Yasso: Amanda Klane and Drew Harrington

Amanda Klane and Drew Harrington are childhood friends, and co-founders of Yasso; they defied the advice of experts by creating a recipe for frozen Greek yogurt treats, and building Yasso into a $200 million dollar brand. When Amanda got the idea in 2009 to freeze Greek yogurt into popsicles, she reached out to Drew, who had already started a business selling—and there’s no way you could guess this—inflatable beer pong tables. The two friends set out to make a high protein, low-calorie yogurt bar, and despite initial bad reviews from family, and a series of “No’s” from prospective manufacturers, they eventually landed Yasso onto the shelves of Costco and BJ’s. It wasn’t long before they faced competition from the top players in the freezer aisle, but Yasso continued to grow, and was recently acquired by one of the biggest consumer goods companies in the world. This episode was produced by J. C. Howard, with music by Ramtin Arablouei Edited by Neva Grant, with research help from Katherine Sypher. You can follow HIBT on Twitter https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 1:32Guy Raz?

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• 4:27Guy Raz?

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• 5:10Guy Raz?

  You know, we talk a lot about hustle on How I Built This. And recently, I spoke to Jason Sudeikis, 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, Tatalasso. Check out my conversation with Jason Sudeikis 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.

• 5:59Guy Raz?

  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?

• 6:13Speaker 01

  Of course. Yeah, 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.

• 6:48Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 7:00Guy Raz?

  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.

• 7:19Guy Raz?

  Back before Hamdi Ulukaya 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.

• 8:04Guy Raz?

  Amanda Klane 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 it 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,

• 8:49Guy Raz?

  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.

• 9:18Speaker 02

  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, you know, come work for me. And he let me carry a bag and be a salesperson. And I think, you know, 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

• 10:02Speaker 02

  and really just quickly learning, okay, 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.

• 10:16Guy Raz?

  So dairy and frozen products?

• 10:19Speaker 02

  Yeah. Ice cream, frozen pizza, yogurt, cheese, eggs.

• 10:25Guy Raz?

  And what were some of the brands that he represented?

• 10:29Speaker 02

  So it's funny, I think as we talk about Yasso too, and the shift to kind of this healthier food, healthier foods, options nowadays, when I was a kid, it was brands like Micromagic, which were like frozen burgers that you'd microwave and, you know, McCain Elio's French fries. And he then picked up the Chobani brand when they first started.

• 10:48Guy Raz?

  Wow.

• 10:48Speaker 02

  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? You know, now you don't even see frozen orange juice. So there was definitely a shift in the food ecosystem over the years.

• 11:04Guy Raz?

  Yeah. And Chobani, which obviously was, when he got it, was a small brand. But I think, you know, we had that story on the show a few years ago. And I remember Hamdi Ulaqia talking about Stop & Shop in the Northeast being a really important first retailer. Like, that changed the game for him.

• 11:23Speaker 02

  Yeah. And 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.

• 11:41Guy Raz?

  Yeah. All right. So you're sort of kind of learning the ropes about food distribution. In the meantime, Drew, I think you're, you've, I think you've dropped out of college, which was American University at this point.

• 11:53Speaker 01

  Yeah.

• 11:54Guy Raz?

  And I guess you moved back to Boston from Washington DC and like start working, like doing project management at a construction company. Is that right?

• 12:02Speaker 01

  Yeah, that's right.

• 12:04Guy Raz?

  But I guess you, you know, around the age 2021, you start to think about maybe starting your own business or maybe doing something entrepreneurial. Tell me how that kind of thinking started.

• 12:17Speaker 01

  Yeah. So I was still working for J. Dorenzo, 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, where 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,

• 12:57Speaker 01

  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, and go off and hopefully bring some products to market, almost like as 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.

• 13:29Guy Raz?

  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?

• 13:36Speaker 01

  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 to ideate around this idea, around inflatable beer pong table, which was fitting for two 20-year-old guys.

• 13:53Guy Raz?

  And, sorry, an inflatable?

• 13:56Speaker 01

  Beer pong table.

• 13:57Guy Raz?

  Beer pong table, okay.

• 13:57Speaker 01

  Yep, that's right.

• 13:58Guy Raz?

  A beer pong table as inflatable, I'm assuming this would be for a pool or a walk?

• 14:04Speaker 01

  Pools or lakes or oceans, but mainly pools.

• 14:07Guy Raz?

  This is a table that you play pong on to land into a cup of beer?

• 14:12Speaker 01

  Exactly.

• 14:13Guy Raz?

  Got it, okay.

• 14:14Speaker 01

  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.

• 14:24Guy Raz?

  But by the way, did, did they exist? Like, could you source these from anywhere?

• 14:29Speaker 01

  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.

• 15:08Guy Raz?

  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?

• 15:18Speaker 01

  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.

• 15:33Guy Raz?

  And how did you finance it?

• 15:36Speaker 01

  Mainly through my savings from the construction company.

• 15:39Guy Raz?

  So this was a risky endeavor.

• 15:41Speaker 01

  Yeah.

• 15:41Guy Raz?

  You were like making, taking all your savings that probably you should have put in like a 401k or something like sensible.

• 15:48Speaker 01

  Exactly. But my mentor at the construction company matched a $50,000 investment that I had made too.

• 15:55Guy Raz?

  Oh, so he believed in this idea?

• 15:56Speaker 01

  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.

• 16:15Guy Raz?

  This was called, and the brand was called, the product was called Poolside Pong.

• 16:19Speaker 01

  Poolside Pong was the product. The company name was Redefined Industries.

• 16:23Guy Raz?

  Got it. Okay. So you get the Chinese manufacturer, make them and you have 5,000 on order and they arrive and now you've got to sell them. So how do you, how did you start to get stores to sell them?

• 16:39Speaker 01

  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.

• 16:51Guy Raz?

  Yeah.

• 16:52Speaker 01

  You know, we were kind of ahead of our time in terms of the idea. I think the, in the product, 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 B to C.

• 17:10Guy Raz?

  Yeah, it didn't really open up to the, to the public, I think, until like 2009 or 10.

• 17:14Speaker 01

  That's right. And at that moment, it was direct to consumer via our website.

• 17:19Guy Raz?

  Got it.

• 17:20Speaker 01

  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 iParty had reached out.

• 17:46Guy Raz?

  iParty is, is like a chain of, I guess, party supply stores?

• 17:50Speaker 01

  Yeah, it used to be a big box retailer for party supplies.

• 17:53Guy Raz?

  Got it.

• 17:54Speaker 01

  Then Urban Outfitters came on board and then our biggest customer was Spencer Gifts.

• 18:00Guy Raz?

  Wow. So, so all of a sudden, the Sports Illustrated article generates all this interest. By the way, how much did they sell? How, what was the, the price?

• 18:07Speaker 01

  We sold them on our website for $49.99 plus shipping. And so the first year, I think we did about somewhere around 100, 150,000.

• 18:18Guy Raz?

  Wow.

• 18:18Speaker 01

  And then it got up into year two and three when we added in Spencer's. We eclipsed about a million in revenue.

• 18:26Guy Raz?

  That's amazing.

• 18:27Speaker 01

  Yeah.

• 18:28Guy Raz?

  So you were sort of like in the fraternity business.

• 18:31Speaker 01

  We like to think it was the summer fun business, but I was never formally part of a fraternity.

• 18:38Guy Raz?

  I mean, it's a, it's a great idea, like to think about, like, you know, to think about, how do you market to fraternities? Like, you know, you could actually create a great business around just fraternity products.

• 18:49Speaker 01

  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, it was a good run until we ran into the manufacturing issues. It was.

• 19:11Guy Raz?

  And what, what was that? What happened? What was the issue?

• 19:15Speaker 01

  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 rats that had arrived to the States had pinhole holes in them, so they weren't staying inflated.

• 19:33Guy Raz?

  And you couldn't, you couldn't send them back to the manufacturer or ask them to do a new run?

• 19:39Speaker 01

  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.

• 20:07Guy Raz?

  So you basically shut that down because that, that order kind of, you, you felt like you couldn't recover from that?

• 20:14Speaker 01

  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.

• 20:35Guy Raz?

  All right, let's go back to you, Amanda. You're watching Drew's like beer pong business. And tell me, like, What was your impression of it? Like, did you think it was silly or fun? Or what did you think about it?

• 20:50Speaker 02

  Oh, it was super inspiring. So at the time, you know, 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, you know, 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.

• 21:30Guy Raz?

  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.

• 21:49Speaker 02

  Yeah, as I was working for him and seeing this shift in 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 & 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

• 22:33Speaker 02

  nutritional facts panel and was using like better ingredients?

• 22:39Guy Raz?

  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?

• 22:49Speaker 02

  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 two, 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?

• 23:28Speaker 01

  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 were on 95, it was 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.

• 24:06Guy Raz?

  And Drew, were you as an athlete, did you, did you eat Greek yogurt? Because it's a great source of protein. It's dense protein source, right? It's like really relatively easy to consume. Were you like a, at that time, were you eating Greek yogurt or not quite yet?

• 24:21Speaker 01

  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.

• 24:40Guy Raz?

  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?

• 25:03Speaker 02

  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 that form.

• 25:31Guy Raz?

  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?

• 25:43Speaker 02

  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 spaces like,

• 26:17Guy Raz?

  Yeah.

• 26:17Speaker 02

  How do we create something that tastes great but is better for you?

• 26:20Guy Raz?

  And, and so let, 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 it 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 started experimenting with Greek yogurt, like, what were you doing to, to figure out how to make this work?

• 27:04Speaker 02

  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.

• 27:13Guy Raz?

  Yeah.

• 27:14Speaker 02

  And we're like, okay, that's not going to work. I think one of the key challenges we had upfront 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.

• 27:48Guy Raz?

  How long did it take you?

• 27:51Speaker 02

  Almost an entire, well, an entire year to get our first product, which, looking back at it now, like, wasn't very good.

• 27:59Guy Raz?

  Yeah.

• 28:00Speaker 01

  It was kind of sad. 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.

• 28:23Guy Raz?

  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.

• 28:47Guy Raz?

  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/built and add your thoughts. That's M-I-R-O.com/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

• 29:32Guy Raz?

  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.com/built to leave your answers with sticky notes, comments, and reactions. That's miro.com/buil't. Miro.com/built.

• 30:01Guy Raz?

  Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in, so the work is production-ready from day one. And you can get it done with help from Framer's AI agents. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. AI agents and humans work together. The agents bring speed and scale,

• 30:45Guy Raz?

  and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on. NetSuite Next surfaces insights

• 31:30Guy Raz?

  exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only Part of the story. AI is also reshaping how people and teams work together. And that shift is already underway. That's why NetSuite wants to put a new expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 32:13Guy Raz?

  If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built. Stripe is built for whatever comes next, because the pace of change has never been faster than it is right now. New business models, new currencies, and new expectations for speed, reliability, and scale. Stripe builds financial infrastructure that helps businesses start, grow, and operate globally. From payments and billing to fraud protection and cross-border payouts,

• 32:57Guy Raz?

  Stripe is built to support the new pace of commerce. They're trusted by the companies building at the frontier, from 86% of the Forbes AI 50 to global leaders like Salesforce and OpenAI. In fact, more than 1.6% of global GDP flows through Stripe, with Stripe's users processing a combined $1.9 trillion last year. So if you're already thinking about what's next for your business, see what's possible at stripe.com. As a business-to-business marketer, your needs are unique. B2B buying cycles are long, and your customers face incredibly complex decisions.

• 33:39Guy Raz?

  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

• 34:22Guy Raz?

  prospective guests for the show. Make B2B marketing everything it can be and get a $100 credit on your next campaign. Go to LinkedIn.com/builtthis to claim your credit. That's LinkedIn.com/builtthis. 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.

• 34:54Guy Raz?

  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.

• 35:15Speaker 02

  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. Drew is a name that could probably go both ways because you have 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

• 36:00Speaker 02

  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.

• 36:08Guy Raz?

  So, so coming out of that, that like 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.

• 36:18Speaker 02

  No, we were like, Google, how do we find ice cream food scientists?

• 36:22Guy Raz?

  Right, right. 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?

• 36:33Speaker 01

  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 Yasso. 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 Yasso? And she's like, I like it. And we sent it over to the designer who we'd, we'd already contracted at that point. And we said, hey, can you play around on front of packaging with the name Yasso, 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 Yasso.

• 37:17Speaker 01

  And she did it in two-tone, Y-A-S was in green, S-O was in brown. And we immediately loved it. We felt that it had energy and we were, it was easily trademarkable because it was frankly a new word. And that was it.

• 37:31Guy Raz?

  Yeah.

• 37:32Speaker 02

  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.

• 38:02Guy Raz?

  You hadn't raised money from friends to family quite yet.

• 38:05Speaker 02

  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 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.

• 38:50Speaker 02

  And we thought that that would translate.

• 38:52Guy Raz?

  And what are the top three flavors again?

• 38:55Speaker 02

  Blueberry, strawberry, and raspberry.

• 38:56Guy Raz?

  Got it. Okay. Yep.

• 38:57Speaker 02

  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.

• 39:03Guy Raz?

  Right. 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?

• 39:17Speaker 02

  Yeah, they were molding bars in little 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 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.

• 39:42Guy Raz?

  You wanted each bar to be no more than 70 calories?

• 39:46Speaker 02

  Yep. And so we kind of gave them these guidelines of here's where we want our protein, here's where we want the calories, we don't want fat, and we want to be 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.

• 40:12Guy Raz?

  And once you landed 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.

• 40:26Speaker 01

  Yeah, we had the prototype. Poolside, that endeavor was actually easier to find a manufacturing partner in China, although it felt, you know, half a world away. Here in the United States, once we had our prototype in hand on Yasso, finding a manufacturer partner became extremely difficult.

• 40:44Speaker 02

  Yeah, you know, Greek yogurt was still fairly new to the US market.

• 40:47Guy Raz?

  Right.

• 40:48Speaker 02

  And there weren't a ton of people that could actually manufacture Greek yogurt.

• 40:52Guy Raz?

  Because it has to be strained to make it thick or spun in a, you know, right in like a big spinner to get the water out.

• 41:00Speaker 02

  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.

• 41:24Guy Raz?

  That it would like, I don't know, back up the pipes or get stuck in there?

• 41:29Speaker 02

  Yeah, we ruined a few pieces of equipment and plants over the last 10 years. But yeah, I mean, a similar, think about like if you shake up a protein shake to some degree, it gets kind of foamy.

• 41:40Guy Raz?

  Yeah.

• 41:41Speaker 02

  And plant equipment doesn't like to pump foam. It's not something you want going through the pipes. So it tends to back them up and make them 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.

• 42:01Guy Raz?

  All right, so it 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.

• 42:35Speaker 02

  So there's actually not a lot of people that make

• 42:38Guy Raz?

  Oh, okay.

• 42:38Speaker 02

  the product that we needed. That was part of the, so we didn't know that, obviously, when we chose the form.

• 42:44Guy Raz?

  Yeah.

• 42:44Speaker 02

  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.

• 43:06Guy Raz?

  Wow.

• 43:07Speaker 02

  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.

• 43:14Guy Raz?

  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, who make their own products that they sell, they have their own factories.

• 43:25Speaker 02

  Exactly, yeah, Nestle, Unilever, Wells Blue Bunny, kind of those big brands.

• 43:29Guy Raz?

  And they would not, they're not co-packers, they're not going to make product for another brand?

• 43:33Speaker 02

  No, not usually.

• 43:34Guy Raz?

  Right.

• 43:35Speaker 02

  Not two 23-year-olds.

• 43:37Guy Raz?

  Right, okay.

• 43:38Speaker 01

  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 or 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.

• 44:20Guy Raz?

  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, you guys felt that you had to find a manufacturer even before you had these meetings in the fall?

• 44:42Speaker 02

  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 cell unit and be like, here's the brand, here's the product, here's our strategy.

• 44:57Guy Raz?

  And only three factories, roughly three factories in the US were doing this for non, for anyone who had the money.

• 45:05Speaker 01

  Yeah, there weren't many.

• 45:06Speaker 02

  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.

• 45:41Speaker 01

  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.

• 46:04Guy Raz?

  Got it. So you had to go down and present a business plan and that was it? So that was great. You had a meeting and...

• 46:10Speaker 02

  It was the last one.

• 46:11Guy Raz?

  This was the last one? Because the other two said, no, we're not going to work with you?

• 46:16Speaker 02

  Yeah, exactly. No one else had either returned the calls or they were just playing out no's.

• 46:22Guy Raz?

  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...

• 46:31Speaker 01

  Yeah, we walked in, we had drove down. I remember the days prior, we were practicing our pitch to each other, 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. 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, you know, 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.

• 47:13Speaker 01

  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 believes in us, but we pitched her on Yasso 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.

• 47:37Guy Raz?

  So with the trial run, how many did you need?

• 47:42Speaker 02

  Oh, man, I don't remember. It was like a couple hundred per flavor.

• 47:45Guy Raz?

  Okay.

• 47:46Speaker 02

  So three different flavors.

• 47:47Guy Raz?

  And, and how, how much, do you remember how much it cost?

• 47:52Speaker 02

  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?

• 48:07Guy Raz?

  Yeah, that's a lot of money. I mean, that's scary because you're, you're only going to get a few hundred bars for that. But obviously if it works, it's an investment worth making.

• 48:19Speaker 02

  Correct.

• 48:20Guy Raz?

  So how did you cobble the money together?

• 48:23Speaker 02

  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

• 48:34Guy Raz?

  Yeah.

• 48:34Speaker 02

  were, were rich and had some money to give us. Like we called anyone we knew that we thought had some money.

• 48:39Guy Raz?

  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.

• 48:47Speaker 02

  Exactly. Yeah.

• 48:48Guy Raz?

  Got it. All right. So they agreed to do this trial run. And in meantime, how are you contacting retailers to get in the, in the door to pitch them? Like, is there, is it, is it like an open casting call where anybody can like apply and?

• 49:02Speaker 02

  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.

• 49:21Guy Raz?

  So. You're contacting these places and meantime, they're preparing for a trial run. And tell me how it went. Because the concern was that like as it extrudes this protein heavy yogurt, like it could back up the system, but presumably that didn't happen.

• 49:42Speaker 02

  Yeah, there were some glitches that we learned. I think the biggest thing we learned was like, how do we feel about the flavors? And do we have to tweak some of like, is the strawberry strawberry flavored enough? And, you know, is blueberry purple or blue enough in color? So they were more like minor tweaks.

• 50:01Speaker 01

  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'd 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. Be like, oh, we're so sorry TSA confiscated it. But behind the scenes, we were actually trying to make

• 50:46Speaker 01

  strawberry better for the next production run. So we could just launch with something that was better tasting. And I think that started to create a theme of the Yasso DNA, which is continuous improvement even to this day.

• 50:59Guy Raz?

  Did you, in trying to make like a better, like a low calorie bar, presumably it restricted the amount of sugar you could use. Imagine that was the biggest restriction, right?

• 51:10Speaker 01

  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 evolved 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

• 51:55Speaker 01

  is too low. Maybe the benchmark's 100.

• 51:58Guy Raz?

  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, right? 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, like, so do you imagine this being next to other diet brands or low calorie brands in the frozen section? Was that, is that what they were asking?

• 52:32Speaker 02

  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.

• 52:46Guy Raz?

  Yeah.

• 52:47Speaker 02

  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.

• 52:59Guy Raz?

  Did you, and I mean, your strategy, as you say, wasn't to go to the small natural 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 natural food co-ops. Why? Why did you want to do that?

• 53:25Speaker 02

  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.

• 53:52Speaker 01

  We also had Chobani and Fay and those Greek yogurt brands and 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.

• 54:16Guy Raz?

  So who was your first, who was the first buyer who pulled the trigger? Who was like, okay, I'll put in an order?

• 54:24Speaker 02

  So based on the selling season, we had a handful of our Northeast retailers who were willing to give it a shot.

• 54:30Guy Raz?

  Like what stores?

• 54:32Speaker 02

  Like your Stop In Shops, Big Y, Hannaford Brothers, those types of accounts here in the Northeast.

• 54:38Guy Raz?

  Yep.

• 54:39Speaker 02

  We also went to some of those big box stores like your BJ's 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's, it gives you this kind of free marketing boost.

• 54:54Guy Raz?

  When you're in Costco, it's a, it's a marketing boost just by being in there?

• 54:59Speaker 02

  Just because it's limited SKUs 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 SKUs on shelf in a way bigger category with more brands.

• 55:15Guy Raz?

  And in Costco, you're not selling a four pack, you're selling a 12 or 24 pack. So it's a huge box.

• 55:20Speaker 02

  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.

• 55:28Guy Raz?

  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?

• 55:36Speaker 01

  That was a sizable order. I remember the check was about a hundred thousand dollars, 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.

• 55:53Guy Raz?

  The Costco check came in fast enough that you could use it to finance the production?

• 55:58Speaker 02

  The next.

• 55:59Speaker 01

  It wasn't, yeah, the next run. 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 were 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. And 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 the, you know, it's coming to us. We're gonna pay next week.

• 56:44Guy Raz?

  They were getting nervous.

• 56:45Speaker 01

  They were getting nervous, I think, just because, hey, we're 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.

• 57:05Guy Raz?

  This is a check from Costco?

• 57:06Speaker 01

  Yeah, for $100,000 that we owed all of it and some more to the manufacturing facility. And we said, okay, we're gonna 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,

• 57:48Speaker 01

  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. It actually cleared and we were able to get the money into the account and wire Cookie Face.

• 58:09Guy Raz?

  I understand, like, from what I read, one of the first

• 58:15Guy Raz?

  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.

• 58:31Speaker 02

  All of it.

• 58:31Guy Raz?

  What happened?

• 58:33Speaker 02

  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.

• 59:14Speaker 02

  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 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.

• 59:55Guy Raz?

  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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• 1:02:54Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2011 and Yaso bars are already in Costco and a few other retailers, mainly in the Northeast. Drew and Amanda are sourcing the yogurt from Chobani, and though the brand is selling well, it's not yet turning a profit.

• 1:03:12Speaker 02

  No.

• 1:03:12Speaker 01

  No, not at all.

• 1:03:13Guy Raz?

  Far from it.

• 1:03:14Speaker 01

  Far from it. Yeah, it was in those years we learned the concept of how important gross margin and EBITDA are.

• 1:03:22Guy Raz?

  Yeah. Tell me some of the reasons why. What were some of the mistakes you were making at that time?

• 1:03:27Speaker 01

  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.

• 1:03:49Guy Raz?

  And in terms of building your team out, I mean, in those first sort of, you know, 2011, you debut. 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?

• 1:04:07Speaker 02

  It was a handful of people. 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 and 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.

• 1:04:51Speaker 02

  And then eventually we got a little bit larger space that housed about 10 of us.

• 1:04:58Guy Raz?

  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?

• 1:05:06Speaker 02

  Oh, we did. We did it $5 million our first year in business.

• 1:05:09Guy Raz?

  Oh, wow.

• 1:05:10Speaker 02

  By 13, we were doing around 18.

• 1:05:12Guy Raz?

  Wow. So you were growing really fast.

• 1:05:16Speaker 02

  Really fast.

• 1:05:17Guy Raz?

  But still not profitable?

• 1:05:19Speaker 02

  No.

• 1:05:19Speaker 01

  No, with a gross margin in the teens. 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.

• 1:05:30Guy Raz?

  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, is that kind of right?

• 1:05:47Speaker 01

  Yeah.

• 1:05:48Speaker 02

  I think too, the other challenge in our space is just the slotting dollars that are required to get shelf space.

• 1:05:54Guy Raz?

  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.

• 1:06:00Speaker 02

  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.

• 1:06:22Guy Raz?

  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.

• 1:06:35Speaker 01

  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, 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.

• 1:07:15Speaker 01

  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 of 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.

• 1:07:55Speaker 01

  And so we were starting to, like, get a better margin profile just through scale, but also just improving the fundamentals of everything that was going on in the business.

• 1:08:07Guy Raz?

  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 around 2014. When you heard about that... Were you worried? Were you nervous? Of course.

• 1:08:33Speaker 01

  That was, that was a scary moment. That was, at that point, we probably had 10 employees. We had an office space in Boston and every Friday morning, we would host these little breakfasts where everyone had a good energy. It was right before the weekend and one of those Friday breakfasts, we're walking down this long hallway in 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."

• 1:09:16Speaker 01

  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.

• 1:09:26Guy Raz?

  Yeah, I mean, that's the 800 pound gorilla right there, right? Even though Ben & Jerry's might not see themselves that way.

• 1:09:35Guy Raz?

  I mean, what, how did you respond to that? Was there anything you could do or respond?

• 1:09:40Speaker 01

  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. You know, Yoplait had launched Weight Watchers, Skinny Cow. Like, they were all coming.

• 1:10:19Guy Raz?

  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 any of them kind of try to push you out?

• 1:10:32Speaker 02

  Oh, yeah. It was, 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 in kind of this 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.

• 1:11:14Guy Raz?

  Wow. So, all right. I mean, at a certain point, I mean, you were growing. And did you, you know, 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 bona fide 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?

• 1:11:45Speaker 02

  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 and 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.

• 1:12:23Speaker 01

  Yeah, and ultimately, we came through on 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.

• 1:12:39Guy Raz?

  What about things like trends, right? Like keto and paleo and 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 on 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, okay, we need to introduce a non-dairy line? Or we need to introduce a keto brand? Or, you know, stuff like that?

• 1:13:17Speaker 02

  I think from the very beginning, we were pretty disciplined in like, we are a 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 in, 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.

• 1:13:57Guy Raz?

  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 frozen Greek yogurt, right?

• 1:14:08Speaker 01

  Yeah, the pints were difficult because we, that really was our offensive against Halo Top.

• 1:14:15Guy Raz?

  Yeah, we had, as you may know, Justin Wolverton 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 relatively low calories. When that was happening, that Halo Top craze, that was your response to Halo Top?

• 1:14:38Speaker 01

  Yeah, we were willing to dabble with innovation, but not remove our moat

• 1:14:43Guy Raz?

  Right.

• 1:14:44Speaker 01

  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.

• 1:15:17Speaker 02

  At that point, it was like a race to the bottom.

• 1:15:19Guy Raz?

  It was a race to the bottom. Oh, like just in terms of like pricing?

• 1:15:22Speaker 02

  Yeah.

• 1:15:23Speaker 01

  Yeah, people were promoting in a way that was buy a pint, get a pint free.

• 1:15:27Guy Raz?

  Oh, wow.

• 1:15:28Speaker 01

  And then you get that pint, you get another pint free. It just was like, you could, mathematically it 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 Yasso 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.

• 1:15:49Guy Raz?

  Yeah.

• 1:15:49Speaker 01

  And we ultimately retreated.

• 1:15:51Guy Raz?

  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?

• 1:16:22Speaker 01

  It wasn't something we focused necessarily on obsessively. But when we got to a certain point around that break even year of profitability in 2015, we started to look more seriously in 16 as who could be a longer term partner.

• 1:16:40Guy Raz?

  Yeah.

• 1:16:40Speaker 01

  And in 17, we built a great relationship with a private equity firm and we partnered with them at the end of that quarter.

• 1:16:47Guy Raz?

  This is Castania or Castaneda?

• 1:16:50Speaker 01

  Castaneda Partners, based here in Boston.

• 1:16:53Guy Raz?

  Got it.

• 1:16:53Speaker 02

  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.

• 1:17:28Guy Raz?

  In 2023, Unilever announced that it would acquire Yasso. And that's happened. It's been acquired and you guys are, I think, no longer part of the company, right? Are you advisors or are you completely out of Yasso now?

• 1:17:44Speaker 02

  We're brand ambassadors for Unilever, for the brand.

• 1:17:47Guy Raz?

  Got it, got it. Okay. And but that's it. It's now, I mean, it's kind of full circle. Like you were, Unilever was the big sort of, you know, 800 pound gorilla and, you know, Ben and 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, now you're in that world.

• 1:18:12Guy Raz?

  How do you feel about that?

• 1:18:14Speaker 01

  It feels great. It feels like the dream we always shared. It makes us super proud of the team that got us this moment. And 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 Yasso to more people, which was always our goal.

• 1:18:34Guy Raz?

  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?

• 1:18:41Speaker 01

  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 was 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 just as hard as us in different areas and at different phases of the journey.

• 1:19:22Guy Raz?

  Amanda?

• 1:19:24Speaker 02

  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 I grew up in the industry. I don't think I'll ever leave it. I still see it with my dad. He's in his 70s. 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.

• 1:20:05Guy Raz?

  That's Amanda Klane and Drew Harrington, co-founders of Yasuo. 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.

• 1:20:22Guy Raz?

  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 Arablouei. It was edited by Neva Grant with research help from Katherine Seifer. Our audio engineers were Gilly Moon and Maggie Luthar. Our production staff also includes Casey Herman, Kerry Thompson, Alex Chung, Elaine Coats, John Isabella, Chris Messini, Carla Estevez, Sam Paulson, and Ramel Wood. I'm Guy Raz, and you've been listening to How I Built This.