How I Built This with Guy Raz - Happy Family Organics: Shazi Visram (2020)

Episode Date: July 4, 2022

While she was a student at business school, Shazi Visram ran into an old friend—a new mother of twins. The friend confided she felt like a bad mom because she had no time to make her kids healthy meals. That gave Shazi her initial idea: why not make organic pureed baby food, and sell it frozen instead of jarred? People told her she was crazy to take on Gerber, but she convinced dozens of friends and family to invest in Happy Baby. Nearly 20 years later, the brand is known as Happy Family Organics and reportedly makes more than $200 million a year.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This podcast is brought to you by Squarespace. I talk to entrepreneurs all the time who are looking for a way to upgrade their digital footprint. Well, whether you're just starting out or you're scaling your business, Squarespace is the easiest way to build a great website that stands out. It's an all-in-one website platform that gives you everything you need to claim your domain, showcase your products, and get paid. Anyone can use Squarespace's cutting-edge design tools to build an online presence that truly reflects what makes your business special. There are templates, intuitive drag-and-drop editing, and even an AI-enhanced website builder. Then, Squarespace's built-in analytics tools help you make smarter business decisions. Review website traffic, learn where to focus engagement, and track revenue all in one place.

Looking to grow your business, Squarespace even offers fast, easy business financing through Squarespace capital. Go to Squarespace.com slash built for a free trial. And when you're ready to launch, use offer code built to save 10% off your first purchase of a website or domain. Loans issued by Celtic Bank and serviced by Stripe. All loans subject to credit approval. This show is in partnership with Airbnb. This past summer, I took my family to Vienna, and it was incredible. We spent our days wandering the old streets, stopping for coffee and pastries,

visiting museums, and just soaking up the history of one of the most beautiful cities in the world. And one of the things that made the trip so special was the whole. home we booked on Airbnb. It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, 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.ca. slash host. Hello, everyone, two quick important announcements. The first is, how I built this, is always a free podcast on all podcast platforms. But if you want to hear it a week early and ad-free, you can subscribe to Wondery Plus for a small monthly fee where you'll get access to all of Wondry's amazing podcasts. And if you do subscribe to Wondry Plus, you are also supporting this show. Second, I hope you've been enjoying all the new content. As you know, our team has been working double time

to get you two new episodes a week. But this week, our amazing producers are taking a short break, so we're running an episode from our archives that you might not have heard. It's a great story of a founder who wanted to make healthier baby food. and what she discovered was that the baby food industry was not as warm and fuzzy as she expected. Hope you enjoy. We launched with, I mean, it must be at least like a thousand demos. You would go in demo.

Okay, yeah, what would you do? So you have like a table and you put down as much as you can to make it look nice and warm and fuzzy. And I'm standing there with a happy baby t-shirt on. And you're trying to get people to sample these, like, yummy foods that I'm thinking, I'm so proud of this. This has taken years to make this, you know? And you're standing there waiting for someone to come. And then barely anybody comes.

And on the third time that I did a demo, I realized that this wasn't going to work. Welcome to 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 Shazi Visram decided to take on the big baby food companies and build happy family, one of the best-selling organic baby food brands in America.

One of the trickiest things about building a business around software or a product that you have to engineer and machine is that the barrier to entry is pretty high. You usually need lots of money just to come up with a minimally viable product. It's why Toby Lutka had to raise money just to build an early version of Shopify, and why John Foley needed to find hundreds of thousands of dollars just to make a prototype of what would become the Peloton bike. But when it comes to food, much of that prototyping can be done without ever raising a dime. For example, Lara Merrickin just chopped up dates and nuts and shaped him into bars,

which eventually became Lara bars. Kathleen King of Tate's Bake Shop baked her time. crispy chocolate chip cookies at home long before she launched a bakery and a brand that would go on to sell to Mondalese for half a billion dollars. It's a similar story with baby food. It's not that hard to make. You puree some veggies some veggies or mash up some fruit and there you have it, baby's dinner. And this is essentially what Shazi Visram did back in 2004 in her apartment in New York, except Shazi was experimenting with a potential business idea. An idea, an idea that started with pureed peas and mint.

And eventually a bunch of home recipes that she turned into happy family organics, a brand that now sells around $200 million of baby food a year. But getting that brand off the ground took a long time and many moments when it could have collapsed. For starters, her original idea was to make frozen cubes of baby food, except that idea never gained traction.

That is, until she made 80s. pivotal change, a change that would turn her brand into a powerhouse. But of course, long before any of that happened, when Shazi was a kid, she literally grew up in a motel, in Alabama. Her parents were Indian immigrants who first settled in Canada where they ran a convenience store. But after saving up some money, they were able to move to the U.S. And I remember I was three years old, and my dad had this friend, and he was in the motel business and in the southeast. And there are a lot of Indians in motels in the southeast. And this guy

sold my parents a motel outside of Birmingham, Alabama. We packed up all of our stuff and then we moved down to Fultendale, Alabama and lived in the motel. Wow. Wait. So how do, I mean, how did that idea even happen? I mean, your parents, they have a convenience store and, I mean, it's fine, but they have this opportunity and they're thinking, yeah, let's do this. Let's go. You know, they're inherently already risk takers. I mean, both of them grew up completely with dirt floors under their feet. They had grit, you know what I mean? And, you know, it's not like it's rocket science.

It's a business like any other. And you wrap your head around it and you figure out what do we need to make this successful. Yeah, they didn't have experience. But I think like so many other things, you figure it out as you go. All right. So they have this opportunity to buy a motel. And was it expensive to buy a motel? I want to remember the exact number.

I think it was $300,000. I think they had saved up $100,000 after working in Canada for seven years. And I think they put that down. And I think they bought it for $300K. So you're three years old, is you, your brother, your mom and your dad. And they just relocate to this town right outside of Birmingham, Alabama, to basically take over a day's in motel. And that's it. That's where you end up growing up. Tell me about that. I mean, so did you guys live in a, like, was it like an apartment behind the reception area where you guys lived? And then the motel was like in front, like how did that work?

Yeah. So we lived, it sounds so terrible, but it was actually really nice. But we lived in room 123 and 125. Yeah. And they were, you know, it's like imagine stopping at a day's in somewhere as a motel. And imagine getting two adjoining rooms. That was where we lived. You know, my brother and I kind of had fun. It was like, you know, someone might say, oh, wow, you must be so poor. This must be so hard.

I'm thinking, we have a 104-room house. And do you have a swimming pool? Huge swimming pool. I mean, at the time, it was one of the biggest in Alabama outdoor. Wow. So, and if you think about it, if I ever wanted something to eat, there was a chef. His name was Randy Crowder, and he would make me a burger and fries. Oh, you guys had a restaurant?

You had a restaurant? There was a little restaurant. Oh, wow. Okay. Oh, yeah. And there was a bar. And the woman's name was Sandy, and she made me my first Shirley Temple. Wow.

And was the hotel business? I mean, I imagine it was tough, right? because there's like, you know, it's hard work for one thing. And another thing, like, it depends on guests staying at the hotel. Like, you know, it's a grind, right, to make that work. They figured it out. They made it work. I got some billboards off of the highway.

And, you know, just like anything in life, you figure out the right price point to attract your customer. You say, we have a great swimming pool, an HBO. I mean, these are, you know, early marketing lessons, I suppose. And they made it work. Shazzy, I'm curious, like, as a kid, when you go to school, were you the only South Asian kid in your classes in your school? Yep, totally. Well, my brother, if you were in the same school at the same time, it would be the other one. And as a kid, did you feel different?

Did you feel like you guys were different? Well, I have a lot of heart for Alabama. I have to say. And my experience was really unique. So my parents, you know, despite us living in a motel, they knew that the most important thing for us was to get the very best education. That was part of why they came to America, right? And so for them, that meant private school.

And so I first through third grade went to a private Catholic school. And I was the only Indian girl in the class. And then after that, we found another school. It was a Baptist school. And so I definitely felt more different there because there, that's when I felt like, and I was told this all the time, that because I was who I was and my family was who they were, we were clearly going to hell. And, you know, that our salvation would be if we were saved. Yeah. And I really believed that for a while.

I would come home and question my parents saying, you know, we're really good people and you guys are so nice. Why would we go to hell? And I think in that environment, I felt definitely different, but I had friends. I was like a regular kid. You know, I could invite people over to swim in the pool. We could have really good slumber parties, you know. Yeah, you know, I'm wondering when you were a kid, when you were at school, did your parents, like, you know, have, had these sort of ambitions for you to get like a stable, safe job, like to become a lawyer or a doctor or to go into finance.

Was that, like, was that what they wanted for you? Yeah, I mean, I think with Indian parents, doctor is usually number one. And then, you know, you have to go to Harvard. So when I went to Columbia, it was sort of like, for my mom, it was like, well, why not Harvard? But the funny thing about them is that, of course, they wanted me to have every opportunity. and they wanted me to do what in their mind was the traditional version of success. But the way that they lived and the ethos that they had showed me something very different. They always talked about how meaningful and how proud they were to be owners

and to be the ones who are their own boss. I mean, granted, they're working all the time, but they're working for themselves. They're working for us, not for someone else. And I had never let that go. So you go off to college, and what did you think you wanted to do there? I wanted to be an artist. I went to Columbia. I was excited because I wanted to be in New York City.

And while I was in high school, I painted. Yeah. And my undergrad degree was in visual arts, and I did a double major in history. But yeah, I just wanted to paint pictures. And was business even like, part of your thought process at all when you were when you're in college? Never. You know, if you think about it, like what I'd witnessed and kind of lived through, I had not a disdain for it, but I was just like, I don't want to be a slave to the way that they were just always on.

And I saw them with the grind, and it's like never ending. And I didn't want that. Yeah, because you saw your parents and you were like, this is not the life I want to do. So when you graduated, what did you, where did you go work? So I got a job as the first interactive media buyer at what was then, and it might still be, the largest independently owned agency for media buying. Like a company that buys ads on behalf of clients or brands on shows like ours or TV or whatever. Exactly. And it was fun. I mean, I learned a lot and it was cool. I mean, it was literally, I think the agency that I worked in was the one that Mad Men is kind of based off of loosely.

And I think one of the things I learned is that I was good at it. And I didn't, you know, like I didn't want to be so good at business, but I'm kind of good at it. You know, I was on a good track for success there, but I just didn't feel good about working so hard for someone else whose values I didn't truly identify with. And when I say that thing about Madman, think about what that means. Like, why am I killing myself to make someone else so much money that they then gift their admin who's about to become their wife a Porsche? It just didn't feel right. I mean, this is the story of so many junior people at like consulting firms or law firms or finance firms, which is like they're the cogs grinding away, making all this money for the partners and the stakeholders. Yeah, and using your God-given incredible talent to create abundance, but then for the wrong reasons.

Yeah. It's not up to you where the money goes. Right. And I kind of grew up seeing that when you work for yourself, you're in control, and your values are the ones that you bring to the table because you're the one doing the directing. And I felt, yeah, I just felt like I had to do something else. So I read that after you left, you kind of ran your own marketing business for a while. And then I guess at a certain point you decided to enroll in business school. Well, you know, I decided to go to business school because I realized that I needed more tools in my toolbox so that if I had the idea to do something big, like I could do it big.

And I was totally terrified of going to business school. I mean, I didn't think, and I didn't, you know, I didn't fit in. I was the black sheep of the business school. And it's not like I was alone and everyone hated me or anything. I just didn't. I felt like I felt kind of sad because I felt like a lot of the students, and this is totally different now. What brought them there was different than what brought me to business school. And I expected and wanted to meet more people that were similar-minded to me.

And at that time in that era, pre that sort of 2008 humbling of the economy, there was a lot of hubris in that environment. And then while you were there at Columbia, you kind of, I guess you kind of stumbled on this idea for what would eventually become happy family. How did that happen? What happened actually was it was like the time that people started talking about the new green economy. And there was, I think it was Fortune or Forbes, but there was a story about like, you know, how this could be the business of the future that makes change is like going green. And that sounds so cliche right now. But remember this is like 20 years ago. And right, I remember, I was like within a day or two of reading that article, I ran into a friend of mine.

And I hadn't seen her in a while. And she had had twin babies, which I started. still think it's a superhuman feat for anyone to have more than one baby at any given moment. And she was telling me that she was a bad mom because, you know, she didn't have the time to make all of their food fresh from ingredients she got at the local farmer's market. And I never like to see my friends upset and berate themselves. And this is someone I really cared for. And I'm like, I haven't seen you in a really long time.

You just had twins. it's amazing. And you're not a bad mom for feeding them baby food out of a jar. And then it was like all of a sudden I was like, oh, well, there's got to be something better. There's not? Oh, well, then I'm going to make something better. Because if I can make something better, it all came together for me. It wasn't just like selling a product.

It was contributing to what looked like was going to be the movement of the future towards creating abundance in a way that felt right. And it just kind of came together where it was like, you know, I have to do this. Wait, I'm just, this is like, this is the summer of 2003. Yeah. And in that moment at that lunch, you thought, hey, I could maybe tinker around with this idea. Or was it just a seed that was planted in your head that kind of just sat there and germinated over time? Well, I asked her, you know, what's the best, like, why are you feeling guilty about buying something?

Like, isn't it good? And she's like, no, it's gross. It comes in a jar and smells and it just doesn't like, it's not fresh. And I thought, wow, you know, this shouldn't be one thing that you stress out about. There should be something that makes you feel good about how you feed your children. And then I started looking into it. So you thought, all right, so you leave that lunch and you sort of the gears in your head are turning. And you're like, okay, let me look into it.

And what did you find? What was on the market in 2003? Yeah, so what I found was so interesting that baby food as a category was created in around the 1930s. Okay? And the category was created to be this new market for convenient and cheap product that was consistent. And that, you know, started in the 30s with kind of the two mega giants. Beachnut and Gerber. And the Gerber baby became like an iconic baby.

Yeah. Right? You know, but that didn't meet the needs of my friend. She won something fresh and premium and alive. And she wanted something that was going to contribute to their health and that tasted good. But in 2003, like presumably Gerber and BeechNet were like the Coke and Pepsi of baby food. But there weren't a whole lot of, you know, if you think about Coke and Pepsi, you also have like, you know, a thousand other. great beverages out there that you can sort of check out and organic and kombuchas and whatever

is out there like you go to whole foods and there's just like endless shelves of cool interesting drinks was it mainly gerber and beech nut in 2003 when it came to baby food there was a small organic player um called earth's best right and there were some they were little players there was another one i remember looking at and then there were innovations from around the world i started seeing like there were some fresh and frozen options in the UK. I mean, I went and visited. I tried to learn as much as I could about what was going on. You went and visited the UK?

Oh, yeah, absolutely. Yeah. Like, wait, while you were a business school student, you flew out to the UK to just buy baby food? And met these two women who started a frozen baby food company. And I was, the more I looked into it, see, this is what really drove me. It was like, I actually saw this whole company as an opportunity. to change children's health for the better. I really did.

I thought, well, if we're starting ourselves off on processed foods, and then we're hooked on processed foods, and then we eat the standard American diet, then we get sick. And we get sick because we don't have this, like, health blueprint that could be based on a more natural way of living. So you really start to research this in earnest. You go to the UK, you check out the baby food,

And you start your second year at Columbia with this idea to pursue this thing? Oh, that was all I lived for. Wow. After that point, I just became the baby food girl. And I did a little polling, you know. And this was, I think, 230 parents. More than 70% of them didn't like the taste of jarred baby food. Of that 70%, 12% had made their own homemade or tried to.

Of that 12%, I think it was only like 4% continued to do so. Because it's a lot of work. Yeah, and I'm thinking, let's come up with something that answers this need. Putting some charred lamb and some kale and white beans in a puree feels so special. I'm like, let's make these special. I mean, who's putting quinoa and baby food? Yeah. Just out of curiosity, Shazzi.

I mean, you're obviously super smart and like very resourceful. And you've kind of learned a lot about this industry. But food is especially when you're talking about babies, who, like, that is, that's just crazy, scary because, you know, you like, you need food scientists who understand pH levels and shelf life and spoilage and all this stuff. Like, I'm assuming that you weren't quite there just yet. You're still making it your cuisine and art and just testing it with you and some friends and just, right? or did you start to talk to food scientists already at that point? I was doing both. I was trying to make something that I could be proud of,

and then I was trying to think, well, how do you scale this and make it commercial? And you can't, here's the thing, which you're totally right about. I mean, most of the people, I mean, 99.85% of the people were just like, you are absolutely crazy. I will not touch that business with a 10-foot pole. No one is ever going to manufacture that for you. This is a hazard just from the get-go. and, you know, don't touch, don't try to touch this industry and don't try to wake a sleeping giant.

And I was like, you know, I just started talking to people. I called the Organic Trade Association. I started calling Trade Association, started going to trade shows. I met, like, so many special people that, some that you've even interviewed that I'm just so, like, humbled by. Like, I called them. Like, I called Seth Goldman, you know. Of Honest Tea, founder of Honest T. And 2004, by the way, he was not crushing it yet, right?

Like, his company was still, he was still building it. But he was already a known entity because Honest He was this kind of cool story. And you'd called him for advice, I guess, right? Yeah, I kept putting myself in these positions to, like, meet people and learn because I didn't know anything about the food industry. Right. So your prototypes, where were you making them? Oh, those were like in my kitchen.

I used to have these little... containers and I would make, you know, all the flavors that I thought we would one day launch. And you were turning them into ice cubes, right? Yep, we'd fill it. Feel it a little, like, think of like a, yeah, like a little ice cube tray. And you pop out what you need. And, you know, freezing is sort of nature's best preservative. And I'm just curious about recipes.

How did you know what recipes to make? Yeah, I did a lot of research. I talked to so many nutritionists. I had a lot of friends, you know, and I found my, I was excited to just always be kind of trying new things and coming up with cute names. We had one with beets and carrots, called it beta carotene. I like that. And the peas were a nice one, and they were so bright green, but I felt like they needed something.

And so it would make this really nice mint tea and steam the peas with the mint. And that, you know, I don't know, you play with it and you learn. It was fun. So it was like a couple of you would do like two, three, four. thing ingredients in there not too many vegetables and fruits um well there was one inspired by my mom called baby doll and that was um that had some more spice and some flavor in it was it lentils or yellow peas or yeah it was lentils french lentils and um potatoes carrots and we used coriander and a touch of human and just a hint of cinnamon and all of those things had you know like everything had a reason it

It wasn't just, I mean, it was like if you only had good stuff under the kitchen sink and you threw everything in the kitchen sink, it would be good because you started with good stuff. It was kind of like that, just, you know, so many different fun combinations that felt right and sounded good and tasted good. I mean, at this point, it was still just you, right? I mean, because you keep saying we, but I think you're, you are in your kitchen doing this by yourself. Yeah, no, at that point it was just me. And then I had a lot of friends who knew what I was doing. I had almost like a support group. That you were just, and you were talking about this all the time.

And at what point did you come up with a name Happy Baby? Well, it was called Fresh Start Organics. That was the name I wanted, was Fresh Start Organics. Yeah. And it actually turned out when I went to finally get to the trademarking that Fresh Start was taken by a woman in California who was going to do fresh frozen organic baby food, which never ended up launching. But even still, we had to come up with options. And so I remember having these little boards, and there was a naming shop. God, where are they from, Minnesota?

And they came up with a number of options, and they were like Twinkle and Goo Goo Gaga. And I mean, funny names. And one of the names they came up with was Happy Baby. And I was like, at first I didn't actually see it. I was, the one I wanted to go with was nurture me. And our incorporation name was nurture ink. And then finally I started seeing happy baby and happy and like pairing the emotion with health. And it was just like, who in the world doesn't want a happy baby?

That's everything. All right. So you've got a name. You've got this concept of like frozen baby food. Now you need money. Where do you go? I mean, I tried everything. So I wanted to raise like half a million dollars, which to me was like the current equivalent of maybe a trillion dollars.

Yeah. And that would be enough to get the first like production up and running and to maybe get some distribution. Like that would be enough to give you like a year or two of runway maybe. Yep. The original plan was to launch in a few stores in New York, you know, find a manufacturing facility to make it. You know, put together best in class advisory board, microbiologists. nutritionists, pediatricians, like the whole, you know, build out a team and have people to help because nobody does any of this stuff by themselves. And I almost made the worst mistake of my life.

I almost took half a million dollars from a VC group because I felt so alone, you know, and I felt so broke, and I felt like a disappointment to my family. that here I was, went to Columbia Business School. I never recruited for anything. You know, everybody else is like, you know, talking about their job at Morgan or whatever. And, you know, like some of them, you know, some of my friends would be like,

we're going out for sushi. I mean, I could never go. And meanwhile, your mom and dad are like, so what are you going to do? And how's this baby food going and, you know, whatever. Yeah. And I didn't want to ask them for money. Yeah.

You know? Yeah, sure. Because I just didn't feel comfortable. And it was kind of like when I wanted to be an artist, I didn't want to ask them to support me so I could paint pictures in New York City. It just didn't feel honorable and right. And so I got a job.

And then this time, you know, I found someone and I thought, okay, this is it. I'm going to raise this money. You're talking about money from the VC firm. Yeah, and I'm thinking the terms were so bad when they finally gave me the term sheet that I shared it with a few, different advisors. And everyone was like, Shazzy, you can't take that deal. You lose control the second you start. You won't really own this thing. And, you know, all the things that you want to do, you're jeopardizing them by bringing on a partner who you don't really know.

Just to clarify, when you, when you, when you, because you need money to start and they came, or you impressed them and they're like, sure, we'll give you half a million bucks, which can be really attractive because it's a shortcut. They need to have to go to a bunch of people and start asking for all this money. If one, one VC firm is going to give you all of your seed money, that's going to save you a lot of time. One check with a nice office.

And that's attractive. And a lot of people, we've had them on the show. They take that deal. But the terms were, do you remember what the terms were? Like they would own more than half of it or what? It was 70%.

They would own 70%. Have every blocking right, every right to, you know, and I was ready to sign on. And then one day, one day one of them was. It's just like, yeah, we love the name Fair, F-A-R-E.

And I'm like, I don't know, it doesn't, like, feel good and just kind of gross. And, like, I was just, I was funny, that was, like, the day that I met my husband for our first internet date. You met online? Yeah, we met on the internet. And I remember walking into this, like, little place in Soho. And I meet Joe, and he's this, like, cute puppy dog of a guy. And I was just like to kind of tell this guy my whole, and then he's like not a business guy. And I remember part of the story is just the advice he gave me, which was like, don't do something and doesn't feel right.

Like I don't have an MBA from Columbia or a degree from an Ivy League school to tell you that. He was like a snowboarder yoga guy. I mean, but he was right. And I didn't take the deal. Wow. So wait, wait. And this first date with this guy who is now your husband and partner in life, he's like, this just doesn't sound right to me.

And you're like, yep, I think this is not right. I don't think I'm going to do this deal. Yeah. I mean, it might be obvious to you or to someone else, but, you know, when you're in the thick of it and you're stressed out, I mean, you're using your Amex to charge peanut butter. I would eat peanut butter in my apartment in Brooklyn with a chopstick to make it less longer. Like, who does that? Yeah. So you tell this VC firm, I'm not going to take your money, but that means you now have to find the $500,000, because this is the number in your head. So where do you go? How do you start to get that money?

It was hearing no a million times. I mean, I could probably still remember the original investor roster. I think it was $36 people for $550,000. And Seth Goldman of honesty was $2,500. $500. $2,500. He was going to originally, he was going to give us $5,000. But then he told me that his wife really needed a new oven that year and he was going to have to cut it down to $2,500. Like, it's oven cost $2,500. By the way, how long did it take you to cobble together the $500,000? It took like at least six months.

And then as soon as I raised that money, I started raising the next million. like because we were like on the verge of spending it all you know it's just it's like a it was a churn the the thing is is that the in some ways the seed round is the most stressful because you're raising money from people you know right like family and friends and like it's their money um but at the same time like they're also the people who want to help right so i mean did you find that it was challenging getting that initial 500 000 where most people like you know shazzy i believe in you I've known you for a while and here you go. Here's 5,000 bucks or here's, you know, $2,500 or here's $10,000.

Oh, my God. It was super challenging. The ones who like you, who don't really want to invest, have a hard time being straightforward sometime. And so then you're like circling back and circling back and following up. You know, it was really hard. And yeah, some people believed in me. But like, I didn't have a track record, you know.

And I've never done this. before, I didn't know anything about the food industry. And I think the people who invested, first of all, there's so much extra pressure when it's the people you know. Yeah. And my mom, actually, to go back to the banning, she was the first person who put the money in. Like, I knew the value of my mom's money. And, you know, I knew she was like making a margin selling Snickers bars to give me that money.

Yeah. And that had a tremendous amount of pressure. And then there were people who invested because they really believed in the vision and the mission and felt like it was right. And felt like, you know, I was going to do my very best or die trying. When we come back in just a moment, Hashazi took that startup cash and created her first products. And what happened when those products totally bombed? Stay with us. I'm Guy Raz.

listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's the mid-2000s, and Shazzy Visram is working on a fresh, frozen type of baby food, an alternative to the jars of Beech Nut and Gerber that dominate the baby food aisle. But her idea, it's hard to pitch to investors because the Beech Nuts and the Gerbers, they're super inexpensive, often less than a dollar a jar. My whole pitch was, look, I'm not trying to make something cheap.

I'm trying to make something premium that is truly like an alternative to homemade. And, you know, we might look at the baby food market, but then look at all the other stuff for baby. You can drop $1,000 on a crib right now if you want. You can drop $1,000 on a stroller. And yet at the time, parents didn't have a better option when it came for food, which does actually impact your own. health. And so my whole thing was, look, people will spend more and we will be able to have a healthy margin. And to a retailer, this is an opportunity to make a healthy margin on something that was otherwise a loss leader. All right. So you raise this money and you need to start to make

the product, right? But in the meantime, you met somebody who becomes your sort of your co-founder, Jessica Rolf. Who's Jessica? How'd you meet her? So, yeah, Jessica was my founding partner and she was our C-O-O and she was working in Texas at Whole Foods, like on-site at Whole Foods, basically doing research for them. And we were connected through a mutual friend. And, you know, I said, look, if you want to be a part of this, come join me. Help me. But that's kind of a big risk, right? I mean, there are many stories like that that end really badly.

How did you know that this was the right decision? I think I have a pretty good gut for good people. You know, I talked to her and met her a number of times before I offered her a role. But she was just authentic and smart and really organized. She was a perfect person to be a C-O-O to like a crazy kind of loud-mouth visionary type person. who had big ideas and big dreams. She was an executor, and that's what a lot of us founders need sometime as, you know, the right person to actually make it happen. All right, so you've raised this seed money.

You've got a partner in Jessica, and how did you find the place to make the baby food? Was it in New York? I mean, I guess it would have to be, right, because you were living in New York. Yeah, actually, there was a man I'd met who had a little manufacturing facility. outside of Boston. And he was making kids' foods. I remember calling him, and I said, Steve, can you just, do you think it would be okay? We could just do a pilot run?

Because I really just, I want to launch from a professional facility. And he said, yes. And Jessica was there, and we were jumping up and down, you know. And we would drive up, and because my parents had a days in, we had these days in employee discount coupons. They were like literal physical yellow coupons, and you could get a days in room for $25 a night. So like Jessica and I would share a room at the days in Danvers,

which was near the facility. And we would literally go and like make the baby food in their plant. And we initially used like a pastry baster, pastry bag type of thing to fill. To just fill what jars? Oh, cute ice cube. No, we made a mold. We made a tray that looked like an ice cube kind of tray. And we would fill, you know, it was kind of like Laverne and Shirley.

Like, I would do the peas and she would do the carrots. Oh, so you guys were making, you guys were doing the labor. You didn't just outsource it to them and have them do it. Like, you had to do it. There were people around to help, but, like, we were doing it. But this is, like, by hand, a giant, like, pastry bag that you were just squeezing into the things. And then the other question is, where did you get all, like, the vegetables and the, you know, the peas and all that stuff, where did you source that from?

Yeah, I mean, so it'd be like local organic produce that we would, you know, peel and chop up and steam and, you know, just literally just like if you were making it homemade, that's the way we were doing it. And this is a commercial kitchen and you just use like their giant whatever pots and steamers and whatever to just to make the first run, the first badge. Exactly. Yeah, they have a massive, you know, it's like it looks like a like if a giant had a cuisine art. They had one of those, and they had this blast freezer. I remember being in that blast freezer and being like so cold. Yeah. And the ice trays of the baby food, did you put that in like a cardboard box, or was it like a little plastic sealed plastic thing around it with your name on it, like happy baby on it?

What did you, had you package it? Yeah, so there was an ice cube tray and had like a thin sort of plastic film over it that was like kind of heat sealed on. and then it came in a little cardboard outer shipper, and it said Happy Baby, and there was pictures of all of the fruits and vegetables, which I would take. So I had this little white box, and I would take all the fruits and vegetables

and photograph them, and then we had a contest for all of the different babies to be on the front of the Happy Baby box. And that was really fun to name the winners, because they all, of course, became, like, huge fans of Happy Baby. So at least we had, like, seven consumers in the beginning, because one of them was my nephew. Yeah.

But yeah, and it's just, it looked like this fun, beautiful, different thing in the freezer with a bunch of babies on the front of the box smiling at you as you walk past the freezer. But once you packed this first run, how did you, where did you sell them? I mean, you had to sell them at a store. So what store, who sold it? So we launched with, in New York City, in five gourmet garage. stores. The gourmet garage is my first of, I mean, must be at least like a thousand demos. And assuming you're doing these in the frozen food aisle, right? I mean, is that, is it how it worked?

Yeah. So you have like a table. And you put down as much as you can to make it look nice and warm and fuzzy. And I'm standing there with a happy baby t-shirt on and my gloves, you know, and you're trying to get people to sample what looks like warm, fresh, really, really high, like beautiful colors of these like yummy foods that I'm thinking, I'm so proud of this. This has taken years to make this, you know? And you're standing there by the freezer waiting for someone to come. And then it's like barely anybody comes. And then you're waiting for, you're waiting for a mom with a baby to walk in. And you're like, oh, mom, baby, come. And they might just pass you by.

Like, I'm sorry, I'm just really busy. Yeah, I mean, imagine, like, I don't want to try that. Or, ew, baby food. A lot of people were like, ew, I don't want to sample baby food. And I'm like, well, why don't you want to sample it? It's amazing. It's so look at this. It's incredible.

It's delicious. I live for, literally, I live for this. But that's not how you convince a consumer to buy something. And I'm thinking, like, I have this big dream. to change the way children are fed in this country. And it is not going to happen if I keep standing where I am standing right now. But I understand why weren't people buying them? I mean, it's a great idea.

You're demoing it. You've got this cool concept. Why weren't people buying the frozen baby food? Because it wasn't that some people weren't buying it. There were just a few people who were buying it. Right. But they were buying it as an alternative to homemade. They were not, what I needed was the alternative to the jar.

And that's how you move markets. And it wasn't convenient. And also I guess our habit is to go to that one aisle where all the jars are. Like we don't, it's hard to change human habits, right? And people were not used to going to the freezer aisle for baby food. I mean, one of the hardest things to do is to change human behavior. And what I realize is you have to work with the existing human. behavior and make small steps to change. I realize that my whole dream of creating, you know,

this sort of like enlightened alternative to that jar, that alternative was not frozen baby food. Just to get sense, like in the first year of the company, do you remember what your revenue was? $116,000, which was far from what I thought we would be on track for. $116,000 is revenue, but obviously you've got all the costs of the produce you've got to buy, the packaging and the distribution. Like, you probably were losing money, right? You're eating into your 500,000 seed money pretty quickly. Oh, yeah. Our revenue was certainly not covering our costs, our operating costs.

Yeah. I mean, this sounds like you realize this pretty quickly. Like, within the first year of launching the company, did you continue to make the ice cubes in year two year three because this is like 2006 2007 is that what happy baby was still in those years yeah so in 2006 when we launched we had five skews 10 flavors of frozen organic baby meals and um I think probably guy within and here I'm talking about something that took me almost two years and change to get on shelf, get produced professionally, have the right quality control, scientists,

microbiologists, everybody working together to make this product. Probably on the third time that I did a demo, did I realize that this wasn't going to work. But you still have to make it. You still have to sell it. Yeah. And what I realized, hey, Shazzy, you're being a dummy. Frozen, this is a beautiful product, but it's the alternative to homemade baby food. Yeah. This is not how. how you're going to change the way children are fed in our country. You've got to do that in the baby aisle where moms are shopping and dads are shopping. So did you start to think, okay, I better just make shelf-stable baby food and jars like Beech Nut and, you know, Gerber? No. No, what I thought was let's look at the set and let's enlighten it. And the first innovation actually was let's look,

let's see what's there and how can we bring something meaningful to the table. And it was funny. I was having, we had a trade show. We were, you know, sampling the frozen baby food because to the external world, you don't tell them you're giving up on something. You're still selling it in and trying to build a brand, you know, but in your heart, you just know, like, it's just like, you know, this is not going to be the thing, but you got to keep it going. I'm really interested in this because there's a lot of times where you see somebody, a politician or a business leader is very optimistic. You know, a politician is a good example. Their poll numbers suck, but they're like, we're going to win the White House. Your sales sucked. And you still

had to sell this product and be optimistic and represent it. Always. And it was, this is, you know, this is part of the solution. We're playing a long game here. We're changing consumer behavior. That doesn't happen overnight. You know, believe in me. Buy us some time.

We're going to support this. We're going to promote it. I mean, the sales were terrible. And every time we made a batch, we would lose money on it. You know? And we had to keep selling it in to keep staying alive because you can't just like launch and then go away and then come back two years later. Yeah.

And we're on a mission. Don't give up on my mission. But it was hard. When we come back in just a moment, how Shazi discovers a much smarter way to package her product and then gets it featured in a Super Bowl ad without having to pay a penny for it. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2007 and Shazi Visram has hit a wall. Her frozen cubes of pure. fruit and veggies aren't selling, but she's not ready to give up on the baby food business just yet. So she's desperately looking for an idea that will stick. I mean, we looked everywhere. And the first space to innovate where I really saw something was with cereal. So we launched the first ever baby food in the world that had probiotics.

And I believe very strongly in establishing strong gut health. you know, from the very beginning of life. And why can't we introduce them into a first food that's a weaning food, typically off of breast milk or formula. So we still have, so the baby still has probiotics. That was just a moment. And that became happy bellies. And that cereal was like a huge success.

I mean, to quantify huge. It was, it took us from, you know, we did 115, 116,000 the first year, $520,000 the second year, still on frozen baby food. The next year we launched the cereal and we're able to get so much more distribution because we weren't struggling for space in the freezer. Right. And we went to $2.1 million. So this is like rice cereal that you mixed with water?

Well, so we had a multi-grain with Amaranth and quinoa. We had rice, brown rice. And we had an oatmeal. And we could also, you know, show people how you could. mix them with the cubes of frozen to make a yummy breakfast or a meal. And it started beginning a platform. It absolutely saved our hides. Wow. But you're still not able to kind of crack that market with the frozen baby food. So are you still obsessing about how to solve that problem at this point? I was never not thinking about what is the actual alternative to the jar. And then one day I saw it.

One day you saw what? I saw a pouch of a sauce at a trade show in Melbourne, Australia. And then I started seeing... Oh, like cooking sauce. Yeah, and then I started seeing kids' applesauce in this pouch. The squeezy sauce, like that pouches, yeah. And it was from Europe. And it was like the very...

You know, at first there were these pouches that had this tear strip. And we looked into that, and we launched initially with both kinds of pouches. a tear strip for more chunky meals and a pouch that had a spout where the beauty of it, this is this product, this package enabled to change consumer behavior in a way that gave them a more premium product with fruits and vegetables, and a lot of vegetables actually, but made it easier rather than harder. I mean, it was like, you know, it was like the epitome of the light bulb moment where we've been in in this game for a few years now, and you see something, you're like, that's what I've been looking for all along. And that is it. That is the alternative to the jar. Because you wouldn't

need to refrigerate it. You could put it on the shelf next to Gerber and whatever, right? And it's convenient. It's a pouch. And it tasted better, and it felt better. You could feel the fiber and the food, like the technology allowed for such a different process. All right. So you've got this idea for pouches. So where did you source them from? And what factories were going to be able to, because you were using like pastry bags to fill ice cube trays, and I guess it got a little more sophisticated, but what factories or companies or, you know, plants in the U.S. could fill pouches with your baby food? There were two options in the United States and one in Canada. And when you noticed something that's disruptive and groundbreaking in the market, your competitors notice it too.

Yeah, sure. And if you don't have cash to compete with someone else asking for that line time in these facilities that have this very precious and very highly sought after commodity of a technology, then that's when it gets like really challenging. And so we lived through that too because if you're scrappy and bootstrapped the way we were, that was actually the big thing. It was like, it was so crazy because I'm sitting here thinking, I finally found the solution that will make this business,

the business in my dreams. And then you're like, oh, my God, I have this huge challenge as a result of that solution that makes me feel like this is nearly impossible right now. And there is, I mean, the world of baby food sounds sweet, but it's actually like a dog-eat-dog. It was like a dog-eat-dog world of competition. And back then when you're fighting for shelf space, if you think about it, like going to a retailer and showing them this whole full lineup of maybe 20 skews to have that platform.

I mean, this was like, it was like the stuff of dreams. But you had to be the first one to get there. And were you the first one to get there or were there others who snuck in before you? Okay, so we were the first brand of baby food and pouches and whole foods and Target. Wow. And those two accounts were really meaningful for our whole business moving forward. How? How did you get into Target?

We got into Target with frozen baby food. Jessica and I would walk around a store. There was 12 Target stores that we were in for the test. We would walk around the store with a free trial coupon and a box of frozen baby food. And regardless of how terrible our turns were, they kept us in. And I'm like very proud to tell you that Happy is the biggest brand and Target in Baby. Wow. And it started in 12 stores literally walking around and giving it away for free.

But how did you, I mean, how were you able to fund that? Was it hard to fund that growth? Because, I mean, I've read that you basically were like, I'm just not going to go to private equity or venture capital. I'm going to raise this money pretty much from individual investors or, you know, I'm going to borrow it. that's harder to do in some ways. Were you able to raise the money fast enough to fund the production? I never, so I never took a penny from any institutional shareholders. That time in our life, that was really hard for me because I, up until that moment, we didn't have this like breakthrough hit. And I was ready to do whatever it took to make sure we had the financing

we needed to grow the business. And I started talking to private equity finance. funds and I had a few options and I was scared but I you know like you it's one thing to cobble together $550,000 from 36 people it's another thing to raise $8 million in one shot and that's where I was that's what I was looking at and um actually what happened is you know my son was just born I got an inbound email that said we're doing an online it was going to be an online documentary, actually, for American Express. And we want to tell the story of Happy Baby. We've heard about your company.

It was just a random solicit, like an email from somewhere at Amex who just... Well, it wasn't totally random. It wasn't totally random. So the real story is in 2009, there was a competition called Shine Alight. And Shine a Light was a competition between American Express and NBC to shine a light on inspiring new businesses that were actually. making it in America. And you had to submit this very long form and, you know, talk about why your business could be, could be one of these. We didn't win. We were actually the second, we were

the runner-up to the most inspiring business in the country. And then what happened was about a year later, American Express was doing another campaign. And I had no idea when they called. It was an inbound email. I didn't even know it was related. And finally said, well, we heard about you through shine a light, oh, we're just doing an online documentary. Can we follow you around for four days? Of course. So they filmed this for four days. This is, it's all kind of culminating, you know, so I, I just had my baby, and he's in the video,

and it's very sweet. He's the happiest baby, honestly. So it was just beautiful to see that journey kind of documented. And, you know, we've been, like, working hard, and we're sort of seeing some success. It's not big, but, like, it's coming. And the pouches are coming. And we know that something is about to happen. And then Amex emails.

And they say, we need you to come in for voiceover work for the commercial. And I'm like, what do you mean commercial? I thought it was an online documentary. Oh, no, it's a commercial. It's the centerpiece of a campaign. We're putting $50 million of media behind your commercial. Wow. So for, I mean, this was going to be a massive ad campaign that you didn't even have to pay for.

I mean, there was no marketing dollars. you had to put behind it. You were all of a sudden going to, your name and your brand were going to reach millions of people. It's a guy. They played it before, you know, like on the Golden Globes when they show you, like, save it for the end, what's the best movie? Our commercial played before that. They played it on the Super Bowl pregame. Wow.

And all I had to do was take that email from Amex and email it around. And I raise $8 million in three weeks. Wow. Yeah. I mean, what happened to sales? I mean, all of a sudden, millions of people are exposed to your brand and products? That year was 39 million. How did you make enough products to fulfill all that demand?

God knows. It was hard. 39 million went from 13 million to 39 million, like practically overnight. And we had 100 and some skews. So at this point, we were building a real platform for nutrition. for, you know, the first three years of life. A hundred different products. So like the pouches and the cereals and the, you know. Puffs and the yogis.

Yeah. All right. So here's, now here's the crazy thing. You hit $63 million in revenue in 2012, a company that did $115,000 just a few years earlier selling frozen ice cubes of baby food that you were co-packing. You were making in a co-backing facility. You're doing $63 million. You far are presumably exceeding even your own business plans and projections. In 2013, you sell 92% of the company to Danone, which makes yogurts and it's a huge French conglomerate, owns a lot of food companies.

Why? What was the thinking behind it? What was the advantage? I mean, obviously, you're going to get paid a lot of money, but you were already doing so well. why did you sell it at that point? I was really, really nervous. I was nervous about the future of the business because I saw the potential of it being the biggest baby food brand in the world.

And I really felt like we are, A, in uncharted territory, B, it's not like you don't know what your competitors doing. I knew both of our bigger competitors had hired bankers and were selling their companies. This was like plum organics and... There was another one called Ellis. And you knew if they had the backing of those big companies, they could potentially crush you, right? With all those ad marketing dollars and R&D and the distribution they had.

Like if they wanted to, if you stayed independent, you might have gotten crushed. We might have gotten crushed and everything we worked so hard to build around that initial mission of actually changing the way children are fed. All of that could have been. jeopardized. And then personally, I was just, I was in so much turmoil at home. And I just felt like I needed, I needed another strategic partner. What was going on at home? Well, in April of 2012, my son, who's, you know, so beautifully featured in the American Express commercials, was diagnosed with autism. And it was a state of, it was, they call it regressive autism. So he had every milestone his first two years of life.

And all of a sudden he was losing his milestones and losing his ability to communicate and point and talk and label things and make eye contact. And it was terrifying. And as a mom leading a business that was what, the fastest growing food business for almost three years in a row, it was, you know, I felt like I needed to take a step back and say what.

I need to focus on, number one, the health of my child and my family. Yeah. So, I mean, this is really important because, right, we talk to founders about their businesses and growing it. And usually we do talk about personal life. And that's much more important than the business, right? And in this case, you now know that you need to focus on, primarily on your son and working with him and with people who could help him. And you were not able to do that in sort of the life you were living, I guess. Is that, is it right?

I mean, it's right, you know, not just financially, but focus and attention-wise. You know, it's like there's so many special moments. not that I was just missing as a mom, but that I needed to be a part of in order to help his healing. And the thing was, what my parents would have done for me is drop everything and focus on how to figure out the solution for me to have the best chance in life. I mean, the other thing is that in addition to, of course, getting more time with your son, I mean, I'm assuming that choosing to sell also gave you, you know,

financial security because I think a lot of people don't realize that even though the company was making, you know, $63 million in revenue at this point, I'm assuming you were not, you weren't making millions and millions of dollars. And by selling to Danone, it was going to make you financially secure, which I imagine was attractive, that security was attractive. Well, sure, especially when you feel like you need to find, you need something for your family and your children. I will, you know, I will kill. kill for it. Yeah. You'll blaster the walls, yeah. I will do everything in my power. And I'm a fighter, and I don't quit. And in that case, I felt like that was the right choice to give me some financial

security, to partner with summons that I could continue to build and have ownership, but not the majority of the burden. And, you know, not for nothing. Danone's been selling baby food for 100 years. They were the second largest infant nutrition company in the world. And there were a lot of synergies that I could have imagined working with them to build this brand for the future and which we have actually accomplished. Yeah. I mean, it's interesting. We did an episode with Tristan Walker who started Beville, personal grooming products for men of color. And then he expanded it.

And he sold it to Procter & Gamble. And now he works for Procter & Gamble. And one of the arguments he made was like, look, to get this out into the world, we needed the marketing dollars, the R&D dollars, the distributors. the distribution dollars that a company like Procter & Gamble has, was it the same with Danone? Like with Danone and their marketing budget and their, you know, huge R&D and their other brands, was that in your mind the way that you could really scale happy baby and happy family and turn it into the big huge brand you wanted it to be?

Yeah, that was part of what I had hoped. And if anything, I wasn't. so naive to think they were going to do very much because, you know, when a big corporation buys a smaller brand, part of it is they want to retain your DNA and what makes you uniquely, you know, like the mission of our brand and the beauty of our business is very attractive to a large organization because we help inspire them to make the changes that they inherently want to make but have inherited so much else in their history, you know? And it's funny how it works but it's been a really pleasant two-way street.

And we've stayed very true to who we are. Yeah. For instance, I really believe strongly in the movement around B-Corps. And Happy has been a B-Corps for many, many years. And Danone recently became, you know, the largest publicly traded B-Corp in the world. And I feel like Happy has been an inspiration in that process. And that's a way to make systemic change. I'm not saying everything is sunshine and rainbows when you sell your company as a founder.

It's hard. It's bittersweet. It's my baby, but it's not mine anymore. You stepped down as CEO in early 2018. Shazzy, when you think about all that you achieved and, I mean, you know, just those, the pivots and the crazy moments and Amex and seeing the pouches and then, you know, how much do you think this is this all happened? because of luck and how much because you were just smart and you worked really hard? I don't see how you can answer that without saying both. You know, I think number one, I think I am the luckiest person I've ever met.

But, you know, I think you make your own luck by showing up and fighting for what you believe in. But like I say, you can't win the lottery unless you buy a ticket. So I think it's both. If you, I mean, if you think about, I know your dad, he, he, he, He passed away in 2013 and your mom's still around and she's still in Alabama, still involved in the motel business. They wanted you to be a doctor, lawyer, or maybe finance anything like that. I mean, I have to assume that even your dad, he got to see he got to see you really succeed. He got to see that.

That must have been a big deal for them, you know, moving to the U.S. with no money and like knowing no one and grinding away at a motel and raising their kids. kids in rooms, 101, 103, or whatever it was. And to see you achieve that, I mean, just a must have just, they must have been so proud. I mean, he must have been so proud of you. He was, he was, you know, nothing makes me prouder than thinking about every, you know, month we would, well, we would talk almost every other day, but every month I would call him and tell him what our sales were. And I used to call him and say, like, Dady, we did four.

thousand dollars in sales you know and then I remember the last one was like May of 12 I think we had a ten million dollar month and my dad would always remind me he would say Shazzie you are a lion and they are sheep but you are a lion and the irony at the end when we sold the company and he grew up again dirt floors motel room he was comfortable there. He died a millionaire because of their investment in happy baby. And the most happiness I've ever gotten from the conversation with him was telling him, we sold the company and getting him to guess for how much. He couldn't believe it. He actually told me he had to sit down. His head was spinning and he had to lie down. And so, yeah, but he was proud of me.

because I think I became the daughter that he had hoped for as a human. You know, you want your kids to grow up and be someone that you love and you're proud of and you want to be around them and you, you know, you respect them. And I think that's what we had. That Shazi Visbram founder of Happy Family Organics. When she left the company in 2018, it was doing more than $250 million in revenue a year. As for Shazi, she launched a new company last year. It's called Healthy Baby, and it sells organic diapers and plant-based skin creams and related products for baby and parents.

Hey, thanks so much for listening to the show this week. If you want to contact our team, our email address is hibt at ID.wondry.com. If you want to follow us on Twitter, our account is at how I built this, and mine is at Guy Raz. And on Instagram, I'm at guy.org. This episode was produced by Rachel Fockner with music composed, by Ramtin Arablewee. It was edited by Neva Grant with research help from Candice Lim. Our production staff also includes J.C. Howard, Casey Herman, Liz Metzger, Carrie Thompson, Alex Chung, Josh Lash, Sam Paulson, Catherine Seifer, Elaine Coates, John Isabella, Chris Messini, and Carla Estevez. I'm Guy Raz, and you've been listening to How I Built This.