Jan 30, 2023 · 1h 25m · how-i-built-this
Chomps: Pete Maldonado and Rashid Ali
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Chomps co-founders Pete Maldonado and Rashid Ali share how they turned past entrepreneurial failures and a bootstrapped $7,000 investment into a healthy meat snack brand generating over $100 million in annual sales.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 31.9% of the talking time here. How this is scored →
Guy as informed peer 3.1 Guest teaching 2.7 Guest disagreement 1.2 Guy pushing back 1.4
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:10:39 Calling out competitor greenwashing and misleading labels
Pete forcefully attacks legacy meat snack competitors for deceptive labeling practices, mocking rivals who rephrase ingredient lists to claim '100% beef grass fed' instead of genuine grass-fed beef.
Hardest push from Guy ▶ 30:45 Guy challenging Rashid's instant partnership without diligenceGuy playfully challenges Rashid for committing $3,250 and signing a 50-50 partnership in 24 hours, pointing out that it ran totally contrary to his rigorous professional background as a corporate consultant.
Biggest teaching moment ▶ 1:14:32 Pete overturning assumptions about jerky demographicsPete educates Guy on the modern meat stick consumer by revealing that over 70% of Chomps buyers are women and mothers, overturning Guy's assumption that the customer base is primarily male gym buffs.
Guy holds their own ▶ 57:19 Guy detailing Trader Joe's private-label playbookGuy demonstrates deep industry expertise by breaking down Trader Joe's standard retail playbook of testing branded items before replicating them under internal house labels.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Pete Maldonado's Athletic Roots and Dropping Out of College | 1 | 2 | 1 | 1 | Guy asks basic biographical questions about Pete's athletic background in Long Island and early personal training gigs. Pete humorously explains deciding to drop out of college on the spot after changing his business professor's flat tire. | |
| Florida Real Estate Flipping Boom and Bankruptcy Collapse | 3 | 2 | 1 | 1 | Guy contextualizes the mid-2000s Florida real estate boom and easy credit environment. Pete describes getting over-leveraged across multiple properties before being wiped out and declaring bankruptcy in his mid-twenties. | |
| The Rise and Fall of Frozen Fitness | 4 | 2 | 1 | 2 | Guy drills down on the logistics and economics of Pete's meal-prep concept Frozen Fitness, noting the steep working capital and distribution demands. Pete describes the distribution failures, overbuilding the website, and signing the business over to his angry investor. | |
| Moving to Chicago, CrossFit Trends, and Logic Meat Locker | 4 | 2 | 1 | 1 | Pete details moving to Chicago, discovering CrossFit culture, and testing consumer demand with cheap Facebook ads and Google Trends before founding Logic Meat Locker. Guy references ButcherBox to frame the direct-to-consumer frozen meat model. | |
| Partnering with Rashid Ali and Merging Complementary Skills | 3 | 2 | 1 | 2 | Rashid joins the conversation to describe meeting Pete at a poker party and partnering within 24 hours based on complementary operational and creative skill sets. Guy playfully pushes back on Rashid's total lack of typical corporate diligence before investing. | |
| The Logic Meat Locker Deficit and the Meat Stick Epiphany | 3 | 3 | 1 | 1 | Rashid breaks down the flawed economics of Logic Meat Locker, explaining how customizable orders and expensive frozen shipping made profitability impossible without scale. The founders describe realizing meat sticks offered a shelf-stable alternative. | |
| Mid-Episode Bumper: Heading to Missouri and the Big Break | 3 | 3 | 1 | 1 | Guy questions the mechanics of casing and curing meat sticks. Pete and Rashid describe driving to tiny Green Top, Missouri to meet co-packer Kevin at Western Smokehouse, who agreed to test small production runs. | |
| Developing Clean Formulas and Early Quality Nightmares | 2 | 4 | 1 | 1 | The founders detail removing added sugars and chemical stabilizers from traditional meat stick formulas. Rashid educates Guy on early quality control disasters, including packaging delamination air channels and irregular fat spots. | |
| Spare-Bedroom Fulfillment and the Uncrate Traffic Spike | 2 | 3 | 1 | 1 | Pete recounts fulfilling initial orders out of his second bedroom and hauling packages to the post office in his Jeep. Rashid describes receiving thousands of unexpected orders while on his honeymoon after being featured on Uncrate. | |
| Managing E-Commerce Cash Flow and Sourcing Australian Beef | 4 | 4 | 1 | 1 | Rashid explains managing cash flow by collecting DTC credit card payments upfront against supplier terms. He explains why they shifted beef sourcing to Australia and Tasmania due to automated X-ray grading over domestic core drilling. | |
| Contrasting Growth Strategies and Committing Full-Time | 4 | 3 | 1 | 2 | The founders contrast their cautious side-hustle approach with RXBAR's rapid full-time leap. Pete recounts getting an unexpected call from Trader Joe's, holding firm on branded product, and receiving a staggering 1.1 million stick purchase order. | |
| Mid-Episode Bumper: Scrambling for Working Capital | 3 | 2 | 1 | 1 | Pete and Rashid describe raising short-term bridge debt from friends and family to fund working capital without surrendering equity. Rashid shares that his own brother demanded a personal guarantee on the loan. | |
| Navigating Co-Founder Friction and Rashid Going Full-Time | 3 | 2 | 2 | 2 | Guy presses into the co-founder friction during the phase when Pete was working full-time while Rashid was still consulting. Pete admits being annoyed by Rashid auditing his work from the outside, while Rashid emphasizes the unglamorous backend financial rigor required. | |
| Channel Discipline, Retail Focus, and the 2018 Brand Refresh | 3 | 3 | 2 | 2 | The founders discuss defying advisor recommendations to expand rapidly across all retail chains, choosing instead to focus strictly on Trader Joe's and DTC. Rashid details going full-time in 2018 and executing a critical packaging redesign. | |
| Market Differentiation, Female Consumers, and Surpassing $100 Million | 4 | 4 | 2 | 2 | Pete criticizes legacy meat snack competitors for greenwashing and misleading labeling. He surprises Guy by revealing that Chomps' core customer base is over 70% female and moms, completely defying standard jerky category demographics. | |
| Pandemic Volatility, Facility Expansions, and Disciplined Team Growth | 3 | 3 | 1 | 2 | Pete details pandemic volatility where impulse checkout purchases plummeted before surging past production capacity. Rashid outlines scaling to multiple manufacturing facilities while deliberately keeping headcount under 40 employees. | |
| Accepting Minority Private Equity and Building Toward $1 Billion | 4 | 3 | 1 | 1 | Guy discusses Chomps accepting an $80 million minority investment at a ~$200 million valuation. Pete and Rashid explain seeking experienced institutional scar tissue rather than cash as they build toward a billion-dollar business. | |
| Immigrant Heritage, Resilience, and Capitalizing on Luck | 2 | 2 | 1 | 1 | Guy asks about the balance of luck versus hard work. Both founders credit their immigrant backgrounds and observing family resilience for their scrappy, persistent execution style. |
Statements from this episode (25)
Maldonado decided to drop out while changing business professor's flat tire
“I made that decision literally as I was changing this guy's tire that I was done with college.”
Maldonado: Stuck with millions in loans during Florida real estate crash
“At my rock bottom, it was a couple million in loans that I ended up getting stuck with.”
Maldonado: Frozen Fitness investor pledged $250K but only invested $60K
“He agreed to putting in 250,000. He actually put in, I believe, 60,000.”
Maldonado: Search Trends for Grass-Fed Beef and Keto Saw Hockey-Stick Growth
“So I started using these tools and looking at grass fed, like the search terms for grass fed beef delivered, any type of search term that was all related to that. So paleo, keto, all of those. And every single one of these search terms were just like an absolu…”
Ali matched Maldonado's tiny $3,250 initial investment to co-found Chomps
“I mentioned how much had he invested and he was like, it was at 32 53,250 dollars, I think is what he had put up. So I cut a check and match that.”
Ali: D2C frozen meat shipping has no path to profitability without scale
“What we figured out was shipping frozen without scale, there's no path to profitability, and because the business was like self-funded, we had to figure out a way to make it profitable”
Maldonado: Chomps found co-packers by tracing USDA legends on competitor packaging
“Each one of these meat sticks has the USDA legend on there. So we had a whole list of people to contact. And then we found one specific one in Missouri, in this very small farm town called Green Top, Missouri”
Maldonado: Chomps still uses its original beef stick recipe today
“We landed on that original stick recipe that is the same exact recipe we use today, and it only took us a few tries.”
Maldonado: Chomps received 10 to 20 daily orders in year one
“It was a handful, right? Like, 10, 20.”
Ali: Uncrate feature proved Chomps had appeal beyond CrossFit and paleo
“Our consumer prior to that was, Primarily CrossFit, paleo, whole 30, like very focused. And uncrate is just like your general guy, right? Where it's like your 20 or 30 something that was just interested in it, and it showed, oh, wow, the product has a lot more…”
Ali: Chomps shifted beef sourcing to Australia over US quality issues
“We were, we had a few domestic partners, but we actually started having some quality challenges because I think the way that they process it and measure the lean point, it's a, they call it core drilling where they'll, they'll drill and measure and get an aver…”
Ali: Founder Tension at Chomps Revolved Around Going Full-Time
“A lot of the tension was around when we both would go full-time.”
Maldonado: Trader Joe's first Chomps PO was for 1.1 million sticks
“It was. 1.1 million sticks. And you know, when we saw that first PO, like that's where I was like, this is it. This is what's going to put us on the radar. It's going to change everything. And it was larger than the previous year altogether in a single PO.”
Ali: Trader Joe's order required 150,000 lbs of meat vs. normal 10-15k monthly
“So, so 10 to 15 was our normal click. This required us to do about a 150,000 pounds.”
Maldonado: Chomps raised Trader Joe's bridge financing from eight personal investors
“And we raised money from probably eight different investors that put up between a hundred to 200, a little more. Some of them had a little more.”
Maldonado: Chomps exceeded Trader Joe's sales projections fivefold
“And Trader Joe's, they gave us some projections. They thought that we were going to do, and they kind of let us know their forecast. And we far exceeded the projections, I think by five times.”
Rashid Ali: Every new Trader Joe's SKU nearly doubled Chomps' business
“I mean, Trader Joe's, every time we launched another SKU, the business would almost double.”
Maldonado: Chomps exceeded $100 million in revenue
“We're going to be exceeding the, we have exceeded that, that nine figure range of revenue.”
Ali: Chomps brought 40% new consumers into jerky category at one retailer
“And I think also there's one stat, like with one of our retailers, we were bringing 40% new folks to the jerky set.”
Ali: Chomps operates three manufacturing facilities and three packaging lines
“No, I mean, we've, we have now three separate manufacturing facilities and three packaging lines running simultaneously, and we went ahead and ordered six more.”