#1121 Mike Salguero | The Founder Who Bootstrapped To $500 Million In Revenue

Mike Salguero is the Founder & CEO of Butcher Box. In this conversation, we discuss his journey from failing at his first business to bootstrapping a $500M business at Butcher Box. We also talk about Mike's methods to building businesses, interacting with his executives, and how he structures his day. ======================= Valour (formerly DeFi Technologies) represents what’s next in the digital economy -- providing simplified, trusted access to crypto, decentralized finance and Web 3.0 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, through a single stock purchase on a regulated exchange. Currently listed on U. S. (OTC: DEFTF) and Canadian (NEO:DEFI) exchanges. For more information or to subscribe to receive company updates and financial information, visit our website at valour.com ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit https://compassmining.io/ to start mining bitcoin today! ======================= Arculus is the next generation crypto & NFT cold storage wallet that combines one of the world’s strongest security protocols with the easiest to use form factor and app. Arculus requires 3-Factor Authentication to ensure only you have access to your digital assets – something you know – a PIN, something you have – the Arculus Key Card, and biometrics. Learn more and buy it now on getarculus.com. Use promo code POMP to save 15%. Remember, with Arculus, it’s your keys, your crypto. ======================= Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. With its focus on design and user experience, Exodus has become one of the most popular and loved cryptocurrency apps. It’s supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone. Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= Amberdata provides the critical data infrastructure enabling financial institutions to participate in the digital asset class. We deliver comprehensive data and insights into blockchain networks, crypto markets, and decentralized finance. Download our Digital Asset Data Guide at https://www.amberdata.io/pomp ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off.

• 0:11Anthony Pompliano?

  Mike Salguero is the founder and CEO of ButcherBox. In this conversation, we talk about how he failed his first business, and then he bootstrapped a $500 million revenue business in ButcherBox, what exactly he did to build the company, how he interacts with his executives, how he

• 0:27Speaker 02

  structures his day, and much, much more. I really enjoyed this conversation with Mike, and I hope you guys enjoy it as well. Once you get done listening, jump on Twitter. Let us know what you liked and what you didn't like, what you agreed with and what you disagreed with. We really appreciate the feedback. All right, let's get into this episode with Mike. I hope you guys enjoy this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:05Anthony Pompliano?

  All right, guys. Bang, bang. I've got Mike here. You've built a business that you bootstrapped, raised no outside money to over $500 million in revenue, which makes you seem like an absolute genius. And a bunch of people are like, how the hell did he do that? We'll talk about that in a second. You also previously raised $30 million for a company that you learned a lot of things not to do, doing. Talk a little bit about kind of that first big experience trying to build a business, raise a bunch of money, and like it not work out, and kind of how you thought about, hey, where did we screw up? And like, what lessons did we learn so that then it set the ground for ButcherBox to eventually become this huge business?

• 1:42Speaker 03

  Yeah, for sure. So I was 26 years old. My co-founder and I were best friends, and we wanted to do something. We didn't know what we were going to do, but we had to find something to start or to run.

• 1:54Anthony Pompliano?

  Get rich.

• 1:54Speaker 03

  Yeah, get rich. That's right. And it was like very financially motivated, very much American dream. Like, we want to like, do something ourselves, make money, stop having a boss. And my co-founder loved custom woodworking. He had just bought a coffee table on this website, custommade.com, and he's talking to the woodworker who made his table. And the woodworker's like, I get all my work from custom-made and I pay $35 a year for my subscription. This is like a $2,000 coffee table. And so we're like, this is great. Like, everything you search for around custom furniture, if you typed in custom-made bookshelf or custom-made desk, custommade.com showed up first. And these guys were cleaning up. So we bought the website off of a guy for $140,000.

• 2:38Anthony Pompliano?

  Why did he sell it for so cheap?

• 2:40Speaker 03

  That was four times revenue. So, you know, I had been transitioning out of a job and I had written him months prior. And then when I left the job, my last job that I worked for someone, he wrote me like two days later and was like, I'll sell. And so we didn't have $140,000. We put down $5,000 and had 90 days due diligence where we ran around town, ran around Boston trying to convince people to give us money. And this is like 2008, right? When Bernie Madoff just ran off with everyone's money in Boston. So it was like, it's a tough time to be raising money.

• 3:16Anthony Pompliano?

  It's funny that you say 2008 Bernie Madoff, not global financial crisis. Like, the bigger thing was Bernie Madoff.

• 3:21Speaker 03

  No, in Boston, I mean, like, if you were, the people we were connected to and trying to raise money from in Boston had like, just been personally impacted by Bernie Madoff.

• 3:29Anthony Pompliano?

  Jesus. And they're pissed? Or like, they're like?

• 3:31Speaker 03

  Pissed, yeah, real pissed. Like, yeah, all my money went to him and now it's gone. And so we bought this website and we started this subscription business where these woodworkers would pay an annual fee to be on the site. And we tried to like, upgrade the site, but I mean, we made so many mistakes on that website.

• 3:50Anthony Pompliano?

  How many of the mistakes around the website were, you're young and didn't know versus like, you had this theory of, we'll make more money, or it'll be a better product if we do X, and like, your assumption was just wrong?

• 4:02Speaker 03

  At the beginning, it was really like, we're young and we didn't know. Like, you know, I look at entrepreneurship now, and I think it's a lot better resource than it was. Like, if you don't know how to build a website, you can find that information. In 2008, like, I didn't feel like there were a lot of people out there who could explain to us, like, here's what you do and here's what you don't do.

• 4:20Anthony Pompliano?

  There's podcasts, there's blogs, there's Twitter, there's like, all this stuff. And then you also like, know many more of the people who've been doing this for now, you know, a decade plus after 2008, that you can reach out to and ask.

• 4:31Speaker 03

  Right. And so we didn't have any of that. We built a website that was really bad.

• 4:38Speaker 03

  And, you know, we had all these makers calling in complaining about how all their work dried up. The SEO dried up. We just like, it was a nightmare. It was a nightmare. And it kept crashing and...

• 4:47Anthony Pompliano?

  Is there a moment where you're like, alright, we raised some money, we bought the website, we thought we were improving it. Oh shit, we may have actually been destroying it. Like, is there like a one moment where that like hits you?

• 4:57Speaker 03

  Uh, that was pretty much every day.

• 5:01Speaker 03

  I mean, we just, we just did our best to just destroy all the value we purchased. So then we, we raised a little more money. All of this was friends and family at this point. So we had gotten up to like a million dollars of raised capital. Mostly people that we had worked with before in real estate. And then we decided, you know, everyone's like raising money from VCs, like we should go raise money from VCs.

• 5:22Anthony Pompliano?

  Of course.

• 5:22Speaker 03

  Yeah. So we go out in like, uh, what was it? It was, um, the summer of 2011. So we go out in 2011 and we're going around with like, hey, we're a woodworker listing service. And every VC is like, hell no. Woodworker listing service? Not in a million years. Like not a venture thing. This won't work. Blah, blah, blah, blah, blah. But nevertheless, like we were really good at persistence and sales. So we just kept going, kept going, kept going. And I remember this moment like vividly. Uh, we, we built this feature called the job board. Where, um, a, a customer could like say, I'm looking for a custom bookshelf in, um, Lake Placid, New York.

• 6:04Speaker 03

  And then a local maker could like bid on it and say, hey, I could do that for you. And the reason why we built it is because when, um, when we would call these, these woodworkers and say, hey, we have this, it's like, there's all this work on here. You should join. They were like, well, how do I know there'll be work? And so we built this publicly facing job board that we, we'd say, oh, here's your zip code. Look, there's been three posts today that you could respond to. Anyway, so I'm in this VC meeting and I'm like, pull up the job board and pull it up. And I'm like, all we have to do is stand in between these transactions. And they're literally like coming in. It's like boom.

• 6:35Anthony Pompliano?

  Oh, so it's like working?

• 6:36Speaker 03

  It's working.

• 6:37Anthony Pompliano?

  Yeah.

• 6:37Speaker 03

  People are posting stuff.

• 6:38Anthony Pompliano?

  Yeah. You ever seen a live demo that worked?

• 6:41Speaker 03

  And we're like, all we have to do is stand in between these transactions and we'll have the largest marketplace for custom stuff. And as soon as I said the word marketplace, everything changed. Like the VCs went from like, no, no, no, to like marketplace. You could be the next Airbnb. And I'm like, yeah.

• 6:57Anthony Pompliano?

  Of course.

• 6:59Speaker 03

  Yeah, that's what it's going to take. Like, no problem. Yes, we could be the next Airbnb. And they're like, great, we're in. And so.

• 7:06Anthony Pompliano?

  Hurry, write marketplace on the top of the website.

• 7:09Speaker 03

  Well, and I think, you know, it's like, um, I have a lot to say about VCs in my experience, but one of the things that's really important is that the VCs are pattern matchers, right? So if you're out raising money, um, the more that you can point to this being like part of a pattern that they're currently very interested in, like, they say yes. That's just how it works. So in 2011, everyone was trying to chase the next marketplace. Uber had just gone out, Airbnb, like, people are like, I can't miss the next marketplace. And that, that worked. So we raised like $2 million. Five months later, we raised another four. And then a year later, we raised 18. And so it went from like, nobody wanted to touch this thing to like, everybody wanted to touch this thing. Now, the problem was that the business that we were selling people on, this marketplace,

• 7:53Speaker 03

  where we were going to stand in between a maker and a buyer, it didn't work. Like, nobody wanted to actually transact that way. So like, so there were lots of people interested in projects, but they generally were very fickle, they'd fall apart, the maker would pull them off, off platform because it was easier for them and for a whole host of reasons, it just like.

• 8:14Anthony Pompliano?

  I was interested in the custom bookcase until he told me it was $20,000. Now I'm not interested.

• 8:18Speaker 03

  Yeah, exactly. Like, I want IKEA prices, but I want it to be custom. And so we had a really hard time vetting people and building a liquid marketplace. But because we had raised all this money and because we had said the word marketplace and because that's what people invested in, it was very hard to unwind it and be like, hey, you know what? We're just going to be a subscription business now. Like, we couldn't be. And so we had this subscription business that was like a pretty decent business before we raised a bunch of money. And we just like, we, we got stuck. And then it became like, okay, well, it's gotta be your team that's the problem. So we had, um, you know, uh, Google, so Google was one of our investors. They're like, hey, do you want us to send our engineers around just to like, I don't know, poke around, do an audit of what's happening on your site? And we're like, yeah, of course, like Google, that's awesome.

• 9:03Speaker 03

  You know, they come in, they're like, yeah, this is bad. Like you, you guys need to scrap this whole thing and rebuild it. And we're like, oh shit. Okay. And so over the course of a year, we

• 9:14Anthony Pompliano?

  Thanks for your opinion, but I go back to Google.

• 9:16Speaker 03

  Well, I didn't have the confidence to say that. That's what I should have said.

• 9:20Anthony Pompliano?

  Yeah.

• 9:20Speaker 03

  Right?

• 9:21Anthony Pompliano?

  What did you say?

• 9:21Speaker 03

  What I did instead is I was, we're gonna fix this. And we ended up

• 9:27Speaker 03

  basically firing everybody. And so I heard this analogy once of a startup being like you're hacking through the jungle with machetes and you're just looking for a trail somewhere. And what you need is people who just have, you know, are relentless at hacking and finding a trail. And then they find a trail and maybe that trail leaves to a dirt road. And in, in the custom made business, we got to this dirt road. There was a nice shiny Google funded bus on the dirt road. And I was like, I don't think you guys know how to drive. And I left them all in the jungle, all of them. So all my friends, all the people who like built this thing from the beginning, all the people that were in the trenches with me, we left

• 10:07Speaker 03

  them all. And that is by far my biggest regret of the whole experience.

• 10:13Anthony Pompliano?

  Were they pissed?

• 10:15Speaker 03

  Yeah, I mean, yes and no. It depends. Some of them actually are now working for me at ButcherBox, which is cool. Some understood it. They understood like the pressures we were under. But yeah, a lot were super pissed.

• 10:28Anthony Pompliano?

  Yeah.

• 10:28Speaker 03

  Because they helped me build this thing. And then at the very, at the very moment where it became like, oh, we, we attracted outside investment because of all the things you did, we're like, you're not good enough. And I mean, it's never, it's never easy to let people go and to do it on your terms instead of theirs. So, yeah.

• 10:46Anthony Pompliano?

  So you do that. How do you get from like, we've raised whatever, $30 million, whatever it ends up being to like, okay, this doesn't work. Like, it's over.

• 10:55Speaker 03

  So it went something like this. First was the circular firing squad like this must be an engineering problem. This must be a product problem. This must be a marketing problem. Like basically every department, department by department, it's their fault, it's their fault, it's their fault.

• 11:09Anthony Pompliano?

  Everyone's problem but Googles.

• 11:10Speaker 03

  Everyone's, everyone's problem except like the investment thesis might not have been the right one. Then it became our problem. So my co-founder and I, I was like, we don't think you guys are the right people. It was like, okay. So then they made us like waive, waive rights and you know, kind of.

• 11:27Anthony Pompliano?

  Did it get nasty?

• 11:30Speaker 03

  Yeah, a little, a little nasty.

• 11:31Anthony Pompliano?

  Can, whatever you're allowed to say, you can take out names, whatever, but like, I think there's a lot of people who only see the positive side of like interacting with investors. Like, what can you tell me about the nasty part of it? Like, did they pressure you guys to do things?

• 11:45Speaker 03

  Yeah, yeah, yeah.

• 11:45Anthony Pompliano?

  Like, how did that work?

• 11:46Speaker 03

  Yeah. So the nastiest thing that happened was we had negotiated as all should do, that despite the fact that we had investors, that when it came to management decisions, including replacing ourselves, that that was up to us. Right? And so if you have, if you're raising, if you're raising capital and it's competitive, you can get something like that put in there. Most founders don't even know that they should negotiate for that. So we negotiated for that. And at the end, it was like, you need to waive that. Because we're going to try to replace you and we want you to waive that. So if we find someone great, like, we can replace you. And we were like, no. What do you mean? You already, like, you already negotiated for that. And, and they basically were like, we're going to

• 12:30Speaker 03

  blackball you. We're going to make sure you don't raise any more money and you'll be dead.

• 12:33Anthony Pompliano?

  Yep.

• 12:33Speaker 03

  You're going to erase it. And we're like, okay. Like,

• 12:37Anthony Pompliano?

  Sure.

• 12:37Speaker 03

  You know, you, you backed down pretty fast.

• 12:39Anthony Pompliano?

  Yeah.

• 12:40Speaker 03

  At least we backed down pretty fast. Now, you know,

• 12:44Anthony Pompliano?

  If you could go back to that moment now, knowing everything you know, what would you have done? Like just told him to fuck off?

• 12:50Speaker 03

  Well, the problem with the business was we were like, look, we're burning $500,000 a month. $500,000 a month, a lot of money. We're like, this business is, we're not gonna make it. Like, there's a wall, we're gonna run out of money, we're not gonna make it. We need to like dramatically reduce staff, change our business model, do something different. Like, and our investors were like, no.

• 13:14Anthony Pompliano?

  Ah, I got it.

• 13:15Speaker 03

  You know, like, basically, at first it was, well, we're gonna try to replace you guys as CEO, or you as CEO, Mike. And we want a new CFO, CEO to see like, a full company of people. That was their reasoning. And then after that, it was like, well, we're gonna try to sell. And we want the new company to see like, lots of people. And like, neither of those were very good investment philosophies. But nevertheless, we kept burning money. And so at the very end, we had taken a small venture debt line as part of the 18 million. And that bank was like, your bank balance is below what you owe us. And none of your investors are willing to pony up anymore.

• 13:59Speaker 03

  We wanna do what they call a friendly foreclosure. So they basically did a foreclosure.

• 14:04Anthony Pompliano?

  Friendly, they just throw that in for?

• 14:06Speaker 03

  Yeah, yeah, just to make it sound better.

• 14:09Anthony Pompliano?

  Just to make you like, you know, smile while they do it?

• 14:11Speaker 03

  No, as I understand it, like, you know, a lot of these venture banks work kind of on the side of venture capital firms, right? So they have lots of deals together. And so it's basically like-

• 14:22Anthony Pompliano?

  They're playing a long-term game with each other.

• 14:24Speaker 03

  They're like, look, we're the debt provider, we come out first, there's not enough debt here. Like, we don't get the big return, you're the equity provider. Kill this deal and, you know, on the next one, we'll take care of you. And so, ended up getting foreclosed on. We fired everybody. Then my co-founder, the relentless bastard, went back, took it out of bankruptcy, took four of the people who were still there and is still running the company. But did everything we wanted to do, pivoted it, you know, leaned out the team, did all the things.

• 14:57Anthony Pompliano?

  And wiped all the equity holders, so like-

• 14:59Speaker 03

  Everyone got zero.

• 14:59Anthony Pompliano?

  None of the original investors benefit-

• 15:02Speaker 03

  Correct.

• 15:02Anthony Pompliano?

  Post, and neither does the debt.

• 15:05Speaker 03

  Yep.

• 15:06Anthony Pompliano?

  Got it.

• 15:06Speaker 03

  So the only saving grace of the whole thing on investment wise is as part of the 18, because the the deal was so oversubscribed, we were able to do secondary. So we were, we were able to offer all of our original like friends and family, three X their money. We were able to take some off the table, small, but like we were able to take some off the table. That was the only saving grace. Otherwise, I would have been seven years, lost everyone's money and had nothing to show for it.

• 15:34Anthony Pompliano?

  How many of the friends and family took the secondary?

• 15:39Speaker 03

  Most.

• 15:40Anthony Pompliano?

  Okay.

• 15:40Speaker 03

  Not my mother.

• 15:41Anthony Pompliano?

  That's bad. Well, that's bad. But that's better than most.

• 15:44Speaker 03

  I have faith in you. It's like.

• 15:45Anthony Pompliano?

  Yeah. No, mom, please don't.

• 15:47Speaker 03

  Next time it's like, mom, this is it.

• 15:49Anthony Pompliano?

  Take it. But like, what's interesting to me is obviously secondaries became very popular, especially last year in 2021. And every single mathematical formula you could think of outside of this is the next Facebook, this is the next Airbnb, this is the next, what, I mean, not even Airbnb, but like, you know, these big companies, you should take some.

• 16:09Speaker 03

  Yeah.

• 16:10Anthony Pompliano?

  Of the money off the table, even if it's just one X what you invested, so you don't lose money on the deal.

• 16:14Speaker 03

  Right.

• 16:14Anthony Pompliano?

  Right. And now you're playing with house money, whatever. But because it's been so celebratized and like it's so sexy to be the seed investor or whatever in like the next unicorn, that becomes the like hundred plus billion dollar company. Nobody was taking secondaries, except for many of the founders were taking secondaries. But none of the early investors were, because like, oh, my God, you know, such and such firm or this firm or this firm is like coming in, like they're smart. So like, I'm just gonna ride.

• 16:37Speaker 03

  Right.

• 16:38Anthony Pompliano?

  And so it's very fascinating because like actually the math tells you to take the deal or at least part of the deal. But like psychology takes over and humans are dumb and we're just like, ah, screw it. Let's let it ride.

• 16:49Speaker 03

  Well, one way that companies manufacture that is that they, they, they make it all or nothing on secondary. So they say you have to sell your entire position or nothing. And so in a lot of cases, then people are like, well, do I want to sell everything? But in the cases where you're actually able to sell a piece, like I don't see any reason why you shouldn't be selling a piece, especially because, you know, there, I think what the past year has taught all of us is like,

• 17:16Speaker 03

  everything looks great when you're riding high, but when the tide goes out, like you want to make sure you have a little bit of liquidity in your, in your back pocket.

• 17:22Anthony Pompliano?

  So. You get into bad times.

• 17:25Speaker 03

  Yes.

• 17:26Anthony Pompliano?

  Thankfully, friends and family, for the most part, are okay.

• 17:28Speaker 03

  Yes.

• 17:29Anthony Pompliano?

  They wanted the grand slam. They got a single. Fine. How do you go from that to ButcherBox?

• 17:34Speaker 03

  Yeah, so I actually had all of these designs to take 100 days off. I had a five-month-old daughter at the time. And I was-

• 17:44Anthony Pompliano?

  She's not five months anymore.

• 17:45Speaker 03

  No, yeah, she's grown up a little bit. She's eight now. She, uh, so I had a five-month-old daughter and I was like, you know, I'm just gonna like, I'm gonna take 100 days off and just like lick my wounds and maybe go to meditation retreat and like figure out what's what. I ended up taking the weekend off. And then starting ButcherBox. And I did because so-

• 18:10Anthony Pompliano?

  That's so gracious of you. You took a whole weekend?

• 18:13Speaker 03

  Memorial Day weekend, so it was, it was a long weekend. It was, got an extra day there. So I, I had been, so my wife has an autoimmune condition, thyroid condition, and we were following all of these elimination diets, like anti-inflammation diets, to like help her with her, with her condition. And they all said eat grass-fed beef. And we couldn't find it. Couldn't find it in the grocery store. Maybe there'd be ground beef, but there wouldn't be anything else. And I just became obsessed with this, like, well, how do you get grass-fed beef? And I ended up, like, in the last year, as custom-made was, was failing, I ended up starting to buy cow shares from different farmers, local farmers.

• 18:56Anthony Pompliano?

  What is that?

• 18:56Speaker 03

  Cow share is where you buy like half a cow. And so you get like two massive trash bags full of meat. That's all different cuts from a cow. And so the, the cow share was too big to fit in my freezer, so I started selling it to like my friends. So I basically like, you know, split it up like a drug dealer and get my little head stash for, you know, for free.

• 19:19Anthony Pompliano?

  Were you diluting?

• 19:21Speaker 03

  Yeah, diluting. Exactly.

• 19:24Speaker 03

  And so, you know, somebody was like, somebody who was in my office was like, this would be so much better if it was just delivered to my house. And I was like,

• 19:32Anthony Pompliano?

  Oh, you were like saying like, hey, you can come buy it, but you gotta like come to my

• 19:34Speaker 03

  Yeah, well, well, no, they were, I would bring it to work. And it was like people from work who would buy all these shares off of me. And he's like, this would be so much better if it's delivered to my house. I was like, yeah, that would be better. And at the time I was looking for, I wanted to run a hobby business. And I wanted it to be like modeled after like the Tim Ferriss four hour work week. I'm going to be living in Argentina. I'm going to pick up my laptop, look at it for 10 minutes, close my laptop, go about my day. And I thought a subscription business, especially because of my experience with custom made, that a subscription business would be like much better. Because there is recurring revenue. So once you get it going, it's just like, it just feeds on itself. And so I just got this

• 20:17Speaker 03

  crazy idea that my hobby business was going to be like sending grass fed beef to people's houses. And so I didn't know how to like, put all the pieces together. I didn't know how to, I mean, I ate meat, but I'm not a meat guy. I didn't know how to buy meat. I didn't know how to ship meat. I didn't know like, the first thing about any of it.

• 20:37Anthony Pompliano?

  Did you, so before we kind of get all the way into what you did, you're doing this for like a year.

• 20:43Speaker 03

  Just kind of poking around buying.

• 20:45Anthony Pompliano?

  Yeah, this is like, uh, meat plus leftovers, right? Did you like run actual tests? Like, did you like set up a website or anything? Or was it like, oh, this sounds cool. It could be a hobby business. Like, we're starting a business.

• 20:58Speaker 03

  Yeah. So the idea was, so first of all, I didn't know how to do anything. And then I met, I hunted down the former head of operations of Omaha Steaks.

• 21:07Anthony Pompliano?

  Which the people who would come to like your house and like try to sell you steaks.

• 21:10Speaker 03

  They do that very rarely, but yes, they do do some of that. But it's a, you know, it's a $500 million gift giving business. It's been around for 100 years, catalog and direct mail and all that. And so he was the guy who like knew how to buy the product, how to ship the product.

• 21:28Anthony Pompliano?

  Interesting.

• 21:28Speaker 03

  And so I reached out to him on LinkedIn and he's like, yeah, my non-compete ended like I'll help you out. And so then pieces started coming together. It's like, oh, okay. Here's how you do it. He's like, here are some farms and here's like the shipping facility and like, so things started to coming, coming together. And so when I was leaving custom made, um, to me, it was like, I could either wait and like, kind of lick my wounds and figure things out. Or I could just get started on this new venture as fast as possible.

• 21:57Anthony Pompliano?

  It's like a rebound.

• 21:58Speaker 03

  Yeah. And, um, because I didn't think it was going to be very big. Like I was, I was literally like, if I have a thousand subscribers and I make $20 per subscriber. It's $20,000 in gross profit. I'll outsource some stuff to like a couple Filipinos. And I'll probably be able to bring like 10 to $12,000 a month and like cover my nut. That was it. That was like, that was it.

• 22:24Anthony Pompliano?

  That's the dream for like a lot of people.

• 22:26Speaker 03

  No kidding. That is the dream. I like to say that I failed miserably at that dream. Like I did. That is not what happened. But, and the other thing was I thought that, so the way I wanted to start was via Kickstarter. Because with custom made, it was a two-sided marketplace. So there's a buyer and a seller. And so as CEO of custom made, I went to school on like marketplaces and marketplace dynamics. And, um, and there's this, there's these points of time in marketplaces where they, they reach like saturation on the internet. And then there's huge opportunity for people who know how to play by the rules. So early days eBay, it was like, there used to be stores where they would sell your stuff for you because they knew how to like write good descriptions and take good photos.

• 23:10Speaker 03

  Nowadays eBay has figured out how to like make that all part of like the app and that opportunity is gone. But it was, it was a big opportunity for a long time. Amazon marketplace, Etsy marketplace, people are taking advantage of these arbitrages. I thought Kickstarter was like rife for that. And it was. So, um, our whole, our whole.

• 23:30Speaker 03

  Thing was to get the Kickstarter Verified badge. Cause we, we noticed that Kickstarter Verified put you on the homepage, put you on the top of the food page, put you in search. Kickstarter would send a tweet about you, like they would do all these things. And so we tried to deconstruct, how do you get Kickstarter Verified? Which was one part like blowing through your goal in the first day and one part momentum. And like, we just.

• 23:53Anthony Pompliano?

  How did you deconstruct that? So like you realized, okay.

• 23:56Speaker 03

  Just looked at stuff.

• 23:56Anthony Pompliano?

  You just started analyzing all the ones that were verified.

• 23:59Speaker 03

  Yeah, we like look at things that went live and like, oh, look, they got the badge. Oh, they got the badge like right after they did X, Y, Z. So just kind of like became students of what was happening on Kickstarter. And so we launched in September. So I took off Memorial Day weekend and I actually had an intern who I paid $10 an hour, start with me on the Tuesday after Memorial Day. Cause I was really worried about starting a business by myself. Like I didn't think I had, I'd have the discipline to like actually work all the time.

• 24:36Speaker 03

  So, but I knew if somebody was there, like.

• 24:38Anthony Pompliano?

  I know I can't take more than four days off, but like, I'm actually worried I can't do the work.

• 24:42Speaker 03

  Yeah. No, I just, I just thought I would just like sit on the couch and like, you know, not work. But I knew if somebody was there being like, all right, what's the next mic? I'd be like, uh, okay, do this. And that's how we got going.

• 24:54Anthony Pompliano?

  An intern's much better than a co-founder at that.

• 24:57Speaker 03

  Yes, absolutely. I mean, I, I, yeah, I, I think, um, you know, a lot of businesses fail because of co-founder dynamics. I'm blessed to still be very close with my co-founder from my first company, but I never want to have a co-founder again.

• 25:13Anthony Pompliano?

  Great guy, but.

• 25:15Speaker 03

  Awesome guy. It's just like when the decision, when, when the decision has to be like, there, there needs to be somebody in charge.

• 25:22Anthony Pompliano?

  Yeah.

• 25:22Speaker 03

  Even if they're a co-founder, you need to figure out like, okay, who's in charge here though?

• 25:26Anthony Pompliano?

  And I think most great businesses, even if there are multiple co-founders, uh, three, four, five, whatever, they, if you even ask them, like who has the final say?

• 25:34Speaker 03

  Yeah.

• 25:35Anthony Pompliano?

  They all defer to one person if the business ends up being great.

• 25:38Speaker 03

  Yep.

• 25:39Anthony Pompliano?

  Because if not, there becomes all kinds of issues. And I've also seen companies that said, okay, we're going to draw a line in the sand. All the decisions that relate to X, this co-founder decides. All the other ones, this co-founder decides. And like even that's a little messy sometimes.

• 25:52Speaker 03

  Yep.

• 25:52Anthony Pompliano?

  But at least there is some, you know, final decision maker that everyone agrees on for that specific topic.

• 25:57Speaker 03

  Yeah, we had a card. So ours was like, um, uh, the decision card. So if we were at an impasse and could not make a decision together, um, then somebody who started, my co-founders started with a card. It was like, he could be like, I'm pulling the card. And then whatever the decision is, like, we go with what he wants to do.

• 26:19Anthony Pompliano?

  Yep.

• 26:19Speaker 03

  But then I get the card.

• 26:21Anthony Pompliano?

  Oh, that's slick.

• 26:22Speaker 03

  Yeah. So it's like, you better use it on something good because then I'm going to have the card and you're not going to have the card. He actually never pulled the card.

• 26:29Anthony Pompliano?

  So you never got the card either?

• 26:30Speaker 03

  Yeah, I never got the card.

• 26:33Speaker 03

  So I don't know if it worked or didn't, but we, we, we ended up being able to settle all disputes with just a lot of arguing.

• 26:42Anthony Pompliano?

  All right. So you got ButcherBox. You're, is it, do you know what the name of this thing is at the beginning?

• 26:47Speaker 03

  Yeah, well, I started with meetwithaneam.com, which would have been really bad.

• 26:51Anthony Pompliano?

  Meet with a name?

• 26:52Speaker 03

  Meet with a name because like the animal has a name because it's being well cared for. And then, yeah.

• 26:58Anthony Pompliano?

  I'm glad you did not.

• 26:59Speaker 03

  Yeah, no, that would have been bad. Then a buddy of mine was like, what about ButcherBox? And butcherbox.com was taken by.

• 27:06Anthony Pompliano?

  How'd you get it?

• 27:06Speaker 03

  We got it two years into the business. It was a butcher in McLean, Virginia. And he had built it because he wanted to do butcher boxes and ship them out. And so we, we had getbutcherbox.com for a long time or for a few years. And then I just kept harassing him. And finally he's like, I'll sell you a fine.

• 27:27Anthony Pompliano?

  How much?

• 27:28Speaker 03

  I think we paid 10 grand for it. And at that point it was like, that's a no brainer. Let's do it.

• 27:33Anthony Pompliano?

  Yeah.

• 27:35Speaker 03

  Yeah, so we came up with the name ButcherBox. The first thing that happened was we, I sent my intern out to like Whole Foods to talk to people about how much meat were they buying per, per visit or per month? How much did they pay for different types of meat? How much did they know about grass-fed beef? And what we learned within one day of just surveying people is our model, which was gonna be we were gonna ship a box of grass-fed beef, was just not gonna work because people don't eat that much beef in a month. And so people are like, I would definitely sign up for something if it had chicken and pork and beef, but I'm not gonna do it for just beef.

• 28:17Anthony Pompliano?

  Got it.

• 28:18Speaker 03

  And so we immediately were like, okay, ButcherBox is not just beef. We're gonna do beef, chicken, and pork. Our Kickstarter was beef, chicken, and pork, and you could choose which box you wanted, like all beef, beef and pork, beef, chicken, and pork.

• 28:31Anthony Pompliano?

  Were you worried that that introduced complexity either on the user side or on like the operations side?

• 28:37Speaker 03

  Yeah, it, well, it definitely increased a little bit of complexity on the operations side because now you're dealing with like three different species instead of one, and you have to figure out like what the grass-fed equivalent is for pigs or for chickens or whatever. But it was definitely what the member wanted, and I wanted to be able to ship a box every month to the member, and it just wasn't gonna work if it was beef. So it just, it just got more complicated.

• 29:00Anthony Pompliano?

  You had to do it.

• 29:01Speaker 03

  Yeah. But the thing that we did, so again, so we start, I'm like, I'm only gonna put $10,000 into this company. I'm not raising any money because it's supposed to be a hobby and like, alright, 10 grand, I can recoup that, this'll work. And so, less than 10 grand to start the company, Kickstarter, all that. And the other thing that we did, because we didn't have any money, is we sent out a, what we call the curated box. So if you chose beef and chicken, we're gonna send you beef and chicken, but we're gonna send you whatever we want. Like, you don't get a choice as the customer. We've since changed that. Now we have like a custom box, and you can choose from like 50 different products and whatnot.

• 29:43Speaker 03

  But at the time, in order to not have to carry any inventory, we basically were like, we're gonna send you whatever. So the, the January box would be like, here are the cuts that are gonna be in the January box, so we could bring in the inventory, run through the inventory, bring in more inventory for February, and keep going.

• 30:01Anthony Pompliano?

  This episode is brought to you by Valor, which represents what's next in the digital economy. They provide simplified trusted access in crypto, decentralized finance and Web 3 investment opportunities. Institutions and investors can gain diversified, secure, compliant and easily tradable access to a diversified set of industry-leading equity products and protocols, all through a single-stock purchase on a regulated exchange. They currently are listed in the US under the DEFTF stock ticker and on the Canadian NEO exchange under DEFI. For more information or to subscribe to receive company updates and financial information, visit their website at valour.com. That's V A L O U R dot com. This episode is brought to you by Compass Mining, the world's largest marketplace for mining hardware and hosting.

• 30:46Anthony Pompliano?

  With Compass, everyone can mine Bitcoin. You can do it at home or in one of their 23 hosting facilities around the world. All you need to do to start mining your own Bitcoin is go to compassmining.io today. Again, if you want to get into Bitcoin mining, go check out compassmining.io today. So this is interesting because you raised no money. Yeah. So for those that don't know, normally you would have to raise money. You then would go spend a bunch of money on marketing, acquire customers, and then those customers would almost be like just-in-time customers because you may get them on Tuesday and ship a box out on Wednesday. And like you're playing an inventory game, which you're talking about here. Because you weren't holding any inventory, did you tell people like, hey, you have to be subscribed by like January 14th to get the box that ships on like January 21st?

• 31:29Anthony Pompliano?

  Like, how did you operationalize not being overextended, not having to put a bunch of money in? We, so we did hold inventory. We just ran it so tight that, so boxes were always going out. Okay. And the place that we started with had a cutting facility attached to the shipping facility. Smart. So we were able to like move stuff pretty, pretty quickly, pretty just in time. And they were actually, I mean, you know, one of the things that I say about people are like, how did you grow the business without raising money? Like, I'm stuck with inventory. What do I do? And one of the things was the company that cut our meat was actually remarkably bad at invoicing us for the meat.

• 32:13Speaker 03

  You know, it's like the $30,000 order of New York strips, they like forgot about for a month and then would bill us for it.

• 32:19Anthony Pompliano?

  Just so happens you got $30,000 of customer revenue.

• 32:22Speaker 03

  Yeah, exactly, exactly. So we, um, we, yeah.

• 32:26Anthony Pompliano?

  So find dumb vendors who have bad operations is a key component to building a self sustaining business.

• 32:33Speaker 03

  Bad operations, yes, or, or bad billing department. Um, and then we ended up like, over time, we've actually financed the inventory using debt, not.

• 32:43Anthony Pompliano?

  How does, how does that work? Just for people who don't, who spend all the time in the software world? Like, how do you finance what would be inventory?

• 32:49Speaker 03

  Well, so it's a physical good, right? So it's a, it's a hunk of meat. Um, and so that has a value to it. And so there are lending institutions that will lend against inventory.

• 33:01Speaker 03

  And yeah, so we, uh, we actually started with our fulfillment center was like, did a program where they would finance our inventory. And then there are lenders who will finance against inventory. Uh, and you can get a pretty low rate because if you default, they get all your inventory and that has like, you know, they can get 70 cents on the dollar or something like that for, for selling it. Um, so as we got operations up and showed that we were like profitable and like a real thing, uh, we were able to do that. Which is, yeah, I mean, inventory from my experience in, uh, our business as well as mentoring lots of other people, inventory is an area

• 33:42Speaker 03

  where I think a lot of people like start thinking, well, I need to raise money, uh, to fund inventory. And it's really a debt problem. It's not an equity problem. And I think a lot of people tune, that's the point where they're like, okay, I'm going to go raise money, um, versus trying to figure out different options, different funding options to, uh, finance it.

• 33:59Anthony Pompliano?

  So Tuesday after Memorial Day, when you started this thing, uh, you know, none of this.

• 34:03Speaker 03

  Yeah, no.

• 34:03Anthony Pompliano?

  You're like emailing or LinkedIn, uh, with Omaha steak person.

• 34:06Speaker 03

  Yep.

• 34:07Anthony Pompliano?

  And you have an intern. How do you go from, I don't know, a stranger and an intern to like, okay, we're live on Kickstarter and like, we get the verified badge and like game on.

• 34:17Speaker 03

  Yeah. So.

• 34:18Anthony Pompliano?

  So what do you do there?

• 34:19Speaker 03

  Yeah. So first we had to, um, you know, I had been playing around with Kickstarter for a while, trying to figure out like what, what's happening here. And so we, you, you have to have like a plan of what you're going to do with Kickstarter. So for us, it was like, first of all, I want to be able to ship out these boxes, like pretty much immediately, like I So our Kickstarter was like September 9th through October 8th. And we were shipping out boxes by like the 20th. Because we wanted to like get product in people's hands and then roll them to a subscriber. So we just built a plan of like, here are all the things that we need to do. Here are all the people that need to say stuff. And then it just became, you know, we were into the Lean Startup book and just running kind of

• 35:00Speaker 03

  trying to figure out how to like run tests, understand what our customers would like. So we did a lot of surveying, a lot of like going to Whole Foods, a lot of like just getting in front of people and asking them questions. And came up with like, alright, we can launch this Kickstarter campaign, which you need, obviously you need a video for, which I had a friend who did stuff at Custom Made for us. You need like a brand, which I had another friend who ran a branding firm that helped us with. So I just compiled all these people to kind of like help with the original unveiling.

• 35:36Speaker 03

  And yeah, I didn't want to spend a lot of money because I wanted it to be a hobby business. And so really, everything went through that lens. It's kind of like, yeah, we can't do that because it's too much. Or we can't, we can't focus on buying customers. And during Kickstarter, we had this big aha moment where we had reached out to like anybody on Twitter who had mentioned Grass Fed before, being like, hey, we're launching this company. Could you give us some press when we do? And there was this nutritionist, this paleo nutritionist called Chris Cresser.

• 36:19Speaker 03

  He's a doctor in California with a huge following. And he tweeted, when we launched on Kickstarter, he tweeted about it. He was like, I tell you to eat grass-fed beef and this is like a great, great place to go to get it. And we just saw all of these signups happen like right away, like tons of activity on Kickstarter. And we were like, that's interesting, let's do more of that. And so

• 36:44Anthony Pompliano?

  So no grand boardroom plan of influencer marketing. It's like, Chris the doctor from California got a subscriber.

• 36:51Speaker 03

  Notice the signals.

• 36:51Anthony Pompliano?

  Who's Chris number two?

• 36:53Speaker 03

  Yeah, yeah, yeah, notice the signals. Yeah, I mean, okay, so here's what I think about like, in general, with entrepreneurship. I think people spend way too much time on a business plan. And no time on a lifestyle design. And I think one of the like most incredible things about being an entrepreneur is you get to actually define what you want your lifestyle to look like. And so what I encourage people to do is to go do like a visioning exercise of your three years in the future, like what does your lifestyle look like? What time are you getting up? What are you doing? Do you have kids? Are you hanging out with them in the morning? Are you like, are you doing a hard workout? Like, you know, what does that lifestyle look like? I'm not a big believer in business plans because every time I've written one, like

• 37:38Speaker 03

  they change like right away.

• 37:40Anthony Pompliano?

  They're complete bullshit for a business that's starting because to your point, like you could have written the whole business plan, then you went, literally went to Whole Foods, you're like, oh shit, it's wrong.

• 37:47Speaker 03

  Right, totally. And it anchors you on the wrong stuff. And then you're like, kind of like our first business, you're like, well, this is what we said we were gonna do. And so in this business, it was like, no, we're just gonna like observe and then make decisions based on our observations and then just keep going with this relentless pursuit of like helping the customer get what they want. Yeah, and so influencers, it was like, I guess we're doing influencers. And then we went hard after influencers and.

• 38:13Anthony Pompliano?

  What do those deals look like in the beginning? Are you just stroking checks to them or how's it?

• 38:16Speaker 03

  Yeah, no, so we didn't have any money, so we couldn't stroke checks. So what we did is we reached out to these influencers. And the way we reached out to them, we used to call it our Trojan horse, is we were like, we were sending this box of meat and it was curated and we would like to throw in recipes about the things we sent. So if we send you back ribs, pork back ribs, like, and here's a recipe on how to cook them. And so what we did is we went out to these influencers and we're like, hey, we saw this back ribs recipe, this whole 30 back ribs recipe, we're ButcherBox, we'd like to include it in our box and like put your name on it and a link to you and all this stuff. Like, would you be okay with that?

• 38:57Speaker 03

  And everyone, everyone said yes, because influencers trade on like influencer, influence and free marketing. And they're like, oh, by the way, what's ButcherBox? And we're like, oh, let us tell you what ButcherBox is. And you know, we're like, oh, we're the service, like, yeah, it probably aligns really well with your audience. By the way, we can't pay you to send an email, but what we can do is pay your residual. So every month that subscriber maintains their membership, we can give you $10 or we can give you $15 or whatever the, whatever the deal was at the time.

• 39:26Anthony Pompliano?

  What's the most that anyone was making?

• 39:28Speaker 03

  Oh geez, I mean, we still have people north of $20,000 a month.

• 39:32Anthony Pompliano?

  So there's some people who are as a influencer slash distribution partner, whatever, uh, for butcher bots are making a quarter of a million dollars a year.

• 39:41Speaker 03

  Yeah.

• 39:42Anthony Pompliano?

  That's fucking crazy.

• 39:43Speaker 03

  Amazing, right? And so for them, it was, it was amazing for them.

• 39:46Anthony Pompliano?

  Yeah.

• 39:47Speaker 03

  And we backed into this like, you know, unbeknownst to us, we backed into this really interesting moat because there, there have been other companies that have come along and, and sold meat in the mail. But what is the motivation of that influencer to go like work with them when they're already like getting this like residual income stream for

• 40:10Anthony Pompliano?

  They don't even have to do anything else. Yeah, they don't even have to do anything else.

• 40:12Speaker 03

  That's right.

• 40:13Anthony Pompliano?

  And like, I just know I'm getting my $20,000, as long as my people don't leave.

• 40:15Speaker 03

  So are you really gonna like go hawk some other product and destroy that income stream? Probably not. So we, yeah, we just like stumbled upon this like pretty sweet thing and we went hard after, if you were like in Paleo, Whole30, CrossFit, Keto, like you almost definitely wrote about, about butcher box at some point. And we actually were like, I don't, I want to make sure it's not like, oh, we gamed everything. Like, we actually provided a product that people were looking for and their audience was looking for. So it was like a win-win on both sides.

• 40:49Anthony Pompliano?

  How much of it was the gamification slash marketing and you guys are smart there versus like, nah, even if we weren't good at that stuff, like the people wanted this box and so we would still have a pretty good business even with just the box without being experts on the market.

• 41:02Speaker 03

  Yeah, I think that to start with, it really was that people really wanted the box and the, this is true today as well, but the, the industry for what, what we call claims-based meat, but like meat raised better, we can get into all that, what, what that means. In 2015 and 16 and 17 was really nascent and people had like read Michael Pollan's Omnivore's Dilemma or had like read some of these blog posts that I had read and were like, I want to make a change. Okay, where do I go? And there's like, Nowhere to go.

• 41:33Anthony Pompliano?

  Mm hmm.

• 41:34Speaker 03

  Uh, and then all the farms that you could buy from were really inefficient because they would sell like half a cow, which is two massive trash bags full of meat. Like, where are you going to put that? Um, or there'd be farms that would ship direct, but they would have to, you'd have to like get it overnighted. So it was like a hundred fifty dollars in shipping to send you like twenty dollars worth of meat.

• 41:52Anthony Pompliano?

  You had to be hardcore.

• 41:53Speaker 03

  Yeah.

• 41:54Anthony Pompliano?

  And like big time believer with big dollars behind you in order to do kind of the traditional way. You guys basically brought a, a lower cost option to the

• 42:01Speaker 03

  That's right.

• 42:02Anthony Pompliano?

  Table.

• 42:02Speaker 03

  That's right. Uh, and then as we've scaled the industry, because at, at, at our size, we're now like scaling the industry, uh, we've, we've continued to do it more and more efficiently to drive a better and better value to people so that they can actually afford to eat this way. Whereas like five years ago, that was not the case.

• 42:20Anthony Pompliano?

  So we're like screwing around. We're like, oh yeah, this like small thing with an intern, whatever. Like you make over five hundred million dollars a year. You guys have raised outside capital, right? Five hundred million dollars in revenue per year is a fucking crazy number.

• 42:33Speaker 03

  Thank you.

• 42:34Anthony Pompliano?

  Uh, how do you go from like, oh, we were at Whole Foods and like somebody told us like, go include chicken?

• 42:40Speaker 03

  Yeah.

• 42:40Anthony Pompliano?

  To five hundred million dollars a year in revenue.

• 42:43Speaker 03

  Yeah. So I mean,

• 42:44Anthony Pompliano?

  What does that scaling look like?

• 42:45Speaker 03

  So our revenue path was, uh, so we did about three hundred thousand dollars in the first, uh, year. Um, two thousand fifteen, we launched Kickstarter in September. So we did the Kickstarter and then we had like some follow on subscribers. So three hundred thousand dollars, then we did five million. Then we did thirty three million. So like those are five X the business, six or six X the business, you know, thirty three million, then a hundred million, then two hundred twenty five million. Um, and then COVID hit. So we went from two twenty five to four fifty. So we didn't think we were going to double, but then we doubled the business again. And then we did four fifty to five fifty last year. So like slowing down a little bit.

• 43:26Anthony Pompliano?

  You can't triple and double forever.

• 43:27Speaker 03

  Yeah, it turns out you can't. Um, and then this year, we don't know where we'll end up. We were hoping to be north of six, but I think that's going to be pretty tough, just given the, um, just the environment. We'll definitely be above last year, but it's gonna.

• 43:40Anthony Pompliano?

  So three hundred to five is a big fucking leap, right? For any founder that's out there, it's like, I got to three hundred. They're like, okay, maybe this works, maybe. Like you still have questions.

• 43:50Speaker 03

  Right.

• 43:51Anthony Pompliano?

  Five is like, I got a business.

• 43:52Speaker 03

  Yeah.

• 43:52Anthony Pompliano?

  Right? Uh, is that all influencers?

• 43:55Speaker 03

  No. So influencers was like,

• 44:00Speaker 03

  Really got us to like 35 and then, and then we started doing.

• 44:06Anthony Pompliano?

  Well, how about how do you get from 300 to five? You get 300K to 5 million.

• 44:10Speaker 03

  Yep. So that's.

• 44:11Anthony Pompliano?

  Influencers. Okay.

• 44:12Speaker 03

  Five to 30.

• 44:13Anthony Pompliano?

  Five to 30, whatever you say.

• 44:15Speaker 03

  Deep influencers.

• 44:16Anthony Pompliano?

  That's like a stupid jump. Right? If you had investors, they would be like, in the LP update, you're the first company. Right? They're like, hey, this butcher box went from 5 million to 30 million. Look how smart we are.

• 44:28Speaker 03

  Yeah.

• 44:28Anthony Pompliano?

  That's all influencers too.

• 44:30Speaker 03

  Yep.

• 44:30Anthony Pompliano?

  So you basically got a 30 million in revenue in two years ish.

• 44:33Speaker 03

  Yep.

• 44:35Anthony Pompliano?

  Just going to people and being like, do you want to be included in the box? And like, can you tweet about us?

• 44:38Speaker 03

  Yep.

• 44:38Anthony Pompliano?

  That's wild.

• 44:39Speaker 03

  Yep. And we, I mean, we, we, we built a very large program very quickly. We were maniacal about like reaching out to everybody.

• 44:48Anthony Pompliano?

  And you guys are profitable this entire time?

• 44:50Speaker 03

  Yeah, always been.

• 44:52Anthony Pompliano?

  Pretty much from day one.

• 44:52Speaker 03

  Yeah. So when we got to 33 though, it became harder and harder to scale. And so what we did, we thought we had enough cash flow coming in. What we did is so every, every single subscriber that we signed up for the first two and a half years had to be what I called box one profitable, which means we had to make money on you as a customer. That first box fully loaded. So we'd call it dollars per box. So we knew the amount of dollars that we were making off of every box. Let's say it's $25. And so we knew that we had $25 to acquire you as a customer. And then if we acquired you for less than $25, when you resubscribed, which 90% of the people would or whatever. It's all, it's all gravy from there. Right?

• 45:36Speaker 03

  And so that's how we built the business. So then you've got this bolus of subscribers who are starting to fund the business and you're profitable on the first customers. After a while, we were like, this isn't going to work anymore. We need to dip into month two. So then we, it was like, okay, we'll spend the profit of box one and box two on acquiring that customer. Because we had a little bit more cash flow and we're like, not feeling like we're suffocating all the time.

• 46:01Anthony Pompliano?

  And you also understood better about the retention of.

• 46:03Speaker 03

  That's right. Like we.

• 46:04Anthony Pompliano?

  So you knew, hey, if they buy the first box, they're probably going to buy the second.

• 46:06Speaker 03

  Yeah. We, we were then understanding our lifetime value curves, how long a customer would stay for, what they were going to buy, how, how we can influence that and improve that.

• 46:16Speaker 03

  And so, yeah, I mean, we, fast forward to now, we're, we're spending way deeper than two months in because we know what the customer, we know the right customers to try to purchase and then we know.

• 46:28Speaker 03

  Yeah, we know how to keep them.

• 46:31Anthony Pompliano?

  When you start to get the machine going, how many people are working at the business at this time? Is this like you, the intern, the Omaha Steaks person and like another person? Or are you at like 25 people, 50 people?

• 46:43Speaker 03

  No.

• 46:44Anthony Pompliano?

  What did the employee basically?

• 46:45Speaker 03

  Yeah, we were, we were pretty, we were pretty lean for several years. So, and mostly with interns, people who didn't, people who had a chip on their shoulder or something to prove and didn't really have any knowledge of what we were doing. And so we, yeah, we brought in Juan, who's, who's came in today, was like a freshman at Bentley and was looking for something for the summer. And like, we brought on people like that. And then we just tried to keep people going. The first like real hire we made was on Halloween of 2016. So we had been in business for like over a year and he was, it was a meat guy, this guy, Mike Billings.

• 47:29Speaker 03

  And I used LinkedIn once again and I reached out to him and was like, hey, I've got this business. He had retired. He, he ran meat and seafood at BJ's, which is like Costco on the East Coast. And he had retired. He was like day trading on the beach and was bored. And I just somehow stumbled upon his thing, wrote to him and he's like, yeah, I'll come talk to you.

• 47:55Anthony Pompliano?

  What, what are you searching for on LinkedIn? I've done this many times.

• 47:58Speaker 03

  Meat.

• 47:58Anthony Pompliano?

  Like, okay.

• 47:59Speaker 03

  That's what finally.

• 48:00Anthony Pompliano?

  You and I are very similar.

• 48:01Speaker 03

  That's what finally happened.

• 48:02Anthony Pompliano?

  Like you're just searching like, what is the shit that I could search that might be in their LinkedIn profiles? Like a find this person who's been doing this for 35 years to get on a phone call so I could talk to him for an hour and take all the knowledge?

• 48:15Speaker 03

  And, and you say shit because like, I've been asked like, well, where'd you find this guy? I was like, yeah, I was pooping. I was just like looking on the internet for this guy, you know? It was like, I was like, all right, let me just type in meat. And he, his, his LinkedIn said, experienced meat executive.

• 48:32Anthony Pompliano?

  He was waiting for someone, he literally was waiting for someone to search meat on LinkedIn.

• 48:37Speaker 03

  So this guy comes in and he's, he's like expensive. He's like, you know, my last company, I made over 200 grand. Like, I don't need to make that much because I'll take some equity, but like, he, he needs money. And at this point, we're shipping like 10,000 pounds of meat a month.

• 48:54Anthony Pompliano?

  Geez.

• 48:55Speaker 03

  And I'm like, okay, so that's like a few thousand boxes. And I'm like, we, at this point, it feels like if we bring in somebody who knows what they're doing,

• 49:07Speaker 03

  they can probably make up their salary. And we were also like, we were not sending a great product. There was like, we did this Groupon one time and, and there was like green meat that we shipped out and stunk and like, we had to give all these refunds and like, I, we, we had no idea what we were doing. We needed like a professional. So he was the first professional.

• 49:27Anthony Pompliano?

  Yeah, but this is interesting because you're like, hey, I had a bunch of like interns and young people and like people like chips on their shoulders and stuff, but like Omaha Steaks guy.

• 49:34Speaker 03

  Yeah, totally.

• 49:35Anthony Pompliano?

  Mike Billings, right? Retired meat executive. Those people are like pretty experienced. So it's almost like you kind of sound like, I don't want to give you too much credit, but like you sound like you knew when to like, hey, we need just hungry people who are like young and willing to just work, you know, nonstop versus like the experience. Like, how did you know when you needed which one?

• 49:53Speaker 03

  So I called this the barbell strategy.

• 49:54Anthony Pompliano?

  Okay.

• 49:55Speaker 03

  So what I've found is actually the further people are in their career, the, the more they act like the young, hungry people.

• 50:02Anthony Pompliano?

  Oh, interesting.

• 50:02Speaker 03

  And so like, you got like a 70 year old who had a 30 year brilliant career, but now is like super bored and knows fricking everything. All they want to do is come in and like teach younger people. So these young, hungry people are like, hey, can I learn from you? They're like, yeah, great. Like, sit down, let me tell you everything, you know? Where, where we've tended to have more trouble, and I don't want to say like, for those on my team who are listening, this isn't as big of a problem, but like, it's kind of that like late 30s to early 50s crowd. Where.

• 50:35Speaker 03

  Really want to make a name for themselves, need to be moving up within the company, also want to coach soccer, all of which, all this stuff is great.

• 50:42Anthony Pompliano?

  Yeah.

• 50:42Speaker 03

  But like, when you have somebody who's super young and hungry, and you can pair them with somebody at the end of their career, either they had retired and are doing another one, or like are about to retire. That's where magic can happen.

• 50:55Anthony Pompliano?

  It's the extremes. It's like, I've seen this over and over again. So it's interesting the way you're describing it. But it's like, a lot of times, venture capitalists, which we'll talk about whether you like them or not, we'll talk about like, you want to find a founder who is amazing at one thing. Like if they're amazing at sales, or they're amazing at technical ability, or amazing at whatever, they don't need to be this super well-rounded person. A lot of times it's just like, be amazing at one thing. Really what you're talking about here is like, oh, this person has so much knowledge that it's on the extreme end because they're at the end of their career. Or like, this person is willing to go above and beyond and work so many hours and like be so tenacious, that's on the extreme of the spectrum. The people in the middle are actually the most well-rounded people. Because they still kind of sort of work hard, right? They kind of sort of know what they're doing, like. But it actually is like this very weird middle ground,

• 51:39Anthony Pompliano?

  which, sure, there are plenty of outliers, but like, that is maybe not the best place if you want to have extreme outcomes like you guys have had.

• 51:47Speaker 03

  Yeah, yeah. And if you remember before, I was talking about like, how in my first company, I left all the people who helped hack through the jungle, in the jungle. This time around, it was really important to me that I was going to take all of these interns, or you know, the kind of like the younger people, and teach them as we were going. So that they could, they would be able to drive a bus by the time that we needed them to drive a bus. And so that was really important to me is to like, pair them with, with older people, grow them, help them to understand where, like where they might be blocked so that they're prepared to take on big pieces of our organization. And one of the coolest things about running a company, especially a company that has like

• 52:29Speaker 03

  grown as much as we have is watching people's careers just like skyrocket. You know, you come in as an intern and then you're running a division of the company and like it's just been really humbling to see.

• 52:41Anthony Pompliano?

  I forget who wrote this a while ago, but I read a blog post and it was like, what do you do if you're like graduating college, right? And the argument was like, don't go work at the big tech companies, right? Cause you're just gonna be one of 20,000 people or whatever. And actually, if you're reading this blog post, you shouldn't start a company because like you would have already done it if that was who you were. The best thing to do is like, go join like a series B company that is already heavily de-risked, but still has growth in front of it. And so if you were like early-ish at Uber or early-ish at Airbnb or whatever, like you get the brand, uh, kind of recognition of the company because of what it becomes eventually. You also learn a lot because you're getting thrown so many different things. And if you're good, you can move up in the organization like you're describing.

• 53:25Anthony Pompliano?

  It's like, it's this very unique place to go, uh, where you still do get the benefits of like growth in a business, but you don't have to take the founder risk.

• 53:35Speaker 03

  Yep.

• 53:35Anthony Pompliano?

  And so like, I always thought that was like pretty good advice, uh, in terms of like these young people, where they should go. And you guys pretty much for the last three years, like fit that almost perfectly.

• 53:44Speaker 03

  Yeah. I totally agree with that advice, although I would say that I personally believe that people should go into sales first.

• 53:53Anthony Pompliano?

  Why?

• 53:54Speaker 03

  I just think getting your ass handed to you every day, having somebody say no to you, time in and time out, is really valuable. And so if there's any, uh, some people have sales experience growing up, like, uh, for example Mormons, um, have to go spend two years on mission, being told no over and over and over. But I think having time in your life where you are, uh, trying to sell something and being told no constantly is, is, is pretty important.

• 54:22Anthony Pompliano?

  I've never told this story, I think on this podcast, but you wanna know one of the first things I ever did in my like professional career? Me and three friends from high school started a business and, uh, we were getting local small businesses to sign up for, uh, almost like a Yelp type product for local schools. And you know how we acquired customers? I don't know why I never thought of this before. We would go to a shopping center, like we'd like look on the map and be like, all right, cool. Like you two go to this shopping center, you two go to this shopping center. And we would just like go store to store and we would just walk in and be like, hey, is the owner here? You can imagine like two 22 year old kids walking in no uniform, no like, just like off the street like as the owner here and the people at the cash register are like, uh, do

• 55:04Anthony Pompliano?

  you have a weapon? Right? Like, who are you? Uh, and like, yeah, in hindsight, like, you learn how to talk to people.

• 55:10Speaker 03

  Yep.

• 55:10Anthony Pompliano?

  Right? Even if you're not successful, like you definitely learn how to communicate with people. You learn very quickly, like, oh, they're interested in this to your point about like going to Whole Foods. Like, they don't want just beef. They want these other things or whatever. So like, that's actually pretty good advice of like, just get in front of as many people as possible and get the reps.

• 55:26Speaker 03

  Yeah.

• 55:26Anthony Pompliano?

  To learn.

• 55:27Speaker 03

  Yeah. I think, um, you know, when, when we went out to raise venture capital, we must have been in 50 meetings where people were like, no, definitely not. I'm not going to invest in that. Uh, there have been several times when I tried to get a job in commercial real estate. I was sleeping on couches and like, you know, just pounding the pavement, being told no. When we first raised money while Bernie Madoff ran off of everyone's money, we were just told no. Um, and you know, it just builds this thick skin where you're just like, whatever, I'll just keep going. Like, I don't care. Somebody's going to say yes. We'll just, we'll just keep going until someone says yes.

• 56:00Anthony Pompliano?

  As you think of the business today, like, where is this going?

• 56:05Speaker 03

  Yeah.

• 56:06Anthony Pompliano?

  Right? Most people are like, all right, cool. You get to five million, they would have just been like, don't break anything, right? Like, just like, let the fucking thing roll. Uh, 35 million, they'd be like, oh, definitely don't break anything. Everyone chill out. A hundred. Now you're over 500 million, wherever you guys end up this year. Uh, do you just like run it for cash flow? Do you try to get to a billion? Do you take it public? Do you sell it? Do you raise cat weight? Like, how do you think about the various options? Cause it's a great position to be in a profitable business doing half a billion dollars in revenue.

• 56:35Speaker 03

  Yep.

• 56:36Anthony Pompliano?

  But also sometimes like having a lot of options actually can be tough because you might not know what the right kind of clear path is.

• 56:43Speaker 03

  Yeah. Um, so for the first few years, I was really enamored with the idea of building this company and selling it as fast as possible.

• 56:51Anthony Pompliano?

  Okay.

• 56:52Speaker 03

  So I did like, you know, go talk to some grocery stores and try to put together a deal and like, there was a moment, um, probably three years in where I was like, I'm going to sell this. Uh, and also there have been two moments where I got almost a term sheets with, uh, venture capital, um, who were interested in investing. And I was like, okay, great. And I could get some secondary and like, you know, whatever. So. And every time it's fallen apart, generally because I've trusted my gut and I'm like, I this doesn't feel right. Like, I just need to back out. And where I

• 57:25Anthony Pompliano?

  I won't make you name who it is.

• 57:26Speaker 03

  Yeah, yeah. Thank you. Where I sit now is I think we're in a really unique position. We have no outside investors. We have no one breathing down our neck. We can kind of do what we want. And I believe that what I believe in, like, what I believe the opportunity is, is I want to build an iconic brand in meat. If you think about the brands that you know in meat, like, you probably don't know very many. And most people know brands and they're like, yeah, I don't eat that. I know spam, but I don't eat that.

• 57:58Anthony Pompliano?

  Tyson.

• 57:59Speaker 03

  Tyson. I don't know if you eat that or not. But so

• 58:02Anthony Pompliano?

  I'm grass fed.

• 58:03Speaker 03

  Yeah, good. Right. Exactly. So you're like, I know that, but I won't eat it. Right? And so a brand

• 58:09Anthony Pompliano?

  Some Tyson executives watching this like, fuck pop.

• 58:13Speaker 03

  Yeah, he said it, not me, just to be clear.

• 58:14Anthony Pompliano?

  Just kidding. I'm just kidding.

• 58:17Speaker 03

  A brand that's like, stands for doing things right in meat is sorely needed. It's a massive market. And I think that that is like, what we have the opportunity to do. But like, if you look at iconic food brands, like the Coca Colas of the world and the Oreos of the world and whatever, like, they've been around for 100 plus years.

• 58:38Anthony Pompliano?

  Are the brands iconic because they've been around so long? Or are they around so long because the brands were iconic from early on?

• 58:47Speaker 03

  I don't know.

• 58:48Anthony Pompliano?

  Okay.

• 58:48Speaker 03

  But if you if you start to go to school on like, what do these companies look like? Even even Tyson, like

• 58:54Anthony Pompliano?

  No, tell me.

• 58:55Speaker 03

  Purdue, Campbell's.

• 58:55Anthony Pompliano?

  I'm in school right now.

• 58:56Speaker 03

  Yeah, what they what they look, they all are very closely held.

• 59:00Anthony Pompliano?

  Okay.

• 59:01Speaker 03

  Family controlled.

• 59:02Anthony Pompliano?

  Okay.

• 59:02Speaker 03

  Multi, like, you know, multi decade, if not 100 plus years old.

• 59:09Speaker 03

  And so that appears to be the playbook.

• 59:10Anthony Pompliano?

  Is that a key component to making it last so long and being iconic is that there aren't a lot of cooks in the kitchen? And it's like, one family usually behind these things?

• 59:18Speaker 03

  I don't know. Maybe. I mean, some of them have gone public, but like, the family still controls it. I have no idea. But when you look at it, you're like, okay, there's a pattern here. You know, Mars, huge company, privately held. Cargill, also a huge meat company, privately held. So there's just like, there's just a number of these. And I got really like, okay, I think that meat is, needs to be transformed in this country. And I'm kind of like, I've gone from being like, all right, let me sell this as fast as possible to like, I think this might be my life's work. Like, if I could like, spend my life trying to change an industry where there's a tremendous amount of suffering

• 1:00:01Speaker 03

  in terms of the animals, the environment, like the farmers, there's just, there's a lot to fix. If I could spend my life doing that while running a big profitable company, like, fuck yeah, that'd be awesome.

• 1:00:11Anthony Pompliano?

  This episode is brought to you by Arculus. Arculus is the next generation crypto and NFT cold storage wallet that combines one of the world's strongest security protocols with the easiest to use form factor and app. They have three factor authentication and you can use your PIN and the Arculus key card along with biometrics. They don't compromise your holdings by requiring a USB port, charging or browser connections. With Arculus, you're protected from hackers and institutions freezing your access. Learn more today and buy it now at getarculus.com. You can use promo code POMP to save 15%. Getarculus.com, use promo code POMP. And remember, with Arculus, it's your keys, your crypto. This episode is brought to you by Exodus. Accessing Web3 across multiple networks

• 1:00:55Anthony Pompliano?

  just got a hell of a lot easier. Exodus is one of the most popular crypto wallets for mobile and desktop, and they just added Chrome and Brave web browsers to the lineup. The new Exodus Web3 wallet is a multi-chain browser extension that lets you safely navigate Web3 and DeFi apps on Ethereum, Solana, and Algorand from one wallet. Manage Mint and Sell NFTs on multiple networks in one wallet. You can swap Solana and ETH tokens natively right within the extension. And if you ever hit a snag, world-class customer service is available 24/7. More of your favorite chains are on the way, so run, don't walk. Over to exodus.com/pomp to download the Exodus Web3 wallet right now. Again, exodus.com/pomp. Go check them out today.

• 1:01:38Anthony Pompliano?

  This is a topic that nobody wants to talk about publicly, behind closed doors. I have many friends that all laugh when they hear me talk about it, at dinners, or, you know, we're hanging out, whatever. They're like, dude, I hear this like, life's task, or life's work, or whatever. That's bullshit. I just want to make money. Or, the thing I want to do is like, serve my customers, but like, I've got 20 other ideas that I want to like, go build companies with, whatever. Maybe five years from now, they're like, oh, this is my life's work or whatever. But like the transition, it's the same company.

• 1:02:11Speaker 03

  Yeah.

• 1:02:11Anthony Pompliano?

  Right? You didn't start out like this is going to be my life's work. You kind of were like the opposite of the spectrum. And you're like, oh, this hobby business. Oh, maybe I could just like flip it for some money. And then like it grew into your life's work. So like, how do you think about that in hindsight? Is that actually the like more sustainable path for it to potentially be your life's work? Or do you think that, no, you could start out from the beginning and be like, this is my life's work. And then just go, or you can do what you did. Like, how important is it to almost like have low expectations? And I recently read a book and it says happiness is expectations minus reality. And so like, if you had like hobby and it turns into $500 million in revenue, like you pretty much exceeded expectations. So like, how important is that?

• 1:02:56Speaker 03

  So there's a really great book. It's, it's out there. It's called The Way of the Superior Man by David Data.

• 1:03:03Anthony Pompliano?

  Okay. The Way of the Superior Man?

• 1:03:05Speaker 03

  Yeah. It's, I mean, just as a disclaimer, it's like very graphic, very sexual, pretty misogynistic. But, but there's some good content in there. It's really good. One of the things that he talks about is purpose.

• 1:03:20Anthony Pompliano?

  Okay.

• 1:03:20Speaker 03

  Living with purpose. He talks about, about men in particular. I think he's wrong that it's just like really a men thing. I think it's men and women, but

• 1:03:29Speaker 03

  men with purpose, right? And one of, one of the images in the book is like this idea that your purpose is like peeling back an onion. And so you might be on purpose. Like my first purpose was like, I'm going to prove that I can start a hobby business and not raise outside capital. Chip on my shoulder. And then you get to a point where you're like, okay, that's done. What's next? And it's like, oh, here's another purpose inside of it. And for, for me with ButcherBox, like ButcherBox has always revealed like another deeper, more important, maybe not more important, but deeper purpose for me to be going for. So it went from like, build a hobby business to build a huge company that I can make money to like,

• 1:04:12Speaker 03

  okay, like, I guess I'm just supposed to go try to transform meat, which seems like a really big undertaking. And I think that, you know,

• 1:04:24Speaker 03

  Oftentimes, people, they want to think about this like purpose way out in the future. Like, this is what I'm looking for, rather than like peeling back one piece of that onion. You know, one of the things David Data says is like, if you need to pee, your purpose is like, you need to go to the bathroom, like, you need to be on mission to go to the bathroom. Okay, great, you've gone to the bathroom, what's your next like purpose in life? And thinking about that, like, some purposes can be really fast, some purposes can take years, but being on purpose, living on purpose, is far better, at least for me, than the alternative and not knowing where you're going.

• 1:05:01Anthony Pompliano?

  This is fascinating because Ranjai Gulati, who's a Harvard Business Professor, has a whole book, podcast, etc., around purpose. They went and did a big study. Companies that have a clear purpose drastically outperform businesses that don't. Then if you read Robert Greene, many of his different books, but something like Mastery, he talks a lot about life's task, right? Like, what, like, you gotta figure out what that is, and then you're off to the races. If you then go and you look at maybe somebody like, so you have Ranjai, you've got Robert, maybe you could even look at somebody like Vivek Ramaswamy, I don't know if you've seen him, Strive Asset Management.

• 1:05:42Anthony Pompliano?

  All of these C-suites and Board of Directors, etc., are becoming very like ESG-centric and all this stuff, and he basically shows up and he's like, listen, the purpose of this business is to make fucking money, right? And so like, cool, I get that other shareholders want you to do other things that aren't actually what makes us money as shareholders, but like, here's my letter to the board, go make money. And his whole thing is like, you can't serve, you know, five different masters as a purpose, like, you have to have one, and is it to make money, or is it not, whatever? And so like, there are these different data points throughout, I think, business and society in general, around purpose. But most of them are talking about purpose as like a singular thing. What you're talking about here is like, the purpose can almost evolve.

• 1:06:23Speaker 03

  Yep.

• 1:06:24Anthony Pompliano?

  And in some way, your purpose got bigger. And I wonder how much of that is like, you gained confidence because you're like, oh, the business is bigger. Oh, there's more profit. Like, like, I actually have the potential to do more. Whereas if, you know, if you're sitting there Memorial Day weekend, you're like, I'm gonna change the meat industry. The intern might not even come work with you. Right? And so like, how much of it is like, the success of the business almost gives you more confidence to like, can I go a step further?

• 1:06:50Speaker 03

  Yeah, it gives you like, permission to say, uh, my purpose is bigger.

• 1:06:54Anthony Pompliano?

  Yeah.

• 1:06:54Speaker 03

  Uh, yeah, so I, um, you know, going back to the very beginning, I definitely started searching for grass-fed beef because I thought it was a much better option environmentally for the animal, for the end consumer, et cetera. And so I guess right from the start, I, I knew that the industry was broken and needed to be fixed. I just guess I didn't think that I would actually make a dent in a massive, super entrenched industry. Uh, but that's changing. Like, that's actually literally changing.

• 1:07:24Anthony Pompliano?

  How big are the other companies? Like the Cargill's or whatever?

• 1:07:27Speaker 03

  I mean, Cargill's a hundred, hundred and twenty-five billion dollar privately held company.

• 1:07:32Anthony Pompliano?

  Hundred and twenty-five billion?

• 1:07:32Speaker 03

  But they do a lot of ag.

• 1:07:34Anthony Pompliano?

  Like valuation or revenue?

• 1:07:36Speaker 03

  Revenue.

• 1:07:36Anthony Pompliano?

  Jesus.

• 1:07:37Speaker 03

  They're the largest or second largest privately held company in the world. They're friggin' massive.

• 1:07:41Anthony Pompliano?

  How big do you think their meat business is?

• 1:07:44Speaker 03

  I mean, meat is a multi-hundred billion dollar industry in the United States.

• 1:07:47Anthony Pompliano?

  Yeah.

• 1:07:47Speaker 03

  Just in the United States.

• 1:07:48Anthony Pompliano?

  But like, the lar- is Cargill the largest?

• 1:07:51Speaker 03

  Uh, there's the big five. So Tyson, National Beef, JBS, um, Cargill, and I'm forgetting one of them.

• 1:08:00Anthony Pompliano?

  I'm sure there's nice people that work on all of those.

• 1:08:01Speaker 03

  Oh, totally.

• 1:08:02Anthony Pompliano?

  When Texas Slim came on the show, he said a lot of nasty things about all of them. Not about the people, but about, uh, the way the businesses are run, all these, these issues that you're talking about. So when you think about five hundred million dollars of revenue.

• 1:08:16Speaker 03

  Yep.

• 1:08:17Anthony Pompliano?

  Does that make you a top ten, uh, player? A top fifty, a top hundred?

• 1:08:23Speaker 03

  Like, I mean, certainly top hundred. Um, I, I don't know about top fifty, but when, when, okay, so the, the, the industry is, um,

• 1:08:32Speaker 03

  So grass-fed beef is 2% of the overall beef consumed in the United States.

• 1:08:36Anthony Pompliano?

  Okay.

• 1:08:36Speaker 03

  2% out of 100%, right? So it's tiny. And then that is pretty much the case for the other species, like at the level that we're doing. So we do humanly raised antibiotic and hormone-free pigs, and we do free-range organic chicken, and we have a whole bunch of wild-caught seafood and all this other stuff. But each of those markets are tiny compared to the conventional market.

• 1:08:57Anthony Pompliano?

  Mm-hmm.

• 1:08:57Speaker 03

  Right? And so we are a big portion of the claims-based market, as we call it.

• 1:09:08Anthony Pompliano?

  What does that mean?

• 1:09:09Speaker 03

  Claims-based? It's like, so meat with claims. So

• 1:09:13Anthony Pompliano?

  Got it.

• 1:09:13Speaker 03

  Grass-fed beef, or antibiotic hormone-free, or pasture-raised, or non-GMO, or whatever those like claims are. That's just an easy way of saying like, meat raised better. So we are a very, a large portion of the meat-raised-better market, but it's still like 2% of the overall market.

• 1:09:32Anthony Pompliano?

  Mm-hmm.

• 1:09:33Speaker 03

  So the people who are really big in this space are the ones that are like using confined feeding operations, using massive feedlots, using massive chicken houses, like all the stuff that you see the undercover videos for. That is how most animals in this country are raised.

• 1:09:53Anthony Pompliano?

  I got a lot of questions about this.

• 1:09:54Speaker 03

  Great.

• 1:09:54Anthony Pompliano?

  First is, are they playing both sides? Are they like, any one of the big five? Are they like, oh, so here's like the regular stuff? And then, oh, by the way, we also have grass-fed.

• 1:10:03Speaker 03

  Well, this is what's

• 1:10:03Anthony Pompliano?

  Trying to play the game?

• 1:10:04Speaker 03

  This is what's interesting is like, so

• 1:10:08Speaker 03

  most of those large companies have not really built out any programs, any like grass-fed programs or claims-based programs, because they don't believe that there's a market.

• 1:10:19Anthony Pompliano?

  Interesting.

• 1:10:19Speaker 03

  However, watching us, and now that we're like a little more open about our revenues, like watching us Literally us, they're like, oh, wow, there is a market here. And so we're actually getting like reached out to by those large companies being like, do you want to partner with us? Like, would you be, if we raised animals to this standard, would you be a buyer? Which is fascinating, it's like.

• 1:10:42Anthony Pompliano?

  Would you?

• 1:10:43Speaker 03

  Yeah.

• 1:10:44Anthony Pompliano?

  If it met the standard?

• 1:10:45Speaker 03

  Yeah, because we'd actually be changing the industry. You know, I was asked recently, like, what do you do? What would happen if we're like 10 years in the future and these big companies like all partner with you and they all build out their own programs? And now they're bigger than you and they've like squeezed you out and you go out of business? And I'm like, I don't know, if I could get all those companies to like actually change their practices and do things the right way, like I think I've acted like I've done my mission, like I did it, like, that's fine, put me out of business, like, whatever. I'm sure I'll figure out something else to do, so.

• 1:11:16Anthony Pompliano?

  Start another hobby.

• 1:11:17Speaker 03

  It's okay, I'll start another hobby, it's fine. So I just, I'm, I'm really encouraged by, you know, we like to work with two types. We like to work directly with small farmers and help them to like grow their business, which takes capital, it takes us cutting purchase orders, saying like, hey, if you raise your animals to the standard, we will purchase from you. And we're also really interested in talking to big companies and helping them to like figure out how they can like actually do this at scale. And if we have to be the anchor tenant for them to scale a program, like we're.

• 1:11:51Anthony Pompliano?

  How do you make sure that they actually meet the standard? Like, it sounds dumb, but like, you can't talk to the meat.

• 1:11:56Speaker 03

  You know, interestingly.

• 1:11:57Anthony Pompliano?

  Like, how do you, how do you make sure?

• 1:11:59Speaker 03

  Interestingly, so there's a whole bunch of third party stuff you do, especially around the humane certification stuff. So all of our stuff is like certified humane, you need to like make sure that it's raised to the right standard. There's a few certified humane certification agencies. Antibiotics and hormones are an affidavit, it's written, there's no test. So you can say like, yep, wasn't fed a hormone, wasn't fed an antibiotic.

• 1:12:23Anthony Pompliano?

  Does that need to change? Like, do you think that they should have a test?

• 1:12:25Speaker 03

  We've talked about like random sampling our, our product. But what I was gonna say is interestingly, like. Unfortunately, oftentimes it's the smaller players who get in trouble, who start cutting corners. It's rarely the large players because they just have too much to lose. And I know like you look at big ag and you look at the way they treated animals and maybe that sounds backwards, like that sounds like, you know, I'm giving them a pass and like, but if you're, if they're, if they're going to sign their name on something that says this animal was treated this way, the bigger you are, the more you have to lose. Right. And so I've unfortunately, and we've worked with these people, like, we've definitely had stories of farmers, like their herd gets sick.

• 1:13:10Speaker 03

  Right. And you, you got to understand when you're a farmer and you're raising 50 head of cattle and you got a loan and you're raising them to a grass fed standard and they get sick and so you give them an antibiotic to like, keep the cow alive. But now they're not supposed to be in the program anymore because they were fed an antibiotic and we're never ever antibiotics. So what, what do they do? Sometimes they are forced to lie.

• 1:13:34Anthony Pompliano?

  Yeah.

• 1:13:35Speaker 03

  And I'm not saying that that's like a huge thing in our business, but it's definitely, yeah, yeah. So, so there's, you have to do careful monitoring of everybody. What they're doing. And I, and I think we can do a much better job of this, uh, using technology, which is really nascent. Everything's done on paper. It's a huge industry where like millions of heads of different animals trade hands and it's all done on paper.

• 1:14:02Anthony Pompliano?

  I mean, what's crazy about this is like,

• 1:14:06Anthony Pompliano?

  ancient Rome, right? Like people were literally trading livestock, doing all this stuff. And like, sure, we have like, I don't know, maybe printed paper, right? But like, like not that much has changed from like the pure like transactions. Now people laugh, they go, all this other stuff's changed, whatever. But like, yeah, the basic idea of you're going to raise an animal and you're going to sell it to somebody else. It's like still pretty archaic.

• 1:14:29Speaker 03

  Yeah, very. Um, and there's, there's really not a lot of tracking, not a lot of,

• 1:14:35Speaker 03

  There's not a lot of data going back and forth. There's not a lot of, you know, I think that there is, this area is ripe for disruption. First of all, the, so every cow starts out exactly the same. It's cow, calf for six months, and then it's a cow living on pasture for a year. And then after eight, so 18-month-old cow, you know, 98% of them go to a feedlot for the last six months. And the problem with a feedlot is when you're that farmer, who generally they buy the cow at six months old and raise it for a year. The problem with the feedlot is, the feedlot is gonna put corn into the cow and grow it to be as fat as possible in six months. Whatever the price of corn is, is gonna dictate what they're

• 1:15:17Speaker 03

  willing to pay that farmer. So the farmer is actually like, at the whim of the commodities market, and they're just trying to like, raise animals. And so, I mean, for years, the farmer has lost money on every herd that they put through their farm. Like, that, that person. Grass-fed is like, hey, don't sell to the feedlot, just keep it on grass. They could conceivably do it on their own grass, or they could like, that is, absolutely could be a program. The problem is that the farmer's loan is due from the bank. So they, in order to get the next herd, they have to pay off the first herd. And so they actually can't keep the animal for an additional six months, nine months, just eating grass, because they

• 1:15:58Speaker 03

  have to get another herd. And like, this is a problem that I think-

• 1:16:03Anthony Pompliano?

  How big are the loans?

• 1:16:04Speaker 03

  Oh, millions of dollars. Yeah. Cause if you have 50 head of cattle, you know, it's, or, I mean, that's a small herd. Yeah, you're talking about a couple thousand dollars per animal. They can be big.

• 1:16:15Anthony Pompliano?

  Yeah.

• 1:16:17Speaker 03

  And so, I, I actually think it's a really interesting application for like, Bitcoin or for, for crypto to like, cause there's, there's an increasing value of that animal as it goes along. And if you can like, marry all these subscribers that we have who want something raised differently, and you can marry that with like, this animal that, we just need to break it through that last stage, you could have something really special.

• 1:16:40Anthony Pompliano?

  Yeah. Is that something that you guys wanna actually do yourselves, lately?

• 1:16:43Speaker 03

  Yeah, or partner with somebody, yeah, for sure.

• 1:16:47Anthony Pompliano?

  And as you continue to do this, can you eat into, or do you have interest in eating into other parts of people's grocery bill? Or is it just meat?

• 1:16:54Speaker 03

  Uh, we've, we've, we've started eating into other parts of the grocery bill. So we ship frozen in the mail, and we really are looking at anything that is- Frozen. We've, we've moved.

• 1:17:06Anthony Pompliano?

  But not ice cream?

• 1:17:08Speaker 03

  Not ice cream. We do sell smoothies on our site. We are talking about doing dessert at some point. Ice cream's tough to keep frozen in the, in the mail.

• 1:17:15Anthony Pompliano?

  Okay.

• 1:17:16Speaker 03

  Um, which is why it wouldn't be like my first product. Um, we, uh, have an egg, like eggs, egg bites and butter coming out soon. We've moved into jerky. So we're like, we're doing kind of things in the periphery, but we haven't done like frozen vegetables.

• 1:17:34Anthony Pompliano?

  And is that because there's like a, a health angle to it? Or that's because like literally it's hard to keep frozen or something like that?

• 1:17:40Speaker 03

  Um, it's really a capacity at this point. Uh, we actually are, um, going to be doing, uh, pet treats this year.

• 1:17:50Anthony Pompliano?

  Hmm.

• 1:17:51Speaker 03

  Um, which is, has been highly sought after from our customers. And it is, it really helps balance the animal. It uses pieces of the animal that don't get eaten normally by humans. Um, so it, it helps us like balance kind of all the, all the cows we're using.

• 1:18:08Anthony Pompliano?

  So as you're like watching this continue to grow, you get increased confidence. Kind of, I just think of like, it's working, it's still working. Okay. Shit. Like maybe we have a business, right? You can do all kinds of crazy stuff, right? Like, like you have cash and you're not beholden to anyone. How do you evaluate what to do and what not to do?

• 1:18:28Speaker 03

  Yeah.

• 1:18:29Anthony Pompliano?

  How much of it is the customer? How much of it is like, we want to do this? Like, like we're excited about it? How much of it is like an economic decision? How much of it is something else? Like, like just what's the framework?

• 1:18:38Speaker 03

  Yeah, that's a, that's a good question. So I think, um, so we have a, we have a purpose and we have a mission. Our, our purpose is, uh, really more of a feeling and it's this idea of being able to confidently feed yourself and your family. Like something that you trust, right? That you put this, you put butcher box in front of yourself and you're like, I know that they went to the nth degree to like, make sure that this is the best possible quality, the best possible price. And they, they did all the vetting that I don't have time to do. The mission of the company is to transform meat. So when we, when we decided on moves to make or things to change, or like things to invest in,

• 1:19:19Speaker 03

  or money to give away to, we're really looking at that mission and that purpose and, and deciding like, does this help us transform meat?

• 1:19:28Speaker 03

  Or, you know, so that's like kind of the purpose, mission side. Or how does this help us be more sustainable so we can live for another year by helping us improve gross margin or improve like the fundamentals of our business? So we actually, last year, the past two years, we opened a dry ice facility. So we opened a dry ice facility in Oklahoma City and we're opening another one in Iowa. And the reason why we did dry ice was, first of all, the machines are comparatively cheap and they'll put you on like a five to seven year like zero percent down thing and you can depreciate the entire thing in year one. So that's like pretty good financially.

• 1:20:10Speaker 03

  And secondly, if we don't have dry ice, we can't ship a box. Like if we don't have bacon and you have bacon in your box, we can ship you the box and be like, sorry, we ran out of bacon, here's your box. But if we don't have dry ice, we can't ship. And so it was this critical bottleneck where we were really looking for like, what are the critical assets that might be hard to get in the future or that we'd want to control in the future?

• 1:20:36Anthony Pompliano?

  You think like the big meat players would like go squeeze you with the dry ice?

• 1:20:42Speaker 03

  Well, actually, dry ice got really squeezed over the past two years. It's been...

• 1:20:47Anthony Pompliano?

  Why?

• 1:20:48Speaker 03

  So at the beginning, during the pandemic, so dry ice is made from CO2. CO2 is generally a byproduct from manufacturing. The number one manufacturing thing that it's a byproduct from is ethanol. Because of the pandemic, nobody was driving their cars. There was a lot less gasoline being consumed, so there was a lot less ethanol being produced. So there was a lot less CO2 being produced. Then Coca-Cola and Anheuser-Busch and all these other guys were like trying to buy it all up. And so...

• 1:21:23Anthony Pompliano?

  Because they need dry ice too?

• 1:21:24Speaker 03

  They need CO2 for their drinks.

• 1:21:26Anthony Pompliano?

  Oh, got it.

• 1:21:27Speaker 03

  Right? So CO2 became like hard to get. And then all the dry ice, when the vaccines started shipping, they were all being shipped frozen and on dry ice. And so then there was just a huge, a huge influx of dry ice demand with like, small amounts of dry ice capacity. And so we were one of the few companies that shipped on dry ice that like, didn't really have a problem.

• 1:21:49Anthony Pompliano?

  Why didn't you have a problem?

• 1:21:51Speaker 03

  Because we controlled our own destiny. We had our own tanks. We had our own CO2. We had our own agreements with people already, like, when they put in the tanks that they were gonna fill them at some sort of interval. And so where some, some places, even in the facilities we were shipping out of, were like, we can't ship this week, we don't have dry ice. We just kept shipping. Because we were able to control our own destiny.

• 1:22:11Anthony Pompliano?

  What else are you scared of that somebody could like, take away from you?

• 1:22:14Speaker 03

  Oof.

• 1:22:16Anthony Pompliano?

  Like, what about the boxes? Those are plentiful?

• 1:22:20Speaker 03

  Uh, yeah, they're, I mean, we, we ship in a cardboard, a fully recyclable corrugated cardboard box. Um, let's see, what are we scared of that people could take away?

• 1:22:31Anthony Pompliano?

  Plastic bags?

• 1:22:32Speaker 03

  Well, one of the interesting, one of the interesting, uh, challenges that is going to come up, is California just passed this law, Prop 12, where, uh, it's an animal confinement, specifically pigs. And what that is going to require is for pigs to be raised differently, because California is a massive meat market. We helped to push Prop 12 forward, knowing that it was gonna hurt our supply in the short term.

• 1:23:04Anthony Pompliano?

  Okay.

• 1:23:04Speaker 03

  Because-

• 1:23:05Anthony Pompliano?

  Why did you do that?

• 1:23:06Speaker 03

  Uh, because it's just transforms the, it's like, it's where meat needs to go.

• 1:23:11Anthony Pompliano?

  Shoot yourself in the foot to-

• 1:23:12Speaker 03

  Yeah.

• 1:23:13Anthony Pompliano?

  Push the industry-

• 1:23:13Speaker 03

  Yeah. And, and so like, that's like, kind of, a window into how we would make a decision, like, should we support this? And it's like, if you thought about it, just like if, let's say we were publicly traded and we're like, well, that might mean that we're gonna reduce our gross margin and pork for the next five years is like the industry heals itself. You could see where you're like, yeah, let's, let's actually go on the other side. Let's like, let's, let's be against the regulations.

• 1:23:38Anthony Pompliano?

  Our shareholders may force us to.

• 1:23:39Speaker 03

  Yep, exactly. Like, because you have that fiduciary duty to your shareholders. If you are private, without outside investors, you can kind of be like, well, what's the right thing to do here? Well, we think ultimately, the reason why we started this company is because we think pigs should be treated better. So like, let's be on the other side of that.

• 1:23:59Anthony Pompliano?

  Yeah.

• 1:23:59Speaker 03

  Even if it hurts our supply in the short term.

• 1:24:01Anthony Pompliano?

  What's your day to day like? Like you, you plus your employees own 100% of this business. You sleep till like 11 o'clock in the morning?

• 1:24:08Speaker 03

  Yeah, just kick my feet up, relax.

• 1:24:12Anthony Pompliano?

  Like, what does like a, like a normal day look like?

• 1:24:14Speaker 03

  Totally. Um, okay. So I have three young girls. I have two six year olds and an eight year old. So my morning, usually I'm trying to get up before they get up because once they get up, it's, I'm like shorter to cook and preparing their lunches and doing all the other stuff. It's just chaos. Yeah. So if I can get up at like-

• 1:24:32Anthony Pompliano?

  I have a one year old and it's already chaos. Three girls, six and eight. Nah, I'm good.

• 1:24:36Speaker 03

  Yeah. So like, if I can get up with something like, like, like five, spend some time meditating, stretching, just like writing, writing in a journal. That's a good day. Doesn't always happen, but that's a good day. Then they get up and from six to 7:45, I am like on demand.

• 1:24:54Anthony Pompliano?

  Yeah. You're dead.

• 1:24:55Speaker 03

  Uh, yeah. Um, just every request possible getting thrown at me. And then they're off to school. And so I'm, I'm now trying to figure this out. We just opened an office. I'm trying to figure out like, what does my daily routine look like?

• 1:25:09Anthony Pompliano?

  You didn't have an office before.

• 1:25:10Speaker 03

  We shut down our office during the pandemic.

• 1:25:12Anthony Pompliano?

  Okay.

• 1:25:13Speaker 03

  And then we had a temporary space, but I wasn't going very much. And now we have like a permanent space that we have a long-term lease for.

• 1:25:19Anthony Pompliano?

  And you're like going.

• 1:25:19Speaker 03

  And now I'm going. Yeah. So I'm going to be going at least Tuesday, Wednesday, Thursday, going to the office. And then Monday, Friday, I might stay at home and just have like more thinking, walking, whatever. During the pandemic, I would just be taking phone calls and just walking laps of this pond near my house.

• 1:25:35Anthony Pompliano?

  Dude, it was the greatest thing ever.

• 1:25:36Speaker 03

  I know. It was amazing.

• 1:25:37Anthony Pompliano?

  Like, I don't know why. I enjoyed it so much, but the ability to like do the call and no one judged you for like being outside.

• 1:25:47Speaker 03

  Yeah.

• 1:25:47Anthony Pompliano?

  Was amazing.

• 1:25:48Speaker 03

  Yeah. I still do that. I can't stand being on Zoom or Teams or whatever. And I try as much as possible to just like be in person or be outside.

• 1:25:57Anthony Pompliano?

  I banned Teams in one of our companies.

• 1:25:59Speaker 03

  Good for you.

• 1:25:59Anthony Pompliano?

  I was just like, look, it's too hard in the calendar invites. There's no phone number to call in easily. So I'm out.

• 1:26:06Speaker 03

  Yeah, I'm out.

• 1:26:08Anthony Pompliano?

  All right. So what time do you go to the office?

• 1:26:09Speaker 03

  Uh, so yeah, so I work out with a trainer Monday, Wednesday, Friday. Um, if I, if I'm doing that.

• 1:26:15Anthony Pompliano?

  What do you do in the gym?

• 1:26:17Speaker 03

  So I work out with my old CrossFit coach and we do both boxing, which I'm really bad at, but learning quick and just like strength training.

• 1:26:27Anthony Pompliano?

  Okay.

• 1:26:28Speaker 03

  Just try to like beat myself up.

• 1:26:30Anthony Pompliano?

  Do you do that in the morning?

• 1:26:31Speaker 03

  Yeah, do that in the morning.

• 1:26:32Anthony Pompliano?

  Okay.

• 1:26:32Speaker 03

  Three times a week. And then on the off days, I'm usually doing some sort of like cardio, whether it's a run or in Boston, Harvard University has a really old stadium, looks like the Coliseum, and you can do the stadium where you like walk up the stairs and walk down, which I try to do several times a week.

• 1:26:49Anthony Pompliano?

  I, I played football at Harvard, not going to Harvard, against Harvard. And I remember just being like, holy shit, this place is like different. There's no other stadium in all of college football like that.

• 1:27:02Speaker 03

  Yeah, it's really cool.

• 1:27:02Anthony Pompliano?

  Yeah. Okay. So you go to the office nine thirty?

• 1:27:06Speaker 03

  I would say like nine. I try to be home in time for dinner.

• 1:27:11Anthony Pompliano?

  Okay.

• 1:27:12Speaker 03

  Dinner's usually like 5:15 at our house.

• 1:27:14Anthony Pompliano?

  Okay.

• 1:27:15Speaker 03

  I have an away message on my, well, it's like in my, the footer of my emails that says that I try to be off the grid between 5:00 PM and 8:00 PM.

• 1:27:26Anthony Pompliano?

  Okay.

• 1:27:26Speaker 03

  And then sometimes I get back on to check emails. But like, if I kind of, if I reach out to you, it doesn't mean you have to reach out back out to me. Just like, it's just when I do my work. So I try to be like, kind of present between five and eight, just to be like with the girls and enjoy that.

• 1:27:45Anthony Pompliano?

  What do you do during the day? Like, so you're there from nine to five, let's call it. What are you doing?

• 1:27:50Speaker 03

  Mostly meetings. So I have an executive team that I work with and then I have other projects that I'm working on. The innovation bucket goes up through me because I really love that stuff. And I try to make a lot of time for like ad hoc stuff, especially now that there's an office, like quick 15 minute, like, hey, let's talk about this or let's do this. And then I just spend a bunch of time trying to get the word out about what we're doing, whether it's being on podcast or writing or just trying to like push it forward. But, you know, I would, I would say it comes and goes, like productivity for me comes and goes in waves. Like, I don't think right now I'm nearly as optimized as I have been on the productivity front. I think I've got some work to do to like.

• 1:28:34Anthony Pompliano?

  What's the biggest thing that you're like, I know I'm doing this, but like, I gotta change this.

• 1:28:42Anthony Pompliano?

  Whatever you just.

• 1:28:43Speaker 03

  Browsing TikTok.

• 1:28:44Anthony Pompliano?

  I was gonna say, whatever you just thought.

• 1:28:47Speaker 03

  No, or even like.

• 1:28:48Anthony Pompliano?

  TikTok?

• 1:28:49Speaker 03

  Just like, or even Twitter. I mean, it's like, um, I don't know. There, when the pandemic first hit, my social media, um, like, usage went way up. And there was a time where it really felt like I was like, like, working because I need, like, all this information was flowing. It's just like, I, I need to be doing this and it now just feels a little bit more like a luxury and not like necessarily like as much work.

• 1:29:18Speaker 03

  The other thing is, so there's this, I learned from this great CEO, uh, he has like a rule of 10, which is that he will only allow himself to do 10 things at any given time. And he writes them down, only 10. And so I've started reinstituting that. I've done that at other times in my, in my career as well, where it's like, okay, here are the 10 things I'm willing to work on. And, you know, so one for me is leading leaders, which means like I have an executive team and I need to lead my executive team. So like, what are the initiatives that I'm doing this week on that? Or thought leadership, like, what are the initiatives I'm doing on that? And so I think when I'm not in the space, then I can just have this big to do list and it's like, okay, it all seems important.

• 1:30:03Speaker 03

  And I don't know what to like work on first. And I think prioritizing especially.

• 1:30:10Speaker 03

  Especially like when things are tougher, prioritizing is a really good thing to do.

• 1:30:15Anthony Pompliano?

  Yeah. This episode is brought to you by Amber Data. If you're a financial institution entering the digital asset class, you'll need access to granular on-chain and market data from multiple venues to power research, trading, risk management, and compliance. Amber Data delivers comprehensive data and insights into blockchain networks, crypto markets, and decentralized finance, empowering financial institutions to apply traditional finance methods to digital assets. Amber Data eliminates the infrastructure setup, integrated challenges, and maintenance headaches to access digital assets data, reducing cost and time to market to enter the digital asset class. Learn more and download their digital asset data guide at www.amberdata.io/pomp. Again, that's amberdata.io/pomp.

• 1:31:00Anthony Pompliano?

  Go check them out today. This episode is brought to you by LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of liquidity, and they have 100% uptime track record through all the volatility spikes. LMAX Group's liquidity relationships and ultra-low latency technology means that LMAX Digital is the market-leading solution for institutions across crypto trading and custodial services. LMAX Digital: secure, liquid, and trusted. Go learn more at lmaxdigital.com/pomp. Again, that's lmaxdigital.com/pomp. I recently read The Practice of Groundedness, this guy Brad Stolberg. And one of the things he talks about is like, we live in the state of hyper alertness, right? Because, and he even says like,

• 1:31:44Anthony Pompliano?

  that used to be a really important thing because like, you didn't get killed by the predator. But like now, hyper alertedness is something that like, our ancestors could have never imagined. We're just like touching an electronic every five seconds. And he's like, and somehow as a society, we've convinced ourselves that the more notifications you get, or the more emails, the more whatever, like, the more important you are. And he's like, actually, the people who like really win the game are like the people who are like, that's bullshit.

• 1:32:09Speaker 03

  Yeah.

• 1:32:09Anthony Pompliano?

  And like, how do you separate? But to your point, I got a lot of friends who run a lot of different types of companies. And the people who I think make the best decisions are, it's not all the time, but like maybe once a week, maybe half a day, whatever they can do, they can step back and just be like, where are we going? Are we like going in the right direction? Am I like doing the things that I need to unlock the team, the product, whatever? And like, It's counterintuitive, but like, I think people are waking up to just how important it is.

• 1:32:36Speaker 03

  Yeah, yeah, I didn't mention this, but I have tried not to work every Friday since I started the company.

• 1:32:44Anthony Pompliano?

  Really?

• 1:32:45Speaker 03

  Yeah, it started as like a way that I was gonna hang out with my girls, uh, cause my, my daughter was five months old when I started. But now they're in school and I'm kinda like, I don't think I wanna like, just load myself up with meetings. And so it's my thinking day, like it's the day that I'm able to like really process things, put things together like, you know, and when I'm with the girls, it's like I'm painting with them or I'm like playing with blocks. So I'm like being childlike and also thinking and I think, I think it's important when you're a CEO or when you're starting a company, I think it's important to give yourself time to think. Because you don't need to be scheduled up to the gills and you will be if you don't protect your time.

• 1:33:28Speaker 03

  Like, it's just the nature of the beast.

• 1:33:31Anthony Pompliano?

  Friday, I do a very similar thing, but I call it output day. And I try to do no meetings or calls. It's like nothing that's like coming inbound. And it's just like, I know when I get to the end of the week, there's a bunch of shit I didn't do yet. And it's like, I can just mow through it and sometimes it takes me all day. Sometimes it takes four hours, whatever. But I can focus on the things I think are most important, right?

• 1:33:51Anthony Pompliano?

  And what I found is it's great because like mentally you go into the day thinking very differently. And now I violate the rule all the time, but like for the most part, try to do it. But the first four days of the week, get fucking loaded up.

• 1:34:04Speaker 03

  Yeah.

• 1:34:04Anthony Pompliano?

  And so like, I've always gone back and forth on like, should I actually have that dedicated day? Where it really puts more stress on the other four days because I know that I'm not gonna have any of the meetings or calls on Friday? Or would you be better off kinda like spreading it across five days? And I, I don't know what the answer is, but then I also have a friend who now Thursdays, he's doing something similar. Like dude, come on, like, like line up the days, right? So then like if I need so I can call you. And so it's like funny because I think again, it's, it's some of it's thinking, but also some of it is just like, if you're in meetings all day, like you don't, I'd laugh all the time, like I don't do my email.

• 1:34:40Speaker 03

  Right.

• 1:34:41Anthony Pompliano?

  And then you're like, shit, it's, you know, five, six o'clock and you're like, I have, you know, X number of email that I have to go do. And you feel like you didn't do anything all day, right? But you're like, I've been in meetings and now I have to do this. And if you don't answer, then you know, people get blocked or whatever. Like it gets complex pretty quickly. If you don't have a good plan, I think to kind of take on responsibility.

• 1:35:00Speaker 03

  Yeah. And I think that we actually do this poorly as a company as well. Like I think, um, so we're about, we're over 200 people now. And, um, I think as you grow as a company, you don't necessarily prioritize like efficiency. And so I hear all the time about people just in meeting after meeting after meeting. And they're like, when, when do I have time to actually sit down and think, do any work? And it's like, what responsibility do we have as a company to like, help people navigate that? You know, I know what like works for me, but I need to like, kind of bring solutions to a larger organization. It's one of the things I, well, we really want to work on for next year is like, uh, efficiency.

• 1:35:41Speaker 03

  Cause there's just too many meetings with too many people who don't need to be there, who are just wasting time.

• 1:35:47Anthony Pompliano?

  The executives, um, how many of them were previously executives somewhere else versus like this? The first time they've been an executive. It's like split.

• 1:35:56Speaker 03

  Uh, most of them have been an exec. At this point, most of them have been an executive somewhere else.

• 1:36:00Anthony Pompliano?

  Okay. And your relationship with them are like, are you doing like one on ones and like weekly check-ins and all that type of stuff? Or are you just meeting with them as like an executive team together? Like, how does that work?

• 1:36:10Speaker 03

  Both. So we meet as an executive team once a week. Um, and then I do one on ones. It depends on like how long I've been working with you for. We have a new CMO and a new CFO who I'm meeting with at least once a week. Um, but then for some people who I've been with for a long time, it could be every other week or something like that. Yeah. It's really just making sure that we're coordinated. Like, are we in sync? Are we coordinated? Do I know what's happening?

• 1:36:37Anthony Pompliano?

  Explain that more because I think this is something I see, even I do it, but a lot of, uh, first time founders. They'll set up meetings because they want information. And it's like, this is an information meeting. This is not like an action, you know, we're not getting an action coming out of this meeting. And some of them, maybe like the async type communication companies have gotten really good at like, oh, there's this doc and like, I can just go there and see it and not have to bother anyone. But like, definitely the company's in office. I still see it all the time where people like set up a meeting and it's like, okay, tell me what you're working on or tell me what's going on.

• 1:37:10Speaker 03

  Right.

• 1:37:11Anthony Pompliano?

  And maybe they have an obstacle or a problem that needs to be solved, but for the most part, it's like literally one person transferring information to another person.

• 1:37:17Speaker 03

  Yeah.

• 1:37:17Anthony Pompliano?

  Like, have you solved avoiding that or not really?

• 1:37:20Speaker 03

  Yeah, well, I think the best solution for that problem is Yvon Chouinard, who's the Patagonia founder, had this thing called the 15-5, sometimes called the 5-15. But basically, it's a weekly update that you have your executive team or whoever is in your direct line, takes, it's supposed to take them 15 minutes to write and you five minutes to read. The biggest thing you have to work on is making sure it's only 15 minutes because sometimes people like write a whole book and you're like, dude, no, it's 15 minutes, like set a timer. But, you know, it basically is a list of like, here are all the things that are happening. Here are the bottlenecks, like here's what I need your help on, and they do it every week.

• 1:38:02Speaker 03

  And so Yvon Chouinard and his book, Let My People Go Surfing, or I think that's what it's called, that's what it was all about, is like, the only way that I can go surfing and my staff can go surfing is if we have a common understanding of like, here's how you're going to report upon your work, here's what's going to happen, you know, like, that has worked. I don't use that with my executive team now because the kind of people do that ad hoc. Like, I don't feel like I need to have like a structured 15-5, but that has worked in the past at this company and my previous company.

• 1:38:36Anthony Pompliano?

  So. I get weekly reports from, I don't know, a number of different people about different things. And what I've found is like, it's helpful for me because I obviously get the information, whatever. It's more helpful for them.

• 1:38:49Speaker 03

  Yes.

• 1:38:49Anthony Pompliano?

  Because it helps them. They have to sit down, they have to write like, hey, here's what's going on.

• 1:38:52Speaker 03

  Yeah, totally.

• 1:38:53Anthony Pompliano?

  And some of them are like, it's mutually beneficial. And then sometimes I literally tell them, I'm like, by the way, like, I met with you on Wednesday. I know what's going on for the most part. I'm gonna meet with you next Wednesday.

• 1:39:03Speaker 03

  Right.

• 1:39:03Anthony Pompliano?

  Like, write it down because you're gonna come up with, here's the problem, here's two potential solutions. And what I've noticed is the best people who do it, they don't do it in 15 minutes. So maybe that's something we should work on. But the specificity.

• 1:39:16Speaker 03

  Yeah.

• 1:39:16Anthony Pompliano?

  Right? Like, you can go back and you can look week after week after week. And it's like, it started out and it was like, things are great. Right? And then it's like, you know, X thing shipped. And then it becomes like, an actual metric that moves week over week progress. Like, you can literally see the improvement. And it just clarifies thinking.

• 1:39:33Speaker 03

  Yeah.

• 1:39:34Anthony Pompliano?

  Which I think is super important, right? So it's like, how do you get informed, but also if you can help clarify the thinking, your whole team's better?

• 1:39:40Speaker 03

  Yeah. Yeah. The other thing that we've worked hard on is our, our executive meetings, or our leadership team meetings, where I don't just want it to be, like, if I'm gonna meet with you, or if I'm gonna get an update from you, I don't want to then sit in the room with all these other people. And like, I know all the information. It's like, this isn't worth it to me. Like, you guys meet, I'll just, you know, do something else. So it's like, how do you get like, above and beyond just the update into like, what's really holding us back? What are the big decisions to be made? And how do we like, collectively think through that stuff?

• 1:40:11Anthony Pompliano?

  Mm hmm. I won't do the update meetings, like, in a group, because I get, it's just like, becomes a clusterfuck.

• 1:40:18Speaker 03

  Yeah.

• 1:40:19Anthony Pompliano?

  Right? But the other thing too, yeah, it's boring, but also, I always want like, an agenda beforehand. And I know, I know people get annoyed, but I'm like, listen, like, again, the agenda, and I'm almost like, a little OCD about it. I'm like, well, we're supposed to go to this next point. Like, why are we going over here? And what I've found is that like, the process is so important, if you want to be able to not be in the meeting at some point, like, you know it's being run correctly. And the single biggest unlock, I think I've ever taught any of the different teams, how to take notes. Like it's like so stupid, right? But like every team I've ever worked with, whether I'm

• 1:41:03Anthony Pompliano?

  an investor, whether I start the company, whether I'm like brought in to help or whatever. If you have a 10 people or six people or whatever in the meeting and nobody takes notes, I'm like, hey, you should just take notes and just email to everyone afterwards. And it's like so stupid, but then what you realize is like everyone's like, oh, that's really valuable.

• 1:41:20Speaker 03

  Yeah.

• 1:41:21Anthony Pompliano?

  And it's same thing like another one is in the investor updates. It's all founders. I'm like, listen, just put a section that says how you can help. And if there's nothing to help, let's say no asks, right? But like investors are stupid and they scroll through and if they don't see that, they don't know.

• 1:41:36Speaker 03

  Right.

• 1:41:37Anthony Pompliano?

  And they're not gonna do anything. They might not even respond.

• 1:41:39Speaker 03

  Yeah.

• 1:41:40Anthony Pompliano?

  The last thing I want to talk about is investors. You had VCs, now you don't.

• 1:41:44Speaker 03

  Yes.

• 1:41:45Anthony Pompliano?

  What, what, why not? What is your evaluation?

• 1:41:48Speaker 03

  Yeah, I mean.

• 1:41:49Anthony Pompliano?

  You almost dated them again, but then didn't.

• 1:41:50Speaker 03

  Yeah, I didn't.

• 1:41:53Anthony Pompliano?

  So to the altar.

• 1:41:54Speaker 03

  Yeah, got super close to the altar.

• 1:41:59Speaker 03

  Well, first of all, I think like, I think venture capital is really important for certain businesses. Like if you're doing deep tech stuff or, you know, building hardware, like there's a lot of businesses where it makes sense to go raise money. It's also a great way to learn. If you're a young founder and you don't know what you're doing, and if you can get people to give you money to like go learn on their dime, that's awesome. Just know what you're signing up for. And what you're signing up for is like you're on the venture capital train and you, you don't call the shots anymore. Like you have a boss. And so a lot of people like, it goes back to kind of like, what kind of lifestyle do you want? They get into a business because they're sick of working

• 1:42:41Speaker 03

  for somebody else. They, you know, work on it for a little bit and then are like, well, people are raising money on Shark Tank, so I should raise money. And then they go and raise money and then they get diluted. And then they're, they are not performing and their investors are mad at them and are up their ass and they're like, I'm now working for someone else that's just an investor. I didn't raise money, plain and simple, because my first company failed. And I was like, I'm just gonna do a hobby business. And like, I don't need to raise money for a hobby business. And then it got bigger and it was like, well, I just don't think, you know, we're growing this business. I don't think venture capital is gonna help much.

• 1:43:20Anthony Pompliano?

  You didn't have money problems at that point?

• 1:43:22Speaker 03

  Yeah, we've always had money problems, but I have felt like the money problems have kept us sharper.

• 1:43:29Anthony Pompliano?

  Okay.

• 1:43:29Speaker 03

  And so, you know, as I was saying before, like, our, our whole marketing strategy was born out of not having money. If we had money, we would have, we probably wouldn't have found influencers. We probably would have just like, started roasting through money on Facebook, like every other box subscription company did. And so, it really, like, that, like, the decision to not raise money really shaped the company that we have. And I'm so glad that we didn't, because if we had, I don't think we'd be here anymore. I think we, when Blue Apron went public and started trading really poorly right after going public, all the capital for box subscription companies just dried up immediately.

• 1:44:11Speaker 03

  And so if you were one of these businesses that was running like, unprofitably and like, just hoping for the next VC round, once, once that hit, you were, you were done. And so like, I'm an LP in several venture capital funds. I like, am an angel in a bunch of deals. Like, I, I'm cool with people raising money and I think, you know, you find the right funds, you can have huge returns. And if you find the right companies, it can be great. But I think, I just, it feels like entrepreneurship has become a lot hotter of a space in the past 10 years. And I think some of the things that people believe about entrepreneurship are just not true.

• 1:44:54Speaker 03

  Like, you have to raise money in order to be successful. That's not true. You can build an amazing business. I know lots of people who have bootstrapped boring businesses that are crushing it. And like, I, I just think that that's not really taught as an option. Another one is like, lifestyle design. Like I was saying before, it's like, as an entrepreneur, you get to choose the lifestyle that you wanna have. And this whole idea that you need to like, just be all about hustle culture and like, bust your ass 24/7, 365 is the only way to get ahead is like bullshit. It's like, I mean, I don't know. The first time I held my daughter, I was like, okay, I gotta like, reprioritize here. This is because my first company, I worked my ass off. I, you know, I was in every Saturday. I was like, working late. I was first one in, last one to leave,

• 1:45:38Speaker 03

  like, and it didn't work. Like it, all that, like, it didn't work. It's just like, no matter how hard I tried to push the boulder up the hill, the boulder wasn't going to go up the hill. In this business, I'm like, all right, you know, I'm gonna like, let go of that. I'm gonna hang out with my daughter. I'm gonna prioritize my health. I'm gonna like, do other things. And that's worked really well. And so I think like, I don't know, I just feel like the, the, the entrepreneurship as it's being taught right now is very much about like, you need to raise money and then you need to like, go bust your ass to like, make good on the people that invested in you. And I, I just, I think it's a road to like, anxiety and depression, which is unfortunately a reality with a lot of founders. It's a road

• 1:46:23Speaker 03

  to diluting yourself. And I, I just wish people would do a lot more consideration before they just go and raise money.

• 1:46:31Anthony Pompliano?

  Yeah. I think that there's a lot of people who are learning the lesson the hard way.

• 1:46:35Speaker 03

  Yeah.

• 1:46:36Anthony Pompliano?

  Uh, but also, um, one other aspect is when you said raise money and learn on other people's dime, I do think that especially young people, uh, they learn a lot from the right VCs. So there's plenty that are absolute idiots and everyone knows who those are for the most part. Um, but there is this idea of like, they, like, basically they're paying you to some degree. No, not really, but like, they're paying you to teach you. And so, uh, what's fascinating is that there's very few young founders who bootstrap. And I don't know why. And like, there are outlier examples or whatever, especially like 10, 20, 30 years ago. But like today, if you think of, I don't know, you and I probably could rattle off 10

• 1:47:18Anthony Pompliano?

  or 20 companies that we know that are bootstrapped. It's almost always the second or your third, fourth, fifth company. It's people who've cut their teeth. And I don't know if it's like, oh, I did the VC thing. So like, now I know not to do it for this type of business. I don't know if it's like, I learned how to build a business. And so like, on the third attempt, you know, now here we go. I don't know what it is. But it's always fascinating to me that like, a lot of young, you know, young twenties, let's call it, founders, they don't bootstrap. And is it because they're being told to go raise money? Or is it because like, there is something about having already run a business that makes you better suited to, to scale without the venture capital? I don't know.

• 1:47:55Speaker 03

  Yeah, that's a great insight. I mean, I do think that it's helpful. If you're young and starting out, and people are going to give you money, like, just take the money, you know?

• 1:48:07Speaker 03

  Just to understand what you're getting on to. You know, a lot of people will be like, oh, I'm gonna, I'm gonna raise money. But this is the last round I'm gonna do. It's like, that's not how this works. Like, once you're on the VC train, you're on the VC train.

• 1:48:19Anthony Pompliano?

  You're losing money every month. You're eventually gonna run out.

• 1:48:21Speaker 03

  Right.

• 1:48:22Anthony Pompliano?

  The other thing I've thought a lot about, if you, if you look at many founders, not all, like Zuck, it doesn't fit this, Bezos doesn't fit this, but there are, Elon Fitz, what I'm about to say, they have a small, like a single or a double. Then maybe they had like a double or a triple. And then they have some big thing. And maybe the fourth, fifth, sixth, whatever company. Every founder I've ever talked to is like, this is going to be $20 billion company. And you're like, I can go count how many there are out there. Like, there's just not that many $20 billion companies. So maybe, like, yes. But like, would founders be better off just saying, like, hey, I'm gonna go try to build a, you know, $100 million company. And along the way,

• 1:49:05Anthony Pompliano?

  if somebody wants to buy it for 30 million, I'm gonna sell it. I'm gonna put, you know, $10 million in my pocket. And like, I'm a fucking genius.

• 1:49:12Speaker 03

  Hard to do if you raise money.

• 1:49:15Anthony Pompliano?

  Exactly.

• 1:49:15Speaker 03

  Especially if you get into the As and the Bs. I mean, it's, it's hard to do. Because people, people give you money at high valuations. And then like, selling for $30 million is like, not really an option anymore. When you just did five on 20, or whatever. It's just. So and and forget to negotiate like that you get to make the call at the end of the day if you sell the company or not because sometimes the VCs are the ones making that call and they're like, no, hold on to it. And so, yeah, you you end up backing yourself into a corner pretty fast versus if you can keep it small, if you just do like a seed round, if you need money, or if you try to just bootstrap. It's an easier way to get that stand up single.

• 1:49:53Anthony Pompliano?

  Yeah, makes sense. Where can we send people to find you on the internet if they want to learn more? I feel like you're a wealth of knowledge when it comes to some of that

• 1:49:59Speaker 03

  stuff. Thank you. Okay, so they can follow me on Twitter, at Mike Salguero. And yeah, anyone can email me as well, [email protected].

• 1:50:11Anthony Pompliano?

  All right. Don't give out your phone number. Somebody recently did that. Said, yeah, call my office.

• 1:50:17Speaker 03

  Give me a call.

• 1:50:18Anthony Pompliano?

  I was like, no, please don't do that. All right. Thank you very much. I appreciate it. I think people really learned a lot from this. We'll do it again.

• 1:50:23Speaker 03

  Yeah, thanks for having me.

• 1:50:25Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io. My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75 of the world's best Bitcoin and crypto companies. Go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io. If you enjoyed today's episode, make sure you share it with your friends and I'll see you all for the next episode.