The Exchanges

Q So what did you, I mean, what was going on in your head? I mean, you've got the frozen cubes. You know it's not working. How are you gonna, how are you gonna fix that? Where are you even looking for ideas?

A I mean, we looked everywhere, and the first, the first space to innovate where I really saw something, um, was with cereal. So we launched the first ever baby food in the world that had probiotics, and I, I believe very strongly in gut health and 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, Um, so we still have, so the baby still has probiotics. And, um, 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 a 115, 116,000 the first year. 520,000 the second year, still on frozen baby food. The next year we launched the cereal and were able to get so much more distribution because we weren't struggling for space in the freezer.

AI assessment note: “we looked everywhere, and the first, the first space to innovate... was with cereal.”

Q welcome back to How I Built This. I'm Guy Raz. So, it's the mid-two thousands, and Shazi 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.

A 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 a thousand dollars on a crib right now if you want. You could drop a thousand dollars on a, on a stroller. And yet, at the time, parents didn't have a better option when it came from, for food, which does actually impact your 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.

AI assessment note: “My whole pitch was, look, I'm not trying to make something cheap.”

Q Yeah. And the ice trays of the baby food, did you put that in, like, a cardboard box, or, or was it like a, like a little plastic, sealed plastic thing around it with your name on it, like Happy Baby on it? What did you, how did you package it?

A Yeah, so there was an ice cube tray, and it had, like, a thin sort of plastic film over it that was, like, kind of heat sealed on, and then, yeah, there were, it came in a little, um, cardboard Outer shipper, and it said Happy Baby, and there was pictures of the, all of the fruits and vegetables, which I would take, so I had this little, like, 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, it 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 we had, one of them was my nephew, um.

AI assessment note: “thin sort of plastic film over it that was, like, kind of heat sealed”

Q You know, I'm wondering, when you were, 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, to, to get like a stable, safe job, like, like to become a lawyer, or a doctor, or to go into finance. Was that, like, was that what they wanted for you?

A Yeah, I mean, I think with Indian parents, doctor is usually number one. Um, and then, you know, and you have to go to Harvard. Um, so when I went to Columbia, it was sort of like, for my mom, it was like, well, why not Harvard? But, uh, 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, I had never let that go.

AI assessment note: “Yeah, I mean, I think with Indian parents, doctor is usually number one.”

Q All right. So you've raised this seed money. You've got a, a partner in Jessica. Um, 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.

A Yeah, actually the, um, there was a man I'd met who had a little, um, manufacturing facility outside of Boston. And, um, 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. Um, and, um, we would drive up, and because my parents had a Days Inn, we had these Days Inn employee discount Coupons. They were, like, literal physical yellow coupons, and you could get a Days Inn room for 25 dollars a night. So, like, Jessica and I would share a room at the Days Inn Danvers, which was near the facility, and we would literally go and, like, make the baby food in the plant, in their plant, um, and we initially used, like, a pastry baster, pastry bag type of thing to fill.

AI assessment note: “there was a man I'd met who had a little, um, manufacturing facility outside of Boston”

Q And as a kid, did, did you feel different? Did you feel like you, you guys were different, or, or?

A Um, well, I, I have a lot of heart for Alabama, I have to say. And, um, 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, um, 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, um, and then after that, uh, we found another school, and it was, it was a Baptist school, and so for fourth and fifth grade and sixth grade, I went to a Baptist school, and, um, I definitely felt more different there, Because, um, there, that's when I felt like, and I, 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, um, and, you know, that our salvation would be if we were saved.

AI assessment note: “I definitely felt more different there, Because, um, there, that's when I felt”

Q Yeah. And the ice trays of the baby food, did you put that in, like, a cardboard box, or, or was it like a, like a little plastic, sealed plastic thing around it with your name on it, like Happy Baby on it? What did you, how did you package it?

A Yeah, so there was an ice cube tray, and it had, like, a thin sort of plastic film over it that was, like, kind of heat sealed on, and then, yeah, there were, it came in a little, um, cardboard, um, Outer shipper, and it said happy baby, and there was pictures of the, all of the fruits and vegetables, which I would take, so I had this little, like, 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, it 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 we had, one of them was my nephew. Um, but yeah, and, and it's just, it looks like this fun, 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.

AI assessment note: “thin sort of plastic film over it that was, like, kind of heat sealed”

Q Got it. Okay. Shaz, I want to bring you in. Um, you've been in this position before where, you know, you've got a new product, and do you bring investors? What do you do? Uh, thoughts or questions for Andrew before we dive into his question?

A It's fascinating to think of olfactory and plants and creating a deeper connection with nature, so I love that. Um, if you're, like, really in this and you believe and it's your hundred percent thing, then you have to raise money from investors and you kind of go big or go home, is my feeling. Um, I don't think you start this one on a bootstrappy, small way, um, because ultimately you want, like, Home Depot, and you want You want to be an option at every, every store that sells gardening supplies, and you want to start in terrain, and I can just see, you know, I can see it becoming a craze and a phase, and now that you have the patent and the ability to produce it, um, I would, you know, I'd find a way to test and get it to the place where it's a product that you know people are going to love and want. So, um, I don't know, that, that's my perspective, is that if you want to go big with it, build a brand around it.

AI assessment note: “then you have to raise money from investors and you kind of go big”

Q scary because, you know, you, you, like you need food scientists who understand pH levels and, and, and shelf life and spoilage and all this stuff. Like, I'm, I'm assuming that you weren't quite there just yet. You're still making it your Cuisinart and just testing it with you and some friends and just, right? Or, or, or did you start to talk to food scientists already at that point?

A 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 ten-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, um, I was like, you know, I, I just started talking to people. I called the Organic Trade Association. I started calling trade associations, started going to, uh, trade shows. I met, like, like all, so many special people that, um, some that you've even interviewed that I'm just so, like, humbled by. Like, I called them. Like, I cold called Seth Goldman.

AI assessment note: “I was doing both. I was trying to make something that I could be proud of”

Q And assuming you, you're doing these in the, in like the frozen food aisle, right? I mean, is, is that, is that how it worked?

A Yeah, so you have, like, a table, and, um, 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, um, and my gloves, you know, and you, and you're trying to get people to sample what looks like warm, fresh, really, really high, like, beautiful colors, um, 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. Yeah, I mean, imagine, like, oh, 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. Um, 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, I live for, literally, I live for this. But that's not, 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.

AI assessment note: “Yeah, so you have, like, a table... standing there by the freezer”

Q And, and, 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?

A 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, um, 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 still think is a superhuman feat for anyone to have more than one baby at any given moment, um, 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, 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 gotta be something better. There's not? Oh, well then I'm gonna make something better. Cause 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 t…

AI assessment note: “she was telling me that she was a bad mom... there's gotta be something better”

Q So you, so you decide, I've gotta just stay in New York to do a business degree at Columbia, and, um, uh, was it everything you thought it was gonna be?

A I was the black sheep of the business school. I mean, I did not fit in. I did not feel like I belonged. Um, and it's not like I'm, I was alone and everyone hated me or anything. I just didn't, I felt like, I felt kind of sad because, um, 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 that at that time in that era, pre that sort of 2008 humbling of the economy, there was a lot of hubris in that, um, environment.

AI assessment note: “I expected and wanted to meet more people that were similar minded to me.”

Q And as a kid, did you feel different? Did you feel like you guys were different, or?

A Um, well, I, I have a lot of heart for Alabama, I have to say. And, um, 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, um, 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, um, and then after that, uh, we found another school, and it was, it was a Baptist school, and so I definitely felt more different there, because, um, there, that's when I felt like, and I, 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.

AI assessment note: “so I definitely felt more different there, because”

Q dollars that, 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, and their other brands, Was that, in your mind, the way that you could, you could really scale happy baby and, and, and family, happy family, and turn it into a, the big, huge brand you wanted it to be?

A You know, that was part of, that was part of what I had hoped, and if anything, I, I wasn't so naive to think they were going to do very much, um, because, you know, they, when, 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, 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, um, it's funny how it works out, but it's been, it's been a really, um, pleasant two-way street, and we've stayed very true to who we are. For instance, I, I really believe strongly in the, you know, the movement around, um, B Corps. And Happy has been a B Corp 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.

AI assessment note: “that was part of what I had hoped, and if anything, I wasn't so naive”

Q that? Was it hard to fund that, 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?

A 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 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 dollars from 36 people. It's another thing to raise eight million dollars in one shot. And that's where I was, that's what I was looking at. And, um, actually what happened is, you know, uh, 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, um, we want to tell the story of Happy Baby. We've heard about your company.

AI assessment note: “That time in our life, that was really hard for me”