How I Built This with Guy Raz - Advice Line with Gary Hirshberg of Stonyfield

Episode Date: November 14, 2024

Stonyfield co-founder and former CEO Gary Hirshberg joins Guy on the Advice Line where they answer questions from three early-stage founders. Plus, Gary explains how a social mission can be a competitive advantage for a consumer product.First we meet Cate in Oregon, who’s trying to figure out the best way for her leather goods company to stop cow hides from going to waste. Then Jamie in Santa Barbara, whose gourmet vegan camping meals are speaking to a customer demographic she wasn’t expecting. And Dianna in the Bay Area, who’s ready to hire a right hand for her seeded cracker company but isn’t sure where to look.Thank you to the founders of Range Revolution, Poe & Co. Folk Foods, and Cult Crackers for being a part of our show.If you’d like to be featured on a future Advice Line episode, leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to [e-mail] or call 1-800-433-1298.And be sure to listen to Stonyfield’s founding story as told by Gary on the show in 2017.This episode was produced by Alex Cheng with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Cena Loffredo.You can follow HIBT on X & Instagram and sign up for Guy’s free newsletter at guyraz.com.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at ID.wondry.com and make sure to tell us how to reach you.

And also don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gairoze.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Gary Hirshberg. He's the founder of the yogurt and dairy company Stonyfield. Gary, thanks so much for coming back on to how I built this.

Great to have you. Good to be with you, Guy. You were first on how I built this way back in the second year of the show of 2017. And it's amazing how you started the business as a one cow operation on a rundown farm in New Hampshire. And of course, for those of you listening, if you haven't heard it, we will put a link to that episode in the podcast description. One of my favorite things about Gary's story was how many times, Gary, you guys almost went under, how much failure you endured in the first decade of trying to keep Stony Field afloat. For example, at one point I remember one of the dairy farms you were working with, like almost stole the company, the business. I'm laughing.

It wasn't funny at the time. You had to borrow millions of dollars, including begging your in-laws to give you loans, almost ruined your marriage. But you made a product that people really liked. I remember you described it as ambrosia. Every time I see Stonyfield, I think of your voice saying, Ambrosia. And that is ultimately what saved Stonyfield and then ended up turning into one of the biggest organic yogurt. brands in the world. Well, I thought you were going to say that there were some times when we almost succeeded. That was actually more the ratio. We call ourselves a 40-year overnight success.

It's like the Winston Churchill thing. You know, you're going from failure to failure until you succeed. I think the Churchill line is wisdom is something you get just after you needed it. Well, that's one, but there's the failure one too, which I'm going to quote for you because I can't always remember it by heart. But the quote is, success is the ability to go from failure to failure without losing your enthusiasm. No loss of enthusiasm. Yes, that's the one. Yeah. Gary, before we get to bringing our callers, I'm curious, because I think a lot of our callers today are going to, is trying to figure out the best sales channels for their products. And we'll address that. But at one point, I remember in our interview, you talked about how for your 30th birthday,

you basically asked friends to go to their local market. Bread and circus. Bread and circus, okay. And you asked, you had them go in and ask them to carry Stony Field yogurt. And it worked. The companies eventually called you and said, hey. It was my old ultimate frisbee team who had come up to the farm to celebrate. We had finished milking.

I asked them on a Sunday at my birthday party to go down and ask for the yogurt. And on Wednesday, the buyer called me and said, Gary, I don't know what's going on, but demand has gone through the roof. Get that yogurt in here right away. And we did. We delivered that afternoon. Okay, a great strategy. The retail landscape has changed a little bit since then. What would your general advice to founders be for trying to get their products into a retailer like that today, like a Whole Foods? I mean, does that same strategy still work?

It really does, because in the end, the retailer and the manufacturer beholden to the very same client. The consumer is who we all work for. And so if you can, my advice to any entrepreneurs trying to sell a CPG product, food or otherwise, is build loyalty. In Stonyfield's case, because of our gross margins, we never really had the ability to spend on advertising, but we were always happy to spend on influencers, bringing people up to the farms. We still do to this day. Pre-influencer marketing before we even had that word. Well, yes, we were actually the first food company I know to hire a blogger. back in the day. But the point is to talk to your consumer. Consider it a conversation. I call it

having a handshake with your consumer, and whether that's on mission or on product or on taste or price. But you've got to have that loyalty, and then they will pull it. They will help you to pull in. There's nothing better that you can say to a retailer than, hey, I've got, you know, 10,000 online consumers in your market. You know, you've got a ready-made marketplace surrounding you. Yeah. You guys were an early pioneer in practices that are kind of the norm today, right? No pesticides, no hormones. You try not to depend on fossil fuels and a certain point you were fossil fuel-free. We've had versions of this discussion on the show before. And I'm curious on your take, which is how much do you think today consumers really care about these things to the extent that it actually can make or break a product? Or does it really ultimately come down to taste and taste? value. It always comes down to taste if it's food. I always used to say you could ship the yogurt 3,000 miles, but it was the last 18 inches that made all the difference. It has to, because you're not going to get a second taste. Right. If it doesn't deliver on the first one. But honestly, mission,

environmental, social mission is probably more important today than it was even back then. We often joke that we had a wonderful company back then, just no supply and no demand. You know, Nobody knew what we were doing when we were talking about organic and the need to reduce our carbon footprints and so forth. But today you have a generation of consumers who index extremely high on this stuff. In fact, they're a pretty demanding audience. They kind of want it all. They demand absolute transparency on everything from animal cruelty or avoidance of cruelty

to organics, avoidance of pesticides. Climate is extremely important. Equity, very important. And that's a real competitive advantage that wasn't an advantage back in my day. See, I'm really surprised to hear you say that because I look at like fast fashion brands like Shee in, which have just exploded in growth. And that just runs counter to everything that you've said. I mean, I've seen, I see a lot of consumer brands that really are doing well that don't do any of the things you're describing. Sure.

I mean, look, it's all depending on your target. If you're seeking brand market leadership, if you're going to try to be number one, then of course, price. convenience, taste in the case of food are predominate. But if you're trying to build loyalty and with a higher priced, lower gross margin item, then mission is your secret to success. That's your way of getting trial, getting reach, and ultimately getting that holy grail of consumer products, which is word of mouth. Gary, what do you say? Let's take our first caller. Wonderful. Okay. Hello, caller. Welcome to the advice line with me and Gary Hershberg. Please tell us your name, where you're calling from,

and just a little bit about your business, just a little bit. Hi, Guy, hi, Gary. I'm so happy to be here with you both. My name is Kate Havstad Kasad. I'm calling in from Bend, Oregon, and I'm the founder of Range Revolution. Range Revolution is a leather company, which sources 100% of its hides from verified regenerative ranches. We were founded to address the massive waste dilemma that exists in the millions of hides, which are thrown into the trash each year, and to give consumers a leather product that they can feel good about. Wow. Okay, so welcome to the show. Thank you for calling in. Okay, so Kate, you guys basically take cow hides that are otherwise going to be just like incinerated or whatever because like a lot of cows are killed for meat, obviously, and you turn them into like wallets

and bags, essentially? Yeah, correct. Most people don't know this, but in current systems today, when we send a steer to slaughter, about 65% of the cattle carcasses is being utilized. Wow. And then meanwhile, in the greater fashion movement, we have a giant globalized leather supply chain, which is quite opaque and oftentimes is coming from systems that lead to deforestation. Wow. Most of the beef that's consumed, it's just like the carcass is wasted. We're not turning into leather or anything. It's just being burned or thrown away. 35% of that carcass is going to, quote, wait.

And I say, quote, because there's no such thing as waste. Why is that just so surprising to me? I mean, you would think that there's a lot of demand for leather goods out there. You know, it's just as the consolidation of the industry has led to say these big four packers that really dominate the industry, we've lost a lot of the systems of aggregation that really focus on that middle, the missing middle, middle agriculture and middle processors. And so there's a need to rebuild that middle system of aggregation to get these hides back into the system.

Wow. So, Kate, how did you start this business? So this all really starts because my husband and I have been farming and ranching together for 11 years. And we've grown our farm and ranch called Cassad Family Farms, which is organic and regenerative. We've grown it from a three-acre market farm doing CSAs and farmers markets. And to now we manage about 1,400 acres. And as first-generation farmer ranchers, I like to say we've learned not just how to grow food, but what it takes to save a farm. and in the same era of the past decade, I've been operating a custom hat business where I build custom Western hats and fedoras.

And it really just came down to, I thought I was building something for Habstad Hat Company. And I wanted to find hides that align with my ethos, how I source my food and how I live the rest of my life. And as soon as I started looking for regional hides, you know, regenerative hides, something that might have traceability, I realized it did not exist. And so that started this journey. Wow, I'm looking at your website and beautiful bags and purses and phone cases and wallet. So and how and you're selling these direct to consumer only right now? Yep. We launched direct to consumer softly in December of 2023.

And then we launched our first kind of brand campaign earlier this year. And we got our first handful of independent boutique retailers this summer. And this will get into our question. There's there's kind of a second arm of this business that is percolating in my mind that has to do with both improving our cost of goods and also moving more of these hides. Yeah, so go ahead and ask your question. Yeah, okay. So we've been approached by a lot of people who are so excited about the value proposition of

these hides that they would like them for their business. And whether it's an interior designer, a furniture maker, other bag designers or, you know, makers, I see this B2B play opportunity where we can provide a finished leather option to somebody and as a small startup with limited resources, it's always a question of where we, you know, divide our attention and our resources. And so I'm curious both you, Guy, and Gary, how you would think about dividing our attention

on building the direct-to-consumer brand with finished products versus starting to really funnel resources into the material play. So you basically have more hides than you need right now? Absolutely. There's a lot of volume. that even when range reaches $10 million in sales by 2028, we're still barely touching the volume that really needs to be pulled out of the supply chains, even just on the West Coast.

All right, you're projecting $10 million in sales in four years? Yep. I love it. Okay. But right now, you've got a warehouse full of hides. Well, I don't have a warehouse full of them yet. I have processors beating down my door saying, come take my hides, come take my hides. But I know what's in that pipeline.

and it's large. And the more we move, it improves the cost of goods for the brand, of course. Gary, let's tackle Kate's question, but you may have some questions for her before we do that. Yeah, hey, Kate, first of all, obviously we are connected in lots of ways here. I love your, there is no such thing as waste. I add to that there's no such thing as a way. It's another myth. So I know we speak the same language. And obviously, the mission is close to my heart. What of those two of the bifurcated choices you just laid out, which one excites you the most? What stirs you? Because I'm such a producer first, farmer, first human.

I just want to see more of these hides pulled out of the trash. But if I were to add the caveat, in order for this movement to truly scale, we need the consumer mindsets to shift in order to care about natural fibers again and not think that it's evil or bad. And so the brand has such a huge role to play in that narrative. Yeah, it does. I think your cred is your brand. By the way, I think your credit is also that you're farming and ranching. Your story is really, really important and central. But I agree with you, there's a bigger mission here than just selling purses and wallets.

But it does, I think your cred and probably your cash flow depend on the brand being strong. And so I guess since I think your question is how do you divide you? your time and resources, that's your key. I would be very focused on making sure you have an excellent brand manager, CEO, head of sales, chief offensive officer, whatever you call it. But I would not allow your attention to move off to the mission that gives you so much passion, which is moving these hides without being absolutely sure that the mothership is being completely taken care of. Because you know, that's your cash flow. And, you know, entrepreneurs, I always call us pathological. optimists. We tend to think there's sort of no limits to what we can do. So I really appreciate

that you recognize that there are limits and also recognize that you can't do too many things. Look, I chaired the national campaign to label GMOs. It was a major distractant. But the luxury of taking that time to work on a mission that is basically a generational mission comes from being sure that the mothership, like I keep calling it, is taking care of. The more I'm hearing you, I would make sure that the 10 million is in the bag, no pun intended. I would really concentrate for the next year on the things you need to do to cement and lock in that growth trajectory, which includes, you know, that right hand that you can appoint to take up the critical roles you play.

I would become a sponsor of an environmental media association of environmental working groups, earth dinners, I would award shows. I would make yourself the boutique. I would really, really use all your talents and wisdom and lock in the brand trajectory. Be sure the gross margins are protected. Be sure you've got a defensive business as well as a niche before allowing yourself to slip off too far. And by the way, you might even consider, you know, maybe there's a nonprofit to the Hides thing. Maybe there's other partners for you.

Yeah. You know, my first $10 million, I was just nose to the grindstone. But once I got there and I could hire good, talented people, I was freer to start focusing on the mission, which in turn came back and fed the product, right, for the yogurt sales. Yeah. Gary, I have a question about branding here because at the end of the day, I mean, as beautiful as these bags are, in this category, it's all about brand, right? Like, why do people buy a Kate Spade bag or a Tori Birch bag, right? Because of the brand that they built. I mean, this goes back to the opening conversation in our intro chat.

You know, there's a changed consumer out there. Yeah. I think what Kate is on to, I think this is a fashion statement being truly green, truly clean. And let's not forget, Kate is providing a critical currency for these farms. So I think the mission here is the brand. I think it's selling hard on the big picture, the big story of what you stand for that's going to earn you your long-term sustained niche. So I agree with you, but I'm going to take a slightly different perspective here, which is to say that these bags, especially the women's handbags, right?

You need to see these bags on women in New York and Los Angeles. Yeah. Yes. Or in Paris. And so is there a world where range revolution is sort of the all-encompassing company, but you might consider changing the brand name to your name? Your last name is Havstad, Kasad, or something like that. You've got nice European or sort of the cool last name that sounds like... She's got the Kate part already.

Right, Kate. I mean, it kind of sounds like a cool name. Like it could be from Denmark or something. I don't know. Maybe play around with that idea because Range Revolution is what you're doing. But I wonder whether it might sound too much like the cowboy hats. Mm-hmm. and in a sense that may limit the kind of consumer that would otherwise be attracted to these designs.

Look, I actually disagree a little bit here because I think that reigned revolution is your brand, is your mission. The reason I slept into my chatter a few minutes ago, this Environmental Media Association, this is all the environmental stars in Hollywood, stars who lend their time and efforts to really green stuff. you should be the handbag of that thing. You know, you should be the want-to handbag at the Oscars. Yeah. I think, you know, you're not just another fashion brand. You're truly fashionable, which is you're building a future for the farms and for all of us. And I would really concentrate on, you know, get on goop or whatever, but on celebrity endorsement, you know, Michelle Pfeiffer or somebody, perhaps. And I think that will carry you into, onto the red carpet. We, I was just thinking through,

of all, some of my favorite how I built this episodes, and Gary yours is right up there, but as is the Kate Spade, Tori, Birch, Eileen Fisher. And of course, they're all names of those founders. So I totally hear what you're saying, Guy. Yeah. But at the same time, I selfishly want to start this beautiful revolution. And I want people to feel that that fire, that fashion can be, design can be for good. And the most radical fibers are the ones we already have. And let's start thinking that way. I think it makes a lot of sense. I mean, you can experiment, with different ways of trying to bring it in front of consumers. But at the end of the day, you've got a beautifully designed line.

And now the question is, how do you get it into the right hands? It's a, the hardest thing about what you've done, what you're going to do is building a brand. It's turning that into a brand that people know and want to buy. Yeah. Maybe by the next time we talk, you'll see Gwen if Paltrow with a regenerative leather tote on her arm. Maybe. Maybe Kate. The brand is called Range Revolution. Good luck.

Congrats. Thank you both so much. Thank you. Good luck. I mean, Michelle Pfeiffer, who is great, but Gary, I mean, you got to get with the... Well, it happens. Michelle is on the EWG board and I'm a fan. Michelle Pfeiffer. No one knows Michelle Pfeiffer anymore.

I mean, she's amazing. I get this in the hands of the, like Addison Ray or one of these TikTokers. Yeah, I don't disagree. And, you know, again, this is this sort of theme, I think, that happens as entrepreneurs with the mission, you know, the brand or the company, sometimes they forget, right? That that's actually what enables them to get to their platform. So important that she doesn't put the car before the horse. For sure.

All right, we're going to take a quick break, but we'll be right back with another caller and another round of advice. Stay with us. I'm Guy Raz, and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line here on How I Built This Lab. I'm Guy Raz. And my guest today is Gary Hirshberg. He's the co-founder of the organic yogurt and dairy company Stony Field.

Gary, what do you say? Let's take another call. Here, here. All right, let's bring in our next caller. Hello, welcome to the advice line. You are on with me and Gary Hersberg. Tell us your name where you're calling from and just a little bit about your business. My name is Jamie Poe.

I'm from Santa Barbara, California. I'm the co-owner and co-chef of Poe & Co. We make vegan dried camping meals. They're shelf stable. you just said boiling water and eat them directly from the pouch. Amazing. Okay, well, welcome to the show, Jamie. Thank you for calling in. Okay, how did you start this? Where'd the idea come from? Are you a camp, like a backpacker or a camper? So that will lead to my question, but I am not a backpacker. I am just your all-around adventure buddy who likes to go camping on the weekends. I have always had a Monday through Friday or Monday through Saturday job.

What's your day job, if you don't mind me asking? Yeah. So my husband and I worked. together and we own a catering company in Santa Barbara. Uh-huh. So that makes sense that you, that you started this as a side. But tell me what was the impetus or idea. You've got a catering business. You're probably super busy.

You're probably working probably every weekend, I imagine. But what was the idea around this camping food or the dried food? So a little background. My husband and I have a lot of food experience, about over 50 years of cooking experience between the two of us. And when we decided to have kids about six. Six years ago, we tried to figure out how two chefs could still make a living and work. And that's what started the catering business. And we've done pretty well with that over the years.

And as the years have gone on and as our kids have gotten a little older, we have been thinking about what we can do to not work most weekends or at least Saturdays. We kind of actually don't even work that many Sundays right now. And, you know, we thought a lot about, the fact that we have the service-based business, but what can we do as a product? And it kind of led us to the fact that we both love the outdoors, and that brought us to this category. That's awesome. Where are you selling them right now? So we sell them direct to consumer. We sell them in about 25 indie places, and then we're about to launch on Amazon. And I know they're pretty new business, just maybe a year and a half old, but have you guys managed to crack, I don't know, 25, 50, grand in sales yet?

We're about there. And I like to say we're much more tortoise than hair. Great. It is very much our side hustle. And it is one we want to see grow. And we want to be able to become, you know, even more choosy about what catering events we take on and supplement it with running this business. Cool.

Well, Gary Hirshberg is the OG tortoise to scale that into Stonyfield. What's your question for us today? How do we reach our target audience? who doesn't seem to know our category exists. You know, I think what we've come to, the crossroads which we're seeing, is that when we develop these, we develop them for your kind of comfort camper. So, I mean, in California, car camping is huge. And what we have found is that the category itself is much more known

and sought after by kind of more hardcore people. So the backpackers in particular. And, you know, what they want from the product, they want more protein, they want more calories. And so we're sort of at this point where, you know, when we design these, we design them for all these other people. But the backpackers and the ones who know about this category are the ones who have found us. All right. So you design these for like families who are driving to a campground for the night. But actually the people who want this are backpackers who are like going deep into the backcountry.

and they want something light to carry. But the problem, if I'm reading this correctly, the problem for them is there's not enough calories and protein in what you offer so far. Yes. So the backpackers are the ones who have really found us. And they're like great new backpacking food, but it doesn't have this, this and this. And we're like, well, it's really something that we thought more of like the young family is going to a campsite after school on the weekend. and people who just want convenience food to have with their bottle of wine while watching, you know, the waves on the Pacific.

Right. Gary, questions for Jamie? I mean, you've got a number of attributes here. You really are both chefs. And so you've got a gourmet aspect. I see in your background that you've been on Michelin Star restaurants and then you've got convenience and then you've got gluten-free, right? and you've got taste. So if you have 10 seconds with a consumer to say, this is why you should have it, what's the elevator pitch? What's the one thing you tell people? You can have this food in the outdoors. You don't need to worry about a cooler or refrigeration and it's ready in 20 minutes. And why you versus Mountain House or one of the- Patagonia provisions or whatever, yeah. They're all vegan. They're designed by chefs to add boiling water to. So culinaryly, they just make sense.

They're delicious. They're flavorful. They're better for you. And they don't contain dried animal chunks that you're trying to rehydrate with water. Okay. And I'm looking at them right now. They're about $12 a pop. So that's a pretty good price.

That's for a full meal per person. I mean, I would think that the channel would be like the REIs and the sports base. You know, the outdoor stores, right, that people go to. to have you guys, I mean, is there one down in Santa Barbara or can't be stores in that? Yeah. Yeah. So the local buyer there was actually super interested in bringing in our product, but they can't do it at a local level if it's a topical or a food.

So when we first started, we applied there and we got denied and I haven't revisited that. Could I just stand back for a second? I'm Googling around while we're chatting here. And there's this report you should get called Data Intello. the global outdoor camping food market size was valued at $2.5 billion last year. That's big. It's going to be $4.8 billion by 2032 growing at a compounded growth rate of 7.5%. So congratulations, number one. You're in a growth category. But here, catch this sentence.

One of the most significant opportunities lies in the development of new and innovative food products that cater to the evolving preferences of consumers. There's a growing demand for camping foods that align with these dietary preferences. Manufacturers can capitalize on this term by introducing new product lines that cater to vegan, gluten-free, etc. So some of this depends on how you're talking about yourself. You're not just your average add water. You're gourmet, you're delicious. And when we were opening up this call,

we were going back over some early Stonyfield successes. And I'll tell you, it all came down to getting consumers to pull in. You know, REI or your camping stores will carry you if consumers come in saying, hey, do you have that Po and Company stuff? So I'm Googling again. You've got Santa Barbara County Hikers Club, 3,310 members right there. Can you do an event for them? Can you give some donations to help them raise money?

Or can you do a contest? Maybe go out camping with you guys for a night. I mean, people think automatically, like, how do I get into retail? But remember that in retail, there's consumers who are getting their information, you know, in lots of places. and how can you go directly to them? I would work hard on that succinct pitch, that one sentence. Okay. You know, it's sort of like tired of compromising with extra chewy campaign meals,

or I loved your dried animal. You know, that's a good one. You know, why not eat gourmet in the outdoors? Yeah. Yeah. Gary, I'm looking at these flavor, black garlic ramen and coconut chickpeastew. You know, one of the things that you asked, Jamie, was should we lean into the people? People driving the Subarus and going for day hikes or the hardcore campers, I think there's a value in at least trying one skew that's a hardcore protein brand.

Like each packet has 10 grams of protein and, you know, where you really lean into the idea of like this is not only delicious, but it's going to really give you sustenance. Okay. I do think I'm on your site. I think testimonials would be a really important thing to have there. Again, this is going back to who your consumer is. or even testimonials about you. And that's the other thing I want to say on a recent episode, Guy was interviewing my friend Jim Cook, you know, Sam Adams.

And Jim was really emphasizing the personal stories. And, you know, he used his story. Your story is your unique asset. And I think you've got a really unique story. And the idea that, man, I mean, isn't it kind of cool? These two gourmet chefs, you know, who like to camp, have now made this product. I mean, that says so much.

So I'd try to maybe invite a food writer to come camp with you, get your story out there a little bit. A lot of entrepreneurs are shy about that, but you've got a hell of a good one. And really a compelling reason to try the product, I think. Gary, you know, it's always a tradeoff. How much do you put on the label and how much do you leave off? Is there value, do you think there be value in these guys putting just a line there? It's like made by Michelin-trained chefs or something like that at the top? Yes.

But even better would be if I see you worked for Danny Meyer, maybe my old friend Danny, maybe a quote from Danny. I mean, maybe Tom Colicchio, maybe a peer chef out there with a quote that sort of implies, says it all right there, you know, a must have for every meal. But I will say less about the package and more about the website because this is, you're not really as much of a retail play as you are a direct, right, to consumer. And so I think having your sight dimensionalize with, like I say, chefs talking, hikers talking, active people talking. Yeah.

And again, I think, gosh, you know, for me, the thought that there's a lot of commodity products are there. But you're not a commodity. Your chefs who want to have something great for yourself, well, that's what I want to have. I like that. Agreed. The brand is called Poe & Co. Folk Foods, Jamie. Good luck. Thanks so much for calling in.

Thank you, guys. Thank you, Gary. Yeah, good luck. Thank you. I mean, $4 billion, who would have thought in camping food? That's right. And again, that means there's a lot of commodity. There's a lot of stuff out there. There's always room for something better. I also think, by the way, a lot of times these retailers who say they can't carry it, they might allow you to do a demo or something, you know, an enterprising manager. I give a little trial outside, you know, out in the parking lot, just see if it creates a little excitement for the,

them and interest for you. Just don't take no for an answer. Right. If you don't ask, you don't get is my favorite line. All right. We're going to take another quick break, but we'll be right back with another caller. Stay with us. I'm Guy Raz, and you're listening to the advice line right here on how I built this. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and today I'm taking calls with Gary Hirschberg. So Gary, why don't we bring in our next caller? Let's go. All right, Let's bring in our next caller. Hello, welcome to the advice line. You're on with Gary Hirshberg.

Please tell us your name, where you're calling from, and a little bit about your business. Hi, Guy and Gary. My name is Diana Dar. I'm the CEO and founder of Cold Crackers, an organic seeded cracker company. We bake and manufacture in our commercial kitchen in Berkeley, California. And we ship and sell to about 500 retailers across the country and on our website. Awesome. Welcome to the show.

Thank you for calling in. First of all, just full disclosure. I live in the Bay Area, so I know them. I've tried them. I bought them. But describe what they are. They're crackers, but what makes them different? So they're made with six seeds, sunflower, sesame, chia, hemp, pumpkin, and flax. So they are naturally gluten-free, vegan, organic. Got it. One flavor is made with cornmeal and corn flour. And the second flavor is made with cassava flour, which is a root vegetable, sustainably grown. Got it. So one is totally grain-free with a cassava. Yes.

And tell me how you launched this. Were you in food before? So I had gone to culinary school and I had baked. And I couldn't support myself working in restaurants. So I got into e-commerce and marketing. And when I was in my 50s, I was let go from my job. And a mom at my daughter's school suggested we should make these seeded crackers. And I was excited to start a new business, which combined the baking background and my marketing background.

Wow. And then a shout out to Berkeley. I think it's the perfect place to start a food business. They really embraced me here. I was at the farmer's market and I'm in a lot of local stores. And people are just really supportive of local makers and good food. And along the way, I bought out my business partner. And now seven years in, the business is humming along and growing.

And give us a sense of what, I mean, have you guys cracked, a million dollars in sales yet? I mean, that's a big unintended milestone. We will at the end of this year. Congrats. Okay. And tell us what question you have for us today. So my question is every hire I have made along the way has been so I can focus on the next thing to grow the business. Yeah. And I now have a strong but lean team of four people and they bake and package and manage the store accounts. And because my team is so small, I end up doing everything else. And So it's sales, which I love.

HR, not so much, social media, purchasing, and on and on. And my question is, how do I hire someone who has those skills to take on many of those day-to-day things? So I can focus on that next thing. All right, lots to unpack there. Gary Hirshberg, let's bring you in. I'm sure you've got some questions for Diana before we tackle her question. I do, Diana. Nice to meet you.

And I look forward to trying your crackers. I guess the question is, what are those things? that you want to be freed up to do? Is it sales or where will you focus? So it's sales. And it's also recipe development. So creating a third cracker flavor. I need time to work on it. Yeah. And is your impediment scale and profitability, you don't have enough cash? Or is it more that you haven't been able to find the right person? It's not knowing what that role is. Cash is not an issue. Scalability is not an issue. I could double the business with a few more production workers. It's really taking those day-to-day things that were not on my to-do list yesterday that have to be taken care of.

The website goes down and I need to fix it. Something breaks in the kitchen. I'm the one that has to do it. And I don't know if it's a group of consultants that I take on or it's one person who can do some HR, some operations, some facility managing. I don't know how to find that sort of octopus. But you are comfortable that you have enough cash to pay a market salary for that role? Yes. Okay, great.

Because I actually have lived your experience, Diana. There were all kinds of administrative things that not only did I not like, I just wasn't good at them, right? Right. And after four tries, I finally found the right person. And I would call her my partner today. In other words, she became that important to me and ended up being with me for, almost 30 years, but it took a lot of trial and error. And I actually called it a controller, but it turned out she was really a COO, a chief operating officer, which of course have been too

fancy a title for the early going. Diana, by your own admission, you don't yet know exactly what it is that you're looking for. It's okay to be open about that. You need some definitions around it. I think HR and administration, something along those lines, you're looking for somebody who's decent with accounting, who's decent with numbers, who's probably more precise and therefore legalistic and therefore okay with contracts and negotiations and things like that. And so one thing I really recommend here is networking the daylights out of, I mean, think of your marketing your positions like you're thinking about marketing your product. I think it's okay to be out there talking to people, talking to your bank or talking to your accountants. There's lots of folks who I call

corporate refugees looking to get into something like this. The other good place to look is often community colleges. I find there's often a lot of diamonds in the rough. You're talking about professors, people who are adjuncts there are teaching? Yeah, I'm talking about that, but I'm also saying, you know, do you have listing yourself in there, all the students there are looking for positions and define, you know, a little bit about who you are and what you're looking for. But again, it's less about skill set and more about the kind of person. Good thoughts. The best people I found, and again, this goes back to the Stonyfield story.

We've always been very mission-driven. Our whole thing, and you have a mission too. Yeah. Don't underestimate the power of that mission to attract the right person. Right. I totally agree with that, the idea that you're looking for a Swiss Army knife and somebody who's passionate about the product. Whenever we look for people who work on the show,

we want people who love what we do. It's critical. Not necessarily the best producer, editor off. We can make them that. But somebody who's really passionate about what we do. We want them to believe in our mission. I have one last source for you that's going to seem like totally crazy. But you mentioned you're selling at Airwan and Berkeley Bowl and local grocers.

Talk it up there. Oh. You may find people there who are looking to make a change. or who talk to their own customers. And they may become advocates for you. They may say, hey, there's this awesome lady with this really cool cracker company. It's got real legs. And people in retail know a lot of people and have a lot of surface area.

Gary, let me ask you this question. When looking for somebody like that, does Diana have to give that person some skin in the game in order to ensure that that person is going to really supercharge her business? In other words, not just a salaried employee, but somebody who has some equity. I wouldn't give away too much at the outset. I really believe in dating before you get hit. And so much of it is chemistry. But I would say to answer you, Guy, when you do find that right person and you want to keep them,

that's where what I call the three-legged stool comes in. You need to have obviously a market-based salary, so they're not going to be looking for elsewhere for a better pay. They should have some kind of equity incentives or options, if possible. I also think profit sharing some kind of annual incentives, frankly, that's better shared with the whole team, is also important. I call that the three-legged stool. Great. Thank you. Awesome.

Diana Dar, the brand is called Cult Crackers. Good luck. Congrats. I'm going online to order some right now. Thank you. Get some cheese. We have a party. Mm-hmm.

Well, you know, crackers are so, it's so competitive. It's competitive. Good on her. that she sort of fits into the earlier discussion that, you know, she wants to really build word of mouth, build passion from the consumer. Gary, before we let you go, what, when you look back on your time starting at Stonyfield, you know, 20s, is there something you wish you would have known that would have made it a little bit easier or, I don't know, that we're just smoothed the way a little bit more

for you that you kind of wish you knew? Yeah, I wish I understood that being an entrepreneur is. really being a pathological optimist, and the most dangerous word in my vocabulary was yes, doing fewer things better. I can point to the marketplace that was a challenge. I can point to lots of external factors, but I have to hold up the mirror, too, and tell you that a big part of our curve to getting on our own feet was our own excessive imagination and optimism taking on too many things. I can't do it all. Which one should I do? I think that, again, gets back to that Churchill quote about the wisdom when you needed it after you needed it. Yeah. Gary Hershberg, thanks so much.

Guy. Always a pleasure. Thank you. That's Gary Hersberg, co-founder and former CEO of Stony Field. And by the way, if you haven't heard Gary's original How I Built this episode, you have got to go back and listen to it. It is so good. We will put a link to it in the podcast description. And here is one of my favorite moments from that interview. On many occasions, I would tiptoe over to the office to call my mother-in-law, to have a chat, to see if I could borrow another 3,500 or 2,500 to make ends meet. And one night I heard the click-click of call waiting on my mother-in-law's phone. And Meg was calling from the house to say, Mom, don't do this. Wait, your wife was telling her mom not to lend you money for the business? Right. Because it sounds like maybe she didn't believe in it. Well, she had no

reason to believe in it. It was insane. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at gairoze.com. Each week, it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one-minute message that tells us about your business, the issues or questions you'd like help with. and hopefully we can help you with them.

And make sure to tell us how to reach you. You can send us a voice memo at hibt at ID.wondry.com or call us at 1-800-433-1298 and leave a message there. And we'll put all this in the podcast description as well. This episode was produced by Alex Chung with music composed by Ramtin Arablewe. It was edited by John Isabella and our audio engineer was Sain-Lafredo. Our production staff also includes Carla Estevez, Chris Messini, Devin Schwartz, Elaine Coates, J.C. Howard, Catherine Seifer, Carrie Thompson, Neva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to The Advice Line on How I Built This Lab.