Stonyfield Yogurt: Gary Hirshberg

In 1983, two hippie farmers decided to sell homemade organic yogurt to help raise money for their educational farm in New Hampshire. As the enterprise grew into a business, it faced one near-death experience after another, but it never quite died. In fact it grew — into one of the most popular yogurt brands in the US. PLUS in our postscript "How You Built That," how Indiana Jones inspired Steve Humble to sell secret passageways for a living. 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.

• 0:01Speaker 00

  On many occasions, I would tiptoe over to the office to call my mother-in-law, to have a chat, to see if I could borrow another $3,500 or $2,500 to make ends meet. And one night, I heard the click, click of call waiting on my mother-in-law's phone, and Meg was calling from the house to say, "Mom, don't do this."

• 0:20Guy Raz?

  Wait, your wife was telling her mom not to lend you money for the business?

• 0:24Speaker 00

  Right.

• 0:25Guy Raz?

  Because it sounds like maybe she didn't believe in it.

• 0:27Speaker 00

  Well, she had no reason to believe in it. It was insane.

• 0:36Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 0:48Guy Raz?

  I'm Guy Raz, and on today's show, how two hippie farmers and a cow named Lily Bell started a side business in a drafty barn and grew it into Stonyfield, one of the biggest yogurt brands in America.

• 1:05Guy Raz?

  So of all the stories that we've told on this show so far, I think it's fairly safe to say that Stonyfield Yogurt has had more ups and downs, and really, more downs, than just about any other. And it's a pretty unlikely tale to begin with. Two eco-hippie farmers with no real desire to build a company wind up building a company. They start small, milking their own cows, making their own yogurt, selling locally to nuns, and then eventually, spreading themselves way too thin and sliding into deep debt. Now, over the years, Stonyfield has had a whole slew of near-death experiences, but it never quite died. And in fact, it grew.

• 1:48Guy Raz?

  It grew into one of the most popular yogurt brands in the United States. And one thing about Stonyfield's co-founder, Gary Hirshberg, is that even though he didn't really set out to build a company, he knew what it took to run one. Because when he was growing up in Manchester, New Hampshire, his dad owned and ran a pretty big shoe company.

• 2:08Speaker 00

  You know, it was, in those days, they were probably... Fifty shoe manufacturers in New Hampshire alone, and probably 150 in New Hampshire, Maine and Vermont.

• 2:19Guy Raz?

  So how many people did your dad's company employ?

• 2:22Speaker 00

  Several thousand. I think at their peak, they were at 2,800.

• 2:26Guy Raz?

  Wow.

• 2:27Speaker 00

  These were true company towns. Of course, in those days, manufacturing was, you know, the state was built and the region and the country were built on things that we made. And the dark side of that is that when the, essentially because of cheaper labor from abroad, when the domestic shoe industry collapsed, all these communities did as well.

• 2:47Guy Raz?

  And what happened to your family?

• 2:51Speaker 00

  Well, it was really a three, a threefer. The family's business went bankrupt. My parents got divorced and my sort of childhood role model died suddenly of spinal meningitis. So it was a, it was a wake-up year. Yeah.

• 3:09Guy Raz?

  I mean, did your lifestyle change overnight? Because I have to imagine as a kid, you were probably a pretty prosperous family, affluent family.

• 3:17Speaker 00

  Yeah, there we were certainly comfortable. I was a ski racer. I, you know, wasn't ever worrying certainly about the next meal or, and, you know, we traveled up north on weekends for skiing. We had a home on a lake. But yeah, you know, the world, I mean, I think everybody at 14, any conscious being starts to, that your life undergoes changes. But in my case, they were kind of expedited. I, my father got, began drinking.

• 3:47Speaker 00

  And so I had to sort of confront all of that and,

• 3:51Guy Raz?

  Yeah.

• 3:52Speaker 00

  you know, watched sort of all the rocks just suddenly turned to mush. You know, my mom became a single mom with five kids. I was the oldest.

• 4:01Guy Raz?

  And how does she support you? What does she do?

• 4:04Speaker 00

  Well, yes, so of course, again, because my dad's business was gone now. So, you know, there was a huge amount of tension. There was lots of battling over alimony, which for money that didn't exist. So she wound up becoming a buyer for a local family-owned hotel chain, actually, close friends of ours, which eventually sold to Sheraton.

• 4:25Guy Raz?

  Wow.

• 4:26Speaker 00

  And gradually, she parried that into becoming ultimately the senior buyer for Sheraton worldwide. And then from there, she became the senior buyer for Disney for the Epcot Center.

• 4:37Guy Raz?

  Wow.

• 4:37Speaker 00

  When they built that. So, yeah, she was like, literally, you know, a mom with five kids, running a little general store part-time as kind of a hobby, to becoming, you know, a global executive.

• 4:49Guy Raz?

  So this, like, major change in your life happens at the age of 14, which, of course, is going to have an impact and influence on you. Did you, did you start to think about, about business, about being a businessman that early? I mean, you saw your parents, they were both entrepreneurial.

• 5:05Speaker 00

  No, I started to think about running as far as I possibly could away from it. You know, obviously, the bankruptcy didn't happen overnight. It was a result of a steady decline. And my grandfather, my father, and my uncle were all in the business. And I used to sit or work there, and I would listen to them screaming at each other. You know, they were arguing, you know, passionately about what to do about this downturn. And so to me, business was this thing where people got, people yelled at each other, people hung up phones on each other, people were stressed, employees lost their jobs. And on top of that, serious pollution.

• 5:48Speaker 00

  So it led to my deciding that business was the worst thing on the planet, the last thing I wanted to do, and led me to really pursue a career in the sciences, environmental sciences.

• 5:59Guy Raz?

  So what'd you do after high school?

• 6:02Speaker 00

  I went off, you know, to a college that was just an overtly liberal arts, sort of, non-business environment. It was Hampshire College.

• 6:12Guy Raz?

  Oh, yes, right.

• 6:13Speaker 00

  Which, of course, Ken Burns and...

• 6:15Guy Raz?

  If you want to get business knocked out of you, that's where you would have gone, right?

• 6:18Speaker 00

  Yeah, but stick with it because it turns out that it was probably the best training for an entrepreneur that there is because this is a school that has no credits, no requirements, no grades. You only pass, matriculate through by contracting and making progress with individual professors who take you on as their, essentially, apprentice. And in many cases, the funding of work. I mean, I wound up diving deep into ecology and environmental sciences. And turns out, I was, though, hating business still and thinking, you know, again, now I thought, getting educated, I realized, my god, we're warming the planet,

• 6:59Speaker 00

  we're toxifying, we're depleting water, we're disturbing biodiversity everywhere. It's all because of industry. So I was sort of radicalizing in my environmental beliefs, but actually getting business skills all the while.

• 7:12Guy Raz?

  So I guess it was after college that you went and worked on an organic farm?

• 7:17Speaker 00

  Yeah. At the time, there was a little ecological research institute on Cape Cod called the New Alchemy Institute. And they were advancing the idea of using wind and solar power, building really sustainable food systems, long before those words were in our vernacular. And I went from windmill apprentice to windmill technician to executive director. And I saw them on the cutting edge of how we were going to need to grow food in the future.

• 7:46Guy Raz?

  And around this time, you also meet Sam Kamen, right?

• 7:50Speaker 00

  Right.

• 7:51Guy Raz?

  And he is the guy who's going to become your business partner, and he's also running his own organic farm?

• 7:57Speaker 00

  Right. So he was mostly teaching organic farming methods, raised beds, biological pest controls, greenhouse, season extending, basically kind of back-to-the-land type stuff, but with an organic focus.

• 8:12Guy Raz?

  Basically, running this as a nonprofit and just...

• 8:14Speaker 00

  Oh, yes. It was a nonprofit. So we're both, we're each running nonprofits. But I got really excited by his work. And of course, he was back here in my native New Hampshire, which I loved. And he's older than you? Oh, yes. He's about 16 years older. Samuel, at that time, had six kids. Wow. And I was a single guy. But, you know, we became fast friends. And he asked me if I would join the board of the Rural Education Center to help him with his money raising. And did he have a hard time raising money in the first place? Well, right about that time, Ronald Reagan came into office and essentially cut off the lifeline for sustainable energy research, sustainable ag.

• 8:58Speaker 00

  So essentially, money dried up for these nonprofits. And so, we would sit at Samuel's board meetings up at the Rural Education Center. And by the way, critical to this whole story, he had one cow named Lillibel. And Samuel was experimenting with yogurt. And he was a fermentation nutcase. I mean, he made sauerkraut, beer, wine, kimchi. If it fermented, he made it. And when I say he made it, he made incredible foods. And he made this wonderful yogurt. From his cow? From his one cow. And we would sit at these board meetings, eating bowls of this absolutely incredible plain cream-on-top whole milk yogurt.

• 9:42Speaker 00

  And just to back up one step, Samuel is originally from Brooklyn. Grew up very poor in Flatbush. But he got to know a lot of these old Jewish yogurt makers down there. And they taught him yogurt making. And what they explained to him is it's very simple. It's all about the veda, meaning times and temperatures. It's about the weather, the humidity, the temperatures. And he... And so Samuel, for his family and for the school, experimented with yogurt for many years. And one day, and unfortunately, none of us can remember who, but one of us said, gee, why don't we start selling this stuff to make up for the lack of grant money?

• 10:25Speaker 00

  Because it was nigh impossible to raise money during that period. And, you know, seemed like a pretty good idea. So Samuel was able to get some Catholic nuns to provide a $25,000 grant.

• 10:41Guy Raz?

  Wait, nuns?

• 10:42Speaker 00

  Yeah. The Sisters of Mercy, which is, you'll hear in a moment, the appropriate name. They were taking mercy on these two crazy entrepreneurs. They were selling their monastery, and they wanted to turn their principle into local community action. And Samuel used that money to build the first yogurt works. And about the time that the money came in, which was April of 83, when we opened, I decided that I was pretty interested in joining him full-time, not so much to run the yogurt, but I thought that I could help him run his farming school while he did this little fun yogurt venture. So I said, look, I'm going to join you in September.

• 11:26Guy Raz?

  So the summer of 83, you moved to New Hampshire to start doing this full-time?

• 11:31Speaker 00

  Right. I moved into a three-story wood-heated log cabin with no plumbing, and I put solar cells on it. And the Cayman family lives there, and our interns are there. It's one big, kind of happy, crazy, cow-milking, yogurt-making operation.

• 11:52Guy Raz?

  So, I mean, how did the yogurt system start? I mean, it was being sort of put into jars? And how did you get it to customers? How did you sell it? How did you put a shingle out and say, yogurt for sale?

• 12:06Speaker 00

  Well, we started with one cow. Samuel used the money to buy six more cows. So now he's milking seven. He finances this little tiny factory in a tiny little room that you could only really describe as a closet in a 1792 barn with a wood-fired boiler. And the way it worked was he put in a 50-gallon stainless steel tank. We bought plastic cups. And Samuel was a very charming and persuasive guy. And after paying for his first shipment of cups, he managed to somehow continue to get shipments for five months without paying for any more.

• 12:46Speaker 00

  So he started producing April 9, 1983, and took his first six packs of yogurt and drove down to the local supermarket, to Harwood's, and said, "Would you guys sell this stuff?" Well, they didn't know what the heck this was. And they said, "What price should we sell it at?" And Samuel said, "I don't know. Whatever price you think." I mean, we were not business people. So we started selling at $1.49 a quart, which is the same price Danan was selling for. By the way, he was only making quarts, six packs of plain cream-on-top yogurt. It was like ambrosia, Guy. It was the most incredibly perfect product, still the best thing we make.

• 13:33Guy Raz?

  So you guys just start to, you know, basically sell it locally?

• 13:38Speaker 00

  And... And eventually, the Harwood's people called and said, "Gosh, you know, this is good. It's selling." By the way, way below the price that we could afford. So Samuel said, "Great." So we eventually hired a young, local guy to drive a van. We couldn't afford a refrigerator van, so we just told him to drive fast. But yeah, so by the time I got there, five months into this thing, Samuel had probably about $50,000 of sales.

• 14:10Guy Raz?

  Wow.

• 14:11Speaker 00

  And my gosh, the product was selling through, but he couldn't keep up. And he was out of cash, and of course, he wasn't paying bills.

• 14:19Guy Raz?

  He was out of cash because the lag time between when he was getting paid and...

• 14:24Speaker 00

  Well, he had to pay for grain to feed the cows. He had to pay this guy to drive and bring the yogurt. As I told you before, he wasn't paying for his cups. But he had to pay, you know, people to help. And, you know, the $35,000 had sort of disappeared overnight. Honestly, I don't know how he got through five months because when I arrived on September 15th of 83, Samuel had these old army surplus desks in this farmhouse. The three desks were piled high with envelopes, unopened mail. And I said, "Okay, I'm now the executive director of the Royal Education Center and the vice president of Stonyfield Farm. And I'm going to spend my first..."

• 15:07Guy Raz?

  That was the name of the farm, Stonyfield Farm?

• 15:09Speaker 00

  Oh, yes, the farm, sorry, yes, of course. And it's still there. So I spent the morning separating, I thought, the checks from the bills. The only problem was, there were no checks. Samuel, any money that had come in, he had used it to buy feed

• 15:26Speaker 00

  or, you know, lubrication, equipment, fuel, wood, whatever. And by 11:00 a.m. that morning, my first day, I calculated that we were $75,000 in the red.

• 15:38Guy Raz?

  So what did you do?

• 15:39Speaker 00

  Well, I did what any self-respecting entrepreneur does. I called my mother, and I borrowed $30,000 from her, which she could ill afford. As I told you before, she was, you know, her own businesswoman with four, you know, family. But, you know, I had a good fundraising skill. So I went to many of my former funders and many of his, and I said, "Look, can we borrow?"

• 16:04Guy Raz?

  These were the funders for the farm that you had run back in Massachusetts?

• 16:08Speaker 00

  Right. Well, Samuel had a handful of folks who had been his funders. Like I said, he raised $125,000 a year. So there were probably 20 or 30 wealthy individuals. And then I had raised $1 million a year, so I had... You know, high net worth individuals out there. And I, look, what I told them was very simple. I said, you know, the first 10 years of our work was all about proving that you can grow food organically. But if we're going to be successful with this revolution, I said to the funders who had gotten us there, then we're going to have to prove that you can actually make money doing it. And we're going to have to build a model enterprise that will show that you can avoid

• 16:50Speaker 00

  the use of pesticides, avoid the use of hormones with cows, support family farmers, not depend on fossil fuels, et cetera, et cetera. All the things that we were doing in the nonprofit context. I said, you know, this is, I'd like to ask you to join us in the next phase, which is helping us to build a successful business. And instead of asking for a grant, I'm asking you for a loan. And I wound up borrowing $125,000.

• 17:20Guy Raz?

  Okay, so you go out and you start raising money. And did you and Samuel sit down and say, okay, how are we going to structure this business? Like, we are co-owners, this is a joint venture. Like, how did you, did you ever do that?

• 17:35Speaker 00

  Well, we did, because one of the things I did was I hired a lawyer, because I knew we didn't know what we were doing. And the first thing this lawyer said to me was, he said, Gary, what percentage of the Rural Education Center's revenue is coming from the yogurt? Well, at that point, it was getting close to 75%. And he said, well, guess what? You've got to spin it off, because under IRS rules, that makes you a business, not a nonprofit. So Samuel and I realized, we're going to have to buy this from the Rural Education Center. So we agreed to a split in the company, essentially 50/50.

• 18:17Speaker 00

  And then I went out to our lenders of the 125K, and I said, look, will you take stock in this company? And we did our first private placement, you know, threw a dart at the wall, figured out the value of the business.

• 18:32Guy Raz?

  What, what did you value it at the time?

• 18:35Speaker 00

  Well, we thought we were going to value it at a million dollars. By then, in 1984, our sales were up to around 250,000 a year. And this was just in New Hampshire or all over New England? Well, by 84, we were starting to push the boundaries. We're selling to about 20 stores. And eventually, we started selling to an independent grocer who had seven stores called Alexander's Supermarkets, now part of Hanaford in the Northeast. And this will give you the real flavor for this, what was going on here. So one Sunday night, we were having dinner at the Caymans after milking.

• 19:14Speaker 00

  And the phone rings, and Jack Demoulis, the nephew of the owner of the Demoulis Market Basket Chain, calls and says, Samuel, why are you selling to my competitor, this little seven-store chain of Alexander's, and not to me? Now, he had 34 stores at the time. And Samuel said, well, to be honest, Mr. Demoulis, we don't have enough cows. He said, well, get some more goddamn cows. And he slammed the phone down. And we took that as very good business advice. So we went out and grew our herd even further. Wow. And so we now realized we needed to, you know, get serious about this. And so we managed to lease a small refrigerator truck and started delivering, actually, to the Market Basket warehouse.

• 19:59Speaker 00

  How much yogurt were you making at that point? We were producing now about 360 cases a week of yogurt. And a case is like 24 cups? Six packs. Six packs. Six packs of quarts. So by the end of 84, we were, our run rate was headed in the sort of half a million-dollar range. But you were probably spending more money than you were bringing in, right? Oh, my God, you have no idea. Yeah, we were burning, I mean, I kept not weekly cash flows, not daily cash flows. I kept hourly cash flows. Yeah. I knew on a Wednesday morning how much money had to come in that afternoon in order for us, because by then, the cup guy had figured out, you know, Samuel wasn't paying him.

• 20:41Speaker 00

  So now, we were on very short terms with everybody. I mean, my fundraising skills turned out to be, you know, I mean, we would be nowhere without Samuel's yogurt-making skills and his family's unbelievable attention to detail. They were perfectionists all. But we were also, we would also be nowhere without my ability to keep getting credit and cash, because it was burning. I mean, we were on fumes.

• 21:08Guy Raz?

  When we come back in just a moment, how Gary and Samuel begged and borrowed to keep Stonyfield going, and how they almost lost it anyway, again, and again, and again. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 21:36Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So in the summer of 1984, Gary and Samuel and Stonyfield are almost broke. They're basically running on fumes. And they're trying to bring in more money by just finding a few more stores to sell their yogurt.

• 21:54Speaker 00

  In those days, Whole Foods didn't exist yet. But the holy grail for natural products was a little three-store chain called Bread and Circus, which eventually became part of Whole Foods. And they had one store in Cambridge, on Prospect Street. And, you know, we were selling now to DeMullis Market baskets. This is now, I'm talking July of 84. And, and we were desperately trying to get down there because we knew that if we could crack Bread and Circus, every other little natural foods co-op in New England would then take us in. And we kept going down there. And they said, no, no, no. We've already got, you know, hippie yogurt made by somebody in Vermont in their teepee with their wet goat. You know, they didn't need another, you know,

• 22:38Speaker 00

  organic yogurt from some crazy people in New Hampshire.

• 22:42Guy Raz?

  So what'd you guys do?

• 22:43Speaker 00

  So in July of 84, I had my 30th birthday at the farm. And I had my old ultimate frisbee team come up to visit me, most of whom lived in Cambridge, as you might imagine. And I said, look, it's wonderful you've all come. If you want to give me a really good birthday present, go onto Bread and Circus on Prospect Street in Cambridge and ask for my yogurt. That was on a Sunday. On Wednesday, Mary Carol Skinner, the buyer of Bread and Circus, called and said, Gary, I don't know what's going on, but demand has suddenly gone through the roof. We're getting all kinds of requests for your yogurt. Get it, when can you get it in there? Well, I got in my car and I made the first delivery that afternoon. About a month later, we were her number one selling yogurt. She took us in the other two Bread and Circus's and off we went.

• 23:28Speaker 00

  But it was my frisbee team. I mean, you know, that's what it takes. I, you know, I always say we can ship the yogurt 3,000 miles. It's the last 18 inches that makes all the difference. You get it in people's mouths and then they're going to ask for it.

• 23:40Guy Raz?

  But it was the best selling yogurt at Bread and Circus and people loved it. But you were not making a profit.

• 23:46Speaker 00

  No, that's absolutely right.

• 23:48Guy Raz?

  Wasn't that stressful?

• 23:49Speaker 00

  Utterly. It was impossible. Look, this was crazy, right? We're growing, we're booming and we're burning cash, so.

• 23:57Guy Raz?

  And probably working like crazy.

• 23:59Speaker 00

  Yeah, we're 24/7.

• 24:00Guy Raz?

  And Samuel had six kids.

• 24:02Speaker 00

  Yes, well, actually, by the way, the six kids were the secret weapon. Because it was sort of indentured servitude. I mean, you know, it was hard, if they were going to have dinner that night, it was hard for them to say no to, you know, milking or making. And by the way, several of his kids were, are just absolutely astonishingly good yogurt makers. They had their father and mother's sense of pride in the product.

• 24:25Guy Raz?

  And this is right around the time you meet Meg, who will become your wife, right?

• 24:29Speaker 00

  Yeah. So, a month after that fateful meeting with Bread and Circus, we had our Summer NOFA Conference, Northeast Organic Farming Association Conference. And I, as it turned out, I was the keynote speaker. And so I started talking about this enterprise, this business that was now a year old and, you know, all of the dreams of organic farmers. We were sort of like, I didn't talk about our financial problems, I just showed the, that this is possible, that if you build it, they will come. And right after I finished my speech, this very adorable organic farmer from New Jersey, who was running her own nonprofit farm down there, waited patiently to ask me a question.

• 25:11Speaker 00

  Well, that turned out to be what is now my 31-year wife, Meg. And we began courting. And Thanksgiving that year, in 84, Meg introduced me to her family.

• 25:24Speaker 00

  And her mom had been the deputy commissioner of agriculture for New York State. So she had a kind of an ag orientation. At one point, she kind of whispered to me that she'd be OK with, if I needed some money, with lending me some. Well, of course, I needed money. So she loaned us $50,000. And now, we're heading into 1985. We've now launched small cups of flavored yogurt. I now needed to raise about $500,000 because we needed to buy more cups, more fruit. You know, people expected us to pay. So Doris had loaned us the 50 towards the $500,000. Doris is your mother-in-law? My mother-in-law, excuse me.

• 26:09Speaker 00

  And I started raising, and I got to about $275,000, $300,000. This is sort of a month or so later, she said, "Well, I think we can increase." And so she increased to 100, and eventually, I got across the finish line, got the 500. Why did you need so much money? Well, the factory itself was probably 300,000. The factory on Stonyfield Farm? Yeah, the little, we called it the Yogurt Works, the little shop. You know, it was a drafty old barn. It was, we needed to switch over from wood to oil. We needed to just get more modern. We needed to get the warehouse, the barn, you know, made sanitary. We had to get real floor drains.

• 26:51Speaker 00

  We had to stop being a kind of a kitchen operation. And what about cows? How many cows did you have at that point? Well, at that point, we were up to 19. But one night, in this same era, Samuel was out milking. He had milked the first of the 19 cows, and the power went out. Samuel came in and said, "You know, I need help." Because he has these electric milkers. So Louise and I went out and started milking. Well, you know, it was freezing. The cows hated it. If you haven't hand-milked, let me tell you, they didn't. It was, it was a nightmare. The cows were kicking over the buckets. We had these kerosene lanterns in this firetrap barn. You know, every once in a while, the cow would kick one over, and the milk would spill on the lanterns, and...

• 27:35Speaker 00

  We finished milking the last cow at about 3:00 a.m. in time to start milking the first one. And that was the night when we realized, you know what? We've got to sell the cows.

• 27:46Guy Raz?

  You had to sell the cows because you guys could not milk them all by yourselves?

• 27:51Speaker 00

  Right. And so the next morning, we reached out to a local Jersey farmer, because we were using all Jersey cow milk at that point. And said, "Look, will you buy our cows and start selling us milk?" Well, he said, "I'm not going to have anything to do with that organic stuff." And he was fine with hormone-free, antibiotic-free, but he didn't want to feed his cows herbs and buy organic feed.

• 28:14Guy Raz?

  But that was your condition?

• 28:15Speaker 00

  Well, honestly, we had no conditions. We were beggars, not choosers. So we briefly, at this moment in Stonyfield's life, we briefly departed from organic.

• 28:25Guy Raz?

  You had no choice?

• 28:26Speaker 00

  We had no choice.

• 28:27Guy Raz?

  Did that disturb you? Did you feel like you were betraying your values at that moment? I mean, I guess, because you were hemorrhaging. You didn't have any money, but you had this demand and you didn't have enough cows, right?

• 28:39Speaker 00

  Yeah. And I not only had all these problems, but I had my mother, and worst, my mother-in-law's money. And so, you know what? That makes a guy pretty practical. You know, venture capitalists, the reason they want what they call FNF money first, friends and family money, is because they know that you might, as an entrepreneur, if things get rough, you might just get up and walk away if it's, you know, some Harvard MBA with a tie. But if it's your mother's money, uh-uh.

• 29:10Guy Raz?

  Yeah.

• 29:11Speaker 00

  And so, no, we worked for our moms.

• 29:13Guy Raz?

  Which must have been pretty stressful.

• 29:16Speaker 00

  Oh, yeah. You know, what happened in this farmhouse, I always had payroll on Thursday mornings. And by this point, it was a half a million dollar business. And I never had cash in the bank that night before payroll. Never. Just, this became our way of life. And so, thinking Meg was asleep in our bedroom, which was about 50 feet from my office, I would, on many occasions, tiptoe over to the office to call my mother-in-law, to have a chat, to see if I could borrow another $3,500 or $2,500 to make ends meet. And eventually, Meg got on to this. And one night, I heard the click, click of call waiting on my mother-in-law's phone. And Meg was calling from the house to say, "Mom, don't do this."

• 29:58Guy Raz?

  Wait, your wife was telling her mom not to lend you money for the business?

• 30:02Speaker 00

  Right.

• 30:02Guy Raz?

  Because she didn't have confidence in it?

• 30:05Speaker 00

  Well, look, she's living in a nightmare. I mean, she saw how crazy it was. I mean, we had chimney fires. We had-- the well pump would go out. The power would-- I mean, we're in this hilltop farm a long way from anywhere.

• 30:17Guy Raz?

  So was Meg saying to you, "Let's just ditch this thing. Let's bag it." I mean, or did she-- because it sounds like maybe she didn't believe in it.

• 30:23Speaker 00

  Well, she had no reason to believe in it. It was insane.

• 30:26Guy Raz?

  But why did you believe in it? Did you think it was gonna-- I mean, you are, what, two, three years into this thing? And not only are you not making money, you are in debt, big debt, big time.

• 30:37Speaker 00

  Yeah. Well, I'll say this. Meg, you know, fortunately, loved me. Even more fortunately, probably, loved the yogurt. And we had nowhere else to go. You know, she had given up her job down on her farm in New Jersey and signed on to this crazy damn enterprise. But here's where the story-- I know that you think it couldn't get worse, but as Lily Tomlin says, it got a lot worse before it got worse.

• 31:09Guy Raz?

  Okay, what happened?

• 31:11Speaker 00

  Well, so now, I'm gonna jump a year and a half. We've now expanded the plant. We're buying milk from 10 or 12 farms. I'm gonna guess, let me just tell you the number, we are at about a $1.3 million a year run rate.

• 31:28Guy Raz?

  Wow.

• 31:28Speaker 00

  And we have maxed out this little farm. There is no-- you cannot squeeze another drop of yogurt out of this place.

• 31:35Guy Raz?

  So presumably, you are looking to work with another factory?

• 31:40Speaker 00

  Right. So, spring of '86, we are out of capacity. We contracted with a little dairy in western Massachusetts, Greenfield, Mass. We were desperate. We did not do any of the financial due diligence one would normally do. We just-- Got our way in there and we started making yogurt. And, boy, it was great.

• 31:59Guy Raz?

  Yeah.

• 31:59Speaker 00

  I mean, all of a sudden, paved roads, you know, regular power, dairy. And we thought we were coming out of the woods.

• 32:10Guy Raz?

  Yeah. The yogurt's being made somewhere else, but you can oversee it.

• 32:14Speaker 00

  Yeah, yeah. But now we round the bend into the fall of 87, October of 87. A fateful weekend, the weekend of the crash of 87 in Wall Street. But what happened for us was on the Thursday night of that weekend, Becky Capeless, the banker for his, our manufacturer's bank, called me up at the farm and said, Gary, would you like to buy this dairy?

• 32:38Guy Raz?

  The dairy that was producing your yogurt?

• 32:41Speaker 00

  Producing our yogurt. And I said, no, we don't have the cash to buy their dairy. And I said, why are you asking? She said, well, they're in their third year of their Small Business Administration loan guarantee. And the SBA has announced they're not going to renew it. And therefore, our bank, my boss, is going to have to pull our loan to him. And that means that he's probably not going to make it. The next morning at 7:00 a.m., their bank went in and put them into Chapter 7, padlocked the place, locked it up. My cups, my lids, my fruit, my yogurt was in there.

• 33:13Guy Raz?

  Wow.

• 33:14Speaker 00

  But suddenly, this thing is in receivership.

• 33:16Guy Raz?

  Wait a minute. Your production comes to a halt? I mean, this is an outsourced production facility. It just stops?

• 33:24Speaker 00

  So it came to a screaming halt. Worse than that, I had to come up with $100,000 to take my, get my inventory out of the building. Because, again, we owed them co-packing fees. Now the bank's the owner. And so I had to call my shareholders and find $100,000 within hours.

• 33:45Speaker 00

  And so I did. We got our inventory out. And, but now we have no factory.

• 33:50Guy Raz?

  Yeah, you're making no yogurt.

• 33:52Speaker 00

  We have no yogurt. We have what was in the factory. So what could we do? We took a look at the old yogurt works up on the Hilltop Farm. Where the roosters were now living and said, "Son of a gun, we got to come back here." Now, by then, our volume had grown to 100% more when it had been exceeded.

• 34:09Guy Raz?

  You could not make enough yogurt at Stonyfield Farm where you were living.

• 34:12Speaker 00

  Right, right. But that didn't daunt us. That weekend, Samuel and I put on our carpenter's aprons, went out and kicked the roosters out and restarted the old yogurt factory. Fortunately, the equipment was still there. And by Monday morning, so it was $100,000 that we had to borrow to pay off the dairy. And then we had to put about $100,000 into getting this place up and running again. We borrowed and borrowed and borrowed. And I went to all the shareholders. And of course, they had no choice but to lend because everything they had ever put in was at risk.

• 34:49Guy Raz?

  Right, yeah.

• 34:50Speaker 00

  So Monday morning, we began production again at Stonyfield Farm. Now, the problem is, in order to keep up, we have to produce 24 hours a day, seven days a week. Samuel and I had to make yogurt every other night. And Guy, this began and continued for 20 months. And we started burning

• 35:10Guy Raz?

  Wow.

• 35:11Speaker 00

  And brace yourself for this. We started burning $25,000 a week on top of the $200,000 that we had borrowed. So now, I am in deep, you know what. And

• 35:24Guy Raz?

  How much money do you think you were in debt at that point? Like, you're talking a million or more.

• 35:30Speaker 00

  Well, by Christmas of 87, running this factory for two months, I can tell you, we were already $600,000 in debt. By Christmas of 88, we were $1.9 million in debt. By Christmas of the next year, we were $2.7 million in debt.

• 35:56Guy Raz?

  Did any of your shareholders say, "I'm getting nervous here." Like, you are, "This has been a while here. And this is like a lot of money for me."

• 36:06Speaker 00

  Every one of them. And, you know, what you have to know at the punchline of this story is that I wound up by the end of this period with 297 individual investors. There was no way to find common ground with an institutional investor, right? A venture capitalist. Believe me, I knocked on every door.

• 36:22Guy Raz?

  And they were like, take a hike.

• 36:24Speaker 00

  Right.

• 36:24Guy Raz?

  But what about your shareholders? I mean, how did you end up dealing with them?

• 36:29Speaker 00

  I stayed in constant touch with every single shareholder. I was in constant contact with my creditors. I couldn't pay fruit suppliers. I couldn't pay... You know, our fruit supplier had lost $75,000 when that dairy went chapter seven. And somehow, they had not been paying attention and they continued to ship us fruit back up at the farm. So, they figured it out, you know, three months later, that they were now into us for $125,000. And I said, "Look, I can't pay it, but can I come out and talk to you?" And I borrowed a credit card from a friend and flew out, because we certainly had no credit, flew out to Cleveland and met with the fruit people. And I said, "Look, here's the bad news.

• 37:14Speaker 00

  We owe you $125,000, but here's the good news." They said, "At our current growth rate, if we can meet orders, we will be a $250,000 a year customer for you, within six months. So, here's what I'm prepared to do. I would like to see if you would advance us another $125,000 of fruit. I will pay you back, starting in six months, at your interest rate, whatever you want to charge," which is a joke, because nobody, no commercial bank would even lend to us. I said, "I will pledge my stock as collateral," which was a joke, because it was a liability, not an asset. And finally, I said, "And I will pledge that I will buy exclusively from you, not from anyone else."

• 37:59Speaker 00

  Well, that was a joke, because no one else would ever sell to us. And they said, "Well, Gary, that's an interesting offer." They said, "Could you mind if we go up and talk?" And they went into the back room, and, son of a gun, half an hour later, they came out and said, "You know what? We believe in you. We're going to do it."

• 38:15Guy Raz?

  Wow.

• 38:16Speaker 00

  And my summary of that story and so many others of this period is simply, if you don't ask, you don't get. And desperation breeds this thing where you just have no shame anymore. You have to ask. And now I'll just tell you the punchline of that story is those guys have sold us, in the 30 years since, they've sold us probably 250 or 300 million dollars' worth of fruit.

• 38:41Guy Raz?

  That's amazing. You know, Gary, it's kind of crazy because at this point in all of my interviews, normally, it's where we're talking about how the entrepreneur made it through the troughs and the crucibles and just started making money hand over fist. But you are still in crisis. I mean, your company is still not doing well. You didn't even have a factory to make yogurt at this point. You needed a new one.

• 39:06Speaker 00

  Yeah. And we ultimately found one. It was a dairy in northern Vermont. And we negotiated for three months with this dairy in northern Vermont to become the answer to this whole thing. Namely, they would produce our yogurt. Samuel and I would focus on sales and marketing. And we would become partners. And they would get paid a price for every cup of yogurt, just like the other dairy. But this was a much larger, 70 million dollar company. So D-Day comes in April of 88 to go up and get this deal signed. And we had negotiated a deal that was about two inches thick. And I went up. Samuel and I left the farm.

• 39:49Speaker 00

  Now, at this point, Meg is pregnant with son number one. And of course, I've got now, I now have over a million dollars of her mother's money. Okay?

• 40:00Guy Raz?

  Wow.

• 40:01Speaker 00

  Like money she could never afford to lose. Everything they had. And Meg comes to me at the door, and as we're leaving, she says, you promise this is done, right? Because I've been milking every other night, right? No vacations, no breaks, no nothing. So I'm leaving now to go sign this deal. And Meg said, you promised me that all the details are worked out, that when you come back tonight... Where the beginning of this relief is going to happen, I said, absolutely. We have nailed down every last detail. Drove up to Vermont. When I got there, Samuel went into the restroom at their lawyer's office and I looked at my seat. Instead of the two-inch-thick agreement that we were going to go over, there was a letter to me.

• 40:43Speaker 00

  And it said, Dear Gary, and bottom line is, Dear Gary and Samuel. Basically, they decided to trade, to steal the company from us. They said, we've decided that you guys need us more than we need you. We're going to take over. What we're going to do is have all of your shareholders convert their stock into debt, and you are welcome to work down their debt with a credit of one penny per cup for every yogurt, every cup made. We figure it will take two years. And at the end of the two years, we'll negotiate your future employment. So it wasn't a deal, it was a steal.

• 41:17Guy Raz?

  Wow. Wait, this was just sitting on the table, this letter that said?

• 41:22Speaker 00

  On the table.

• 41:23Guy Raz?

  Yeah, our offer is, is we-

• 41:25Speaker 00

  We're stealing it.

• 41:26Guy Raz?

  We want the company.

• 41:27Speaker 00

  And all the while, they're looking at me, and one guy is winking at me, like, you know, do the deal, son, it's in your best interests, or, you know, your wife's back, they're desperate for you to solve this, just be smart. Samuel had not even come into the room. I got up, uttered some things I can't say on public radio, and grabbed Samuel-

• 41:46Guy Raz?

  Wow.

• 41:47Speaker 00

  And got in the car, and we started driving. Now, of course, as luck would have it, don't you know, an April blizzard has started, and so no cars are on the road. We've now got a two-hour drive back, and worse than that, one of us is going to have to make yogurt that night, and worse than that, I have to face my wife. And so, we start driving. I turned to him, I said, what will you do now? Because I knew we were going to have to sign the deal, I knew it was over.

• 42:14Guy Raz?

  Yeah.

• 42:15Speaker 00

  And I said, and he said, well, I guess I'll do something in sales. And, you know, my heart sunk, right? This is a guy who had created this incredible yogurt. I mean, he was a genius who was making the most perfect product, and now he's going to sell widgets.

• 42:28Guy Raz?

  So you basically thought, or at least Sam thought, that this was it? I mean, you guys were-

• 42:34Speaker 00

  I mean- Look, this is the darkest of the dark of ours. We're burning $25,000 a week. We're taking money we cannot ever pay back. We have to go back to this farm. We have no solution. And so I turned to Samuel and I said, listen, Samuel, just for the fun of it, what would be the cheapest yogurt plant we could build? Somewhere that would actually cover our capacity? And he said, you know, I was thinking the same thing. So he flicked on the dome light in the car, pulls out his pad, and we start designing a yogurt plant.

• 43:05Guy Raz?

  In the car?

• 43:06Speaker 00

  In the car. We're driving in this, I'm driving, he's designing. We got back to the house about 10:30, 11 at night. He goes in to make yogurt. I go in to see Meg. She wakes up and she says, so is the deal signed? Is it done? I said, no, no, no, no. That deal's not going to happen, but we've got a much better idea. I slept alone that night over in my office. And the next morning at 7:00 AM, I was up at the SBA office in Concord, New Hampshire, the Small Business Administration. Remember, they will guarantee loans to businesses. So they make it possible for banks to lend to high risk, which we certainly were.

• 43:47Guy Raz?

  And you were. I mean, you guys were in debt. You had no plant. You couldn't fulfill your orders. I mean, how are you going to talk them into giving you a loan?

• 43:56Speaker 00

  Well, we had figured out that we could build this factory for $597,000. So I drove up to the SBA and I sat down with them. And they never, normally you don't go to the SBA. You go to the bank who goes to the SBA. But I sat down, you know, Stonyfield's a pretty popular brand. We're well-known in the state. So I meet Bill Phillips, the head of the New Hampshire SBA office, when he walked in at 7:30. And I said, Bill, here's the deal. We can build this factory for $597,000. We need an 85% loan guarantee. And guess what? We've got a bank, the Bank of New England's, willing to lend us. That was a little bit of an exaggeration. They, this is stone soup.

• 44:41Speaker 00

  You know the story.

• 44:42Guy Raz?

  Yeah.

• 44:42Speaker 00

  I said, and, and I knew that I had to come up with 20% of it with shareholder equity. So. And I said, I've got the 100,000, 125,000 from the shareholders. Also not quite true. Bill said, well, listen, Gary, if you've got the bank and you've got this plan and you've got the shareholders, then we'll happily do it. I drove from there to the Bank of New England, sat down, I said, look, guys, the SBA is going to provide the loan guarantee and I got the shareholders, will you do this loan? And they said, well, if the SBA will do it, of course we'll do it. And if you guarantee the equity, we'll do that. Called the shareholders to a meeting in Boston the next night, got together with as

• 45:25Speaker 00

  many of them as I could, had my mother-in-law on speakerphone. I said, here we are, guys. We got the bank, we got the SBA, all we need is your 125,000. And to make a long story short, we got our money.

• 45:38Guy Raz?

  Wow. How much money did you raise?

• 45:40Speaker 00

  All told, including paying off the debts, $2.5 million. And opened our new factory nine months later in Lunen Derry, where we are today.

• 45:51Guy Raz?

  And did you, both you and Samuel, have to give up big chunks of your ownership?

• 45:55Speaker 00

  Oh, yeah. By then Samuel and I were down to 10% each in the company. Now, we also had stock options, like we had an earn back. The end of 89, we began manufacturing in this facility. The business is now doing $3.4 million in sales, but we lost 1.4 million that year. The next year, we did 6.5 million in sales and we lost 900,000. The following year, the second full year in the new factory, we did 10.1 million and we made $125,000.

• 46:32Guy Raz?

  This is 1992?

• 46:33Speaker 00

  March of 92. So that was our first year of making money. Yep.

• 46:38Guy Raz?

  So the 90s are, this is just the growth period. You guys are on this trajectory. And when do you know that you are now sustainable and that things are looking up?

• 46:48Speaker 00

  We hit $44 million in around 95. Now we've got stability and cash flow and this gave us the courage to go back to our roots. Initially with one farmer and eventually now with 1,750 farmers, began buying organic milk again. And of course, organic has evolved at this point. Whole Foods has become a reality. I mean, the organic sector is real.

• 47:15Guy Raz?

  Yeah.

• 47:16Speaker 00

  So in 95, we converted back our plain whole milk corks to organic. 96, we converted our small cups. 97, we launched drinks. 98, we're at 78 million in sales. 99, we're at 100 million in sales. And that's when I began negotiating with Danone to have them come in.

• 47:40Guy Raz?

  Yeah, I mean, at this point, it's been a long road, right? 83, you start the company and you hit 100 million in sales by 99. What was the reason why you decided to sell, you know, huge steak to Danone? To the French multinational, I guess, much of what they do is yogurt and dairy products.

• 48:00Speaker 00

  So the answer is the 297 shareholders. I mean, some of these folks came in in 1984 without children. Now they have kids going to college, right? I mean, they do need a return on investment. I had no legal obligation, but I felt a moral obligation to, you know, pay them back. And Samuel also was ready to retire. So my idea was, I'll sell my company to you. You buy out all these shareholders and my partner, but you leave me in control. By then, I was up to about 20% ownership through the earn out. And I said, you know, I have this commitment.

• 48:42Speaker 00

  I'll stay on for a really long time, but you got to let me keep running the shop. So I talked to 21 companies. 20 of them laughed at me. Actually, even Danone laughed at me. The original head of M&A who came to see me said, "Gary, do you mean to tell me we're going to buy 80% of your company and you'll still be in control?" And I said, "Yes," and the banker and the lawyers and everyone laughed. And, you know, two years later, that's the deal we signed. I spent two years negotiating with them.

• 49:11Guy Raz?

  So you remained the CEO of the company. And, I mean, in the 2000s, if I'm, I have my sort of dates right. And I think I do because I remember this. Like, all of a sudden, Greek yogurt just exploded. And you guys were not a Greek yogurt company. What did that do to your sales?

• 49:31Speaker 00

  Well, Greek is now 50% of the yogurt category. The thick. Unusual creamy taste of Greek just caught on. It just simply caught on.

• 49:42Guy Raz?

  Huh.

• 49:42Speaker 00

  And we have a wonderful, incredible Greek line, but it's only for us about 15% of our sales. And while we're not the leader in Greek, we are the leader in organic. I mean, I think we're something like 80% of organic yogurt in the US.

• 49:59Guy Raz?

  How much of what happened to you and your success is because of luck and how much because of skill?

• 50:04Speaker 00

  Oh, luck counts for a lot. I mean, I was lucky to meet my incredible wife and her amazing mother. I was lucky to meet Samuel. I was-- we were lucky to find people who would lend us money despite how silly this was. Skill helps. What made this possible was Samuel and his genius and his incredible skills. OK, without that superior recipe, none of this could have happened. You and I wouldn't be talking today. So of course, skill counts. But there's plenty of fantastic entrepreneurs who failed, who had wonderful skills, but just didn't have good luck.

• 50:44Guy Raz?

  This small, little hippie yogurt thing that you started in 1983 has made you very wealthy. I mean, first of all, was that ever important to you? Did you always want to become rich out of this?

• 50:59Speaker 00

  All I wanted was my mother and my mother-in-law to get their money back.

• 51:02Guy Raz?

  Yeah.

• 51:03Speaker 00

  I kid you not. No, look, we began this interview by talking about my father and his failed business and all the tragedy that came of that with all the people in my communities. And I was never a believer that making money was the holy grail. I sit on many boards now. I work with Wall Streeters. And look, I know the best way to convince these guys to invest in organic and renewables is to show you can make a lot of money.

• 51:31Guy Raz?

  And that's basically what you did, despite all these obstacles that you guys faced.

• 51:37Speaker 00

  Yeah, I often joke that we had a wonderful company, just no supply and no demand. No one knew that there was such a thing as better yogurt and certainly no one knew what organic was. And yet, it's interesting that my dad-- And my mom, by the way. In both cases, what I now realize I got from them was this belief in myself that it didn't matter what was going to happen. If yogurt cups were leaking, if stores weren't accepting us, if competition was coming on, if I couldn't meet payroll. You know, there was always going to be a way. And I learned that from both of them.

• 52:14Guy Raz?

  And your mother-in-law, is she still around?

• 52:16Speaker 00

  Sadly, she just passed a couple of months ago.

• 52:18Guy Raz?

  I'm sorry to hear. I'm assuming that her $1 million was, in the end, a very good investment.

• 52:23Speaker 00

  She did extremely well. She and I still kept secrets. I was-- she passed at nearly 97. And I can tell you that the risk she took with Stonyfield was probably one of her greatest points of pride. You know, she and Meg used to always have this conversation. And Meg begging and pleading her mother not to invest in Doris always had this one line, which she had for decades, which is, "Maggie, I'm a big girl. I know what I'm doing. It's gonna work out."

• 52:55Guy Raz?

  Wow.

• 52:55Speaker 00

  And she was right.

• 52:58Guy Raz?

  Gary Hirshberg, co-founder of Stonyfield Yogurt. By the way, earlier this year, Danone sold Stonyfield to another company called Lactalis, one of the biggest dairy companies in the world. And the amount Lactalis paid for Stonyfield? $875 million, which is not bad for a yogurt business that began with just one cow.

• 53:30Guy Raz?

  And please stick around, because in just a moment, we're gonna hear from you about the things you're building.

• 53:38Guy Raz?

  Hey, thanks for sticking around, because it's time now for how you built that. And this week, our story starts at the movies.

• 53:48Guy Raz?

  So there's a scene in Indiana Jones and the Last Crusade, and you may have seen it, where Harrison Ford is stuck in a room that has burst into flames.

• 53:58Guy Raz?

  So he starts to scoot his chair to the only place that is not on fire, which is the stone fireplace.

• 54:06Guy Raz?

  And then, and I think you know where I'm going with this, the fireplace suddenly spins and Indiana is in a whole new room. And this room is full of Nazis.

• 54:18Guy Raz?

  So this movie, it was kind of formative for Steve Humble. Steve is a mechanical engineer and a few years ago, he was living in Salt Lake City renting a big house with some friends.

• 54:30Speaker 02

  And there was a spot in the house that was a big stone hearth. And I have always been kind of fascinated with secret passageways. And I thought I could totally make a secret passageway like what I've seen in The Last Crusade.

• 54:45Guy Raz?

  Because, let's face it, how awesome would it be to have a secret passageway in your house? And the more Steve mulled it over, the more he thought, you know, I bet other people would want one too. So the first thing he did was to Google "secret passageway building companies."

• 55:01Speaker 02

  And there was nobody, absolutely nobody anywhere that could make these secret doors like were in the movies, you know, motorized and maybe high security stuff.

• 55:11Guy Raz?

  Now, at the time, Steve was pretty bored at his day job. So he started to dream of creating a business that would build secret passageways. And he called up some contractor friends and he asked, "Would your clients possibly be interested in something like this?"

• 55:26Speaker 02

  And I got overwhelmingly positive feedback. So eventually, you know, I decided I'm going to do this thing. I quit my job. I had to move in with my parents.

• 55:38Guy Raz?

  Steve moved to his parents' place in Mesa, Arizona, and he started to tinker in his dad's garage. And it just so happened that an old high school buddy was building a house nearby. So Steve said, "Hey, why don't I build you a secret hiding place?"

• 55:52Speaker 02

  He had a niche in the wall, like a recess, and he kept a vase in there. And I made it so that when you twist the vase, a painting on the wall opens and it exposed a fingerprint scanner. And then when you scanned your print... Then the niche itself would slide upwards towards the ceiling, and it was replaced from below by a gun safe.

• 56:15Guy Raz?

  A hidden gun safe. So at this point, Steve started to market his idea. He got a story in the local paper, and within a year, people started to find him.

• 56:25Speaker 02

  Like, big people, like people you would have heard of. And they are building multimillion-dollar houses.

• 56:31Guy Raz?

  And of course, we asked him for the salacious details, but well.

• 56:35Speaker 02

  I wish I could name drop for you, but yeah, I am sworn to secrecy.

• 56:38Guy Raz?

  So anyway, Steve is suddenly in his dream job. He's flying around the world. He's working on palatial homes, putting in vaults and fingerprint scanners and secret doors for people whose names he cannot reveal.

• 56:51Speaker 02

  I felt a little bit like an imposter. You know, I'd show up at this house where there's this incredible team of talent. But I kept reminding myself that nobody knows how to make secret passageways any better than I do. Certainly, no one's built any more than I have. So I guess I am the expert at this.

• 57:10Guy Raz?

  A custom-made secret door starts at around $9,000. But Steve's recently introduced a cheaper line of his secret doors, just $1,500. And they're made to look like anything other than a door.

• 57:23Speaker 02

  One is a full-length mirror. One is a bookcase. One is a wardrobe. And another one-

• 57:29Guy Raz?

  And you can install one of these secret doors in front of your spare bedroom or a closet. You hide what you want, and then you trigger the door by remote control. And Steve says he's barely advertised, and he's already selling about one of these a day.

• 57:43Speaker 02

  I mean, it's on a clear trajectory to surpass our core business.

• 57:48Guy Raz?

  And then his more middle-class ones. Steve expects to make $1.5 million just this year. His company is called Creative Home Engineering. And you can read more about it on our Facebook page. Just search "How I Built This" on Facebook. And of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're up to. And thanks for listening to the show this week. If you want to find out more or hear previous episodes, you can go to howibuiltthis.npr.org. ...PR.org. Please also subscribe to our podcast if you haven't already. You can do that at Apple Podcasts or however you get your podcasts. You can write to us

• 58:28Guy Raz?

  at [email protected]. And if you want to send a tweet, it's at howibuiltthis. Our show was produced this week by Jed Anderson, with original music composed by Ramtin Arablouei. Thanks also to Neva Grant, Sanaz Meshkhanpour, Claire Breen, Lawrence Wu, and Jeff Rogers. Our intern is Diana Mustak. I'm Guy Raz, and you've been listening to How I Built This from NPR.