Case Study #73: Local Meat Delivery Peaks at the Right Time
While most of us are now familiar with deliver-to-your-door monthly subscription boxes, in 2015-2016, this sector was only starting to heat up, and while prepared meal plans were well-known, businesses who focused on protein-only didn’t have that much competition. Enter Marc Lafleur and truLOCAL, which was acquired at the end of 2020 for an eight-figure sum. Not too shabby when you consider that Marc and his co-founder bootstrapped the business with $40,000 of their own money to start.
Path to Profitability
Apart from focusing just on delivering lamb, beef, and chicken, particularly from locally-sourced producers (the earliest versions of the labels had the names of the farms and ranches on them), Marc and his team knew that profitability lay in scaling the operations. Their first angel investment of $100,000 allowed them to hire their first two employees and they hit profitability midway through their fourth year in business.
Smart Advertising
Marc knew that the concept would take off if people could see it themselves and one interesting way he went about marketing was doing pop-ups at Crossfit gyms. They were able to show the quality of the meat and let members know they could sign up right there and get quality locally-sourced proteins delivered to their homes. This worked really well for them.
They also dodged the large-scale influencer marketing (think more than 20,000 followers) and followed the same method they used at the gyms: meeting people and sharing their stories. In fact, they targeted what is known as “micro influencers,” those with between 1000-20,000 followers who have a lot of credibility with their circles. This created a strong grassroots demand for the brand.
Dragons’ Den
For those who might not be familiar with the show, Dragon’s Den is the Shark Tank equivalent in Canada (it even features shark Robert Herjavec). If you want to go down a rabbit hole, Dragon’s Den is an offshoot of an even earlier Japanese show! In any event, Marc only has good things to say about his experience, and not only because he ended up getting a deal with tech investor Michele Romanow.
He sees the preparation for appearing on the show as important personal development milestones. Even the selection of when you appear on the show is strategically important, and Marc decided to go on Day 1. Even though the entrepreneur before him came out crying, Marc wasn’t daunted, and was prepared for any questions the dragons might sling at him. He agreed to a deal on the show, and eight months later the funding came through.
Exiting
By that time, however, Marc knew the company was getting to the right run-rate and growth for acquisition and he engaged an M&A firm to help him identify potential buyers. The first list totaled 420 candidates! The data room was up and running and Marc got engaged with the more serious candidates throughout the process.
One question that kept coming up was, “Are you going to stick around?” Marc, who saw himself as more of a builder, had no desire to stay on and stuck to the idea of a six-month transition, tops.
He also wanted to make sure his team was taken care of. He had always told his team that he wanted to be the lowest-paid employee in the company to help it grow, until the day of sale, when he would get his payday. His employees knew that he wanted to sell one day, but also knew that he had their backs.
In fact, of the three final candidates for sale, one company offered a significantly higher final offer, but one of the conditions was a virtual cleanout of the team. Marc turned down the money and went with one of the other buyers that would honor his pledge to his people and help them continue to grow their careers with truLOCAL.
Lessons
Marc offers some good lessons for business owners in any industry:
- Bootstrap whenever possible — by using he and his co-founders’ funds at the start, they were able to preserve more equity as they fundraised.
- Don’t be boring with marketing — direct selling of your meat-delivery-service at gyms? Sounds strange at first…until you realize that those people, especially at Crossfit gyms, value high-quality meat and appreciate the community-oriented vision of buying local.
- Treat your people right — by being clear on the company being acquired in the future, and telling them he would have their backs, Marc inspired his team to keep pushing forward, not just with him, but under the new ownership.
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