a fixed salary is unaffected by effort, sales allows for increased earnings with harder work and smarter strategies. Additionally, Salguero's approach to renting apartments focused on finding the best fit for his clients rather than simply making a sale, emphasizing the importance of customer satisfaction in sales.

Embracing Unexpected Opportunities and Building Relationships

Sometimes unexpected opportunities can lead to significant outcomes. Mike Salguero's decision to take a job in real estate led to meeting his future co-founder and best friend, Seth Rosen. Additionally, one of his early clients happened to be his future wife, Carlene. This shows that sometimes the choices we make, even seemingly small ones, can have a profound impact on our lives. Furthermore, Salguero's decision to reconnect with his father led to a transformative experience of getting to know him and discovering shared traits with his siblings. It highlights the power of seeking connection and building relationships. Overall, this story emphasizes the importance of embracing chances and finding unexpected treasures along the way.

Learning from Failure: Turning Setbacks into Success

Starting a business without proper knowledge and experience can lead to financial setbacks and challenges. This is evident in Mike Salguero's story, where he initially sold 17,000 t-shirts but ended up with no cash. He admits that he didn't know what he was doing and lacked the necessary skills to account for his sales and expenses. However, this setback didn't deter him from exploring new business opportunities. Eventually, he and his friend Seth stumbled upon custommade.com, a website connecting woodworkers and customers. This led them to purchase the website and transform it into a successful platform. The lesson here is that although initial failures can be discouraging, they can also serve as valuable learning experiences and stepping stones towards future success.

Driving success through strong SEO and website enhancements.

The success of custommade.com was driven by its strong SEO footprint and the opportunity to update and improve a well-established website. With the top spot on Google search results for the keyword "custom bookshelf," the website attracted a large number of customers organically. The investment thesis was likened to a real estate investment, where the goal was to rehab and enhance the website to generate higher revenues. The focus was on allowing users to manage their own profiles and content, making it more convenient for customers. Despite the challenging economic climate and difficulty in raising funds, Mike and Seth managed to secure $500,000 and successfully acquired the website. The plan was to continue improving the listing service and gradually increase prices to drive profitability.

Perseverance and Adaptability: Keys to Building a Successful Website

Building a successful website and overcoming initial setbacks requires perseverance and adaptability. Mike Salguero, the founder of Custom Made, initially faced challenges with search engine optimization and website functionality, leading to a decline in business. However, through hard work and determination, they were able to fix these issues and revamp the website. Despite facing rejection from venture capitalists who deemed their business model limited, Salguero continued to pitch and eventually secured funding from Polaris Ventures. This highlights the importance of staying committed to one's vision and being open to making necessary changes to achieve success in the competitive tech industry.

Understanding Users for Marketplace Success

The key to success as a marketplace platform is understanding the needs and limitations of your users. Mike Salguero's realization that woodworkers were not naturally inclined to sell their expertise or bid on projects highlighted the challenges of creating a marketplace for custom products. The trade show phenomenon and the intimate nature of custom work made it difficult for the platform to thrive solely on transaction fees. This important lesson led to a necessary shift in the business model and a reevaluation of how to generate revenue. It demonstrates the importance of considering user behavior, preferences, and limitations when designing and evolving a marketplace platform.

Flawed business model and financial troubles hindered company growth and success.

The premise behind the company's business model was flawed. Although they had a large number of makers and site visitors, very few transactions were actually being made. The model depended on makers posting projects and attracting customers, but the makers had limited capacity and were essentially being taxed to put themselves out there. The few successful individuals on the platform had to hustle and were skilled at sales rather than being the best artisans. Despite the influx of cash from investors, the company was burning through it rapidly, mainly due to staff hires. In addition, the involvement of Google Ventures and other investors led to doubts about the team's abilities.

Persistence and Adaptability: Keys to Business Success

Persistence and adaptability are crucial factors in building a successful business. Mike Salguero and his team at CustomMade faced numerous challenges and setbacks throughout their journey. They encountered resistance from hackers who couldn't drive the bus, had to replace their entire technology and design team, and lost their sense of culture and belonging. Despite these difficulties, Mike remained hopeful and continued to search for solutions. He even stepped down as CEO to allow his co-founder to take charge. The experience taught him the importance of being willing to change strategies, focus on experience over culture when hiring, and not taking failure personally. Ultimately, the success of a business is often beyond our control, and it requires perseverance and the ability to adapt to circumstances.

Lessons Learned from Failure: The Journey of Entrepreneur Mike Salguero

Failure in a venture does not define an entrepreneur's worth or potential for success. Mike Salguero's experience with his failed business, Custom Made, taught him the importance of resilience and perseverance. Despite the challenges, he managed to maintain a strong friendship and respect with his co-founder. Additionally, he displayed great leadership by finding new jobs for his employees. The bankruptcy of Custom Made did not mark the end for the company, as Seth and a team of individuals bought it and successfully pivoted it into a custom jewelry site. This showcases the possibility of turning setbacks into opportunities. Mike's determination to remain an entrepreneur and his ability to bounce back from failure highlight the importance of staying focused on the long-term goals and having faith in oneself.

From Hobby to Business: Revolutionizing the Grass-Fed Beef Industry

Mike Salguero realized the difficulty and high cost associated with finding grass-fed beef. He wanted to provide a reliable source of grass-fed beef to people who were experiencing the same problem. However, the challenge with grass-fed beef is that it is less fatty, and many believe that the fat in meat is what gives it flavor. In the United States, the beef rating system is based on the amount of marbling, or fat, in the meat. Mike Salguero disagreed with this system and believed that it didn't accurately reflect the quality of the beef. Initially, this idea was just a hobby, but it eventually turned into a business venture when Mike realized the demand for convenient delivery of grass-fed beef. Despite lacking expertise in the food industry, he became determined to make it work.

Collaboration and Expertise: The Key to Success in the Meat Industry

Omaha Steaks, a direct-to-consumer steak shipper, had been a well-established player in the market for over a hundred years, primarily known for their gift-giving business during the holiday season. However, when Mike Salguero, the speaker in the conversation, decided to start his own grass-fed meat business, he realized he needed the expertise of someone familiar with the complexities of the industry. He reached out to the former head of operations of Omaha Steaks, who agreed to help and was flown to Boston for a meeting. This collaboration was crucial for the success of Salguero's business, demonstrating the value of seeking out experienced individuals and even offering them equity in the company instead of traditional payment methods.

Starting a business on a limited budget: the power of a strong network and expert guidance.

Starting a business doesn't always require a large amount of capital. Mike Salguero was able to begin his venture with only $500 in the bank, but he had a clear vision and the support of someone experienced in the industry, Ron Ike. With Ron's guidance and vast connections, Mike was able to expand his initial idea of a grass-fed beef subscription service to also include chicken and pork. Ron's contacts in Iowa provided the necessary meat supply, and they found a solution for cost-effective shipping by utilizing dry ice. This story highlights the importance of having a strong network and leveraging expertise when starting a business on a limited budget.

Butcher Box: Overcoming Challenges and Delivering Quality Meat to Your Doorstep

Butcher Box, a meat delivery company, started with limited resources and found creative solutions to overcome challenges. They used a Kickstarter campaign to generate pre-orders and raise funds, allowing them to purchase meat from suppliers and ship it to customers. To minimize inventory costs, they offered three options for customers to choose from and surprised them with curated boxes. This strategy allowed them to focus on popular products and simplify their operations. Furthermore, they added recipes to provide value and help customers learn how to cook the meat. By thinking outside the box and embracing constraints, Butcher Box was able to successfully launch their business.

How Butcher Box Leveraged Nostalgia and Partnerships for Success

Butcher Box leveraged nostalgia and personal connection to successfully launch their business. By tapping into people's desire for a traditional butcher shop experience, they generated a significant amount of funding through their Kickstarter campaign. Their strategy extended beyond just fulfilling orders, as they focused on converting Kickstarter backers into long-term subscribers. To spread the word about their product, they formed partnerships with influential figures in the paleo community. By offering these influencers the opportunity to promote their own recipes in the Butcher Box, they created a win-win situation that drove referrals and word-of-mouth marketing. This approach allowed them to grow their customer base and achieve profitability with limited resources.

Leveraging Influencer Marketing for Rapid Growth

Influencer marketing was a significant factor in the rapid growth of ButcherBox. By offering influencers a residual income for every subscriber they brought in, ButcherBox was able to tap into various niche communities such as paleo, CrossFit, and keto. Grass-fed meat, a vital part of these subcultures' diets, became a key selling point for ButcherBox. Unlike other meal subscription services that provided pre-portioned ingredients and recipe instructions, ButcherBox focused solely on high-quality meat and gave customers the freedom to experiment in the kitchen. This approach resonated with a customer base looking for more control over their meals. By leveraging influencer marketing and catering to specific dietary preferences, ButcherBox far exceeded its initial subscriber goal, reaching 10,000 subscribers in its first year of business.

Prioritizing Profitability and Sustainability in the Meat Industry

ButcherBox prioritized profitability from the start, relying on a company in Wisconsin that had an inefficient billing system to help finance their operations. By not relying on outside capital or bank debt, they were able to maintain control and be capital efficient. Additionally, their business model was designed to be super efficient, with minimal manpower required. Most of their operations, such as farming, processing, and shipping, were outsourced to third-party companies. While their accounting systems made it difficult to determine their exact profitability, they were consistently profitable. Furthermore, ButcherBox acknowledges the environmental concerns associated with livestock production, particularly in the beef industry. They aim to make meat production sustainable and recognize that grass-fed beef is just a small percentage of the overall industry. Their goal is to find a better way and contribute to a more sustainable future.

Transforming the Meat Industry for Sustainability and Animal Welfare

There is a need to find a new approach to raising animals that is both environmentally friendly and honors the welfare of the animals. The current practices in the industry are not ideal for the environment, and there is a belief that animals can be raised in a way that regenerates the soil and reduces carbon emissions. It is suggested that eating meat in smaller quantities, with a focus on ensuring it is raised in a sustainable manner, could be a better approach. The goal is to create a system where small farmers can raise cattle on grass, while companies like Mike Salguero's take over the process of slaughtering and continue to prioritize sustainable practices. Transformation and reinvention within the meat industry are necessary to achieve this goal.

Disrupting the Meat Industry through Independent Growth

Mike Salguero and his company have succeeded in disrupting the meat industry by delivering a product that people truly need and want. Despite the temptation to seek external funding and potentially scale the company even further, Salguero made the strategic decision to stay independent. This proved to be a wise choice, especially considering the struggles faced by competitors like Blue Apron. By avoiding the trap of buying customers and focusing on sustainable growth, Salguero and his team have built a billion-dollar business that shows no signs of slowing down. Additionally, Salguero's determination to have a bigger role in transforming how cattle is raised in the US highlights his dedication to creating positive change in the industry. While a possible sale in the future cannot be ruled out, it's clear that Salguero's vision extends far beyond mere profitability.

The Recipe for an Iconic Brand: Time, Perseverance, Luck, and Timing

Building an iconic brand takes time and perseverance. Mike Salguero, the founder of Butcher Box, acknowledges that while selling the company might be tempting, he envisions a future where his succession plan ensures the company's continuity. He emphasizes that iconic food brands often have a long history, usually spanning multiple generations, and it may take decades or even a century to achieve that status. Additionally, Salguero highlights the role of luck and timing in his own success, recognizing that the right timing played a significant part in Butcher Box's growth. He compares his previous entrepreneurial experience to paddling against waves, while Butcher Box feels more like a boulder rolling down the hill. This reminds us that hard work alone is not always enough, and factors like timing and luck can greatly impact the outcome.