How I Built This with Guy Raz - Clif Bar: Gary Erickson

Episode Date: October 3, 2016

Gary Erickson asked his mom, "Can you make a cookie without butter, sugar or oil?" The result was Clif Bar, an energy bar named after his dad — now one of the most popular energy bars in the U.S. 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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made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. I left that morning for the office knowing that's the day and I was sitting in the office waiting and my partner was on the phone talking to the lawyers, you know, dot in the eyes and across the T's on the contract. So that day, you're about to go and sign your name on the contract that very day. Yeah, within an hour, we were ready to get in the car and go over. And I just said I got to take a walk around the block.

And so I did. I went out to the parking lot, and I just started weeping. You couldn't, you didn't want to do it. I didn't want to do it. From NPR, it's how I built this, a show about innovators, entrepreneurs idealists and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Gary Erickson used his mom's recipe and his dad's first name to create Cliff Bar, one of the most popular energy bars in the country.

So back in the 1980s, an energy bar was something you just kind of shoved down your throat before running a marathon or going skiing, and that was about it. There wasn't like a whole aisle of Lara and Luna and chia bars in the supermarket. and they weren't in the bottom of our backpacks or in the glove compartment of our cars. And around that time, the late 1980s, Gary Erickson was living in the Bay Area. He was one of those guys who would inhale energy bars right before climbing or racing his bike. And also at that time, he was working at a bicycle seat factory, which was, you know, was fine for a little while. I think all along, even through high school, I think I always wanted to have my own business.

And even though managing a manufacturing facility, making bicycle seats, felt close to having my own business, it wasn't my own business. And then crazy thing happened. I was sitting at my mom's kitchen table, and she was serving me this, my mom's Greek, and my grandmother's Greek, and they taught me how to bake a young age. And my mom was serving me something. It was like a calzoni, and we call it a Greek calzoni.

And I looked at that, and I said, you know, I bet I could sell these things. And so here I am. I've got, I'm working for the bicycle company, I'm racing bicycles, and now I'm going to start a business. So we made a few in her kitchen. I went out to some delis around Berkeley and San Francisco, and they were a hit. People picked them up. What was inside of them? So we had different fillings.

The typical Greek filling was Spanagopi dough, which is spinach and feta cheese. They were really delicious, this wonderful brioche kind of dough. But when I started this business, I needed to keep working. So because I didn't have enough money. So I was funding the business with the bicycle company to fund the small bakery that I started called Callie's Sweets and Savories, which was named after my grandmother. So at night you would like be baking like all through the night and then get up in the morning and then like go work in the factory, the bike factory? Exactly. And then one day in 1990 I was out on a ride with a really good friend.

And we did this one long day trip in the Bay Area. It was 175 mile one day ride. We thought it was going to be 125 miles. And we took along with us six energy bars that were on the market at the time. The only energy bar, really, that was on the market at that time that so many cyclists were eating. That was power bar. Exactly. It was power bar.

And they were also from Berkeley, coincidentally. And so we each packed six of them, probably put a banana in there too. And we did this ride where there was very few stores. and when we're at the top of Mount Hamilton, I had eaten five of those bars, power bars, and I looked at the six one and I just said, no way. I can't do one more. I would rather starve than eat another one of these.

Why? They're hard. They never really did taste good, but we always, as bike racers, we always thought of them as the bitter pill, that they do the job, but it's not about taste. And here I have a bakery, and everything we do taste great.

So we're riding down the hill. We're coasting down into, San Jose to get to a 7-Eleven. And I turned to my friend Jay and I said, you know what? I can make a better energy bar than that. That was it? That was it. That was it.

Literally the next day, I called my mom and she had helped me with all these recipes for the bakery. I said, Mom, I'm coming over and we're going to make an energy bar. And she's like, what's an energy bar? So I had to explain it to her. And I said, it's kind of like that great oatmeal chocolate chip raisin cookie that you make, but we can't use butter, we can't use sugar, and we can't use oil. She goes, well, that's impossible.

I said, well, let's just try. So for the next six months, I brought over bags of ingredients that I had been researching on. And we're not talking about exotic ingredients. We're talking about whole ingredients because Power Bar was made with stuff that was more kind of highly produced and highly refined. And I wanted to be more like my mom's cookie. What kind of ingredients were you using? We were using whole oats, real fruit, and a sweetener. We didn't use oil or butter, but we used a sweetener that was made from rice. And I made them, you know, rectangular, so they were like a bar. And it wasn't going to be a cookie and it had to be like a bar. And we had many failures. And at times we tried to talk ourselves into that this is great. And then I would bring it out to my friends in plastic bags that I was racing with and training with. And I'd say, here, try this, but keep it a secret. And they'd be like, well, this is terrible.

I'll go back to the kitchen. At what point did you say, okay, I've got this thing. We got it. So it was after about six months. I was sampling it, continued to sample it. But we just knew. My mom and I just knew, like, okay, this is what we were looking for. And then you take a risk because you're not sure.

And then you put a package around it. And that story is, you know, another real good friend that I was working with named Doug Gilmore, you know, I helped him out with some of the advertising for the bicycle company, and I knew that he was very, very creative person. I said, you need to design the package for me. And he came up with the climbing image, which is now, you know, for us, it's iconic and has a very deep meaning of, you know, the introspection of climbing, and especially on an overhang the way it is. Yeah. Then we needed a name for it. And there were all kinds of names we were, we were considering. He wanted it to be Gary Barr. I didn't. and one day I was crossing the Bay Bridge coming over to work on it with him.

And my dad's name popped into my head. And I'm thinking, that makes sense. I named the bakery after my grandmother. I could name this after my dad. He's the one that influenced me with the great outdoors. This is about the outdoors. This is a connection with adventure. It's about, you know, taking it on the go when you are outdoors, doing your adventures.

And it made perfect sense. And so we named it Cliffbarr. after my dad. My dad's name is Clifford Erickson. Once you had the bar down, the recipe down, how did you even have the money and the resources to, like, turn this into a business and a product that you were going to, like, put your whole life behind? I never, ever would have thought it's turned into what it has, but all I was thinking was, I've got this bakery, I can figure out how to make this. If I can just take a small market share from Power Bar, then I can continue my lifestyle and have the freedom of my own business

and do something that I love to do, which is both run a business and make a great product. And that was easier said than done. Why is that? So we tried to make it in our bakery. We just didn't have the equipment to do it. So I found a bakery down the street that agreed to help me produce it, like a cookie bakery. And we leveraged the packaging companies and said, we'll pay you. We'll make a small run. We'll give you what we can. And when we sell the first amount, we'll pay you.

I mean, back then, I didn't really even know what I was doing. I didn't learn this in college. And maybe it's a good thing I didn't learn this in college because I wouldn't have done it this way. But I just started thinking out loud, like, how am I going to do this? I have no money. So basically, you went to these, to the bakeries. You said, I'm not going to be able to pay you right away, but then you would turn around to the distributors and you would say, look, can you pay me on delivery? And then you use that money to pay the factory. But how did you, once you started to manufacture cliff bars, like how did you even get anyone interested in them? What did you do? Did you like walk around to just shops and stores and say? I did a couple things.

One is I would go to bike races or I went to running events. And just started passing out the bar. We did one ad, one advertisement in bicycle magazine and a few other magazines that was pretty hard hitting against Power Bar. It was, okay, there's a new kid on the block kind of thing. The title or the headline was, it's your body, you decide. So do you want, do you want refined ingredients or do you want whole ingredients and pictures of both ingredients? That caused us to be sued immediately. Oh, wow.

Our insurance picked up the tab and we ended up settling with Power Bar. But it created this buzz in the bicycle industry where people said, hey, have you heard a Cliff Bar? I don't know if you could pull that off now. And we were the, you know, now there's hundreds of bars out there. But back then it was just us and them. I mean, did you have to like go out and raise money? Did you have to ask people to invest in the company? Or were you able to somehow do it with very little money?

You know, I never thought of either looking for outside money or wanting outside money. And maybe that was a good thing of my naivete because once you do that, you know, you lose control of your destiny. I tried to get a bank loan. I did get a $20,000. My father gave me off his credit card $20,000. But most of it, I, man, I look back and I kind of think, how did I pull this off? Because, and it wasn't big. Yeah. This was just. just a few bike shops and a few natural food stores. And, you know, I remember being at a show like the, or at a marathon, the L.A. Marathon setting up a little table and standing out there in the aisle with a tray of cut up bars and as people walk by, I say, hey, try this new energy bar. And they were like, no, no, no, I've had energy bar. I've had power bar. I don't want it to try it. Oh, come on. Just try it. And then they would walk along and they wouldn't want to look back. And it's like, because they were going to, you know, didn't want to embarrass me. And then they would be chewing it. And they turn around and go, come right back and go, what is that?

And I knew you knew you had it then when you saw that kind of response. And so it was word of mouth and the word spread throughout the country. So what happened in that first year after you, like, I mean, you were still working at the bicycle company? Yeah, I was working the bicycle company for two more years still. And I was using that money too. I was living hand to mouth and I was sleeping in a garage. And I was just using that money. money to also fund, you know, some of the extra bills. And then there was a tipping point. By the

end of 1992, we sold $700,000 of cliff bars. Wow. So you were making money within a year? Probably a year and a half, too, we really started, we started making money. And from there on, it was like a wild, it was like getting on a wild horse and hanging on. We almost doubled sales for the next eight years in a row. You basically were the owner of this company, right? Like, did you make any mistakes by that point, or were you just sailing on? Was it like smooth sailing? No.

One of the larger mistakes was, you know, I call it a handshake deal. At the time, I didn't use corporate counsel very effectively. In fact, I, you know, lawyers were too expensive. So I didn't really use a lawyer. So I did a handshake deal with a distributor in, you know, early 90s where it ended up biting me because they weren't performing, and so I canceled their quote contract, and they came back and sued me for ownership. Too long of a story, but it ended up, we went to court, we settled, and it cost a lot of money to settle this. I made a big mistake. I never should have done a handshake deal on a distribution, on a national distribution deal like that.

So you almost lost the company. Yeah. Oh, it was a knockout, dragout fight. And I, I. That was the most sick to the stomach I had felt up to that point about business. One day when we went to mediation and at the end of mediation I thought, oh my God, I could lose this whole thing. So we fought, we fought, we negotiated. It ended up being just pay him off, costs a lot, had to go get a bank loan, went and visited like five or six banks, finally found one at a party.

This guy talked to me and said, hey, I'm interested. And we went and visited with him and they gave us the loan and we paid it off in a few years. and then we were free. How did you like cope with that emotionally, mentally? Like you had to run your company and you were fighting off this other company that was trying to take you over. I think I've learned a ton with other things I've chosen to do in my life like rock climbing. My friend uses the term sharp end of the rope, which means when you're rock climbing, you're either leading or following. And when you're leading, you're on the sharp end of the rope, you could take a pretty big fall.

and I had done a lot of leading in my life in rock climbing, and I was used to being in that position of facing danger, but being able to stay composed. The weird thing is I actually climb better when I'm on lead than I'm falling, and I'm still trying to figure out how that metaphor works, because you're in more danger if you're leading, but I think I'm more focused when I'm leading. And so I was on this big lead now.

I've got this lawsuit. I've got the company growing. I've got all the manufacturing issues. and collections and blah, but I think because I was so focused, nothing was going to stop me. Except something did almost stop him. An offer Gary Erickson almost couldn't refuse. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.

It's How I Built This from NPR. I'm Guy Raz. Okay, let's fast forward a bit. This is now the year 2000. It's about eight years after a cliff bar has launched, and it's doing incredible. well. It's got a growing staff, almost $40 million in sales. And I should mention Gary Erickson has a partner in this venture. They each have 50% ownership in the company. And something else is going on at the same time. Big food corporations start to get into the game. And they start buying up Gary's

competitors. You know, Power Barriers already sold and balanced bar is sold. So it was just, it was kind of just us as the third as a third. So we got approached by Several companies. And in a very uncharacteristic, I kind of untied from the rope of being on lead and said, all right, I guess this is what you do. What do you mean? What happened? We hired an investment banker. I mean, long story short, we hired an investment banker to put the company up for sale. Instead of us talking to the companies, let's hire somebody to talk to the companies. And it was an odd moment. I can remember the exact moment that I got a call for my partner and said, she said, I want to sell the company. And I said, all right. So there we were. We put the company up for sale and started traveling all over the country and visiting these large companies that wanted us to be part of their

portfolio. And we got an amazing deal from one of the large companies. We got an offer for $120 million on $40 million in sales. That was from Quakerotes. Oh, I guess you heard. So you guys are sitting at the table, Quake Road says, we'll give you 120 million bucks. This is in 2000. That meant you would have gotten 60 million, your partner would have gotten 60 million, and you could walk away. And like, did you seriously, I mean, you were seriously thinking about doing this, right? More than serious, we had the deal essentially done on April, I know the date, April 17, 2000. we were going to meet our investment banker, the people from Quaker, and as well as all the lawyers to sign the deal, and that would have been it. And we had told the company what we were doing, told all the employees, and they trusted us.

It was a naive thing to say that things wouldn't change, but I still said it. And it was not true, and I knew it wasn't true that, of course it's going to change. It could be better, it could be worse, but you can't say it's not going to change. It's going to change. Yeah. And so I left that morning for the office knowing that's the day and I was sitting in the office waiting and my partner was on the phone talking to the lawyers, you know, dot in the eyes and across the T's on the contract. And she was, she was ready to sell. Oh, absolutely.

It was it was done deal in her eyes. And she couldn't wait because she was very fearful of the future and understand that to some degree. But why would people walk away from buying our product if we didn't. sell the company. I never, I was, for the three months that we were selling the company, I was just living in the dark. I was not sleeping well. I was not riding my bike. I was probably not very fun to be around. And I think I just, I was fighting it, you know, internally, but not really, you know, should have gone to a counselor and talked about it. Yeah. Probably wouldn't have gotten to that point. But there it was and I started, I started to have that amazing moment of just shaking. I'm shaking right

I was just thinking of it. So that day, you're about to go and sign your name on the contract that very day. Like within an hour, we were ready to get in the car and go over. And I just said I got to take a walk around the block. And so I did. I went out to the parking lot and I just started weeping. You couldn't, you didn't want to do it. I didn't want to do it.

I guess it's like, you know, walking off the field. Yeah. I mean, this was everything that you built, right? You know, this was, I'd put everything into this. This is my life. And these are our employees and this is my family and it's named after my dad. So what did you do? What did you tell your partner?

So halfway around the block, I decided not to sell the company. And then I felt completely free. It was like, oh, my God, I'm free again. Now I had to go back around the rest of the block and figure out what I was. going to say to my partner. And I told her, she was on the phone. I said, you need to put phone down. I said, I'm not selling the company. Wow. And she knew immediately when I said that, that I was serious. And so she was on the phone with the lawyer. She said, we're not selling the company. So I can imagine she's in the room with all these people on the 38th floor of the Bank American building

going deals off. So now I'm in a new situation where I've got to now go back and convince our people that we're not selling a company and that it's going to be okay. We told them we couldn't do without selling, and now I'm saying we can. Secondly, my partner wanted out so I had to negotiate a deal. And so that was seven months of negotiation. And third was I had to go out, as our attorney says, dialing for dollars. I had to go find $60 million. You had to find $60 million to basically buy out your partner.

To buy my partner. Because that's what you were offered. So her argument was, look, that's what it's worth. Exactly. So, I mean, there's a thing that you don't want to have to deal with as you're growing your business because we were growing like crazy. Yeah. So negotiated this deal and decided that I would try to meet with the entire company every week. and hold a meeting so that I could be in front of them so they could see me every week saying,

we're not selling the company. Because they were convinced this was going to be a short-term deal, and then I would go back and sell the company. And I got calls from private equity groups and saying they heard what happened. And they're like, you are out of your mind. You're never going to make it. You're never going to make it if you didn't have the debt. Now you have $60 million with debt. And did you think that you, and did you ever think like, maybe they're right?

Maybe I'm not going to make it. Maybe I'm crazy. Like, what am I doing? I must have been serving some good Kool-Aid at the office because people started believing that we could do it. And it took us nine years to pay off that thing. And we did it. But, I mean, at that time, Gary, like, you could have taken the money

and then, like, had this charmed life and biked and fished and started a foundation and just kind of, like, had gone to conferences and just given talks. But there was something, like, what? What was the thing that prevented you from doing that? Because that would have been an easier route. You would have, the quality of your life, like the things you could buy and own and the way you could live would not have been substantially different from the way you live today. True. True.

It would have probably the same. Well, obviously it wasn't about money. There was something deep about, you know, wanting to grow this business. And I mean, I think my wife says it very well. You know, it's, it's the power of, yeah, the power of a lot of money could be good. You could donate a lot of money. You could start a foundation, all that. But the power of a business done the right way is way more powerful than two rich people.

I don't want to overstate that because, you know, there's rich people that are doing some great things. But as the company has grown, we've gone from 60 to 400 employees now. You know, our community service program alone contributed over 10,000 hours of, community service last year. We couldn't, we can't do that as two individuals, but we can as a company. Gary, your, um, your dad, Cliff passed away, um, in 2009, is that right? Mm-hmm. Yeah. Um, but it's kind of cool. Like his, his legacy, like your connection to him lives on in this, this, this, this brand, this thing that we all buy and eat Cliff Bar. It's him. It's

Yeah, it's really cool that For one, he was able to experience both That bar named after him And the growth of the company Yeah, I'm just so happy That he did get to experience it

For a very long time He was from Dork County, Wisconsin And he would go to Wisconsin On vacations and bring cliff bars And he'd walk into bike shops And be like, hey, what do you think of those cliff bars? Oh, we love cliff bars

I think as well I'm close Cliff. Like, what? You're Cliff? Oh, my God. Next thing, you know, he's a celebrity. You know, there's just, there's this narrative or I wouldn't even say a mythology about entrepreneurs, that they are successful entrepreneurs are like single-mindedly focused on the goal. And believe in themselves and have very little or no self-doubt. Is that, does that characterize you? Did you ever have any self-doubt? Did you ever have, did you ever have sleepless nights about what did you ever think, what am I doing? Am I doing the right thing? Or were you just like totally focused and just confident in what you were doing and you just forged ahead? The latter. I can't remember a day where I didn't believe that we would get through anything. I don't know where that all comes from. I don't know if that's that unique. But, you know, I do think back to some of the adventures that I've chosen to do. You know, I'm not a super high-risk person.

I don't believe in, I believe in climbing with a rope. But I do think it teaches you a lot because I remember years ago I climbed the face of half dome and I never once thought I wasn't going to make it up that face. It was just, I was happy, I call it happy nervous. I was nervous and I was happy at the same time. There was no doubt we were going to make it. And not for a second did I think that anything would stop us from doing that. And that's just one of many climbs I've done.

or bike adventures. And that's the same way I feel about Cliff Bar. A few years ago, Gary Erickson stepped down as CEO at Cliff Bar. He's still super involved with the company. And in 2010, he and his wife Kit handed over 20% of the company to their employees. Hey, thanks for listening to the show this week. If you want to find out more or listen to previous episodes, you can go to how I built this.npr.org. And if you have a chance, please subscribe to our show through iTunes and let other people know about it.

You can also write us directly at H-I-B-T-NPR.org or tweet us. That's at How I Built This. Our show is produced this week by Ramtin Arablewe. You also compose the music. Thanks also to Neva Grant, Sanaz Mashkampur, and Jeff Rogers. I'm Guy Raz, and you've been listening to How I Built This from NPR. Hey, one more thing before we let you go. If you get a chance, check out my other podcast. It's called The Ted Radio Hour. And it's a show about big ideas. and it features some of the most incredible minds on the planet.

This week's episode is all about the Anthropocene, this strange period of time in which we're living where humans have a bigger impact on our planet than any other force. You can find the TED Radio Hour on iTunes or by visiting npr.org slash podcasts.