Happy Family Organics: Shazi Visram (2020)

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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. 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. Oh We launched with I mean must be at least like a thousand demos. Um you would go and demo Kia, 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 gonna work. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.

built. Guy Raz and on the show today, has Shazi Visram decided to take on the big baby food companies? 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, Lar American just chopped up dates and nuts and shaped them into bars, which eventually became LaraBars. Kathleen King of Tate's Bake Shop? baked her crispy chocolate chip cookies at home long before she launched a bakery and a brand that would go on to sell to Mondelez for half a billion dollars. It's a similar story with baby food. It's not that hard to make. You puree 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 that started with puree 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 a 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 US. And I remember I was three years old. And my dad had this friend. And he was in the motel business. and in the south in the south east. And there are a lot of Indians in motels in the south east.

And this guy um Sold my parents a motel. Outside of Birmingham, Alabama. We packed up all of our stuff and then we moved down to Fulton Dale, Alabama, and lived in the motel. Wow. Wait, so how did I mean how did that idea even happen? I mean your parents

They have a 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. They're inherently already risk takers. I mean th both of them grew up completely with dirt floors under their feet. They had grit.

You know what I mean? And um You know, it 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 um I think like so many other things, you figure

Figure it out as you go. I wanna remember the exact number. I I I think it was three hundred thousand dollars. Um, I think they had saved up a hundred thousand dollars. 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, it's 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 days in motel.

And that's it. That's that's where where you end up growing up. Tell me about I mean so Did you guys live in a like Was it like an apartment?

behind the reception area where 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 one twenty three and one twenty five. Yeah. And uh they were c you know, it's like imagine stopping at a day's inn somewhere as a motel and imagine getting two adjoining rooms. That was where we lived.

Yeah, my brother and I kinda had fun. It was like You know, someone might say, Oh wow, you you must be so poor, this must be so hard. I'm thinking we have a hundred and four room house. And do you have a swimming pool? Huge swimming pool. I mean at the time it was one of the biggest um in Alabama, outdoor. Wow so And if you think about it, if If I ever wanted something to eat, there was this chef. His name was Randy Crowder. And he would make me a burger and fries. You had a restaurant and bar. There's a little restaurant. Oh wow. Okay. Yeah, and there was and there was a bar.

And the woman's name was Sandy, and she made me my first Shirley Temple. Mm. And was the hotel business? Um I mean, I I imagine it was a it was tough, right? Because

There's like You know, you g it's hard work for one thing. Um, and another thing, like, it depends on guests staying at the hotel. Like you you know, it's It's a grind, right, to to make that work. They figured it out. They made it work. They got some bull b billboards off of the highway and you know it 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 and they made it work.

Shazi, I'm I'm curious, like as a as a kid, um when you go to school Were you the only South Asian kid in your classes in in your school? Yep. Totally. Except well, my brother if he were in the same school at the same time would be the other one. And as a kid did did you feel different? Did you feel like you you guys were different or or

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 w you know That our salvation would be if we We're saved. Yeah. And and I and I really believed that for a while. And 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 um in that Environment I felt. Definitely different, but I had friends. I was like a regular kid. Um, you know, I could invite people over to swim in the pool. Um We could have really good slumber parties. Yeah.

Yeah, you know, I'm I'm wondering when you were when you were a kid, when you were a 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 l a lawyer or 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's 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 m 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.

Okay. So you go off to college and what did you What did you think you wanted to do there? I wanted to be an artist. I went to Columbia.

I was excited'cause I wanted to be in New York City. And so and while I was in high school I painted. Yeah. And my um undergrad degree was in visual arts and I and I did a double major in history. But yeah, I want I just wanted to paint pictures.

Mm 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 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 was it's like never ending. Mm.

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'd you go work? So I got a job As the first interactive media buyer At um

What was then and and might still be the largest independently owned Agency For media buying. And a company that like buys ads on behalf of clients or brands uh on like shows like ours or T V or 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 um 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 kinda 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 Um identify with And when I say that thing about madmen

Th think about what that means. Like why am I killing myself? To make someone else so much money that they then gift their Their admin who's about to become their wife a Porsche.

It just it 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 cog's grinding away, making all this money for the partners and the stakeholders. Yeah, and using your like 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 kinda 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 d doing the directing. And I I felt um yeah, I just I felt like I had a To do something else? Hm. So I I read that after you left, you you kind of ran your own like marketing business uh for a while. And then I guess at a certain point you decided to Uh to enroll in business school. Well, um, 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 um I was totally terrified of going to business school. I mean I didn't think Um and I didn't you know, I didn't fit in.

I was the black sheep of the business school. 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 kinda 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 and that era.

Pre the sort of two thousand and eight humbling. Of the economy. There was a lot of hubris. in that um environment. And

And and then while you were there at at Columbia, you kind of I guess you kinda stumbled on the on this idea for what would eventually become happy family. How did that H 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 twenty years ago. And um

Right a I remember it 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.

Just had twins. It's amazing. And you're not a bad mom for feeding them baby food out of a jar. And then all 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 the movement of the future. Towards creating abundance in a way that felt right. And it just kinda came together where it was like You know, I have to do this. Wait, I'm just gonna go.

This is like this is the summer of two thousand Three. Yeah. And In that moment at that lunch you thought, Hey, I could maybe

tinker around with this idea or or or was it just a a seed that was planted in your head that kinda just Sat there and Germinated over time. Well I asked her. Um, you know what's what's the best

Like why why are you feeling guilty about buying something? Like, isn't it good? And she's like, No, it's gross. Comes in a jar and you Smells in 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 um makes you feel good about how you feed your children. And then that then I started looking into it. So you thought, all right, so you leave that lunch and you the sort of the gears in your head are turning and you're like, okay Let me

Let me look into it and what did you find? Was what what was on the market in two thousand three? Yeah, so what I found was that So interesting, um that baby food as a category was created in around the nineteen thirties. Okay. Yeah and the category was um created to be

This this new market For convenient And cheap. Product. That was consistent.

And that, you know, started in the thirties with kind of the two mega giants. Beechnut and and Gerber. 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 wants something. Fresh and premium and alive and um

And she wanted something that was going to contribute to their health and that tasted good. But in two thousand three, like, presumably Gerber and Beachnut were like the Coke and Pepsi of baby food. But there but there weren't a whole lot of You know, if you think about Coke and Pepsi you also have like Yeah, a thousand other great beverages out there that you can

sort of check out and organic and kombucha's and whatever whatever's out there. Like you go to Whole Foods and there's just like endless shelves of Cool, interesting drinks. Was it mainly Gerber and Beechnut in two thousand three, when it came to baby food? There was a small organic player Um, called Earth's Best. Right. And there were certain there were little players. There was another one I remember looking at.

And then there were innovations from around the world. I I started seeing like there were some fresh and frozen options in the UK. I mean I went and visited. I I tried to learn as much as I could. 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 um 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

Is an opportunity To change children's health for the better. I really did. I thought 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 so you really start to research this in earnest. You go to the UK, you check out the baby foods. And you start your second year at Columbia with this idea. To pursue this thing? Oh, I 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. Um, and this was I don't think two hundred and thirty parents. More than seventy percent of them didn't like the taste. of jarred baby food. Of the of that seventy percent.

Twelve percent had made Their own homemade. Or tried to. Of that twelve percent. I think it was only like four percent continued to do so.'Cause it's a lot of work.

Yeah, and I'm thinking If let's come up with something that answers this need. Putting some char 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, Shawzi, I mean, you're obviously super smart and

Like very resourceful and you kinda learned a lot about this industry, but Food is especially when you're talking about babies Whew, like that is That's just crazy um scary because

You know, you you like you need food scientists who understand PH levels and and uh and shelf life and spoil edge and all this stuff like I'm I'm assuming that you weren't quite there just yet. You're still making it in your quees and art and just testing it. Uh with for you and some friends and just Right. Or or or did you start to talk to food scientists?

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 ninety nine point eight five percent 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 gonna manufacture that for you. This is a 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 s I met like Like all the 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 called called Seth Goldman.

You know of Honest T, founder of Honesty. And in two thousand four, by the way, he was not crushing it yet, right? Like th th his company was still He was still building it, but but he was already a known entity'cause honesty was this kind of cool story. Um and and you'd called him for advice. I guess, right?

Yeah. I kept putting myself in these positions to like meet people and learn'cause 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 um

um containers and I would make I would make You know, all the flavors that I thought we would one day launch. And you're turning them into ice cubes, right? Yep, we'd fill it um fill like Think of like a yeah, like a little ice cube tray and you pop out what you need. And um 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 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 I found myself 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 beet a carotene. And um

And the peas were a nice one and they were so bright green, but I felt like they needed something. And so it'd make this like Really nice mint tea and steam the peas with the mint and that um You know, I I don't know. You play with it and you learn. It was fun. So you it was like 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 Thal. 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 use coriander and a touch of cumin and a just a hint of cinnamon and all of those things had, you know Like everything had a reason. 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 st it would be good'cause 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,'cause you keep saying we but I think you're you are in your kitchen doing this By yourself. I had a lot of friends who knew what I was doing. Um I had like almost like a support group. Um but you were just and you were talking about this all the time and and and at what point did you 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 gonna do fresh frozen organic baby food. Which never ended up launching. But even still, um We had to come up with

Options. And so I remember having these little boards. And we um We there was a naming shop.

Where are they from? Minnesota. And they came up with a number of options and there were like Twinkle and Googo gaga. And I mean funny funny names. And one of the names they came up with

It was happy baby. And I was like At first I didn't actually see it. I was pro the one I wanted to go with was Nur Nurture Me. And our incorporation name was Nurture Inc.

And then Finally I started seeing happy baby and happy and like like pairing the emotion. Yeah. With health. And I 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 you've got this concept of like frozen baby food. Now you need money. Where do you go? I mean I I tried everything I was so I wanted to raise like half a million dollars. Which to me was like That

current equivalent of maybe a trillion dollars. Yeah. And that would be enough to to to get the first like production up and running and to maybe get some distribution, like that would be enough to g 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 a best in class advisory board.

microbiologists, nutritionists, pediatricians, like the whole you know, build out a team. And have have people to help'cause you just nobody does any of this stuff by themselves. And um I almost made the worst mistake of my life.

I almost took Half a million dollars. From a V C group. Because I was I felt so alone. You know? And I felt

So broke and I felt like a disappointment to my family. Then here I was went to Columbia Business School. I never recruit for anything. You know, everybody else is like, you know, talking about their job at Morgan or whatever. And I

You know, and 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 gonna do? And how's this baby food going? And you know, whatever. Yeah. And it and I and I didn't want to ask them for money. Yeah. You know? Yeah. Sure. And

It was kinda 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 um And so I got a job, and then this time You know, I found someone and I thought okay

This is it. I'm gonna I'm gonna raise this money. Yeah, and I'm thinking, um 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, Shawzi, 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 wanna 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'cause 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. Then you don't have to go to a bunch of people and start asking for all this money. If one one VC firm is gonna give you all of your seed money, that's gonna save you a lot of time. Right and that and that's attractive. And a lot of people, we've had them on the show, they take that deal. But the terms were w do you remember what the terms were? Like they would own more than half of it or what? It was um it was seventy percent. They would on seventy percent have every blocking right, every v every every right to You know? And I I was ready to sign on.

One day one of them was just like Yeah, we love the name Fair. F A R E And I'm like

I don't I don't know, it doesn't like feel good and just kinda gross and like I just I was just And it's funny, that was like the day that I met my husband. Um for our first Internet date.

You met online? Yeah, we met on the internet and I we were walking And um I meet Joe and he's this like cute puppy dog of a guy and um I'm just like to kinda 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 that doesn't feel right. Mm. Like I don't have an MBA from Columbia or a degree from an Ivy League s school to tell you that. He's like a snowboarder yoga guy. I mean and but he was right.

And I I I didn't take the deal. Wow. So wait on this first date. with this guy who's now your husband and partner in life, um, he's like This just doesn't sound right to me and but and and you're like, yep.

I think this is not right. I I don't think I'm gonna do this deal. I mean it's it might 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 last longer.

Like who does that? Yeah. So um You tell this V C firm, I'm not gonna take your money and but that means you now have to find the five hundred thousand dollars.'Cause this is the m the number in your head.

So where do you go? Who do you 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 thirty six people. For five hundred and fifty thousand dollars. And Seth Goldman of Honesty was twenty five hundred dollars. Seth Goldman of Honesty gave you twenty five hundred dollars. Twenty five hundred dollars. He was gonna originally he was gonna give us five thousand dollars. But then he told me that his wife really needed a new oven that year and it was gonna and it he was gonna have to cut it down to twenty five hundred dollars. My it's oven cost twenty five hundred dollars. Wow how by the way, how did how long did it take you to to cobble together the five hundred thousand dollars?

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 a it's like a It was a churn. The 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 five hundred thousand were most people like, You know, Shazi, I believe in you I've known you for a while and and here you go. Here's here's five thousand bucks, or here's you know, twenty five hundred bucks, or here's ten thousand bucks. 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 Yeah, it's 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. Um And I think The people who invest

First of all, there's so much extra pressure when it's 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. Um I you know, I knew she was

Like making a margin selling Snickers bars to give me that money. uh 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 I you know, I was gonna Do my very best or die trying. And 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 and you're listening to How I Built This.

Hey, welcome back to how I built this. Guy Raj. So it's the mid-2000s 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. 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. Yeah. 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 f for food. Which does actually impact your health.

And so My whole thing was looking. People will spend more and we will be able to have a healthy margin. Um 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 us money. And you need to start to make the product, right? But in the meantime, you met somebody who who becomes your sort of your co founder. Um, Jessica Rolf. Who who's Jessica? How'd you meet her?

So yeah, Jessica was my founding partner and she was our COO. And she was working In Texas. At Whole Foods like on site at Whole Foods basically doing research for them.

And we were connected. Um through A mutual friend. And um You know, I said, Well look if you

Wanna be a part of this? Um Come join me. Help me, but help me launch it. tha that's a kind of a big risk, right? I mean I'm the there are many stories like that that end really badly Um, how did you know that

This was the right thing. Decision. Um, 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 um her a a role. But she is just

Authentic. And Smart. And really organized. She was a perfect person to be a COO.

to like a you know, crazy kind of loudmouth visionary type. person who had big ideas and um big dreams. She w 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. um a partner. And Jessica. Um, and how did you find the place to make the baby food. Was it in New York? I mean it w I guess it would have to be, right?'Cause it you were living in New York.

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. 'Cause I really just I I want to launch from a professional facility. And he said yes. And Jessica's there and we were jumping up and down You know, um and um

We would drive up and because my parents had a days in We had these days in employm employee discount coupons. They were like literal physical yellow coupons and you could get a days in room for twenty five 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. So we had this little We made a mold. We made a tray of um that looked like an ice cube. Can I try? And we would fill Um 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 j giant like pastry bag that you were just squeezing into the things. And and then the other question is where did you get all 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 s literally just like if you were making it home made. 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 the 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 or was it like a

Like a L plastic sealed plastic thing around it with your name on it. Yeah, so there's an ice cube tray and like a thin sort of plastic film. Over it? 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 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 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.'Cause we had one of them was my nephew. Um But yeah, and 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 Pack this first run.

How did you where did 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 um 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. Um and assuming you you're doing these in the in like the frozen food aisle, right? I mean is Is that is it how it worked? 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 colours. 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. And you're you're like oh Mom, baby, come and and and they might just pass you by. Like I'm sorry, I'm just really busy. Yeah, I mean imagine like Oh, I don't want to try that. Or ooh, baby food. A lot of people were like

Ew, I don't want it 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 gonna happen if I keep standing where I am standing right now. But I understand why weren't people But buying them. I mean it's a great idea, you're demoing it. You've got um 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

A few people who were buying it. Right. But they were buying it as an alternative to homemade. Mm. They were not What I needed was the alternative to the jar. And that's how you move markets.

And it wasn't convenient. 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 realized is you have to work with the existing human behavior and make small steps to To change.

uh I realized that like 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 how what your revenue was? Hundred and sixteen thousand dollars. Which was far from what I

So a hundred and sixteen thousand dollars is revenue, but obviously. You've got. All the costs of the produce you gotta buy, the packaging and the distribution like you probably were

losing money right you were you you're you're eating into your five hundred thousand seed money pretty quickly. Oh yeah. Um our revenue was certainly not covering Um our costs, our operating costs. Yeah. I mean this sounds like you realize this pretty quickly, like within within the first year of launching

The company. Um Did you continue to make the ice cubes in in you know year two, year three?'Cause this is like two thousand six, two thousand seven. Is that what happy baby Was still in those years.

Yeah, so in in two thousand six When we launched We had um five skews, ten 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 you know, quality control scientists, microbiologists, everybody

Probably uh on the third time that I did a demo. Did I realise that This wasn't gonna work. But you still have to make it. You still have to sell it. Yeah. And what I realized

Hey, Shawzi, 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 you're gonna change the way children are fed in our country. You gotta 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 beechnut and and

No. Um no, what I thought was Let's look at the set. And let's Enlighten it.

And um 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 or you know, sampling the frozen baby food'cause 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. Yeah, but in your heart you just know. Like it's just like you know this is not gonna be the i the thing, but you gotta keep it going. I'm really interested in this because a 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 gonna 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 sometime, we're gonna support this, we're gonna 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'cause 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. Mm. 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 app.

without having to pay a penny for it. Stay with us, I'm Guy Raz, and you're listening to How I Built This. 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 pureeed fruits 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.

It will stick. 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.

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. 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 hundred and fifteen, hundred and sixteen thousand the first year.

Five hundred and twenty thousand the second year, still unfrozen baby food. The next year we launched the cereal. And we're able to get so much more distribution'cause we weren't struggling for space in the freezer. Right. And we went to two point one million. So this is this is like rice cereal, like that you mixed with water. Well, so we had three so we had a multi grain with amaranth and quinoa.

We had a rice. Brown rice. Um, and we had an oatmeal. And we could also, you know, show show people how you could mix them with uh the cubes of frozen to make a yummy breakfast or a meal. And it started beginning a platform.

I mean 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 I was never not thinking. About what What is What is the actual alternative to the jar? And then one day I saw it.

One day you saw it what? I saw a pouch. Of a sauce. At a trade show. In uh Melbourne, Australia.

And then I started seeing cooking sauce. Yeah, and then I started seeing kids' apple sauce. In this pouch. The squeezy sauce. Yeah. And it was from I it was from Europe. And it was like the very you know, at first there were these pouches that had this tear 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 um The the beauty. Test.

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 I mean it was like you know, it was like the epitome of the light bulb. Where we've been 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. You could put it on the shelf next to you. Durber and whatever, right? Mm-hmm. And it's convenient. It's a pouch. And it tasted better and it

it felt better, you could t feel the fiber in the food, like the technology allowed for Such a different process. Alright, so you've got this idea for pouches, but So where did you source them from? And and what factories were we're gonna be able to 'Cause you were using like pastry bags to fill ice cube trays, and I guess it got a little more sophisticated, but

What what factories or companies are p you know? plants in the US could fill Pouches with your baby food. There were two options in the United States and one in Canada. And when

you notice 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 a technology. then you know, that's when it gets like really challenging. And so um we lived through that too. 'Cause um if you're scrappy and bootstrap the way we were That was like actually the big thing. It was like it was so crazy'cause I'm he'd sitting there thinking, I finally found

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 was I mean that The world of baby food sounds sweet, but it's actually like a dog eat dog. It was I bet. It was like a dog eat dog world of um of competition. And back then when you're fighting for Shelf space.

If you think about it, like go to going to a retailer and showing them this whole full lineup of maybe twenty skews. um to 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 um brand of baby food in pouches and whole foods and target. Well. And um

And those those two accounts were really meaningful for our whole our whole business moving forward. Oh how did you get into Target. We got into target with frozen baby food?

Jessica and I would walk around a store. There was twelve target stores that we were in. For the test. We will 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 or biggest brand and target in Baby. Wow. Um and it started in twelve stores literally walking around and giving it away for free.

But how did you I mean, how did how were you able to fund that Was it hard to fund that that growth because I mean y I've read that you basically were like, I'm just not gonna go to private equity or venture capital. I'm gonna raise this money m pretty much from individual investors or You know

I'm gonna borrow it. That's harder to do. In some ways. H were you able to raise the money fast enough to fund the 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 funds and I had a few options and I was scared but I you know like you it's one thing to cobble together five hundred and fifty thousand dollars from thirty six 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 gonna be an online documentary actually, for American Express.

And we wanna um we wanna tell the story of Happy Baby we've heard about your company. How did it was just a Just random solicit like an email from someone at Amex who've just Well, it wasn't totally random.

It wasn't all the round'em, so Um The real story is in two thousand and nine. There was a competition called Shine a Light. And Shine a Light was a conversation 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 um, you know, talk about why your business sh could be Uh could be one of these. Yeah. 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. It finally said, Well, we heard about Etu Shinolite, um Oh, we're just doing an online documentary. Can we follow you around for four days?

Of course. So they film this this For four days. This is it's all kinda culminating, you know, so I I've 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 kinda documented. And you know, we've been like working hard and then we're sort of seeing some success. It's not big, but like the 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 fifty million dollars of media behind your commercial. Wow.

So so for I mean this was gonna be a massive ad campaign that you didn't even have to pay for. You have to have me there was no marketing dollars you had to put behind it. You were all of a sudden gonna r Your name and your brand were gonna reach. millions of people.

A guy they played it before, you know, like on the Golden Globes when they uh show you w like sh the save it for the end, what's the best movie. Our commercial played before that. They played it on the Superbowl pre game. Wow. And all I had to do was Was take that email from Amex. And Email it around.

And I raise eight million dollars in three weeks. Wow. Yeah. I mean, w what happened to sales? I mean if all of a sudden millions of people are exposed to your

Brand and products. That year was thirty nine million. Wha did did how did you make enough products to fulfill all that demand? Cut nose. It was hard. Thirty nine million went from thirteen million to thirty nine million. Like practically overnight. Um we had a hundred and some skews.

So we had You know, at this point we're building a real platform for nutrition for you know the the first three years of life. the pouches and the cereals and the Yeah. Puffs and the yogis and

Alright, so here's Now here's the the crazy thing. You hit sixty three million dollar in rev dollars in revenue in twenty twelve. A company that Did a hundred and fifteen thousand dollars. Just a few years earlier. selling frozen ice cubes of of of baby food that you were copacking. You were making it a coping facility.

Um, you're doing sixty three million dollars, you far are out uh presumably out you know, exceeding your even your own business plans and projections. In twenty thirteen You sell. ninety two percent of the company to Denon, which makes yogurts and it's a huge French conglomerate owns a lot of food companies.

Why? What was the thinking behind it? What what was the advantage? I mean, obviously you're gonna get Paid a lot of money, but But you were already doing so well. Wha 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 I knew both of 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 if they had the backing of those big companies they could potentially crush you, right, with with all those ad marketing dollars and R and 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 in everything we work 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 um In April of twenty twelve

Um my son Who's you know, so beautiful featured in the American Express commercials was diagnosed with autism. And it was a state of it was it's they call it regressive autism. So he He had every milestone his first two years of life.

And um All of a sudden he was losing his smelstones, and losing his ability to communicate and point and talk. and label things and um and make eye contact. And it It was terrifying.

And um as a mom leading a business that was what the fastest growing food business for almost three years in a row. Um It was it.

You know, I just I felt like I needed to take a step back and say what I need to focus on and number one. The health of my child and my family. So So this isn I mean this is really important because

Right. we talk to founders about their businesses and their and and and growing it and And and usually we 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 who could help him Um And and and you you were not able to do that.

in in sort of the life you were you were li living, I guess. Is that is it right? I mean it's right, you know, not just financially, but focus and attention wise. There's so many special moments. Um

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 the thing was uh I What my parents would have done for me is drop everything.

and focus on how to figure out the solution for for me to have the best chance in life. I mean the other thing is that in in addition to uh of course getting more time with your son. Um Yeah, 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, sixty three million dollars in revenue at this point, I I'm assuming you were not you weren't making millions and millions of dollars and by selling to Denone it was going to make you financially secure. Which 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 for it. Yeah. And to blast through the walls, yeah. I will Do everything in my power.

And um and I'm a fighter and I don't I don't quit. And in that in that case Um, I felt like that was the right choice to give me some financial security, to partner with someone so that I could continue to build and have ownership, but not not Th the the majority of the burden. And you know, not for nothing. Denone's been selling baby food for a hundred 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 we have actually accomplished. Yeah. I mean it's it's interesting. We d we did uh an episode with Tristan Walker who started um Bevel uh uh uh personal grooming products for for men of color. And then he expanded it and he sold it um to Proctor and Gamble, and now he works for Procter<unk> Gamble. And one of the arguments he made was like Look, to get this out into the world, we needed the marketing dollars, the RD dollars, the distribution dollars that that a company like Procter Gamble has.

Was it the same with Denon? Like with Denone? and their marketing budget and their you know, huge R and D and their other brands. Was that in your mind the way that you could m you could really scale happy? baby and and and fam happy family and turn it into a

Yeah. the big huge brand you wanted it to be. Yeah, 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 gonna 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. Yeah.

For instance, I I I really believe strongly And the you know, the movement around Um B Corps. And happy has been a B Corp for many, many years. And Denone 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 um in early two thousand eighteen. Um

Shazi, when you think about all that you achieved and I mean, you know Just the pivots and the crazy moments and Amecs 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 um 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. Um, but like I said, you you can't win the lottery unless you buy a ticket. So I think it's both. If you I mean

I mean if you think about I know your dad, um he he he passed away in twenty thirteen and your mom's still around and she's still in Alabama Still involved in the motel business. Um they wanted you to be a doctor, a lawyer, or maybe finance, something like that. I mean, I have to assume that even your daddy got to see he got to see really succeed. He got to see that. Um

That must have been a big deal for them, you know, moving to the US with no money and like knowing no one and grinding away at a motel and raising their kids in rooms hundred and one, hundred and three and two or whatever it was. And the C U achieve that. I mean that just a must have just

They must have been so proud. I mean, he must have been so proud of you. Uh he was he was You know, th nothing makes me prouder than thinking about Well. 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'em and say, Daddy, we did four thousand dollars in sales. You know. Day and then I remember the last one was like May of twelve, I think we had a ten million dollar month.

And um My dad. Would always remind me You are a lion.

And they are sheep, but you are a lion. Um He And the irony At the end.

uh when we sold the company and he grew up again dirt floor sh Motel room. He was comfortable there. He died a millionaire. Um because of their investment in Happy Baby. And the the

Most happiness I've ever gotten from a conversation with him. was telling him we sold the company And getting him to guess. For how much?

No he 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 he was proud of me.

Because I think I became the daughter. That that he that he had hoped for as a 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 wanna be around them and you

You know. You respect them. And I think that's what we had. that Shazi Visram, 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 wanna contact our team Our email address is hibtid.wondery.com. If you want to follow us on Twitter, our account is at how I built this and mine is at guyRoz. And on Instagram, I'm at guy.ros. This episode was produced by Rachel Faulkner with music composed by Ramteen Arabli. It was edited by Neva Grant with research help from Candace Lim. Our production staff also includes JC Howard, Casey Herman, Liz Metzger, Carrie Thompson, Alex Chung, Josh Lash.

Sam Paulson, Katherine Cypher Elaine Coates? John Isabella, Chris Masini. And Carla Esteves. I'm Guy Raz, and you've been listening.

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