Podcast Summary: Build with Leila Hormozi – Ep 242: The Values, Culture, and Drive That Built $550M ButcherBox with Mike Salguero
In Episode 242 of "Build with Leila Hormozi," host Leila Hormozi sits down with Mike Salguero, the CEO and founder of ButcherBox, to explore the foundational values, culture, and entrepreneurial drive that transformed a startup into a $550 million powerhouse in the meat industry. This comprehensive discussion delves into Mike's journey from his first venture, Custom Made, to the creation and scaling of ButcherBox, offering invaluable insights for aspiring entrepreneurs and business leaders.
1. From Custom Made to ButcherBox: Learning and Transitioning
Mike Salguero began his entrepreneurial journey with Custom Made in 2008, which he led until 2015. The experience with Custom Made, especially the challenges faced with venture capital and layoffs, profoundly shaped his approach with ButcherBox.
[01:20] Mike: "I took the weekend off and I started ButcherBox."
After closing Custom Made, Mike experienced the emotional toll of layoffs, including letting go of close friends and dedicated team members. This painful experience underscored the importance of building a company culture grounded in strong values and a clear mission.
2. The Power of Bootstrapping Over Venture Capital
Determined to avoid the pitfalls of his first venture, Mike chose to bootstrap ButcherBox, intentionally eschewing outside capital. This decision allowed him to maintain control over the company's vision and culture.
[03:03] Mike: "We built a $550 million revenue business. Bootstrap, no outside capital."
Bootstrapping provided the flexibility to prioritize long-term growth and sustainable practices without the pressure from venture capitalists to scale rapidly or make decisions that conflicted with the company's core values.
3. Establishing Core Values: The Foundation of ButcherBox
At the heart of ButcherBox's success lies a meticulously crafted set of core values. Mike and his team collaboratively developed these values nine months into the company's formation, ensuring they reflected the traits necessary for success within the organization.
[06:04] Mike: "We have five core values... Authentic, Humble, Accountable, Relentless Improvement, and Customer Obsessed."
- Authentic: Encouraging employees to be their true selves without pretense.
- Humble: Recognizing the importance of knowing one’s strengths and weaknesses.
- Accountable: Ensuring commitments are honored and responsibilities are met.
- Relentless Improvement: Continuously seeking ways to enhance personal and business performance.
- Customer Obsessed: Prioritizing customer needs in every decision.
These values not only guide hiring practices but also shape daily interactions and long-term strategies, fostering a cohesive and dedicated workforce.
4. Strategic Hiring and Building a Diverse Team
Mike emphasizes the importance of hiring individuals with a "chip on their shoulder," seeking out those with grit and diverse backgrounds. By blending youthful energy with seasoned expertise, ButcherBox cultivates a dynamic and resilient team.
[06:10] Mike: "We filled the company with failed entrepreneurs, children of divorced parents, D1 athletes... people who had something to prove."
A pivotal hiring strategy involved bringing in domain experts like Leslie, who spearheaded customer experience and technology. This blend of young, driven employees and experienced professionals created a balanced and innovative work environment.
5. Navigating Layoffs with Compassion and Strategy
Reflecting on his experience with layoffs at Custom Made, Mike adopts a compassionate yet strategic approach at ButcherBox. He views layoffs not just as business decisions but as opportunities to free up individuals for better futures.
[04:27] Mike: "We're freeing up their future. It’s painful for a minute for them, but they know they need to move on."
By focusing on being a heart-led leader rather than a fear-driven one, Mike ensures that necessary tough decisions are handled with empathy, maintaining trust and respect within the team.
6. Building an Authentic and Sustainable Culture
ButcherBox's culture is deeply rooted in its core values, promoting authenticity, humility, and relentless improvement. Mike shares his commitment to creating a sustainable business model that balances profitability with ethical practices.
[19:18] Mike: "Capitalism can be done in a sustainable way where you're not just trying to extract from everything."
This commitment extends to environmental sustainability, fair treatment of employees, and ethical sourcing of meat, positioning ButcherBox as a leader in responsible business practices.
7. Balancing Work and Life: CEO Boundaries and Personal Well-being
Mike advocates for clear boundaries between work and personal life, a lesson learned from his tumultuous first venture. He prioritizes time with family and personal health, setting an example for his team.
[41:35] Mike: "I decided that I was not going to work on Fridays... It forced my team to grow up."
By establishing non-working days and personal limits on availability, Mike ensures that both he and his employees maintain a healthy work-life balance, fostering long-term productivity and well-being.
8. Evolution of Leadership: From Hands-On to Strategic Visionary
As ButcherBox has grown, Mike's role has evolved from being deeply involved in day-to-day operations to focusing on strategic vision and high-impact decisions. This shift allows for more efficient management and empowers other leaders within the company.
[50:27] Mike: "I realized that I'd already talked to their direct reports because I had these monthly meetings... Freed up 23 hours of time."
By delegating responsibilities and eliminating regular one-on-one meetings, Mike optimizes his time for strategic thinking and guiding the company's long-term direction.
9. Embracing Transparency and Educating the Team
Transparency is a cornerstone of ButcherBox's culture. Mike ensures that his team is well-informed about the company's financial health and operational metrics, empowering them to make informed decisions and foster a sense of ownership.
[73:37] Mike: "We show our company the numbers, we show them how we're doing... It's a great way to rally people and get people bought in."
This openness not only builds trust but also aligns the entire organization towards common goals, enhancing overall performance and accountability.
10. Personal Insights and Unique Practices
Beyond business strategies, Mike shares personal practices that contribute to his effectiveness as a leader. From prolonged water fasts to meticulous organizational tools, these habits underscore his commitment to personal growth and mental clarity.
[75:00] Mike: "I do prolonged water fasts... I often do five-day fasts where I just drink water."
Such practices reflect Mike’s dedication to maintaining his health and mental sharpness, essential traits for steering a billion-dollar business.
11. Conclusion: Building with Purpose and Passion
The conversation concludes with Mike underscoring the importance of building businesses with a clear mission and purpose. By aligning personal lifestyle goals with business objectives, Mike ensures that ButcherBox remains a sustainable and impactful entity.
[67:11] Mike: "Feel free to talk to me about bootstrapping, I'm like, no problem. Tell me where to go."
Mike’s journey exemplifies how steadfast adherence to core values, strategic hiring, and a balanced approach to leadership can propel a company to remarkable heights while fostering a positive, mission-driven culture.
Notable Quotes:
- [03:03] Mike: "We built a $550 million revenue business. Bootstrap, no outside capital."
- [06:04] Mike: "We have five core values... Authentic, Humble, Accountable, Relentless Improvement, and Customer Obsessed."
- [19:18] Mike: "Capitalism can be done in a sustainable way where you're not just trying to extract from everything."
- [41:35] Mike: "I decided that I was not going to work on Fridays... It forced my team to grow up."
- [73:37] Mike: "We show our company the numbers, we show them how we're doing... It's a great way to rally people and get people bought in."
This episode provides a deep dive into the principles and practices that have propelled ButcherBox to success. Mike Salguero’s experiences and insights offer a roadmap for building businesses that are not only profitable but also sustainable and ethically grounded.