How I Did It: Stephen McDonnell of Applegate Farms
Stores like us, because no other brand of meat can fit in more places in the store with different products. We have breakfast sausages and chicken nuggets in the frozen section, as well as hot dogs, dinner sausages, sliced deli meat, and bulk deli meat. When you don't own the manufacturing equipment, your only concern is what the customer wants. And because we source from multiple factories, we are able to create a much wider range of products. Moms want healthy solutions not just for bacon and hot dogs but in every category of meat. Now, instead of getting to know five to six different meat brands, customers can trust one brand.
We will do just shy of $200 million in sales this year. The amazing thing is that if we could ever get to $1 billion, we'd still be less than 1 percent of the market. Meat is frickin' huge! My advice to entrepreneurs is to find the biggest ocean you can get into, because the scaling doesn't stop.
For the past 25 years, I have physically gone to the office only about once a week. Through certain periods, it's been twice a week, but rarely more. I work largely out of my office at home. I think you can observe what's happening so much easier from the outside than when you're inside of it. Your whole outlook changes. You actually become kind of a therapist to your organization. When you're inside it, you're the patient.
I'm letting go of day-to-day management of the company. Going forward, I want my life to be a pie chart broken into three parts: one-third work, one-third pleasure, one-third giving back. I've now handed over finance, IT, sales, and marketing. The only thing I'm still hanging on to is the supply chain, which is a big one. I took a four-week vacation this summer. Before, I'd come back from vacation and no real decisions had been made. This time, it was like all the bills were paid. I have a senior leadership team that I trust.
Three years ago, we sold a minority stake in the business to a private equity group. My wife, Jill, was tired of having all the chips on the table. And I did sleep better after the sale. I'm beginning to take seriously the possibility of going public, especially after seeing Annie's go public in March. They raised $95 million. They're like us, but a little bit smaller. But even if we decide not to go public, I've told the leadership team to behave like we are on that path. When you are publicly traded, the analysts grill you to make sure you've thought of everything and that you're squeezing out every ounce of risk in the business. That's a smart thing for any business to figure out.
My time frame for going public? I said to the senior leadership team, "Let's hang on for as long as we can." We will know the moment. And that's partly why Jill is on my board now. I told her the one thing she needs to do is confirm the moment, because I'm going to be too emotionally in denial. It's like when your kids come to you--and you never know when that will be--and their wings are ready, and you just have to let them go. I'm hoping to make the decision about going public closer to 2020.
