The rickety bus hits an unexpected bump — Dealing with a startup’s first, major problem

Mike Salguero

There is an analogy that I tend to use to describe to people what it’s like to build startups. For those who haven’t been involved in early-stage businesses, I explain the experience by comparing it to an uncharted adventure.

I start by telling the story of how when you start a company, it’s like you just got dropped into a dense jungle, and you don’t know how to get out.

In the analogy, you first need to hack your way through, and all you have is a machete. You get others to join along — building out the team — and tend to bring in people who will swing a machete as hard as you will. You all are working toward a common goal, and, even if you don’t have a sense of what’s exactly next, you develop trust, camaraderie, and each person finds their ideal role. Eventually, you find a path and you follow it, hoping that it will lead to a road.

You also need to plan for what may be next. Along the way, you’ve hopefully added some people on the team who can wield a machete and also know how to drive.

When you clear the jungle and hit the dirt road, that’s when things get really interesting.

The business is now at a new stage, and everything is going to get a lot more complicated; you can’t shoot from the hip as much as you once did. You need structure. You need systems. You need security. You need process.

Getting back to the analogy, at this point, you need to learn how to drive a rickety bus you just found. You’ve just realized that the object now is to take that bus and drive it down the dirt road. The road is bumpy and has many rough patches, but it can also be fun and thrilling. You just hope and pray that bus can make it to a major road without falling apart.

And then it happens: You go from a dirt road to one that is paved. There are still a ton of potholes, so you aren’t driving smoothly yet. At this new phase, there is lots of traffic, tons of bad drivers, and, at times, what I’ll call of “squirrels in the road” (i.e., the unforeseen disasters) that can jump out at you at any moment. Because you are beyond the dirt road, you can go faster. You start to stress test the bus, see how fast it can go.

At this phase in the company’s growth, you still really need all the things you built into the business when you were on the “dirt road” — systems, processes, security, structure. And if you didn’t actually fix the bus while it was on the dirt road, things start to shake and quake as you start really putting the pedal to the metal.

This is where we are now with ButcherBox.

Let me explain to you how one small change can cascade into a massive problem for a young company.

On Black Friday and Cyber Monday, we did a major promotion. Actually, it was the largest promotion we had ever done.

The way it worked is that we offered a “steak sampler” of six steaks to anyone who signed up for a subscription. If you are already a member, you could purchase the steak sampler for a low price. We anticipated a lot of orders, so we had prepped our distribution facilities and had made sure we cut and stored enough steaks for 40% more people than our wildest predictions.

By Thanksgiving night, we knew we had a winner as new signups kept rolling in and current subscribers added the six steak offering to their monthly order. It was exciting and exhilarating.

But in all our excitement, we didn’t realize that we had made a critical error that was not picked up by our normally stringent oversight. You see, we clicked the wrong button when setting up the order and fulfillment process, and a major problem was about to hit.

We had inadvertently hit a button that doubled the order for everyone who signed up to get the steak sampler. This meant that every order was getting twice as many steaks, 12 steaks instead of six.

By the time we figured out something was wrong, half of the orders had already gone out. Unfortunately, the steaks that should have been going out with the second half of the orders had been sent out with the first. In no time at all, we had a huge problem: We had no steaks to send for orders, no inventory, and no idea of when we would get more steaks.

As we approach New Years Day, we are still digging ourselves from this mistake. We are hustling crazier than ever; it is almost as if we are back in the jungle with our machetes — we’ve got a lot more team members working to clear the way, and, worst of all, we’ve let down some in our great community of ButcherBox members.

There are hundreds of customers who have yet to receive a box — we’ve subsequently sent refunds for their purchases. Due to this small error, the company has also lost hundreds of thousands of dollars due to refunds and extra product sent.

Worst, we’ve made a very bad brand impression on hundreds of customers. (I don’t think we can ever fully express our regrets for not meeting their expectations.)

The transmission dropped out of the rickety bus as we’ve approached the on-ramp to a new highway because we forgot to check a bolt or two. We’re working feverously to get the bus improved and back on the road we’ve been on and beyond.

Here is where we go from here:

- We need to stay humble, and we fix what’s broken. We work as a team to figure out where our issues are, and we focus on them to fix them.

- We operationalize checks and balances across the company so that we can catch a mistake like this in the future.

- We embrace the issues and problems because we know they will make us better, smarter, and faster.

At this moment, we are already turning things around. Luckily, we still have the passionate machete-wielders, experienced drivers, and, as we’ve discovered, a few people who know how to fix a transmission.

Mike Salguero is the co-founder and CEO of ButcherBox.

This post first appeared on the ButcherBox blog, Roam. If you want to find out more about a ButcherBox subscription click here or on the banner above.

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