Live From The HIBT Summit: Stacy Madison of Stacy's Pita Chips

Our ninth episode from the 2019 How I Built This Summit features Stacy Madison, co-founder of Stacy's Pita Chips. In this live conversation with Guy, Stacy explains how pita chips became a passion--even though they didn't start out that way. We'll be releasing one more episode from the Summit in the next few weeks, so keep checking your podcast feed. 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.

• 0:02Guy Raz?

  Hey, everyone. So I've got kind of a random question for you. What do you get when you take two psychologists, one social worker, and a few pounds of day-old pita bread? The answer, of course, is Stacy's Pita Chips, one of the businesses we featured at our How I Built This summit last fall. Now, if you remember Stacy's story from the podcast, she was a social worker who teamed up with her brother David and her then-husband Mark, both of whom were psychologists. In other words, they knew nothing about the food industry when they built a multimillion-dollar snack company. And the whole thing began, almost, by accident, when Stacy and Mark ran a sandwich cart on the streets of Boston. They would take leftover pita, cut it up,

• 0:45Guy Raz?

  and bake it into these crunchy little triangles, which, at first, they gave away for free, until it became clear that people were willing to pay for them. Anyway, when Stacy and I sat down live onstage in San Francisco, I asked her what was going through her head at the time. Do you remember thinking, even once you kind of moved into making pita chips, that this would grow into a massive brand?

• 1:11Speaker 01

  No, no idea.

• 1:12Guy Raz?

  And no intention?

• 1:13Speaker 01

  Absolutely none. Never started the company with an exit strategy. Didn't know what an exit strategy was when we started. Didn't know what a business plan was.

• 1:22Guy Raz?

  What do you think it was that fueled the growth? I mean, was it something that you were doing? Or do you think, in some ways, the growth found you? Because it was sort of a wave, right, that you started to ride? Bread and Circus in Boston, which now is Whole Foods, and there was more interest in sort of simpler and wholesome, natural foods.

• 1:41Speaker 01

  Yeah, it started as a wave, and then it kind of went to a hockey stick. So we learned the value of being able to control your growth, which is a skill in itself, you know? Because we were doing our own manufacturing. And with the growth, we got into gourmet food stores, and people were paying about $6 a bag. Has anybody here ever had the pita chips?

• 2:04Guy Raz?

  Has anybody had the pita chips? Are you kidding me?

• 2:07Speaker 01

  Well, you know what, I used to, I used to ask that when I would go speak somewhere. There'd be like five hands in the audience and I'd start explaining, "Well, pita chips, we take some bread and we season it, we cut it." Anyway, I'm glad I don't have to go that back that far anymore. But we started in gourmet food stores. From there, we were in natural food stores and we always just had pure ingredients. We didn't, you know, the whole natural food boom and we were just automatically natural. I mean, there was really nothing in it. There were like three or four ingredients. So, we didn't actually have to do anything when all these other companies were trying to make themselves natural. We were like, "Hey, we already are."

• 2:45Guy Raz?

  There was a point, pretty early on, because at the beginning, Mark was cutting the pita into chips by hand.

• 2:52Speaker 01

  I told you, I had a really big right bicep.

• 2:54Guy Raz?

  Right bicep, right, yeah. And eventually, to just kind of grow it, it wasn't like you went out to a bunch of private equity companies. You didn't really raise money, right? You were just kind of funding the business through the sale of pita chips.

• 3:06Speaker 01

  Through the sale of pita chips and running up our credit cards. You know, beg, steal, borrow, driving a crappy car, whatever it is you had to do.

• 3:15Guy Raz?

  I mean, how did, how did you do that? I was talking to some attendees earlier and they were, same story, you know, "How do I grow this thing? I don't, you know, I'm also worried that, you know, when I put my product out in the world, a bigger company will see it and just replicate it and crush me." That could have happened so easily. Pita chips are pretty easy to replicate. You can't patent them, right?

• 3:33Speaker 01

  Um, you can't patent them and they're not that easy.

• 3:36Guy Raz?

  Not that easy, okay, sorry, I'm sorry. But, I mean, you can imagine that a Frito-Lay or one of these, like, you know, huge company could figure out, you know, some kind of competitive product, right? How, and, and you didn't have a whole lot of money, so how were you doing that? How were, how were you investing in equipment? How did you even have a place to make them? Was the rent cheap? I think you were in like Lynn, Massachusetts or something like that?

• 4:04Speaker 01

  Yeah, in Randolph, Mass. And the factory's still there. But initially, we started off borrowing some space from a woman who made pretzels.

• 4:12Guy Raz?

  Right.

• 4:13Speaker 01

  And it was when we started having to install some of our own, own equipment. That we had to then find a bigger space. So we found a space in a construction type building. Super nice landlords and he sectioned off, you know, 5,000 square feet. And then we were growing bigger and he was on the other side. And he's like, well, I can just move the wall over. And he moved the wall over. We took 10,000 square feet. And then he's like, well, I can just move out. And then we took 20,000 square feet. And then when we started growing even further, that's when we looked, literally one driveway over was this mattress factory for sale.

• 4:52Guy Raz?

  And you took a loan, right? A bank loan for that?

• 4:55Speaker 01

  Yes, we had a bank loan for that. And I said, well, can I get half a million because we have to move? And they initially said, uh, no, not without equity. And then I went out and I got accounts and got letters from airlines and things like that.

• 5:11Guy Raz?

  Airlines who said, we want to, we're going to hand out Stacy's pizza chips.

• 5:15Speaker 01

  Yeah, if you can make them. I'm like, will you write that down?

• 5:19Guy Raz?

  Yeah. And that's how you were able to secure the loans?

• 5:21Speaker 01

  Yeah.

• 5:22Guy Raz?

  Yeah, because, I mean, did you, I mean, now, of course, you know, the lure is to go out and seek capital and to raise money. And at that time, was that even something you and Mark considered doing?

• 5:33Speaker 01

  Um, we did. We considered raising capital. It takes a lot of time and effort and I don't have a business background and one of us did.

• 5:44Guy Raz?

  And you were a social worker.

• 5:45Speaker 01

  I was a social worker. They were psychologists. Anytime I have to do math, I go to my sister because she's got an MBA and I'm like, you know? So we were just about to take on financing, which is when we landed the Trader Joe's account. And so we started doing higher volume and they, it's such a nice company. They would pay before they even got the product.

• 6:06Guy Raz?

  Yeah. Yeah. Trader Joe's unusual in that way.

• 6:09Speaker 01

  Yeah, they pay really quickly. And so I ended up, all of a sudden, we were getting money and we were kind of using, and the chips were really selling. So we used the money that we got in from Trader Joe's to really fund the business and help us grow. So we never ended up taking on any extra outside money.

• 6:26Guy Raz?

  Which was a very fortunate decision.

• 6:32Guy Raz?

  I remember on the podcast you said something to me that really resonated. You said by the mid 2000s you had your daughters and you said the business really started to run you. I have talked to so many people who've been on the show that say if you think you're going to run this business, understand the business is going to run you. I think Angie and Dan Bastian of Boom Chica Pop also said a version of that. What was that period like? I mean, that was when you, I guess, started to think about maybe I don't want to do this anymore.

• 7:02Speaker 01

  Yeah. I think at the time I still would have done it, but I think Mark was, like, there was all these things that he didn't get to do, that he wanted to do. He wanted to go off and he wanted to travel and he wanted to do all these things and yet we're still growing really quickly and we had been approached by five of the largest food conglomerates that there are in the world, asking us to sell. And it was a lot. It was, you know, I'm breastfeeding in the closet, I got the pshh and, yeah. It was, and so the business really started to dictate our lives versus us doing what we love to do and making a living at it.

• 7:44Speaker 01

  And so that's when we decided, well, I think maybe we should think about selling.

• 7:49Guy Raz?

  You know, I'm really interested in this idea of passion, right? We're told, we're often, we often hear, "Follow your passion," which is not actually possible for many people, you know? Follow your passion. Well, your passion may not be able to afford you a sustainable life. Were pita chips, was that a passion? I mean, were you and Mark really following that passion or did it become a passion once you started to really pursue it?

• 8:13Speaker 01

  It wasn't the pita chips per se. It was just like we were in the food business where we both wanted to be, but I feel like it becomes more of a passion when other people start to believe in you. When it transitions from, you know, this crazy idea and you guys have graduate degrees and you've got loans and when all of a sudden, when it starts selling and other people start believing in you and then You start to develop your team and other people start like wanting to work for you and quitting their jobs and then you're responsible for them making a living and that all is like there then it's really becomes a you know.

• 8:54Guy Raz?

  Yeah.

• 8:54Speaker 01

  Passion.

• 8:55Guy Raz?

  You know, I'm interested in you have a new company that you started. You obviously sold Stacy's. You're not involved with the company formally anymore. You've got this new company called Be Bold Energy Bars. You've got a juice bar in Needham, Massachusetts, near to where you live. This is a startup all over again. Obviously, the stakes are different because you are financially secure. It's not a make or break, but of course you want it to work and you want it to be successful. Do you have some of that same kind of anxiety and energy you did when you were starting Stacy's now with Be Bold? Is there some overlap in that feeling?

• 9:31Speaker 01

  Yes, you know, I'm at my juice bar and I'm selling all of these bars, you know, handmade in the back with the mixer. Once again, you know, it's I didn't start anything big. We got a mixer going in the back and, you know, we mix, press and package. And I have to say it's no less nerve wracking starting another company, especially now like now people expect something from us.

• 9:53Guy Raz?

  The pressure's on.

• 9:54Speaker 01

  Yeah, the pressure's on. And when we reached out to some of the people that worked with us at the Peta Chip Company and said, you know, do you want to become a part of the team? And we started to get people now. Our COO, she was with Quaker and then with Jim Beam and now she, we called her up and we said, well, we're starting this company and said, think about it. Take a week. She talked to your husband. Two days later, she called us back and she said, amen.

• 10:21Guy Raz?

  Wow.

• 10:21Speaker 01

  And when she, I mean, like, that's a real job. Like, I keep thinking a real job and she's quitting her real job to come with us and, you know, and do this.

• 10:30Guy Raz?

  And you're nervous about that.

• 10:31Speaker 01

  Nervous about it. And not only that, but it's like, hey, you know what? It gave us this other sense, this additional sense of confidence and belief that, you know, we can do this and we can do this again. And even when my brother came on board and he's just sitting in the juice bar, watching these people buying these. Bars and buying these bars. He's my number one believer.

• 10:53Guy Raz?

  So Be Bold, how big do you want, do you want it to be? Do you want it to be?

• 10:58Speaker 01

  I'm doing what I love to do now again.

• 10:59Guy Raz?

  Yeah.

• 11:00Speaker 01

  So again, there is no exit strategy.

• 11:03Guy Raz?

  Yep.

• 11:03Speaker 01

  We just want to have a, you know, it's a refrigerated bar. And I almost feel, felt remiss just selling it in my local juice bar and having so many people love it and then not putting it out on the market because everybody's going to love it.

• 11:19Guy Raz?

  They are called Be Bold Bars. This is Stacy Madison. She is the founder of Stacy's Pita Chips. Thank you so much for being here.

• 11:27Speaker 01

  Thank you.

• 11:27Guy Raz?

  We appreciate it so much. It's been great having you.

• 11:30Speaker 01

  Thank you so much. Do I get that walk off music?

• 11:32Guy Raz?

  Yeah, and a round of applause, another round of applause. Thank you.

• 11:40Guy Raz?

  That's Stacy Madison. She's the co-founder of Stacy's Pita Chips and founder of Be Bold Energy Bars. Stacy joined me live onstage at the How I Built This Summit, which happened in October at Yerba Buena Center for the Arts in San Francisco. We've got one more of my conversations from the summit left, and it will be in your feed in just a few weeks, so keep checking for updates. Thanks to J.C. Howard, who produced this episode, and Remtin Arablui, who wrote the music. I'm Guy Raz, and you're listening to How I Built This.

• 12:19Guy Raz?

  This is NPR.

• 12:27Speaker 02

  I listen to Bullseye because Jesse always has really good questions.

• 12:30Speaker 03

  What did John Malkovich wear when he was 20?

• 12:33Speaker 04

  Duh. I don't know how to describe it.

• 12:36Speaker 03

  Bullseye, interviews with creators you love and creators you need to know from MaximumFun.org and NPR.