Why Entrepreneurs Don’t Need Venture Capital to Scale

HBR IdeaCast

Harvard Business Review

Leadership, Entrepreneurship, Communication, Marketing, Business, Business/management, Management, Business/marketing, Business/entrepreneurship, Innovation, Hbr, Strategy, Economics, Finance, Teams, Harvard

4.4 • 1.9K Ratings

🗓️ 27 June 2023

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

With all the hype in the startup world around unicorns and hypergrowth, entrepreneurs feel enormous pressure to raise massive amounts of cash from venture capitalists. But now, as interest rates have risen, a lot of that funding has dried up. And a growing number of founders are seeking ways to scale without burning through cash to acquire users. Mike Salguero is the CEO and founder of the meat subscription service ButcherBox. After a negative experience with venture capital at his prior company, Salguero pledged to grow his new startup without it. That meant a "Box One Profitable" strategy built on the creative leverage of influencers, laser focus on costs, and making tough decisions during the pandemic. Salguero shares how he grew a $600 million company in seven years without outside money.

Transcript

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0:00.0	Are you trying to bring your leadership skills to the next level?
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0:24.0	New episodes every Wednesday.
0:30.0	Welcome to the HBR idea cast from Harvard Business Review.
0:41.0	I'm Kurt Nickish.
0:43.0	It's almost become accepted wisdom in startup culture.
0:52.0	Have a great idea, secure a whole lot of funding, and then burn through cash to scale
0:57.0	quickly and build up a large user base as quickly as possible.
1:01.0	A combination of the love of first mover advantage coupled with
1:04.0	plentiful funding from venture capital made this kind of model make a lot of sense.
1:09.0	That is until interest rates started to rise.
1:12.0	Now many companies are looking for other ways of building their businesses and as it turns out
1:17.0	there are models for that even before the VC money tightened in Silicon Valley.
1:22.0	There have always been companies that start with smaller budgets,
1:25.0	build slowly, bootstrap their way to make profit on their products from the beginning,
1:30.0	and they succeed.
1:31.0	One such company we'll talk about today is Butcherbox.
1:35.0	It's a subscription food service organization centered on delivering meat to customers.
1:40.0	It's a $600 million company that CEO Mike Solgero founded with just $10,000 in capital
	...

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