Stacy's Pita Chips: Stacy Madison

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at Yerba Buena Center for the Arts. To find out more and to get your tickets, including early bird pricing, available for just a few more weeks. Go to summit.npr. org. When I got that sixty thousand dollar loan Within six months I went back and asked them for five hundred.

And they said, Here, here's sure, here's five hundred thousand bucks. No, they said no. Well they didn't say no, they said no. Not without equity. And we were like equity.

Equity in what? We've got nothing. Rom NPR, it's how I built this. a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Roz and on the show today, how Stacey Madison turned day old pita bread into a new snack.

Stacey's Pita Chips. and then went on to sell her brand to one of the world's biggest food companies. For a quarter of a billion dollars. So there are some startup stories where most of us are probably thinking, I couldn't do that. Like Squarespace. If you heard that episode, you'll remember that Anthony Casalina was and is a gifted computer programmer. He had a highly specialized skill. Same story with Steve Madden. He literally designed and then fashioned shoes from leather.

And sold them. But But then there are the stories where most of us can actually imagine doing that thing ourselves. Like Brian Scutamore, who bought an old truck and offered to haul away people's trash. That's how we started 1-800 Got Junk. Or Lisa Price, who tinkered with homemade lotions in her kitchen.

She went on to sell her brand, Carol's daughter, to L'Oreal. Well, today's story is of the second variety, the kind of story that almost anyone can relate to because it is such a simple and elegant idea. Cake Pita bread. You cut it into wedges, you bake it, throw some Parmesan or season on it. And voila!

You've got Stacey's Pita Chips. Now even though the snack food industry today is a sixty six billion dollar juggernaut. Stacey Madison did not have a grand master plan to disrupt snack foods in the late 1990s. At that time, she and her boyfriend were literally selling pita wrap sandwiches from a sandwich cart in downtown Boston. The pita chips were an afterthought, a way to use up those extra pitas at the end of the day. Pita chips were never supposed to make Stacey rich, but eventually.

Free Dole would come knocking with a fistful of dollars. But long before that, long before Stacey even sold her first sandwich. She was on an entirely different path. She grew up in the suburbs near Boston. And after college, Stacy went out to California to get a master's degree in social work.

She thought about becoming a psychologist like her dad, but he wasn't so enthusiastic about that. He felt I should always become a social worker rather than go on to get my PhD and be a psychologist He was like, Oh, that's no profession for a woman. That's

One thing that he said was smile and look pretty and you will find a husband. You know, I don't wanna make him sound like a jerk. And he wasn't he was like a caring, loving man that put his family first. But he was also a product of the fifties. Sure. So once you get your uh master's degree, um I read that you you actually

moved to Washington D C to um To to do what, to to do social work? Yes. I worked in a group home for Homeless

pregnant, drug addicted. Women. And I have to tell you, I mean, I loved the job. It was very rewarding. But at the time I think I made

twenty two thousand dollars a year. And It was really Paycheck to paycheck and very hard to survive on that kind of an income. So I decided to go and get licensed

And Which eventually I did go on to do. But I found it very isolating. Go and I unlock the door and and I do you know

marriage counselling and Then my Evening is over, I've s seen five or six patients and I close the door behind me and I go home. And I put a lot of effort into getting those degrees and licenses and

Realized that it ultimately it probably just was not For me. So you're you're uh I guess roughly uh thirty years old at at this time. And and by the way, you were engaged To a guy named Breck, right? No

That ended I I think it was just Mutual. I think ultimately it was just not the right thing. I think we just both agreed. We had had the place picked out that we were gonna get married

And it was kind of a bizarre story, but I went and I had a massage. This is you I know it sounds like I'm going off on a tangent here, but it'll come back. Um, I went and I had a massage. And the woman told me And I took it off, I put it in the dish Got my massage and I got up and I went to get dressed and I was like, oh my god, all my jewelry is gone.

including my ring, my engagement ring. And I was just, you know, it was from his family. It was like I was just so upset. And The girl was gone, she had Gone gone, like never to return. I think she took off to Florida or somewhere. She n never came back to work. She just kinda took all my stuff. But With Rick and I, it was kind of like the ring wasn't replaced immediately, even in and I don't care about the ring, even if it's just a cigar brand or something like that, that it kinda took so long replacing the ring that it forced both of us to look at

Should we really be doing this? Maybe this was a sign or something and um ultimately, yeah, we just decided maybe we shouldn't get married. So you um so you guys split up. Uh meantime.

There was this guy Mark Andrus, who you had met through your brother a few years before. He was a friend Did you guys start dating or w would you just kinda keep in touch? So he was still a friend and I talked to him all the time about my disengagement and all of that. He was super supportive and eventually Our friendship led to dating.

And He was getting his PhD. So he was doing an internship in Hawaii. And Said, Well, why don't you come out to Hawaii?

And what did you do in Hawaii? So Um Hawaii was an amazing experience. We lived in Just this tiny box and there was no kitchen or anything and it and there was no

bedroom. There was basically a cot. And we bought an electric walk. And we used to Cook. In the walk we wash it in the bathtub and

eventually we found a roommate and she had a nicer apartment and we worked out a deal where We would Take her second. bedroom and In exchange for a lower rent, we would cook for her.

Mm And While I was out there, I worked at a restaurant. And I got a job at it as an assistant manager. And the restaurant was going to open up a surf theme.

You know, another location, a surf theme restaurant. And They said, Do you want to be part of that opening? And I said, Yeah, that's great. Which Thinking back, I'm like wow that was

great experience. I got kind of experience of learning to Start a business. Yeah. We had this big opening with, you know, all the surfers, the local surfers in Hawaii and

even retired surfers they came and the owners of the restaurant were like, If we could pull this off, you know, you guys are gonna get a big bonus and blah blah blah. And we did. I mean we were money was coming in left and right and to the point that we had to stuff it in beer boxes and bring the cash down to the to the basement because they couldn't fit it all on the register. It was just crazy. So Successful opening of the restaurant. Um couple of weeks later I sat down with my general manager and said

How about the bonuses they were talking about, do you know, when they're coming and you know And he's like, Well let me meet with the owners and get back to you. Wait another couple of weeks. Sat down with him again. And he said, Well I spoke to the owners

And they've decided that we need to let you go. Hm. And Wow. I was Devastated. I never

Lost a job. In my life. And then I I remember speaking to my aunt who was in the restaurant business and she's saying, Are you kidding me? Don't be so naive. They always hire people to get restaurants open and then they let'em go and Ultimately I circled back and said, Well if I can work this hard For someone else.

then why can't I do it for myself? And It's it's kinda funny because At that point Mark was still in his internship and we were in these high rise buildings in downtown Honolulu and We were cooking meals for

And we figured, well, why not just put a sign in the bottom of the building And When people got home they could f well it was At the time of fax machines.

They could fax over an order and we would just have their dinner ready. Wait, you would You and Mark uh'cause Mark was a trained psychologist, right? I mean that that's what his work was. But you guys were also just like pretty good home cooks. Yeah, we loved cooking. I mean Mark was a total foodie and

We marketed to our building and the surrounding buildings. That if Anybody else wanted us to cook them dinner, that we would do that too, and we called it Condo Cuisine. And what were you offering? Like was it just like tonight's dinner is or you could order from a a menu of things.

Oh no, it was just a more of a You know, you had a choice between Two or three items. Um yeah, we had Seared Tuna with uh Pineapple salsa and

Things like that. Needless. to say we were cooking in our apartment and got very quickly. Then some guy, you know, called or knocked on the door and was like You can't do this.

So basically the health department. So that didn't last long. Yeah, it was the health department that was like yeah, you are not doing this. If you want to do this you have to get into a commercial kitchen and you have to Et cetera, et cetera. So that dream that dream died. And how how long, by the way, did it last before you were shut down? A couple of months. Three or four months.

I mean that clearly like that experience kind of set into motion this idea that maybe we could do some kind of business. Yes. Definitely. And it

Kinda picked me back up onto my feet after losing that other job. Hm. And Mark, even though he's

getting his doctorate at this point. He always wanted to be a chef. Um he came from a family of doctors and it was kind of just that's what you're going to be. But it also meant that he was Setting aside his dream of becoming a chef. So

It was a really crazy decision, but we decided when we got back Ту масачусет We would try something. In the food business.

Wow. So okay, Mark has a PhD in clinical psychology. you are a social worker by training. You always knew that you were going to go back to Boston,'cause that's where both of you guys were, I guess. From Yeah, New England. And

he was gonna become a psychologist, but I guess your plan was hey, before you do that, let's just kinda test out This food business idea for a short time. Yeah. Going into this, I mean you gotta also keep in mind the reality of the fact that

He's got a hundred thousand dollars in student loans. I don't have a penny to my name. Right. So you you moved back to Boston, nineteen ninety six. What did you guys decide to do? So We decided to buy a food cart.

Because we couldn't afford Anything else? five thousand dollars and I worked with my sister who she owned a catering company in downtown Boston. She was a huge help and you know, I laid out the menu and and she would look at the menu and tell me, you know, y you have too many items on here, you're gonna have too big of an inventory, you have to streamline this, you have to like she kinda

Always gave us that. reality check on on what when that business sense And at the same time. As'cause now we learned you have to be in a facility. So all of our menu we prepped

And made out of her Catering. Place in Boston. So what kind of food were you making? I mean this is this is like I'm imagining like a hot dog push cart with like, you know, a water bin that's hot and warm and like another bin to keep buns Like steaming hot. Was that what the food cart looked like? Oh my god, yes.

The food cart, yes, was a cart with Um that was a hot dog heart. And we used to go out at night. After the bars closed. And we did the sausage scene. We were cooking up and we were just trying to get money

Any way that we could so that we could revamp the cart. And once we collected enough money, then we put the cart in the to a shop and you know, I designed it, you know, made it pretty front and a beautiful green awning and we hollowed the whole thing out and made it almost into a deli counter. And we served healthy sandwiches rolled in pita bread off of

And then we made everything to order. So these were like I mean, wraps kind of became a big thing in the two thousands. It's the late nineties. And remember this, like pita pita bread sandwiches started to just like pop up all over the place. Yeah. But just to clarify that, it was basically a Chicken Caesar. rolled in a piece of Pita bread. There were very few options

But we made uh you know ours were you know, we had go cheese. We had Turkey and Havarty and we had More Upscale. choices.

So we prepared, we sliced all the meat, we put everything in a giant cooler. And then we went to downtown Boston. We would literally roll the cart up the street. And put it on the corner of Chauncey and Summer Street. And we'd get an ice delivery to the corner and we'd throw the ice in the bottom and then we'd put out all of the ingredients.

And then we roll it up in the pita bread, and then we had this big white piece of paper. And we'd roll the sandwich in the white piece of paper and we'd twist the bottom. So people were walking around, it was almost like they had this big white club and and so it was really good'cause they'd walk away and other people would say, Oh, that looks good. Why'd you get that? Yeah. And what what was the name of the did you have a name for the push card? Stacey's Delights. Stacey's Delights. D apostrophe L I T E S. D L I T E S. So it wasn't a D lights, it was D Delights. That is so 90s. I love that. Yeah. With how did it do? Was it a hit? Did you guys get custom like lots of customers right away? Yes, it was a hit. Huh.

But we were not the only food cart down there. You have to remember that, you know, up the st you know, fifty yards away is the pretzel cart and then there's the burrito guy and then there's you know, so it was at a time when in the food cart world. I mean now a food cart is more hip and trendy and more inviting. It's more of a food truck. But at the time a food cart had the connotation of um dirty and disgusting. Yeah. But the way that the cart was designed and that it was presented and that it looked and we had fresh tomatoes of you know a mountain of them out front and it was It broke the traditional mould of what is a food cart. Yeah. Yeah. And every day we ordered fresh bread. Wh where would you get the bread from?

Just a local bakery. And It we'd always over order the bread because you can run out of alfalfa sprouts, you can run out of tomatoes, and it's not gonna be a big deal. But in this business, if you run out of bread, you're closed. Yeah, so I I I think I see where this is going. So you you've all this extra bread and you're thinking What do we do with this extra bread?

Yeah. And we didn't want to use it the second day because it's not as Appliable to roll the pita sandwiches. Sure. So when we got back to the kitchen, we would cut them up and bake them into different flavor chips. And the idea was that you would You would do what with the pita chips? You would give them away, you would sell them? Like what initially what were you gonna do with them?

So initially it was just a way to retain our customer base and to keep people happy as they were waiting in line. Uh,'cause it was a long wait. You had every pita sandwich made to order. Yes, and people would yeah, we hired a a college student. She was a cashier, but in between she'd go up and down with a basket of pita chips and just give'em for free to people standing in line while they waited and people loved it because it was kind of like a happy hour. And you know, we gave'em away for free, but people started saying that they did want to buy them. So initially we would just put some in a little baggie with a little ribbon and and keep a basket of'em out on the food cart as well. And you could buy it for like fifth or n a dollar or something.

Yeah, Buck. But the sandwich. And just just out of curiosity, like Did you guys experiment with the baking?'Cause pita bread can can like burn pretty quickly and it can get right, like I I have to assume that you had to experiment with like the right temperature and The right flavors and stuff like that.

That came. Later. Initially we just baked the cinnamon sugar and the parmesan garlic. Everybody thinks simply naked was our first flavor. It wasn't. It was

The Uh Parmesan and the cinnamon sugar. We were baking them in a four rack oven. I mean literally four or maybe eight trays, sorry, it's eight rack oven. So we could spread out the pita chips on a tray and we could bake eight of'em at a time.

And you know you Really, we were making toast. Yeah, you were making thin slices of toast. Really good toast. Yeah, really good toast. And um it wasn't until later as the company started growing that There was a a huge jump between I'm gonna make toast in my oven and I'm gonna manufacture. Hm.

So keeping in mind I mean Mark's deferring his loans and deferring his loans and that adds up Yeah, he's not at this point, he's like full on in the food business and you are too, he's not um using his PhD in clinical psychology. Right, you know, I got I was a clinical social worker, he's got his PhD in psychology and we're on a street corner selling sandwiches. And so at that point, you know, we are all in We are going to do something and We could not

Running home. When we come back? As Stacey and Mark make a full pivot to Pita Chip, and shake off the warnings of an industry expert who says they will never grow their business.

Stay with us. I'm Guy Raz and you're listening to How I Built This. From NPR. Hey welcome back to How I Built This from NPR. So it's the late 1990s, and Stacey and Mark have created kind of a side hustle out of a side hustle, selling pita chips from the little sandwich cart they started in Boston.

And at a certain point, the chips are doing so well that they decide to make more of them. But they're using an oven that can only make eight racks of them at a time. But then they find a way to scale up. We met a very nice woman when we were doing the food cart who sold pretzels. Um it was Boston Pretzel Bakery and She said, Oh I have a forty rack oven. Why don't you come try to make them over there? So we went over to Boston Pretzel and we mixed up our pe the pita chips and we were able to make a rack of forty of them at a time instead of You know, instead of eight trays we could make forty trays.

And She had backup racks, so while forty were in the oven we could load up another forty trays, and forty came out and forty went in, and we were like, Okay, well this is this kinda makes more sense. What I'm trying to understand is like at what point running this cart Did you and Mark say, you know what? Actually, the business we really should focus on is the pita chips and not the pita sandwiches. So I think the coming about of that whole thing was the struggle of getting in inside location. And yeah.

Come winter, it's really rough being out there in the cold. And we w started working with a realtor and the realtor kinda laughed at us and said If you want a tiny little indoor location near where you are'cause we wanted to keep our following of people. Um you and your food cart can stand on line behind Oban Pan, Dunkin' Donuts, at the time Starbucks was coming into the world, you know, everybody wants those little spaces and

we realized we had to make a choice. Hm. And we decided to go for the pita chips because In the winter I was working on on the pita chips and and the bag and the design and the licensing and all that I needed to do in order to get that off the ground. So with the pita chips we could get bigger

Faster. Yeah. And I took a bag, you know, we we had put them in almost like a coffee bag. Like with little window. Oh yeah. Plus

Little plastic bag inside of the paper bag. So a lot of labor went into it, but you know what? I I walked into Bread and Circus in downtown Boston and I said Hi, I'm Stacey. These are my chips and I'd love for you to give him a try.

Wait, you just walked into a Bread and circus, which eventually was was bought by Whole Foods, and you asked did you ask for the manager to be like Yeah, okay. And what did the manager say? He said, Wow, these are good. Yeah. Yeah, I'd love to get'em.

And Now we have one store. Yeah. There was like six or eight of these Bread and circus stores And he showed them to corporate. Huh. And there was nothing in them. They were all natural. And it was the time of the beginning of the natural food.

Revolution and and that Just what we were innately doing. And and obviously you guys Uh, presumably you chose the name Stacy's Pita Chips just'cause that's what it was called Stacy's Delight when you were a food car, right?

We chose it because we thought that a female name on a snack food brand would sell more than a male name. Ah. Yeah, the woman in the kitchen kind of thing is say it. But that's really That was the the thought behind it was that it sounded better than Than Marks.

Mm. Let's just pause for a moment and and talk about money because Even though you are getting some stores you know, willing to pick up the chips and Uh to sell them.

I I can't imagine your business could could operate entirely on like the sale of pita chips, how did you have money to to run this thing. Yeah, I mean we had A lot of

Debt. between the two of us. We ran up our credit cards. We applied for so I I was I started working with the neighborhood development center and they helped me write a Business plan.

There was I I really networked with everybody I could possibly draw information from. Um so there's the neighborhood center, there was um I think Jewish vocational services. was in downtown Boston and there was this one girl that used to eat at the cart and she said to me Um, how do you know if you have enough bread? And she'd ask these weird questions

And a and one day I said, Why are you asking me these weird questions? She said, Well, I teach a business plan Boot camp. And Yeah, I use your cart as an example all the time. Wow.

And I said, Really? I'm like, Can I take that class? She's like Yeah, you wanna take you come on over and and I went and I took an eight week business plan boot camp. So between all of these agencies that I kinda worked with,'cause remember I didn't have a business degree. I didn't know I didn't know what a business plan was. Yeah. So after that eight weeks, I realized that I didn't just need twenty five thousand dollars for the packaging machine, but I also needed twenty thousand dollars to buy bags to run on the machine. And then I needed twenty thousand dollars for this thing that people kept calling working capital. So that was all new to me. So I where I thought I only needed twenty five thousand dollars. You needed sixty. I needed sixty. Yeah. Right.

How did you get sixty thousand dollars? So the neighborhood development center in Jamaica Plain helped me spruce up my business plan a little bit and put me in touch with a bank that they used That

Worked with the SBA. So we had to put down twenty percent of the sixty thousand? And that's where our family Kicked in.

You needed to put up twelve thousand bucks in collateral, basically. Uh yeah. And that was a sixty thousand dollar loan from a small business administration backed Bank in Boston. So you got sixty thousand dollars.

Which gave you how much runway, how how long could you could you function off sixty thousand dollars?'Cause you s you're you're talking about needing to buy a machine to seal the bags, to buy the bags, and and then you're not left with a whole lot. Sixty thousand dollars was not gonna go very far because yes, we bought the machine, we bought the bags But the one thing that we did have We had customers.

Both the consumer. And the retailers that loved our chips and And kept reordering. And when I got that sixty thousand dollar loan Within six months.

I went back and asked them for five hundred. Wow. And they and they said, Here, here's sure, here's five hundred thousand bucks. No No, they said no. Well they didn't say no, they said no.

Not without equity. And we were like, equity. Equity in what? We've got nothing. Yeah. I mean this company's not worth anything at this point. Um so

They said no to 500. And over a couple of months we were able to scale it back and they did say yes to three hundred and fifty. Wow. So you got a a three hundred and fifty thousand dollar loan From the bank.

Yeah. But how did you get the word out about the PETA chips? I get it that you were you were kind of pounding the pavement and you were asking for managers at at l at local you know markets and asking to talk with them, but How did people find out about the chips? Was it entirely word of mouth? I mean, this is pre internet, pre-social media, pre I mean, you didn't have ad dollars. We would go everywhere we could

To sample. So we would go into the store and we would set up a table and we would just give away chips for free, just like we did on the cart. And people would try them and they would buy them and that just that's how we built our customer base. We had three words. Sample, sample, sample. Did you at this point have a vision for how big this could be? Were you and Mark saying

'Cause I have to a s assume you were still doing a lot of the legwork. You were still maybe even baking the chips and uh or maybe hiring people to help you, but Did you think this is gonna be huge, it's gonna be a national brand, or was was that your ambition at this point, or not quite? No, our goal was to be a regional brand, more like Cape Cod Potato Chips, and we were we were going to keep things manageable and in the north east. But what happened was with the growth of the natural food industry

There were these pockets like Colorado and Atlanta and California and there were the these little pockets where the natural food business was really booming and you know the whole creation of whole foods and and them buying up all of these smaller stores, we were in all those smaller stores. So we were in the bread and circus and wild harvest, and then they all became Whole foods which grew tremendously. So our Initial plan to be a small regional

Brand We had to rethink that and I think that you know One of the things that Mark and I were really good at was Yeah. Not being so locked in

to A straight path. That we were able to see when other opportunities came along. So for example, the pita chips over the food cart or um, you know, rather than sell into small gourmet f food stores we're gonna go into the natural food you know we we're like well we could sell to these

ten stores or this one chain has a hundred. But the the business was still you and Mark, right? It was you were the only permanent employees at this point? So It was Mark and I for the first two years, and then my brother, who at this point had his

PhD also. Um and we said to him, You wanna sell some chips? And You know, and ha ha ha ha we were all joking around about it, and then he came back like couple weeks later and said You know what? If I don't try this now.

He's married, they don't have kids, they don't If I don't try this now, when am I going to try it again? He's like, Sure. Huh. 'cause his wife, she was an accountant, she had a steady income So Yeah, he said you could just pay me minimum wage and then

We'll give it a try and after the first of the year you you can just kinda start paying me back as we start Generating a little bit of money. And that's what really, really important Is that in the beginning we Surrounded ourselves with believers.

I mean here you've got two psychologists and a social worker. running a PETA chip business, right? Like how implausible is that like w like nobody would say, I wanna start my business, I need two psychologists and a social worker. But somehow like You're you guys all brought these skill sets to this. to this thing I was street smart and those guys were both street smart and book smart

You know, so we all work together on trying to figure out how we're gonna do this. And I'll tell you, at one point we had Paid fifteen hundred dollars. And we flew a consultant up from Frito. Uh he was a retired Frito.

Guy. And He walked into our how we were running things. Mm. And he was just like These are very good and they taste good.

But This cannot be done. Huh. This is a home baked type. Product.

And it's fine, but you won't be able to scale this business. Wait, why did he say that? Was w were you literally like hand cutting the PETA Was like Three times the size of his left because he was literally using a knife to cut bread. Well.

So when This guy walked in and he saw, you know, we're cut hand cutting bread and we're handbagging everything and Each batch took a certain amount of time and then we have to like, you know, scrape off the trays and clean everything and He was just like yeah, you'll never be able to

bring this product to market on any kind of scale. So For us that was A really hard blow. I bet.

We Also still found it. Hard To believe. Like

If we can take forty racks, you know, forty trays of pita chips. And we can make that Why can't we just line up a whole bunch of these ovens and And be able to make so many racks at a time.

Hm and then what that led to was us realizing we needed a curve conveyorized oven. You needed a conveyor belt oven where you could just throw the pita on there and it would just go through the conveyor belt and then p p come out the end and just into a just a big barrel and the pita chips were made. Yeah, in the end game we ended up having to purchase a Custom built

oven. It was the size of a of a fifty two foot like an eighteen wheeler truck. Wow. But you were still, I mean, or Mark was still hand slicing the pita into the right shapes. You can't scale that. Like one or two or ten people can't do that. So how did you solve That problem.

You're right on target here. So you we we broke it down into each stage of making a pita chip. And that piece of it, what we did was we w we would go and we would tour other factories. So we went down to Cape Cod Potato Chips and we went on that tour that everybody in Cape Cod goes on that tour. Oh you just went as tourists? We went as tourists and we looked through that window and we saw

They were Cutting potatoes. How does that machine cut the potatoes and

they gave us the name of the machine and then we went out and we contacted that company And said This is what we're trying to do, and we had this guy who worked for us. Who could tinker with anything. And so what we ended up buying was a machine that used to cut carrots

For Campbell Soup. So you know how they cut those tiny little squares? Sure. Well What he did is he took those blades. and space them further apart.

And when he first spaced these blades and and all of us are kinda gathered around the opposite end of the machine, holding a bucket where the these are tempted chips are gonna come out. And so he feeds the bread into the machine, he starts tossing, you know, a piece of bread, a piece of bread, a piece of bread, and we're standing out at the other end and we're like Holy sht. Lo and behold. Pita chips. It's a chip, you know. And that was the very last day that Mark ever cut a piece of bread. You and Mark eventually got married, right? And you were business partners and then you got

Married'cause you were together, right? Yes. We had been together for a long time. And eventually we just Got married. Hm.

uh in in ninety seven And all was good. Yeah. Yeah. All right, nineteen ninety nine, you get your production method down, you get the machines you need.

Your revenue is growing. Um I have to imagine that there are both big chip company is looking at you guys, even though you're this tiny little New England based pita chip company and thinking, Huh PETA chips, that's the new craze. Let's make pita chips and crush these guys. Not really, because so at this point in time in the company, as we just started to grow

It was also during the time of the no carb phase. It was close. No carb, low carb diets. Oh yeah. And we were like, Here we are Once again we're making toast. And we thought, Oh my God.

That's gonna put us out of business. Like all these time all these things along the way, you think, Oh my God, that's gonna put us out of business. Oh my god, that's gonna put us out of business. But Ultimately, people loved the chips. It was something people ate all the time and it was becoming a staple in their cabinet. It wasn't just a one time purchase. Yeah.

Yeah. Alright, so you guys are uh kind of operating under the radar but growing steadily. Do you remember the first year you you actually turned a profit like a significant profit? Was it was it in nineteen ninety nine or in two thousand? On people say it takes three years, I would say it takes five.

Five. Right. So it took some time. Yeah. But I guess you guys hit a million dollars in revenue like a around two thousand one, which sounds super impressive. D did that mean that you guys were All m making lots of money? No. we really paid ourselves very little and

If anything. We really weren't making anything'cause everything went back into you know, if we needed another oven. Well, you know, you don't buy this, you don't drive that, you don't do this because you need another oven. Yeah. Uh, by two thousand one you're you're starting to become more sort of stable in the production process.

Uh But just about I think about five years after the two of you get married. You mark divorce. You you decide To get a divorce that year. Yeah.

But then you stay honest as fifty fifty business partners that this is not normally how the story unfolds. Like normally this is very messy and traumatic and difficult. I mean it it doesn't sound like that's what happened. Yeah. Like I'm not gonna say we didn't argue. I mean certainly we argued over a lot of things. I mean there's a lot of tension And

The employees had to put up with us like part of each other and and you know what? And they'd they'd go look, Oh boy, there they go and they'd turn around and they'd leave the room and You know, and then and then eventually everybody would come back to their desk and and And that's okay. But We had a common

Goal. And I would have to say I think he'd probably agree that during the time that we were married for the most part it was a Successful marriage, but we also had a successful divorce. Mm-hmm.

It was clean and it was clear. And We shared the company like it was our child and everything that we did was in the best interest of the company. So we went to court together

And we went before the judge and we said we wanna get a divorce and We're splitting this fifty fifty and we really had no assets. Yeah. Everything we had was the company. And we agreed we built this together and we were splitting the company. And we were both going to stay on. And the judge was like, Wow, this was The easiest one.

I think it's surprising, at least for me, and I think probably for a lot of people listening, just because It it it seems to me that it takes a r remarkably like to come to this agreement to say, hey, you know, like we're not gonna be romantic partners anymore, but

We're really good business partners and we've got this good thing going. And let's keep it going. Now now when I hear that I'm thinking, Of course you would say that. That makes total sense. But most people don't say that. So The greatest gift. That mark.

Gave me. During this period. Was his honesty. '

When or if I wanna have children. Yeah. And I was in my mid thirties already. So you know He said that to me and it was really I mean it was that night that

I left. I went to the factory. I had You know, I brought my dog to the factory all the time. So I really I went to the factory and I slept in the dog bed that night. But

you know, now that I look back on it, I mean really Could you imagine if we would have stayed together and and we might have ended up having a kid, that he wasn't really into having kids and it didn't and that could have been that road that so many people go down and it ends up being a mess. Yeah. But I did decide to start a family and he was Very supportive of that.

I think this is like two years a later, right? Two thousand three you you gave birth to to your twins. Yep, I was thirty nine years old. I gave birth to my twins. Um I mean I went to Boston IVF. And That's how I I had the kids and I and I

Have always spoken openly About that. that I was financially and emotionally ready to start a family and I just needed a little help. Yeah. So At this point when your girls were born.

In two thousand three. Was Stacey's pita chips w was the trajectory Like, was it clear that it was going to be a much bigger brand or or did it still feel like It was a you know g g g more successful regional

Brand. So at this point Um, the company was growing like crazy. It was successful enough that we could each be taking A decent salary.

We can Pull that much out of the business, but you know, it was enough so that we could each, you know, buy a car and you know, we could each buy our own place or w or whatever. So it was successful enough to do that, but we really we decided how much we gonna pay each other And

then everything else just stayed in the business. And were companies coming to to you guys at this point and saying, Hey, we want Stacey's pita chips in our in our stores? Yeah. So I think it was when we

Got into the Club accounts? Like Costco and Sam's Club and all all those. So we started manufacturing for them And then we got into Trader Joe's and we just and it was the perfect demographic for us. And

Trader Joe's was an amazing Company to do business with. They paid On time or early. Wow.

And because of that We were able to Not take on equity. Wow. And at that point, you know, everything just went back into the business. But we were just about to give up give up a piece of the company and we never ended up actually doing that because we got Trader Joe's and they were ordering by the truckload.

And when we were selling when we said truckloads, I mean it's really amazing When Trucks are lined up. We're selling a you know a two dollar item. We're not selling computers, you know. So

Yeah, when we're when we get to the point that we're doing, you know, thirty, forty, fifty million dollars in sales, those are Two dollar sales or one dollar sales. That are going so there's like just truckloads of chips going out the door. And At this point we were

We had um moved to the ceely mattress factory where we bought the building and It was Two or three hundred thousand square feet, something like that. It was basically four acres inside. Wow. And we converted the seely mattress factory into a giant

Pita chip factory. I think it's like By two thousand five, two thousand six. You're selling like More than fifty million dollars worth of pita chips a year, which is sixty five, I think. Sixty five, thank you.

Um, Pepsi announces that they were acquiring Stacey's. How did that happen? Did they approach you like a year before? Did they say, Hey, we're really interested in buying your company, is is that what happened or d or are you looking to sell it? So

A couple of months before we saw them at a trade show and and they were like, Oh, this is a good product and In order for them to even look at you, you have to be at least fifty million in sales and blah blah blah. And we were nowhere near there at the time and And that was the only contact we ever had with them. Then You know, a year later at the

Trade show again. There was this one month window where we got phone calls from Three Of

the biggest food companies in the world. And We were like We better start. looking at this. And this at this time I had

Two little kids. Yeah, they're two years old. Uh single mom So we we really Said you know what, we should We should where we never considered selling

Yeah. We should maybe Think about this. Yeah. So so you decide Uh to sell.

Yeah. In the middle of working on that deal, uh There's actually there's actually a fire in the factory. Yeah, there was a big, big Fire and

We had already signed the SPA we s the stock purchase agreement. We had already signed that, but it hadn't closed. We agreed on a price and all of this. And then we had a fire. There was nine million dollars in damages and twenty five percent of the factory was burnt down. Well. And that's a really hard phone call when they call you, you don't know what they're gonna say. And basically the way that it ended up working out is, you know, we still ultimately

had a brand That was worth Value. And We were like

We will get it back up and running. And The way we did it was we built a wall. across half of the plant, so we were still able to manufacture on the side that Wasn't burnt down.

And then the other side, we called in every person over the last decade that had helped us with anything, and then People were working electricians, they brought in like w the one guy turned into six guys and Overnight, round the clock. We were supposed to close in December. And

Bye. January twelfth. They inspected the plant and they said We don't believe it.

Well they're back up and running. Place looks great. Good to go. Send him the check. Exactly. Send them in the check. Which it would have been nice to see a check, but Nowadays it's a transfer. So we all sat in front of the computer just looking like

Waiting for the number to change. Is it there? Is it there? Is it there? Is it there? And then it was like, you know, the the money transferred in and we did Obviously Close the deal. I've asked, you know, other entrepreneurs about

the sale of their business and there are different answers. I r I I asked um the co founders of Reddit. why they agreed to sell their company at the time they did. And the answer was,'cause it was more money than I'd ever had in my life. I didn't grow up with a lot of money and it was life changing money, which I think is a fair answer. Um I I have to assume that was a a a factor, if not the factor in your decision. It was life changing money.

But It had also become You know, where we loved this business And we loved running it. At a point

The tables turn. And the business starts to run you. So I think It was the perfect timing Yeah, I was working crazy hours. I was lucky if I got home on time before my kids went to sleep.

So for me it was the right time. For Mark I think it was the right time. He was burnt out. Um That being said After it sold. There's this major

Like This was my whole life. This and my and my kids and What am I going to do now?

So what what did you do? I mean How long? Did you stay with Stacey's after you? Sold to Pepsi. One very disastrous year. Wha what was what was what was disastrous about it?

It was so hard. I was Contracted. to stay, but I really only had to work twenty days a year. But I didn't know what else to do, so I would really go in every day. And I think I was more in the way. And I thought that I was gonna be

Like a buffer. Between you know, the new leadership team and the employees and I think I'm I probably just created More confusion.

So it was eight months of Yeah, I probably just was in the way. Yeah. Um, I can imag like you don't sound like a person who is different from the person who you were in high school or college. Of course, we all change and we we grow and evolve, but like You you sound like a very down to earth person.

But um all of a sudden you were You had a this wealth that y I have to assume you weren't you had no experience with How did it change the way you live your life or anything else? I think it

Even today. Sometimes when I go Uh Do something. You think twice, Oh, can I do that?

Oh, can I buy that? Oh, can I you know and Initially. I went out. And I bought a castle. Right?

Right. was like, I'm going to buy a big house in a beautiful neighborhood and get a sports car and do all that. And I did. But Then I realized My kids can't

ride their bike and they go on the bus and and there's only five kids on the bus'cause everybody else is going to private school and and I was like We're done. Hm. We're done with this house. I put the house on the market.

And I bought a Smaller house in a Neighborhood where our neighbors are Right next door. And you could

You know. Borrow a can opener? And the kids can ride their bike and yeah, that's how I wanted to raise My family.

I'm just curious, I mean you You were young, you were um in your early forties. having accomplished this incredible thing like growing this business in The whole rest of your life ahead of you

I mean huge part of that incredible exciting like I you know think m lots of people listening would say I I would love to have that. But at the same time you had to figure out, I guess what you were gonna do with the rest of your life, right? Right.

People are people look at you like You can do anything but at the same time you look at yourself and and you're like well now what am I gonna do with my life? Of course I'm I'm a mom and I'm parenting and that's first and Formost. But um What else am I?

Yeah. And it's a very hard position, it's very hard place to be. And the past four or five years. I've had Some

Big medical. challenges. I had breast cancer. I had an autoimmune disease. I had a full knee replacement. So I was really kind of knocked down for four years and When you're in that position you really feel Like the money at that point Doesn't matter.

You know if There's a day But you think You may die. All of a sudden there's this

Mortality. Yeah. And you have to think of your kids. It's the most awful Yeah. Two Think about

What's gonna happen With my children. Yeah. Who's gonna give them a hug? Who's gonna

You know Obviously, you know my I mean, I've got family that would that would step in and take care of'em, but but it's the little things, it's the day to day things that you mentally go through Um that makes it really hard. How's your How's your health now?

Now I'm good. That's great. I had double mass acomies. Yeah. I

Don't identify myself. As a cancer survivor, I just look at it as this was a time in my life and now it's over. Mm. And

Yeah. All of that you know. getting past the medical issues Selling the company. All of that adds up to

Taking control. And that's my sense of bold. So you kinda got it now, you got your mind in a new space. Amazing. Um

Stacy, when you think about the trajectory of your Life in your career and the incredible success you had. Do you do you think that it's because of The skills that you brought and the hard work that you brought, or do you think that luck played a a bigger role in in that.

You know, a lot of people say, Oh, she got lucky. Yeah. That really pisses me off. Hm. 'Cause you know, yeah, maybe the stars aligned and maybe the timing was right for a lot of things but

Each and every one of the challenges and the hurdles that you overcome Others might not have gotten there. And we did. I could have very easily followed the path that my father laid out for me. You know, I probably could have just stayed in that comfort zone. But you know, yes, by moving to this place and moving to that place and taking on additional challenges, you know, I think you develop the skill somewhat of a survival skill. That's what got us to where we were in two thousand seven. When we sold.

Yeah, maybe there was some luck in there, but there was a lot of skill. that's involved in crossing that finish line. That's Stacey Madison, co-founder of Stacey's Pita Chips. By the way, Stacey is still in the food business. A few years ago, she opened Stacey's juice bar in Edom, Massachusetts, and along with her brother Dave, she's just launched a new energy snack called Bee Bold Bars. But even with those new ventures, Stacey still gets excited every time she's at the grocery store and sees someone putting a bag of her pita chips in their cart. There was a time I was in the grocery store and this woman picked up two or three bags and she put them in her cart and I just couldn't resist. I'm like, you know what? I'm just gonna go tell her and and I did. I went up and I said Those are my chips. And she looks at me and she goes

No, they're not. They're my chips. I was like, Oh my god. Hey, thanks so much for sticking around because it's time now for how you built that. And this story begins about five years ago.

When Pre-Rak Jani was a pre-med student at UC Berkeley taking organic chemistry. Let's say you want to get a hydroxyl group onto a tertiary carbon on an alkane chain. Well then you can use a SN1 reaction. And I know, I know, just hearing this is going to stress some of you out. Or let's say you wanted to convert An alkene, which is a double bond into a single bond. Now here's something you should know, which is that for most premed students, organic chemistry Sucks there are people who will cry uh the night before the final. There are people who would just lose it just because it's so difficult. Now, on the face of it, organic chemistry is actually kind of basic because it's about the essential building blocks of life. Every molecule in your body is an organic chemistry molecule, and those molecules are reacting with other molecules all the time. And so you need to know these compounds pretty well and you need to know how they interact with one another. You start with molecule A, and you have to figure out how to make molecule B. And maybe it's kind of obvious by now that Pre-Rec was one of those rare pre-med students who really liked organic chemistry.

And he made friends with a fellow student, Bilal, who felt the same way. We both very much saw it like a game. And then by the time we graduated, we finally were like, oh my god, we actually have time now. We're both applying to medical school. Let's try to do this thing. Like let's try to actually create a game and see if we can demystify this daunting obstacle that so many pre-med students face. So Pre-Rec and Bilal recruited a few other organic chemistry students And they started to develop a board game that you could play in the classroom. And then we literally met once a week at UC Berkeley in one of their classrooms and uh started brainstorming how is this gonna work? What do we want out of this game? How exactly do we want to convey why we love organic chemistry and why other people should love it too. So they eventually came up with a game where you get this card with a simple carbon chain on it. And the goal is to manipulate that carbon chain into a more complex molecule.

And you do that by drawing more cards with all kinds of reactions and substrates and reagents on them. And I have no idea what any of that means. But the main point is, the person with the most complex molecule at the end of the game. wins. So the earliest version of the game was literally a kid you knot, me and my dad printing this out on Normal printer paper.

Eight and a half by eleven. Like six cards per sheet, cutting it out with scissors in my downstairs living room. Pre-react got a group of friends together to play that first version of the game. But it went on Forever like they couldn't even finish it. Cause it was still really complicated. Our decks were like 300 cards each. And again, they're all an eight and a half by eleven pieces of paper. Cards were everywhere. There was a mess. But it but it worked.

So over the next few months Pre-Rak and his team simplified the game. They eliminated some of the molecules and made each card each chemical element. into kind of a cartoon figure. So instead of thinking about all of these chemicals as scary chemicals, they actually look really fun. Like our bromine is a is a bro. It has a nice hat on it and it looks like a bro. Anyway, by the spring of 2017, Pre-Rec and his friends went onto Kickstarter and they raised about$15,000 from 18 different countries. And the thing that I think really made us all proud was I think people loved the idea. Now Pre-Rec was not doing any of this on a full-time basis.

While the Kickstarter campaign was going on. He was getting ready to go to med school, which he started in the summer of 2017. This is a side gig for all of us. I'm in med school, I have to take care of patients full time, and yet I still have this other thing that I really want to get done. And today The game is pretty much done. It's called React with an exclamation point. A company in China is making it, there's a website where you can order it, and so far they've only sold about 400 games, but Pre-Rock thinks the market is going to grow. I want React to be the supplement for all organic chemistry classes across not even the nation, even the world. And even something they can play before they take the class to really be like, Okay, so this is what I'm getting myself into. It's not death, it's not crazy, it's

is basic science. Pirak Jani is the co-creator of React, it's a board game about organic chemistry. And for now, he and his colleagues are running the company as a nonprofit. Their backup plan? is to become doctors.

And if you want to find out more about React or hear previous episodes, head to our podcast page, howibuilthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts, and while you're there, please do give us a review. You can also write to us at hibt at npr.org, and if you want to send a tweet, It's at how I built this. Our show is produced this week by JC Howard, with music composed by Raptin Erablui. Thanks also to Candace Lim, Julia Carney, Neva Grant, San Azmepur, and Jeff Rogers. Our intern is David Ja.

I'm Guy Raz, and you've been listening to how I built this.

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