SPEAKER_04: In business, there are plenty of white-knuckle situations like data center migrations, or office expansions, and cyber attacks, just to name a few. Knocking on wood, crossing your fingers, and saying all the well wishes won't help in these situations, because next level moments need the next level network. AT&T Business has the security, reliability, and expertise to take your business further. Don't rely on luck to get you through. Get the network more businesses choose. AT&T Business. With Canva, you don't need to be a designer to design compelling on-brand content. In fact, our team uses Canva to create episode artwork, social media posts, and graphics for our website. Canva has endless templates for things like presentations, business documents, brainstorms, posters and more. And you can even create your own custom brand templates for your team to use. And when a rebrand happens, Canva has your back. Say your brand updates their logo, and now you have an old logo and multiple presentations and social posts. Well, you can quickly replace your logo across all of your designs in just a few clicks. Canva is used by 85% of Fortune 500 companies. Whether you work at a small or big brand in a team of 2 or 2,000, Canva empowers teams everywhere to design compelling on-brand visual content together. Start designing today at Canva.com, the home for every brand. Here's a little tip for your growing business. Get the new Venture X business card from Capital One and start earning unlimited double miles on every purchase. That's one of the reasons Jennifer Garner has one for her business. That's right. Jennifer Garner is a business owner and the co-founder of Once Upon a Farm, providers of organic snacks and meals loved by little ones and their parents. With unlimited double miles, the more Once Upon a Farm spends, the more miles they earn. Plus, the Venture X business card has no preset spending limit, so their purchasing power can adapt to meet their business needs. The card also gets their team access to over 1,300 airport lounges. Just imagine where the Venture X business card from Capital One can take your business. Capital One. What's in your wallet? Terms and conditions apply. Find out more at CapitalOne.com slash Venture X Business. This episode is brought to you by State Farm. If you're a small business owner, it isn't just your business, it's your life. Whatever your business might be, you want someone who understands. And that's where State Farm's small business insurance comes in. State Farm agents are small business owners too, and know what it takes to help you personalize your policies for your small business needs. Like a good neighbor? State Farm is there. Talk to your local agent today. You know, we talk a lot about hustle on how I built this. And recently I spoke to Jason Sudeigis, who shared some amazing stories about starting out in comedy. He put in a lot of reps. He played small houses in Vegas. He played in Amsterdam night after night for years. But during that grind, he got an idea for a character who would go on to become one of the greatest leading men on TV, Ted Lasso. Check out my conversation with Jason Sudeigis on my other podcast. It's called The Great Creators. Just search for The Great Creators with Guy Raz wherever you listen to podcasts or go to thegreatcreators.com. And now, on to today's show. As you start to get more successful, you start to attract competitors, including Ben & Jerry's, which launched their own Greek yogurt line. When you heard about that, were you worried?
SPEAKER_02: Of course. Yeah, we, at that point, we probably had 10 employees. We had an office space in Boston. And we walk into the conference room and across this small alleyway was a billboard that said, introducing Ben & Jerry's frozen Greek yogurt. And it was a tough moment to swallow our pride and act like this isn't a big deal in front of our team. But that was a scary moment for sure.
SPEAKER_04: Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how two friends from kindergarten defied the experts and created Yasso, frozen Greek yogurt that actually tasted good and beat out the biggest players in frozen dairy. Back before Hamdi Ulakaya popularized Greek-style strained yogurt in America, most Americans didn't know what it was. This was back in 2005. But within a few short years, Chobani became a dominant yogurt brand. It just took off with consumers. And more importantly, Greek-style yogurt didn't need to be explained any longer. It's thick, creamy, and high in protein. Just four years after Chobani launched, two childhood friends in Boston realized you could do a lot with Greek yogurt. You could ride its coattails. And you didn't even have to compete with Chobani. How? Well, by freezing it. By turning Greek yogurt into low-calorie popsicles. Amanda Klain and Drew Harrington were both college athletes, and so they were trying to figure out how to make a creamy frozen treat with all the things most of us love, like cookie dough and brownie chunks, and keep it to around 100 calories a bar. They called it Yasso, and instead of trying to build the brand quietly, starting with small mom and pops, they decided to go big from the start, selling at big box stores like BJ's and Costco. It was a strategy that was risky, extremely expensive, and forced the co-founders to become much more efficient. Today, Yasso is one of the top selling brands of novelty ice cream. And just to note, novelty ice cream, because you're going to hear it in this interview, basically means a single serving frozen treat that is not sold in a pint. So popsicles, ice cream sandwiches, mochi, things like that. Anyway, Drew and Amanda actually met in kindergarten in Easton, Massachusetts, which is just south of Boston. They had a lot of the same friends growing up, and were both pretty serious athletes. Drew ran track in college, and Amanda played Division One soccer at Providence College in Rhode Island. But when Amanda finished school, she decided to go into the family business.
SPEAKER_03: I came back home and I did the easiest thing you could possibly do. I was like, Dad, I need a job. So when my dad was about 20, he started his food brokerage firm, and he was really specific. It was just in the Northeast, with a focus on mostly frozen and dairy products, and continued to grow that business and became very successful in the industry. And so he was like, all right, come work for me. And he let me carry a bag and be a salesperson. And I think I'm really fortunate that my dad owned the business, so he kind of just threw me into the big leagues. Without a ton of experience, I got to start carrying the bag for some of his bigger lines and calling on the bigger accounts here in the Northeast and some of the big club stores, and really just quickly learning, OK, what does a broker do? How do brands operate? What does the sell-in look like? All of the ins and outs of the food business, really, from the sales perspective. And he was a very specialized, focused broker in this area.
SPEAKER_04: So dairy and frozen products.
SPEAKER_03: Yeah. Ice cream, frozen pizza, yogurt, cheese, eggs. And what were some of the brands that he represented?
SPEAKER_03: So it's funny, I think as we talk about Yaso, too, and the shift to kind of this healthier foods options nowadays, when I was a kid, it was brands like Micro Magic, which were like frozen burgers that you'd microwave, and McCain Ilio's French fries. And he then picked up the Chobani brand when they first started. Wow. And that was huge for him. So it definitely evolved over the years. But yeah, I remember he was selling truckloads of frozen orange juice when I was a kid. And I was like, who drinks this? Now you don't even see frozen orange juice. So there was definitely a shift in the food ecosystem over the years.
SPEAKER_04: Yeah. And Chobani, which obviously was, when he got it, was a small brand. But I think we had that story on the show a few years ago. And I remember Hamdi Ulukaya talking about Stop and Shop in the Northeast being a really important first retailer. That changed the game for him.
SPEAKER_03: Yeah. Hamdi was a huge influence on my early years in the industry. Chobani was very new on the market when my dad got the opportunity to represent that brand. And I got to know Hamdi. And it was an incredible story and just an incredible business for me to watch grow. Yeah.
SPEAKER_04: All right. So you're sort of kind of learning the ropes about food distribution. In the meantime, Drew, I think you've dropped out of college, which was American University at this point. Yeah. And I guess you moved back to Boston from Washington, D.C. and start working, doing project management at a construction company. Is that right? Yeah, that's right. But I guess around the age of 20, 21, you start to think about maybe starting your own
SPEAKER_04: business or maybe doing something entrepreneurial. Tell me how that kind of thinking started.
SPEAKER_02: Yeah. I was still working for J. DiRienzo, the construction company, probably 50 to 55 hours a week. And I, a few life events, one being, you know, one of Amanda and I's best friends passed away going into her senior year. And I just remember in that moment, I was with another friend of ours, my friend Scott. And we weren't filled with anger. I think we were filled with, you know, a lot of sadness, of course, but also this desire to create something with people and, you know, the belief that this could get better even in that darkest moment. And it was really through that conversation over a few summer days that we thought, well, let's create a company. Let's create products. We'll dive into our creativity and ideally heal through that and kind of get some friends involved and go off and hopefully bring some products to market, almost like is a distraction from everything that was really happening in our lives, which was the loss of our friend. And I think at that moment, because I had worked for so long, I maybe, you know, in hindsight had the courage to take that leap knowing I now know what the workforce is like. I wouldn't mind taking the risk to see if it's something I can do on my own.
SPEAKER_04: So you're working at this company and then did you leave to start a business or did you kind of do it on the side?
SPEAKER_02: No, I did it on the side. So I continued to work full time and Scott and I would effectively kind of brainstorm ideas of what these products could be. And then we started ideate around this idea around a flatable beer pong table, which was fitting for two 20 year old guys. And sorry, an inflatable beer pong table.
SPEAKER_04: Okay, so that's right. A beer pong table is inflatable. I'm assuming this would be for a pool or a pool.
SPEAKER_02: Tables or lakes or oceans, but mainly pools. This is a table that you play pong on to land into a cup of beer.
SPEAKER_04: Exactly. Got it.
SPEAKER_02: Okay. So now you put, you can imagine that next call to my parents. So I dropped out, I'm working at a construction company and I'm going to do inflatable beer pong tables. But by the way, did they exist?
SPEAKER_04: Like, could you source these from anywhere?
SPEAKER_02: So they did not exist. We were the first ones to create it. And we worked with an engineer in Texas that figured out the way to essentially create an inflatable table that had the holes for the cups in it because it was really no different than an air mattress. But obviously we needed the cups to sit in. So we had an engineer develop it in Texas. And in those days we used a combination of Google and Alibaba to identify a manufacturer in Shanghai, China that could produce it for us. And ultimately we sent our plans, they produced it, sent us prototypes from their large scale manufacturing facility and it worked.
SPEAKER_04: And they didn't have like a minimum, like you didn't have to spend hundreds of thousands of dollars that you could do it for, like how much was it going to cost you for them to make it for you?
SPEAKER_02: The first few orders, they were lenient. I think at first we ordered 5,000 units, which was a scary thing because now I now had a garage bay or two filled with inflatable beer pong tables that we had to sell. And how did you finance it?
SPEAKER_02: Mainly through my savings from the construction company. So this was a risky endeavor.
SPEAKER_04: Yeah. You were like taking all your savings that probably you should have put in like a 401k or something like sensible.
SPEAKER_02: Exactly. But my mentor at the construction company matched a $50,000 investment that I had made too.
SPEAKER_04: Oh, so he believed in this idea.
SPEAKER_02: He believed in it. His financial partners believed in it and it was a good first learning. 50,000 really took care of that first big production. And up until that point with just some reserve cash was engineer, prototypes, product design, website, things like that.
SPEAKER_04: This was called, and the brand was called, the product was called Poolside Pong.
SPEAKER_02: Poolside Pong was the product. The company name was Redefine Industries.
SPEAKER_04: Got it. Okay. And the manufacturer make them and you have 5,000 on order and they arrive and now you've got to sell them. So how did you start to get stores to sell them?
SPEAKER_02: So that was a hard thing because it was 2007. A lot of the stores we approached were very uncomfortable with the idea of the liability of selling a raft that was in a pool with the purpose of drinking beer out of. We were kind of ahead of our time in terms of the idea. I think the product would have been perfect in an Instagram world. We weren't living in that world yet. Everything we were doing was through Facebook and even Amazon wasn't what it's like now in terms of B2C. Yeah, it didn't really open up to the public, I think until like 2009 or 10.
SPEAKER_02: That's right. And at that moment it was direct to consumer via our website and we started to sell quite a bit of the units, you know, a couple hundred. And then there was one day where we sold close to a thousand and what we had learned organically a blog wrote an article about it that then got picked up by Sports Illustrated. They featured it and then we started getting orders flowing in from all around the country. And with that momentum, a buyer from I Party had reached out.
SPEAKER_04: I Party is like a chain of party supply stores? Yeah, used to be a big box retailer for party supplies.
SPEAKER_02: Got it. Then Urban Outfitters came on board and then our biggest customer was Spencer Gifs.
SPEAKER_04: Wow. So all of a sudden the Sports Illustrated article generates all this interest. By the way, how much did they sell? How was the price?
SPEAKER_02: We sold them on our website for $49.99 plus shipping. And so the first year I think we did about somewhere around $100,000, $150,000. And then it got up into year two and three when we added in Spencer's, we eclipsed about a million in revenue. That's amazing. Yeah.
SPEAKER_04: So you were sort of like in the fraternity business.
SPEAKER_01: We like to think it was the summer fun business, but I was never formally part of a fraternity.
SPEAKER_04: I mean, it's a great idea to think about how do you market to fraternities? Like, you could actually create a great business around just fraternity products.
SPEAKER_02: Yeah, it was a lot of fun. Honestly, it was like the most fun product you could ever create in contrast to that moment of sadness of losing a friend. And I think for a lot of people in our friend group, their first exposure to friends starting a company and being entrepreneurial. And it was a good run until we ran into the manufacturing issues. It was... And what happened?
SPEAKER_04: What was the issue?
SPEAKER_02: The issue there was we had just taken a huge order from Spencer gifts and we had built up considerable inventory for that order. And the issue was, which is important, is that all the rafts that had arrived to the states had pinhole holes in them. So they weren't staying inflated. Oof.
SPEAKER_04: And you couldn't send them back to the manufacturer or ask them to do a new run?
SPEAKER_02: We were on a timeline to meet the order. I believe it was for the holiday season at Spencer's. So what we tried to do is we put them into a large warehouse in Boston, bought blue tape and tried to cover up every hole, which was obviously labor intensive and costly. And ultimately, when we tried to do that on a prototype version before we sent it out to anyone, it just wasn't working. And that was a tough one. It just felt insurmountable.
SPEAKER_04: So you basically shut that down because that order kind of... You felt like you couldn't recover from that.
SPEAKER_02: Yeah, I felt like I couldn't recover. I felt like it just was so much pressure financially carrying that at such a young age. So I paid back over time my partner at the construction company that had put the money into the business and just moved full time ahead with key learnings, but no financial gains.
SPEAKER_04: All right, let's go back to you, Amanda. You're watching Drew's beer pong business. And tell me, what was your impression of it? Did you think it was silly or fun or what did you think about it?
SPEAKER_03: It was super inspiring. So at the time, we were all living together in the city. Like a big group of us was living in this one apartment. It was probably like a two bedroom apartment, but like four of us lived in it. And a couple of us would actually sleep on the poolside pongs as air mattresses because we had no money. We were just, we were freshly out of college and every morning we only had one car. So I would drive everybody to work in the morning. I would drop them all on the way to my end destination of the food brokerage firm. And so I was really close to those early years of poolside and we were all involved from the very beginning seeing how poolside was growing. And it was just super inspirational.
SPEAKER_04: All right. Meantime, you were working for your dad and seeing brands like Chobani really start to kind of blow up. I mean, Greek yogurt at the time was a tiny category. Obviously today it's massive. And I guess you also independently started to think about starting your own business.
SPEAKER_03: Yeah, as I was working for him and seeing this shift and healthier foods hitting the market and just really loving the space, I got the urge and the idea to like, you know, what could I create that would be impactful in this food industry? And, you know, being a new Englander, me and Drew both like Ben and Jerry's was an insanely cool brand to see grow. You know, my dad used to work with the guy that supplied them cookie dough when they were first getting going and I loved ice cream. And then I was seeing this growth of Greek yogurt and this just tremendous product that Chobani was making that was healthier and creamy and delicious. And the idea came, could you put the two together to create ice cream that had a healthier nutritional facts panel and was using like better ingredients?
SPEAKER_04: And at what point did you start to think, you know, Drew's the person that I could, I should maybe talk to about starting a business with?
SPEAKER_03: He was my best friend. I've known him since kindergarten. He was just such a big part of my childhood and growing up that I had this trust factor, number one, first and foremost trust in him. And then to second, he had just started a company. He knew a lot about the branding and marketing side. I knew that he was athletic. I knew that he didn't like to lose. We had a lot of those same character traits that you want in a partner when you're going to go to war when you're starting a business. And so I called him and I was, I was like, hey, I know you're doing poolside, but how do you feel about frozen Greek yogurt?
SPEAKER_02: Yeah, I remember the call vividly. I was in the car with my girlfriend at the time. Now my wife, Liz and Amanda calls and she was on speakerphone and she's like, hey, I have this crazy idea. What do you think about trying to freeze Chobani and make an ice cream product? And I remember I was driving. We're in 95. There's a summer evening coming home from a summer weekend. And before I could even answer, I remember Liz saying, that's cool. And I said, that's cool. Let's do it. And I think maybe only as a naive 22, 23 year old could respond so fast, but that's just the way it was.
SPEAKER_04: Andrew, were you as an athlete? Did you, did you eat Greek yogurt? Because it's a great source of proteins, dense protein source, right? It's like really relatively easy to consume. Were you like at that time, were you eating Greek yogurt or not quite yet?
SPEAKER_02: I was because Amanda was working for her father and similar to them sleeping on poolside pongs because we had no money. I was pretty much living on Greek yogurt, breakfast, lunch and dinner because Chobani was sending, you know, free cases of it to Amanda's father's office. So it was, you know, it was kind of an even trade of sorts.
SPEAKER_04: All right. So I guess around October of 2009, you, the two of you start to experiment with Greek yogurt. And what was the idea, Amanda, initially was it to make like pints of Greek yogurt, like ice cream? Was that what you were thinking? Like, let's get into the ice cream space and do pints of frozen Greek yogurt?
SPEAKER_03: No, that would have probably been the easier route to take early on since pint manufacturing is a bit easier than ice cream novelties, which is what we make. But out of the gates, we knew we wanted some amount of portion control. We knew we wanted it to be like a singular unit. And so right from the get-go, stick bars was where we went. And, you know, looking back at it, we definitely chose the path of a lot of resistance in choosing that form.
SPEAKER_04: Why did you think this was an interesting or exciting category to get into? Like, did you, did you have data or doing market research that gave you a sense that there was something there?
SPEAKER_03: No, you know, we didn't really have money back then. So what I saw was that in a lot of categories like chips, yogurt, like people were seeking out healthier, cleaner food options and ice cream. Although full of like indulgent, delicious brands like Ben and Jerry's and Haagen-Dazs, there just truly wasn't a better option. And if you wanted that, you were going to these diet brands that seemed outdated and old and the product just didn't taste good. So we really thought that was the white space is like, yeah, how do we create something that tastes great, but is better for you?
SPEAKER_04: And, and so let me ask you about the process just when you start to start to experiment the process of turning Greek yogurt into an ice cream popsicle, right? So I'm thinking like I make ice cream. So when you make ice cream, you know, either you use eggs or not, like it can be just dairy based or you can add eggs or whatever you do, but you put it in a machine that spins it, right? And that essentially puts air into it. And then that helps create this creamy consistency that when you freeze it, you can scoop it later on. But if you just take like milk and sugar and put in a blender and put in your freezer, it's going to just turn into a milk ice cube, right? So is that like, how did you, when you start to experiment with Greek yogurt, like what were you doing to figure out how to make this work?
SPEAKER_03: Yeah, so step one, we were like, what happens when we just put Greek yogurt in the freezer? And it's exactly like you mentioned, it just freezes into a solid ice cube. Right. And we're like, okay, that's not gonna work. I think one of the key challenges we had up front was what makes ice cream so smooth and have this great mouthfeel when you eat it is fat and sugar. And we wanted to remove or reduce those items and add in protein. And so we were taking out a lot of the key components that does make ice cream so delicious. And then trying to add things in that at the end of the day, tend to make the product more grainy and icy. And so that was a long learning curve.
SPEAKER_04: How long did it take you?
SPEAKER_03: Almost an entire, well, an entire year to get our first product, which looking back at it now, like wasn't very good. Yeah, it was kind of sad.
SPEAKER_02: My parents threw us like a barbecue and Amanda's family came over. My family was there. We invited a bunch of friends. And we were like, this is our new venture, try our products. And it was in the middle of summer and everyone was tasting it. And just like only Boston friends and family could do just very bluntly was like, this is not that good. You guys might want to consider doing something else.
SPEAKER_04: When we come back in just a moment, Drew and Amanda learn why co-packers do not like to mess with frozen yogurt and why you should never bring a $100,000 check to a beer joint. Stay with us. I'm Guy Raz and you're listening to How I Built This. Hey, it's Guy here with a quick request for all of you. Name a public figure who's really inspired you. Just let me know who on the How I Built This community Miro board. Go to Miro.com slash built and add your thoughts. That's M I R O dot com slash built. It's that easy. Miro is actually sponsoring this episode. And if you haven't heard of it, it's this incredible online workspace. Our team relies on Miro for a lot of our own brainstorms and processes. And I think it's super useful to try out if you want to build something great with your team. While you're leaving your answers, feel free to play around on Miro's platform. You can pick from plenty of templates to get started, like a quick brainstorm, icebreaker or flowchart. And if you're thinking of starting something on your own, you might find Miro useful to create a pitch deck or plot your customer journey map, get feedback, really whatever helps you hit the ground running. I cannot wait to hear from you on our Miro board. Maybe, who knows, you'll inspire me to reach out to some people for the show. Go to Miro dot com slash built to leave your answers with sticky notes, comments and reactions. That's Miro dot com slash B-U-I-L-T. Miro dot com slash built. As a business to business marketer, your needs are unique. B2B buying cycles are long and your customers face incredibly complex decisions. Isn't it time you had a marketing platform built specifically for you? LinkedIn ads empowers marketers with solutions for you and your customers. With LinkedIn ads, you can build the right relationships, drive results and reach your customers in a respectful environment. You'll have direct access to decision makers, 950 million members, 180 million senior level executives and 10 million C level executives. And you'll be able to drive results with targeting and measurement tools built specifically for B2B. 79% of B2B content marketers said LinkedIn produces the best results for paid media. And for how I built this, LinkedIn has been a great resource when researching and contacting prospective guests for the show. Make B2B marketing everything it can be and get a 100 dollar credit on your next campaign. Go to LinkedIn dot com slash built this to claim your credit. That's LinkedIn dot com slash built this. Terms and conditions apply. One more thing before we get back to the show, please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And it's totally free. Hey, welcome back to how I built this. I'm Guy Raz. So it's 2009 and Drew and Amanda are working on a recipe for frozen Greek yogurt, and their early results are actually pretty bad. So they decide to go to one of the most popular places for learning the trade ice cream school at Penn State University.
SPEAKER_03: Yeah, we didn't actually have enough money to sign us both up for the class. So we signed up for one entry into it. And it's in the middle of Pennsylvania in the dead of winter, which is just cold and barren at that time of year. But we signed up under Drew's name because we figured it's a two day course. You know, Drew is a name that could probably go both ways because you have like Drew Barrymore. And so I went to the class the first day wearing a Drew name tag and Drew went to the library and was just photocopying books on ice cream manufacturing. And then the second day Drew went to the course and I went to the library and then, you know, we did learn a ton, but we still came out of it after talking to some experts with a lot of questions about could this be done? And will it taste good? And that was the feedback we had gotten from, you know, a lot of the experts in the space.
SPEAKER_04: So coming out of that course, you guys didn't like rush back to Boston and were like, let's do it. Let's make Greek yogurt ice cream. We got it. We know how to do this now.
SPEAKER_03: No, we were like, Google, how do we find ice cream food scientists? Right, right.
SPEAKER_04: You need to find somebody who could help you figure this out. But before I ask you about that, how did you did you guys already have a name for your brand? How did you come up with a name?
SPEAKER_02: I was still working at the construction company and a good friend of mine there was of Greek origin. And she was walking by me in the hallway one day just very casually said, Hey, if you and your friends are still working on that yogurt company, you should think of Yasu. It means hello in Greek. And I went back to my office. I Blackberry messengered Amanda and I said, Hey, what do you think of Yasu? And she's like, I like it. And we sent it over the designer who we had already contracted that point. And we said, Hey, can you play around on front of packaging with the name Yasu spelled Y-A-S-S-O-U. And she actually iterated a concept back to us a week later that just she had dropped the U and she said, what do you think about this? It's just Yasu. And she did it in two tone. Y-A-S was in green. SO was in brown. And we immediately loved it. We felt that it had energy and it was easily trademarkable because it was frankly a new word. And that was it. Yeah.
SPEAKER_03: And Google was our best friend back then we asked Google everything. And so we started researching food science labs, food scientists, and we just started reaching out to places. But the biggest issue for us back then was a lot of these bigger food science labs are extremely expensive to get prototyping done. And we didn't have any money at this point. We had a little bit of our own money from working day to day, but not any amount that would get us very far. You hadn't raised money from friends to family quite yet.
SPEAKER_03: No, at this point it was just me and Drew. We're still working full time jobs. But what we found was that the University of Nebraska had a food science program. And as part of that, they would do product development and it ended up being an extremely affordable way to develop products because they would lean on students. To help the development process. And so we found these two women who worked out at the University of Nebraska named Laurie and Julie and they kind of believed in, hey, this is unique and different. And so they brought us on as clients and we didn't have money for market research. So initially our brains went to like, okay, well, we know what the best selling, you know, yogurt flavors are. Here's the three flavors we want to create. And they were all fruit based because that is what sold in yogurt. And we thought that that would translate. And what are the top three flavors again?
SPEAKER_03: Blueberry, strawberry and raspberry. Got it. Okay. Yeah. Yeah. These are the top three selling yogurt flavors. We want to create these flavors, but we want to create it in an ice cream bar.
SPEAKER_04: Right. So how so they started to work on this. And what did they tell me how that relationship sort of began to unfold? Would they send you like ship you samples of frozen Greek yogurt on a stick?
SPEAKER_03: Yeah, they were molding bars in little like molds and they would ship them out to us. We would try them with friends and family and we would give them feedback and we would tweak it from there. And it was part of our challenge being a first mover in this category was we didn't really know like nutritionally was this going to be 50, 70, 100 calories. So we kind of landed on this number of 70. I don't even fully remember why.
SPEAKER_04: You wanted each bar to be no more than 70 calories. Yep. And so we were we kind of gave them these guidelines of here's where we want our protein.
SPEAKER_03: Here's where we want the calories. We don't want fat and we want to be, you know, less sugar than your indulgent brands and more in line with healthier ice cream. And so they would develop around that until we finally got to a place that we're like, okay, these taste pretty good, or what we thought back then was pretty good.
SPEAKER_04: And once you landed on on I mean, essentially, once you landed on that, what you thought was pretty good. You had a recipe, you had a formulation, essentially, it was a version of Drew of what you had with the with the poolside pong, you had the plans.
SPEAKER_02: Yeah, we had the prototype poolside, that endeavors actually easier to find a manufacturing partner in China, although it felt half a world away here in the United States. Once we had our prototype in hand on Yaso, finding a manufacturer partner became extremely difficult.
SPEAKER_03: Yeah, you know, Greek yogurt was still fairly new to the US market. And there weren't a ton of people that could actually manufacture Greek yogurt,
SPEAKER_04: because it has to be strained to make it thick or spun in a right now, like a big spinner to get the water out.
SPEAKER_03: Yep, exactly. It was kind of new technology to yogurt baking. And so there weren't a lot of people that were creating Greek yogurt at all. And then from a frozen side, it's thicker. There are challenges with higher protein as you mix it and pump it that plants were concerned about and that we in fact, had as issues when we were first getting going that it would like, I don't know, back up the pipes or get stuck in there.
SPEAKER_03: Yeah, we ruined a few pieces of equipment and plants over the last 10 years. But yeah, I mean, it's similar. Think about like, if you shake up a protein shake to some degree, it gets kind of foamy. Yeah. And plant equipment doesn't like to pump foam. It's not something you want going through the pipe. So it tends to back them up and make a burst and all these other effects can happen. And so there was a big learning curve on how do you take out fat and sugar added protein and create a liquid that you can actually pump through the equipment to the freezer.
SPEAKER_04: All right, so took you about, I mean, you started experimenting October of 2009. And I think it took almost a year for you to kind of get the right consistency, the right recipe from working with these food scientists at the University of Nebraska. Once you had, you kind of land on the recipe, then I'm assuming you just start looking for like a manufacturer, right? I mean, there have to be, you know, at least a dozen, maybe more factories in America that make popsicles. So there's actually not a lot of people that make the product that we needed.
SPEAKER_03: That was part of the... So we didn't know that, obviously, when we chose the form. The type of product we make is called an extruded novelty. So it's a little different than like a molded popsicle. It runs on a different piece of equipment. And so what we learned very quickly was outside of your big national food companies that have their own brands, in the co-packing world, there was maybe three to five people that actually make this. Wow. And so, you know, through people we knew in the industry, and then Google, we found those and we started just reaching out to them.
SPEAKER_04: And just to clarify, I'm assuming the big companies are like the Magnum bars, right? Like Nestle's of the world, like who can just make their own products that they sell. They have their own factories.
SPEAKER_03: Exactly. Yeah, Nestle, Unilever, Wells Blue Bunny, kind of those big brands. And they would not, they're not co-packers.
SPEAKER_04: They're not going to make product for another brand.
SPEAKER_03: No, not usually. Right. Not two 23 year olds. Right.
SPEAKER_02: Okay. The pressure cooker of it all was we wanted to be the first ever frozen Greek yogurt ice cream brand. To be able to sell in a grocery, to be first to market and start producing revenue in 2011, we needed to meet the sell in season where retailers, especially in the Northeast, were taking their meetings. And those meetings for the ice cream category happened once a year and they happened September through November, early December. And by early summer, we still didn't have a manufacturing partner. So we knew if we couldn't meet that fall 2010 meeting with retailers and then also scale up manufacturing to meet orders for 2011, we'd most likely miss our shot.
SPEAKER_04: Now, usually, right, like big stores will place an order and then the entrepreneurs have to find a manufacturer, right? And it could be a potato chip brand or a cookie brand. And usually, you know, they find somebody. But you guys felt that you had to find a manufacturer even before you had these meetings in the fall?
SPEAKER_03: Yeah, I think for us, we wanted it to feel complete and professional in the way our bars are made. Like, we wanted to be able to walk in with a complete sell unit and be like, here's the brand, here's the product, here's our strategy.
SPEAKER_04: And only three factories, roughly three factories in the US were doing this for anyone who had the money. Yeah, there weren't many.
SPEAKER_03: And they weren't open to necessarily new brands. Like one of them we had approached and they showed us a magazine and they were like, see all these brands? 99% of them fail. You guys should just not even try. Like, that was the attitude we were getting. And then some were just blatant like, no way am I taking a shot on you guys? Because it's also a machine that runs a fairly large amount of bars per flavor when you run it. So they were also, there was a financial commitment on their end to make sure that this new brand who they had never heard of was going to pay the bill at the end of the day.
SPEAKER_02: And so we had exhausted most of our searches on Google. We came across one in New Jersey and it was a facility called Mr. Cookie Face in New Jersey. So it literally sounded like a Sopranos episode. And we reached out to them asking for a meeting. They wrote back that this would be the date and time we could go down to see them to present our business plan.
SPEAKER_04: So you had to go down and present a business plan and that was it. So that was great. You had a meeting and it was the last one. This was the last one. Yes. The other two said no, we're not going to work with you.
SPEAKER_03: Yeah, exactly. No one else had either returned the calls or they were just plain out no's.
SPEAKER_04: Yeah. All right. So you guys head down there to New Jersey and tell me about what happened. You get to Mr. Cookie Face and...
SPEAKER_02: Yeah, we walked in, we had drove down. I remember the days prior we were practicing our pitch to each other with like flashcards. This is the brand. This is the market opportunity, so on and so forth. And we walk in. It's the biggest meeting moment of our lives in a way to that point. And we get in the reception area and the receptionist said, Oh, I'm so sorry, but we don't have you on the schedule for today. And we said, no, you do. Here's the email. And they said, no, we don't. And the receptionist went out back. We waited for 30 minutes and finally a lady came out, Tammy Shaw. And you could tell she was visibly upset that we weren't on the schedule, but she's like, I'll listen to what these folks have to say because they drove all this way. And thankfully we went into a conference room, she heard us out. And I don't know if it's because she felt bad for us or she believed in us, but we pitched her on Yaso and we told her what we thought the opportunity could be. And she said, okay, this sounds good. Here's the financial arrangement. If you can pay for the runs, we'll do a trial run across all three of your flavors, which was enough for us to then use that product and show retailers in the fall.
SPEAKER_04: So with the trial run, how many did you need?
SPEAKER_03: Oh, man, I don't remember. It was like a couple hundred per flavor. So three different flavors. And how much do you remember how much it cost?
SPEAKER_03: I don't remember the exact amount, but you kind of pay for like the day that the line is shut down, not producing something that's paying them full price. So like, shy of $100,000, but enough where we needed to like, figure out how do we raise a little seed capital? Yeah, that's a lot of money.
SPEAKER_04: I mean, that's scary. Because you're only going to get a few hundred bars for that. But obviously, if it works, it's an investment worth making.
SPEAKER_03: Correct.
SPEAKER_04: So how did you cobble the money together?
SPEAKER_03: Yeah, so you know, at that time, you know, me and Drew, and then my dad had been helping us out along the way, like, the three of us put our heads together. And we're like, called our family, close friends that we thought, yeah, we're, we're rich, and had some money to give us. Like we called anyone we knew that we thought had some money.
SPEAKER_04: And you got like, gave them convertible debt and you know, and all that stuff. Like you really, you know, everybody was essentially an investor.
SPEAKER_03: Exactly. Yeah.
SPEAKER_04: Got it. All right. So they agreed to do this trial run. And in meantime, how are you contacting retailers to get in the door to pitch them? Like, is there is it is like an open casting call where anybody can like apply and
SPEAKER_03: Yeah, so obviously, with the brokerage background, we had a lot of good relationships here in the Northeast. And so that was our first tactic was like, go to the people we know. Greek yogurt in this area is growing astronomically. So we don't have to necessarily explain what Greek yogurt is they already know. And we hit it the road running in the northeast to start.
SPEAKER_04: So you're contacting these places and meantime, they're preparing for a trial run and tell me how it how it went. Because this because the concern was that like, as it extrudes this protein heavy yogurt, like it could back up the system. But but presumably that didn't happen.
SPEAKER_03: Yeah, there were some glitches that we learned. I think the biggest thing we learned was like, how, how do we feel about the flavors? And do we have to tweak some of like, is the strawberry strawberry flavored enough in, you know, his blueberry, purple, it blue enough in color. So they were more like minor tweaks.
SPEAKER_02: Yeah, you could say we launched with an imperfect product, but at least we were first to market and we got into the marketplace in 2011. But even during those retail meetings in that fall of 2010, we knew strawberry was not up to the barrier. It should be in terms of what people expect of strawberry ice cream. So we would tell a few white lies where one of the hard things about frozen food is you're always handling dry ice. And early on, we realized that the TSA would confiscate our dry ice. And when we realized strawberry wasn't as great tasting, we kind of show them blueberry, show them raspberry. They would say, well, I want to try strawberry. It's going to be the best seller. They'd be like, oh, I'm so sorry TSA confiscated it. But behind the scenes, we were actually trying to make strawberry better for the next production run. So we could just launch with something that was better tasting. I think that started to create a theme of the Yaso DNA, just continuous improvement even to this day.
SPEAKER_04: In trying to make a low calorie bar, presumably it restricted the amount of sugar you could use. Imagine that was the biggest restriction, right?
SPEAKER_02: Yeah, that was a big restriction. I think we were always kind of looking at Skinny Cow and Weight Watchers having been the dominant diet brands in the category. And from the early days, we refused to use the word diet because we thought to consumers that perceived like it lacked taste. Ironically, our first flavors did as well. And then as we evolve the flavor profile, something that we believe wholeheartedly now and we didn't know when we launched is that to be an ice cream, you have to have some indulgence. You have to have some chocolate chips or cookie dough. And once we unlocked that, we unlocked tremendous flavor. And then our ability to evolve allowed us to lean into the fact that maybe 70 calories is too low. Maybe the benchmark is 100.
SPEAKER_04: Yeah, because I mean, the diet category or the diet sector is a huge opportunity. I mean, people spend billions and billions of dollars on low calorie products every year because losing weight is a human obsession. So I mean, I'm assuming that when you started to pitch this to potential buyers or buyers for some of these companies or retailers, that this is a question they ask. So do you imagine this being next to other diet brands or low calorie brands in the frozen section? Is that what they were asking?
SPEAKER_03: Yeah, exactly. And that's kind of what we said. So you had Skinny Cow and Weight Watchers and some of these legacy diet brands. And from the beginning, like me and Drew were dead set on, we want to go mainstream grocery and we want to go up against these guys. Like, this is a product for the masses. Let's go after these guys. So even from our product pricing architecture to start, like we knew we had to be competitive on an absolute price point with those guys. Did you and I mean, your strategy, as you as you say, wasn't to go to the small natural
SPEAKER_04: retailers or even like Whole Foods or like regional Whole Foods, you decided from the beginning to go to national retailers, right? Like you wanted this to be in big retailers from the beginning. You didn't want to sort of test this out at like individual national food co-ops. Why? Why did you want to do that?
SPEAKER_03: I think because we truly felt that this was a product that everybody would enjoy. I don't know if it's our athletic background and the fact that we didn't think through the cost that it was going to take to go after these big national grocery chains, but we just we were go big or go home. I mean, we also had massive manufacturing runs just based on the equipment we were running, so we knew we needed enough scale to be able to run the manufacturing runs and not be sitting on inventory forever.
SPEAKER_02: We also had Chobani and Fie and those Greek yogurt brands in the dairy set, like truly having a generational moment. Greek yogurt was moving in big box retailers around the country, and that was our desire to be first to market with the first frozen form. So a lot of the enthusiasm we had to go big or go home was built because what was happening in the refrigerated set. So who was your first, who was the first buyer who pulled the trigger, who was like,
SPEAKER_04: okay, I'll put in an order.
SPEAKER_03: So based on the selling season, we had a handful of our Northeast retailers who were willing to give it a shot.
SPEAKER_04: Like what stores?
SPEAKER_03: Like your Stop and Shops, Big Y, Hannaford Brothers, those types of accounts here in the Northeast. We also went to some of those big box stores like your BJs and Costco's of the world, because for us it was somewhat free marketing because the billboard effect in those stores is so insane that it gives you this kind of free marketing boost. So when you're in Costco, it's a marketing boost just by being in there?
SPEAKER_03: Just because it's limited skews and just a massive display, you almost get this like billboard effect with your packaging that you don't necessarily get at a regular grocer because you have potentially two to three skews on shelf in a way bigger category with more brands.
SPEAKER_04: And in Costco, you're not selling a four pack, you're selling a 12 or 24 pack. So it's a huge box.
SPEAKER_03: Yeah, it was a I think we started out at a 10 pack and have since continued to increase. But yeah, it was it was 10 bars versus four at retail.
SPEAKER_04: All right, so you decide to pitch Costco. And when Costco put in an order, what did that mean? I mean, what was their order size?
SPEAKER_02: That was a sizable order. I remember the check was about $100,000, which for us at that moment, because they were first and the terms are so great, it actually came in much quicker than some of our retail customers. And we needed that cash to keep up with the demand.
SPEAKER_04: The Costco check came in fast enough that you could use it to finance the production. The next year wasn't Yeah, the next run.
SPEAKER_02: It wasn't fast enough. It was probably 30 day terms at that point. But we knew at least we'd have the cash in a month. But just being young entrepreneurs, we already kind of committing to these manufacturing runs, we were depleting cash pretty rapidly, building up inventory and just kind of wasting a lot of raw materials in the manufacturing facility. They were kind of getting impatient with how long it was taking us to pay, but we were pretty near depleted. And we needed this check from Costco to come in. And it finally arrived on a Friday. And Cookie Face had been calling for probably two or three Fridays in a row. And I said, I promise you that, you know, it's coming to us. We're going to pay next week. They were getting nervous. They were getting nervous, I think, just because they were 23. They had been hit hard before from entrepreneurs that had taken up line time and tried to launch a product that didn't work. And they probably saw this movie playing out again. Unfortunately, when the check arrived, we were so excited to get it. It was the first receivable we'd ever gotten. Visit check from Costco. Yeah, for $100,000 that we owed all of it and some more to the manufacturing facility. And we said, okay, we're going to take this to the bank so we can put it in the account. And then the bank can pay Mr. Cookie Face. But on the way to the bank, it was around lunchtime and said, hey, we need to celebrate this. We should stop in and get a burger and a beer and celebrate this moment of the check. And so we go and we sit at the bar. The waitress comes over. She puts down our beers. She accidentally spills my beer all over the check and it's just soaking wet. And she looks down and she says, I'm so sorry. And then she looks a little bit closer and sees the dollar amount. She goes, oh, I am so, so sorry. And I was like, immediately Amanda and I are freaking out. We're like, we need this. We really, really need this. And she's like, I have an idea. So she took the check and she went back into the kitchen and hung it over an industrial dryer and it dried out enough that by like one o'clock or two o'clock, we were able to go to the bank and actually cleared. And we were able to get the money into the account and wire Cookie Face.
SPEAKER_04: I understand, like from what I read, one of the first orders that you were supposed to deliver, maybe to Costco or another big box retailer, it was in a frozen truck and the truck got in an accident. And like, I guess some of the product got strewn across the highway or got damaged. All of it. What happened?
SPEAKER_03: Yeah. Yeah, it was a full truckload of product. And the truck jackknifed and crashed. And we lost all of that product on that truck. And I'll never forget it because it was Marathon Monday in Boston and I had left the office to go watch a little of the race. And like the second I got there, I get the phone call from the trucking company and I was like, Oh my God. Luckily Costco was super understanding. But it was, we had one of those, everything that could go wrong, went wrong. We also like printed the packaging. So our designer who designed the packaging had flipped the back images so that we could look at them, but never flipped it back. So when the carton folded, the back graphics were actually upside down. And so we brought the packaging to a bar down the street and we, we had folded it into the box and we were like, Hey, do you guys notice anything wrong with this box? And we were just passing it around to people at the bar to look at. And a bunch of people were like, the back is upside down. And we're like, Oh boy, we can't, we can't run this. And this is at a time when we didn't have a ton of money. So running upside down packaging, having a truck crash where you don't get the insurance money right away. Like we were, we were day to day trying to just make it by.
SPEAKER_04: When we come back in just a moment, yet another challenge for Yasso competition from some pretty heavy hitters. Stay with us. I'm Guy Raz and you're listening to how I built this.
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SPEAKER_02: Yeah, it was in those years we learned the concept of how important gross margin and EBITDA are. Yeah. Tell me some of the reasons why.
SPEAKER_04: What were some of the mistakes you were making at that time?
SPEAKER_02: We had a lot of inefficiencies just by nature of our scale. Like we really went out to the big box retailers and behind the scenes, we were a startup doing the first to do ever frozen Greek yogurt. So there was a lot of complexity, a lot of inefficiencies. We really were. We always joke we were freshmen playing varsity.
SPEAKER_04: And in terms of building your team out, I mean, in those first sort of, you know, 2011 you debut and initially it was just the two of you. But tell me how you started to build out your team. I mean, by 2012, 13, I mean, was it five people, six people? It was a handful of people.
SPEAKER_03: We outsourced some of the functions early on, like finance. We were outsourcing a lot of the transactional pieces of finance, but we eventually started hiring against some of the weaknesses. So we brought in a finance guy to help us day to day run the finance side of the business. We brought in some people on the marketing team to help build out the grassroots marketing campaign. We brought in a salesperson to help on the sales side of the business. And then as we started expanding, obviously like product was huge. So we brought the R&D function in house and hired a food scientist. And so there was a handful of us. We had a little space. It started out as a one bedroom apartment in Boston that we all worked out of. And then eventually we got a little bit larger space that housed about 10 of us.
SPEAKER_04: And do you remember, do either of you remember, I don't know, by like 2013, what your revenue was? Did it exceed a million dollars at that point?
SPEAKER_03: Oh, we did. We did it $5 million our first year in business by 13. We were doing around 18.
SPEAKER_04: Wow. So you were growing really fast. Really fast. But still not profitable. No. With a gross margin in the teens.
SPEAKER_02: So we were super bare bones. We weren't paying ourselves much. Sometimes we just didn't pay ourselves at all for the sake of other employees.
SPEAKER_04: This is what I'm curious about. I mean, in the first, it sounds like in the first couple of years of Yasso, you were more or less subsidizing the ice cream bars for people. Like you were essentially losing money on the sale because you needed to, you needed like velocity. You needed people to buy them. Is that kind of right? Yeah. I think too, the other challenge in our space is just the slotting dollars that are required to get shelves.
SPEAKER_04: You have to pay the retailers, essentially a kind of a, I shouldn't say a bribe, but kind of a bribe to get them to put on their shelves.
SPEAKER_03: Yeah, you pay for the space and, you know, frozen and dairy are two of the most expensive spaces in the store because they require electricity, you know, so that was contributing. And then trade was our only marketing in store. So it's just something that is costly. And I don't think we've really thought about it upfront in terms of the cash need that we were going to have.
SPEAKER_04: So a huge part of your, your revenue is going to pay for slotting fees, but also obviously for the product, the product, it sounds like the product was selling. I mean, you hit $18 million in revenue in year three.
SPEAKER_02: Yeah, it was moving quite well. Like we did quickly outgrow Cookie Face to some degree and we had to go out and find a new manufacturing facility in Utah with, I remember the bank laughed at it because that name was Fat Boy. So we had Mr. Cookie Face and Fat Boy as our two manufacturing facilities. And also just on the raw material side, we really had to scour for Greek yogurt as an ingredient. Like I remember Chobani was growing exponentially and also growing their footprint, which was putting pressure on dairy farmers in upstate New York and elsewhere around the country. And the first bottleneck we really experienced was they were legitimately shipping in 32 ounce containers. And there was a laborer on the line that would spatula out the Greek yogurt out of a 32 ounce container, which is what, you know, a family probably consumes over. Three days at breakfast and that's making hundreds of thousands of bars. But we ultimately ended up at a small dairy farm in New York. And that was where we started to see our first efficiency on the margin profile. So when we identified this facility, we upgraded and they were actually able to send in tubs. And then as we grew, tubs became tankers. And so we were starting to get a better margin profile just through scale, but also just improving the fundamentals of everything that was going on in the business. All right. So you start to get more efficient, but you also start to, you know, as you start to get more successful, you start to attract competitors, including Ben & Jerry's, which launched their own Greek yogurt line.
SPEAKER_01:
SPEAKER_04: Around 2014. When you heard about that, were you worried? Were you nervous? Of course. That was, that was a scary moment. That was at that point, we probably had 10 employees.
SPEAKER_02: We had an office space in Boston and every Friday morning we would host these little breakfasts where everyone had good energy. It was right before the weekend. And one of those Friday breakfasts were walking down this long hallway at our office and the conference room just felt different. It was like, everyone's looking into it. We're all walking together. There was like a tint of blue on everything. And we walk into the conference room and across this small alleyway in Boston above, ironically, our favorite bar was a billboard that said introducing Ben & Jerry's frozen Greek yogurt. And it was a tough moment to swallow our pride and act, you know, like this isn't a big deal in front of our team. But that was a scary moment for sure. Yeah.
SPEAKER_04: I mean, that's the 800 pound gorilla right there. Right. Even though Ben & Jerry's might not see themselves that way. I mean, what, how did you respond to that? Was there anything you could do or respond?
SPEAKER_02: No, there was nothing we could do other than put our head down and just continue to improve our product. It was almost a validation of the proposition we had and we were in the market with at that point, maybe for 18 months. And the competitors came fast and quick. It wasn't just Ben & Jerry's. That was a moment that, you know, ironically was legitimately in front of our faces in our office every single day for months that we were reminded that other folks with a lot more money and a lot more horsepower are working. Diligently to bring their equivalent to the market, but it wasn't just them. I, you know, Yo Play had launched Weight Watchers, Skinny Cow, like they were all coming.
SPEAKER_04: Was there any hardball? I mean, there's limited space in the freezer section. Did and you know, some of these companies are very powerful. They have a lot of influence. Did they any of them kind of try to push you out? Oh, yeah.
SPEAKER_03: It was it got, it got extremely crowded. And yeah, like you said, it was all the big guys that have deeper wallets than we do or bigger pockets. And there were a few instances where we would get like strong armed out by someone else just paying more for our space. But I think at the end of the day, like we were in there first, we had been listening to consumers. We knew where we had to go and kind of the shift towards indulgence and improving our product. And I think we were always one step ahead of them in terms of our product taste and quality. And we were able to get ourselves back into every single one of those stores that we had gotten strong armed out of. Wow. So, all right.
SPEAKER_04: I mean, at a certain point, I mean, you were growing and did you, you'd raised some money from family and friends to start that first production run. But then I guess around 2013, you actually did a few like bonafide fundraising rounds and you raised, you know, a decent amount of money around $10 million by 2015. And so how was the business doing at that point? I mean, did you guys gain some financial stability?
SPEAKER_03: Yeah, it was kind of the point in time where I felt like we went from just like treading water and doing a really good job at treading water to actually swimming and moving forward. And like, we were at a point where like, we were able to grow the business in a smart, financially responsible way versus just selling a lot of product and having a really great brand of products, but not necessarily being able to sustain that for 10, 15, 20 years if we had to because of how much we were losing. And so it was a key moment for us because everything that we had said was going to happen was happening. And we were seeing those results.
SPEAKER_02: Yeah. And ultimately, we came through and all the core things that we knew we needed to do to get to break even in 2015. We got to profitability and it was a real joyous occasion for the company. And ever since then, we've been profitable.
SPEAKER_04: What about things like, you know, like trends, right? Like keto and paleo and, you know, dairy free. And I mean, that kind of now you go to the frozen aisle and the dairy ice creams are like just a few. It's like mostly oat and almond milk and cashew milk ice cream. It feels like that, at least to me, like it feels like the dairy ice creams are like one shelf and everything else is like non-dairy. And that really started to happen. Did you guys start to look at your product and say, OK, we need to introduce a non-dairy line or we need to introduce a keto brand or, you know, stuff like that?
SPEAKER_03: I think from the very beginning, we were pretty disciplined and like we are product made with the goodness of Greek yogurt and that is who we are. We're not a free of everything brand. We're not full of fat and sugar. Like we really stayed in that lane throughout all these trends and fads that came and went and it was it was trying. I mean, when you had brands like Halo Top enter the category and have these rocket ship growth out of nowhere, it was you're kind of sitting there being like, are we doing something wrong? And should we be following? But we stayed disciplined and, you know, these fads, they come and go. And, you know, we knew we were a brand that wanted to be around for a long, long time.
SPEAKER_04: But presumably you're also thinking about other products beyond just the ice cream bars. I think at a certain point you even introduced pints of ice of frozen Greek yogurt, right?
SPEAKER_02: Yeah, the pints are difficult because that really was our offensive against Halo Top.
SPEAKER_04: Yeah, we had, as you may know, Justin Woolverton of Halo Top was on the show and, you know, that brand, right, it was just it was the number one selling ice cream pint, I think in like 2017. And it was a high protein and, you know, relatively low calories. When that was happening, that Halo Top craze, that was your response to Halo Top?
SPEAKER_02: Yeah, we were willing to dabble with innovation, but not remove our moat of Greek yogurt. So we went into pints with eight flavors and we got some distribution. And it was in those moments that we truly realized the marketing frenzy that was happening by some of these brands that was creating the velocities that were contributing to their revenue growth and becoming the best seller within a short amount of time. And we were in market for a year as you are when you sell something in. And after that, we retreated because we just felt it wasn't sustainable.
SPEAKER_03: At that point, it was like a race to the bottom. It was a race to the bottom. Oh, like just in terms of like pricing?
SPEAKER_04: Yeah.
SPEAKER_02: Yeah. People were promoting in a way that was buy a pint, get a pint free. Oh, wow. And then you get that pint, you get another pint free. It just was like, you could, you mathematically just couldn't make sense to us. And so we took our shot on innovation. We weren't afraid of that. We believe in the ability for Yasuo to move into packaged form. It was just we were launching into a chaotic moment in a category that hadn't had a moment like that in a long time. And we ultimately retreated.
SPEAKER_04: I'm curious about the sort of the long-term planning of the business, because I imagine that maybe early on or maybe at a certain point, both of you came to the conclusion that you needed to eventually figure out how to get acquired. Right. And so this is, there's, you know, this is a natural trajectory, you seek some type of exit. And so when did you guys start to think about, okay, how do we set ourselves up for an eventual acquisition? It wasn't something we focused necessarily on obsessively.
SPEAKER_02: But when we got to a certain point around that breakeven year of profitability in 2015, we started to look more seriously in 16 as who could be a longer term partner. And in 17, we built a great relationship with a private equity firm. And we partnered with them at the end of that quarter. This is Castania or Castanella?
SPEAKER_02: Castanella partners based here in Boston. Got it.
SPEAKER_03: I mean, I think could me and Drew have continued to run it post that, of course, but I think that we felt we had done it for a long time. Our lives personally were changing with the birth of our first kids, both of us. Me and Drew both had kids one month apart. And I think we were a little bit tired of the day to day and we wanted to step back and take a more 10,000 foot view approach of the business and stay as board members, but bring on someone that we were kind of willing to hand the reins to since it had been our baby for 10 years. In 2023, Unilever announced that it would acquire Yaso and that's happened.
SPEAKER_04: It's been acquired. And you guys are, I think, no longer part of the company, right? Are you are you advisors or are you completely out of Yaso now?
SPEAKER_03: We're brand ambassadors for Unilever, for the brand. Got it.
SPEAKER_04: Got it. Okay. And but that's it. It's now I mean, it's kind of full circle. Like Unilever was the big sort of, you know, 800 pound gorilla and you know, Ben & Jerry's obviously is a Unilever brand. And yeah, I mean, these were sort of your competitors, kind of like your enemies back in the day, maybe. And now you're in that world. How do you feel about that?
SPEAKER_02: Feels great. It feels like the dream we always share. It makes us super proud of the team that got us this moment. And, you know, we're really looking forward to continue on with them as brand ambassadors and see the team continue on as operators of the business as they bring Yaso to more people, which was always our goal.
SPEAKER_04: When you think about this journey that you've taken, how much of what happened do you attribute to the work you put in and how much do you think had to do with luck?
SPEAKER_02: It was a perfect combination of luck and hard work. We're not naive to know that there were so many balls that bounced our way favorably. There were also a lot of obstacles that came our way that we had to overcome that required hard work. But for it ultimately to end up as a brand that Unilever saw a tremendous amount of value is just a testament to the hard work that went into it by so many people. And as founders of a brand to create something that people put that much energy towards and they cared so deeply for. It was just such an unbelievable sense of gratitude that we have for everyone that worked as just as hard as us in different areas and the different phases of the journey. Amanda.
SPEAKER_03: I think it's a mix of both. I think hitting the market at the right time is important, but there was a lot of hard work. And, you know, I grew up in the industry. I don't think I'll ever leave it. I still see it with my dad. You know, he's in his seventies. And all we talk about together is his food because we love it. And so I think it's something that is part of my life and I don't see it ever going away. I think it's just sticking with it through those really dark times or those tough times or those setbacks. But I think there's always a bit of luck of just being at the right place at the right time.
SPEAKER_04: That's Amanda Klain and Drew Harrington. Co-founders of Yaso. By the way, these days they've got a full range of flavors like fudge brownie, cookies and cream and birthday cake. But their number one bestseller, mint chocolate chip. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And it's totally free. This episode was produced by J.C. Howard with music composed by Ramtin Arablui. It was edited by Neva Grant with research help from Katherine Seifer. Our audio engineers were Gilly Moon and Maggie Luther. Our production staff also includes Casey Herman, Kerry Thompson, Alex Chung, Elaine Coates, John Isabella, Chris Masini, Carla Estevez, Sam Paulson and Ramell Wood. I'm Guy Raz and you've been listening to How I Built This. Hey, Prime members, you can listen to How I Built This early and ad free on Amazon Music. Download the Amazon Music app today. Or you can listen early and ad free with Wondery Plus in Apple Podcasts. If you want to show your support for our show, be sure to get your How I Built This merch and gear at wonderyshop.com. Before you go, tell us about yourself by completing a short survey at wondery.com slash survey.
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