$200,000 of Grass-Fed Beef – AOTK182

Roy Morejon:

This episode of Art of the Kickstart is sponsored by BackerKit. BackerKit makes software that crowdfunding project creators use to survey backers, organize data, and manage orders for fulfillment by automating your operations and helping you print and ship faster. Plus, if you want to create and send surveys, offer add-ons, and pledge upgrades or begin accepting preorders, BackerKit makes it simple. Over 2,000 projects and four million backers have used BackerKit, including many of the projects featured on Art of the Kickstart. Ready to try BackerKit? Visit backerkit.com and sign up today.

Welcome to Art of the Kickstart, your source for crowdfunding campaign success. I’m your host, Roy Morejon, president of Command Partners, the top full-service crowdfunding marketing agency in the world. We have helped raise over $70 million for our clients since 2010. Each week, I’ll interview a crowdfunding success story, an inspirational entrepreneur or a business expert in order to help take your startup to the next level with crowdfunding.

Art of the Kickstart is honored to be sponsored by The Gadget Flow, a product discovery platform that helps you discover, save and buy awesome projects. The Gadget Flow is the ultimate buyer’s guide for cool luxury gadgets and creative gifts. To learn more, visit thegadgetflow.com. Let’s get on with the show. Welcome to another edition of Art of the Kickstart. Today I am joined by Mike Filbey with The ButcherBox. Mike, thank you so much for joining us.

Mike Filbey:

Thanks for having me, Roy.

Roy Morejon:

You guys crowdfunded a subscription-based, grass-fed beef delivery system last fall of 2015, overfunded your goal hundreds of percent, raised over $200,000. Tell our audience what the product’s all about and why you guys used crowdfunding.

Mike Filbey:

ButcherBox ships 100% grass-fed beef, organic chicken and pork in the mail. All the products are free of antibiotics and hormones, shipped right to your door nationally. We used Kickstarter because we wanted to not give away a bunch of equity, and then also test the market to see if there was in fact demand for a service like this. We quickly found out that there was. Since then it’s just been great.

Roy Morejon:

We’ve actually crowdfunded a subscription-based service before in the food delivery and it didn’t even come close to you guys. What was some of the secret sauce outside of the meat that led to your overall campaign success?

Mike Filbey:

I think a lot of it was the pre-selling that we did. One tool that was really useful for us was scraping our contacts on LinkedIn. There’s this free service, not sure if you’re familiar with it. Basically, LinkedIn can give you a CSV of all your LinkedIn contacts and their email address. Then me and my cofounder, his name is also Mike which gets terribly confusing, segmented each of our exports based on people who we’re super close with who also happen to be wealthy, and then everybody else. Then we had these email series go out 30 days before we launched telling people that we’re going to be launching a campaign on Kickstarter for ButcherBox and asking if they’ll basically put their name down to select one of those rewards.

Then we followed up with all those folks a week before Kickstarter launched and then the day we launched. I think that’s why we were, I think, 200% funded 30 hours in. We raised over $50,000 within 30 hours, I believe, by doing that pre-sell. It also ended up getting us featured as a project we love which, as you know, has a lot of benefits. That was really where it started. Then also the focusing a lot on the design. We made sure to get really high quality video done, as well as a lot of sexy images and probably spent two weeks writing and refining the copy on the page. My mom was the most valuable editor, though.

Roy Morejon:

Good to have moms onboard. Let’s jump back a little bit further and talk about where this all started. What’s the backstory between you and Mike and Mike getting together and kicking this thing off?

Mike Filbey:

Winding it back pretty far, I was working on a company a couple years ago called Canary where we helped people sell a house full of furniture and other stuff, kind of like Craigslist on steroids. Mike was advising me at the time and he was working at a … He was the CEO of a company called CustomMade, which is the largest website for anything custom. He’d been working on this idea for grass-fed beef shipped in the mail for a few months and he knew that I wasn’t super thrilled with where Canary was going and he wasn’t thrilled with where CustomMade was going, so, after a couple months of discussion, we ultimately decided to try it out. That started with Kickstarter. We were both super excited about it, we didn’t know how to run a campaign, but quickly found out that it was a lot of work. One of the best decisions I’ve made was to do this.

Roy Morejon:

Indeed. Give our audience an idea of why you chose Kickstarter over Indiegogo.

Mike Filbey:

It just seemed like there was a bigger audience on Kickstarter and that’s what the couple of experts we talked to recommended. Mid-way into our Kickstarter campaign we actually launched on Indiegogo, but we didn’t really promote the Indiegogo page whatsoever. They told us that they’d be helping us out with a lot of promotion internally on their side of things, but we didn’t really see it translate into many sales, and maybe that was just because we weren’t directing a lot of traffic there, we were directing it to our Kickstarter page because it had a lot of momentum. Basically just Kickstarter seemed to have a larger audience and we wanted to be on the platform that had the largest audience.

Roy Morejon:

Indeed. You mentioned running the campaign. Obviously you guys got your teeth cut on running your first campaign. What was the biggest challenge that you encountered when getting ready to launch the campaign?

Mike Filbey:

Biggest challenge; that’s a good question. I think it was just making time. We didn’t anticipate how much work it was going to be. We were working with a firm similar to yours, and that was extremely helpful, but without them I don’t think we could’ve done it because, once we got in the weeds, we were working into the wee hours of the morning and basically just maintaining our sanity. Staying focused was probably the biggest challenge because it turned out to be a lot more work than we anticipated. That’s why I’m real excited about the work you guys do because I think most people underestimate how much goes into running a campaign, especially one that’s wildly successful. If they want to take it seriously I think they need outside help.

Roy Morejon:

Indeed. That’s why we interview entrepreneurs like you, Mike, to help educate the audience on the amount of work that actually goes into not only launching a campaign, but making sure that it’s overly successful.

Mike Filbey:

Definitely.

Roy Morejon:

When you guys were determining what to offer in terms of rewards or meat, how did you guys go about setting the price or the packaging requirements? Since this is a little bit of a unique shipment, how did you guys go build about that process in terms of distributing meat across the United States?

Mike Filbey:

Regarding process, my partner Mike was the one who was involved in the pricing research. What he told me was that he just stood outside Whole Foods and talked to people about what they’d be willing to pay for a service that sent them seven to 10 pounds of grass-fed beef a month. It came out to $130 bucks, so $129 is where we started at. Then on Kickstarter we had a early bird $119 reward which quickly went. It was not a very scientific approach to pricing, but it seems to have worked really well.

Then, regarding the distribution side of things, in the earliest stages we brought on this guy named Ron who was running operations for Omaha Steaks for 25 years. He helped us make all the connections to get set up with a pick, pack and ship center. We work with one in Wisconsin, Madison, and all of our meat ships out of that center. He also just introduced us to a lot of folks in the meat space and gave us the credibility that we needed for this fulfillment center to say yes to taking on our business. In the meat industry it’s really who you know, so working with Ron over at Omaha Steaks was very helpful. He was looking for something to do. He was a little bored.

Roy Morejon:

Got to get him back on the saddle again, huh?

Mike Filbey:

Exactly.

Roy Morejon:

Nice. With all of the marketing efforts that you guys put forth on the Kickstarter campaign, what gave you guys the biggest ROI?

Mike Filbey:

That’s a good question. I honestly think it was getting selected as a project we love. I was looking at the stats before this call and that was responsible for 14% of our sales. Again, projects we love, I imagine most of you guys who are listening know what that is, but basically Kickstarter chooses projects that are trending in a upwards direction quickly and then decides to feature them whether it’s on the homepage or feature them within whatever category page, so, for us, food. Then they also put you in this 48 hour select newsletter, as well as some other newsletter.

That brought in $30,000 for us and we didn’t really have to do any work for that. We basically, hit the ground running and 2x’ed our goal within two days and they selected us as a project we love, and that was hugely valuable. Then we also leveraged that just to get more press because it was a credibility badge. I’d say that was the biggest thing. That started with all the pre-selling we did so that we could blow our goal out of the water right out of the gate and get Kickstarter’s attention.

Roy Morejon:

Getting a blessing from the Kickstarter gods is certainly a nice thing for the projects we love, but it goes even further than that in terms of what you mentioned. There’s a lot of things on the creativity side of the project itself, as well the overall design and the campaign itself to get that blessing. Definitely well-earned there.

Mike Filbey:

Roy Morejon:

For sure. One of the unique things about your campaign was also the fact that you guys started shipping within a month of the campaign closing. As you know, many companies aren’t able to ship for potentially more than a year, and I know you guys didn’t actually have to manufacture an actual project like most campaigns do. What else did you guys do ahead of time to ensure that you’d be able to ship so quickly?

Mike Filbey:

We didn’t really do anything. We had Ron, this dude from Omaha Steaks, make sure that it all went smoothly. We paid him a small sum, a little bigger than small, and he ensured that all the product was going to be ready in time. We were continuously updating him on how many orders were coming in and what we were gong to need so that we were able to ship on time. When it comes to meat and it comes to shipping on time just in general, I think it pays to work with people who really know their shit. Ron had been doing this for 25 years. For us to be able to only focus on signing up a bunch of customers and not worry as much about fulfillment was extremely valuable and I think largely the reason why we had such a great campaign.

Roy Morejon:

Go hire Ron if you need to ship meat.

Mike Filbey:

That’s the lesson. I’m sure that’s very applicable for you.

Roy Morejon:

There we go. Our audience, of course.

Mike Filbey:

Exactly.

Roy Morejon:

Now that your campaign’s been over for a year plus, what have you guys been up to since the campaign closed? How have you guys continued to grow your business exponentially?

Mike Filbey:

It’s been a combination of three things. The first is paid ads that we’ve been doing on Facebook and Google. We’re getting a good cost per acquisition there and it looks like there’s a large pool that we can continue to collect customers from. Of course you can be targeted on Facebook. Then the second thing is working with a lot of these influencers, so a lot of people in the paleo world, the food world, the wellness world who have really large email lists or big social followings and a lot of credibility in the space. They’ve been able to share a ButcherBox with their fans and sign up a lot of customers.

Then the third thing is our internal email list. We are laser focused on collecting as many email addresses as possible in a ethical way. We have an exit intent, popup, email capture. If you’re on a website and it notices that you’re trying to leave you’ll get hit with a email popup. That gets us a lot of emails. Then when you go through our checkout flow you do have to put in your email address. That’s a big source for us to get these email addresses. We really convert them well and very few people unsubscribe. It’s really those three things: paid ads, influencer marketing, and our internal email newsletter.

Roy Morejon:

You guys have just been killing it online lately. What’s next for you guys? Where are you headed next

Mike Filbey:

We want to be more than beef, chicken, and pork. We want to be your entire protein solution. For us that means moving into kinds of meat, such as lamb, as well as fish. We’re looking at introducing wild caught Alaskan salmon. We haven’t announced that yet, but that’s in the works. I know that a lot of our customers are very excited for that. We’re really just trying to grow the company as quickly as possible and stay laser focused on what’s work and … Every month is more fun than the last, so I’m happy.

Roy Morejon:

You got to have fun doing it, right, Mike?

Mike Filbey:

Definitely.

Roy Morejon:

What advice would you give to someone else looking to Kickstart, let’s say, their food-based product or subscription service? What one piece of advice would you give to them?

Mike Filbey:

On the food-based side? I think it’s really important that your page is very polished and that you paint yourself as a credible figure because people are putting this product in their mouth. It’s not a toy that they’re playing with, so you need to establish yourself as someone trustworthy for them to buy your product and ultimately feed it to their family or feed it to themselves. That’s why we largely invested in design and brand and showing our team members and our background to show that we’re the real deal, you can trust us. Then, on the subscription, on Kickstarter, you can’t, or at least you couldn’t when we were running our campaign, get people to opt into a recurring subscription.

What we had to do is we got this kid named [Nicky 00:15:01] Graham fresh out of college to come in and call all the people who had backed us on Kickstarter after our campaign closed and try to get them to opt into a recurring ButcherBox membership. We were able to get about 40% of people to commit to a monthly ButcherBox membership. These people are paying, on average, $150 a month. We were really happy with that. Just keep in that if you are launching our subscription service on Kickstarter, you are going to need to do follow-up, and you can probably hire some kid out of college and pay them $15 an hour and just hammer the phones. Of course, being polite. That certainly worked really well for us and that’s how we got our initial membership base.

Roy Morejon:

Awesome. This gets us into our launch round, Mike, where I’m going to rapid-fire a few questions at you. You good to go?

Mike Filbey:

I’m ready!

Roy Morejon:

What inspired you to be an entrepreneur?

Mike Filbey:

I think that everyone in this world is very different, and the idea that all of us can be happy working at a large corporation doesn’t really vibe with me. I felt like Kickstarter was a great vehicle to celebrate everyone’s individuality and also not have to deal with a lot of investors and just maintaining the control.

Roy Morejon:

If you could have a steak with any entrepreneur throughout history, who would it be?

Mike Filbey:

Great question. Besides you, I would say I think Tim Ferriss would be interesting just because he’s built such a strong personal brand and he has so much authority and he’s in the influencer space. I’d just be curious about how he did it. I guess Tim Ferriss.

Roy Morejon:

What would be your first question for Tim?

Mike Filbey:

Would you want to be a ButcherBox affiliate?

Roy Morejon:

Well played, sir. Any business books or life books that you’d recommend to our audience?

Mike Filbey:

Totally. The book that we largely use as our marketing bible is called Traction. It’s not the one that I know you like, Roy, it’s Traction by Justin Mares and, I believe it’s, Gabriel Weinberg. Basically it goes over the 19 different traction channels that you can acquire customers through, as well as the system called Bullseye, which basically means that you do a bunch of tests in different acquisition channels in hopes of finding one channel that gives you a positive return on investment. Then assuming there’s a significant size pool there to pull from, you just continue drilling into that one acquisition channel until it dries out. It’s really easy for entrepreneurs to chase shiny things, and I think a lot of our success has been attribute to our focus. This book drills down into the bullseye theory, as well as the 19 traction channels, in a very accessible way for anyone to digest.

Then another book that I love, Unbroken is really good. It’s one that they made into a movie. It’s about this bombardier in World War II whose plane goes down and he’s in a Japanese POW camp for years. It’s just an amazing story of resilience. As an entrepreneur, it’s great to hear those stories because any time I’m complaining or whining, I just think of Louie from the book and it makes me shut up and do my job. I think, as an entrepreneur, it’s good to read those books outside of marketing and entrepreneurship, but history and … Just those monumental miracle that happen all the time that you can read about for inspiration.

Roy Morejon:

Awesome. Last question. What does the future of crowdfunding look like?

Mike Filbey:

I think it’s going to be huge. It already is getting huge. I think more and more people are going to start launching as the science behind it is unveiled, which I know is largely the value in working with someone like yourself is … There certainly is a science to being successful on Kickstarter, and I think most people don’t realize that and they think that they can just launch a product and succeed one every front from design and copy and brand and marketing, fulfillment, retention, the plan after that, manufacturing.

I think it’s very realistic and a lot of entrepreneurs are unrealistic, especially maybe makers. I think people need to more so understand that there is a science to this. I just think it’s the most amazing thing. There also seems to be this unique point in time with Kickstarter wherein there’s more people who want to back awesome projects than there are awesome projects. If you have an awesome project, the marketplace is in your favor. If you got something, go launch it. Use Kickstarter.

Roy Morejon:

Sound advice, Mike. Please give our audience your pitch. Tell them what you’re all about, where people should go, and why they should go get themselves a ButcherBox.

Mike Filbey:

Cool. Butcherbox.com is where you should go. If you want $20 off, you can use the code Kickstart, one word. You can cancel anytime. Maybe I shouldn’t lead with that. Most people do love our product. Our churn rates, so the customers that we lose on a monthly basis, is ridiculously low, which I think more than anything speaks to the quality of the product that we send out and then also just the ease of use. You don’t need to go to the grocery store and park and deal with stuff being out of the stock or confusing labels like all-natural and, “What the hell does this mean?”

You can just get the best meat delivered to your door every month on whatever date you order. If anyone has any questions about ButcherBox, they can email me. Mikefilbey@butcherbox.com. I’d be happy to talk to you about our experience with crowdfunding and then any questions on ButcherBox. Check out Roy’s service if you’re in the market of running a serious campaign. I wish I knew of him when we launched.

Roy Morejon:

We’re good friends now, Mike. Thank you again for being on the show. Audience, thank you, of course, for tuning in. Make sure to visit artkick.wpengine.com for all the show notes, a full transcript, links to everything we talked about today, as well as the coupon code that Mike was so nice to give to our audience. Again, thank you to our crowdfunding podcast sponsors, The Gadget Flow and BackerKit. Mike, thanks again for being a guest.

Mike Filbey:

Thank you, Roy.

Roy Morejon:

Thanks for tuning in to another episode of Art of the Kickstart, the show about building a better business, world, and life with crowdfunding. If you’ve enjoyed today’s episode, be sure to visit artkick.wpengine.com and tell us about it. There you’re find additional information about past episodes and our Kickstarter guide to crushing it. If you loved this episode, leave us a review at artkick.wpengine.com/itunes. It helps more inventors and entrepreneurs find the show and helps us get better guests on here to help build your business. If you need a more hands-on crowdfunding strategy, please feel free to request a quote on commandpartners.com. Thanks again for tuning in. We’ll see you soon.