Bobbie: Laura Modi. How a Baby Formula Startup Took Market Share From Two Industry Giants

Transcript from https://podmenti.com/t/9111c4fc72a9c100

Most people thought I was building something as a passion project.
For my own baby.
And I found I was dismissed.
I remember one investor who said what I was doing was terrible, that women should be breastfeeding.
That his wife had breastfed.
All of their kids exclusively.
And
He only knew the world by which breastfeeding.
and couldn't understand why I would dedicate my time, energy, and capital.
to going to making something that the world didn't need.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
they built.
Guy Raz and on the show today, how Laura Modi broke through one of the toughest barriers in food to build Bobby, an infant formula startup that's taking market share from two industry giants.
Baby formula is one of those products most of us probably don't think much about.
Until we need it.
And when you do need it, it suddenly becomes one of the most important things you'll ever buy.
It's also one of the toughest businesses in the world to break into.
In the US alone, it's about a six billion dollar market.
dominated by giant brands like Enfamil and Similac.
And because some babies' lives depend on it, it's one of the most heavily regulated food products in the world.
You can't just decide to make infant formula in your garage and start selling it.

But that's exactly the industry that Laura Modi decided to take on.
Laura had built a successful career in tech, working at Google and then Airbnb.
But after the birth of her first child,
She struggled with breastfeeding.
It was a deeply upsetting experience that
Like so many new mothers, she found incredibly hard to talk about.
And when she went looking for formula at the drugstore.
She wondered if there was room for something different.
A powder made with organic grass fed milk that felt more modern and more transparent.
Yeah.
So she left her day job and started building a company called Bobby.
It turned out to be far harder than she'd ever imagined.
In fact, early on, Laura and our co-founder made a mistake that nearly killed the company.
They made their first infant formula and tested it with a small group of moms
before it had received FDA approval.
Very quickly, the agency shut them down. It was a very public brand disaster.
But then Laura faced another enormous challenge.
Companies like Abbott and Mead Johnson, the makers of Similac and Enfamil,
not only dominated the market,
They manufactured their own formula and factories they owned.
Which meant Laura first had to convince someone else.
to make hers.
Today, Bobby is still a very small brand compared to the Giants.
But in just over five years, it's managed to win about 4% of the baby formula market in the US, which
Given the size of the industry?
is a pretty big deal.
As for Laura she moved to the US after college.
She was born in the mid-neteen eighties in a small town on the west coast of Ireland called Westport.
She grew up in a
Big family with four siblings and 48 cousins.
Her dad and two of her uncles ran the family business.
A company that makes protective clothing for workers.
So hard hats, high viz jackets, masks and gloves.
Construction clothing.
Like yellow vests. Like yellow vests, like high visibility clothing. That's a cool business'cause you
Like unsexy, but one of these businesses that where you need less people need to
Have that stuff.
Exactly.
And growing up in Ireland.
You walk those streets late at night, you're wearing your high vis jacket. It's not just on the construction site.
You know, by the way, this is something that'cause humans are just so wired to see somebody in a uniform and assume something, and you can literally get you could go to your dad's company and buy a high visibility
Jack it and just start directing traffic and people will just assume
Like anybody could do that. I always wonder about that. So true, you know?
You're totally right. You could walk into a store and buy a high fizz jacket and do exactly that.
So when when you
kinda went out to college, to university in Dublin.
Did you think, you know?
I'm getting out of this small town and it was great, but I'd I'm gonna start my life maybe in Dublin or London or somewhere else.
So I'd gone to my secondary school was in boarding school up and outside of Dublin. So I'd already spent a few years.
outside of Westport and going back and forth.
But being in Dublin
For college.
Was some of the most formative є.
And it was also during the Tech Boom, of which most of that tech boom was happening in Dublin.
I I sort of watch the renaissance of Ireland and Dublin happening at the time when the tech companies of the world
We're setting up Intel and Google and Exactly. So it was it was a great time to
Be studying there, and to also watch how a city transformed to support.
Really, what was the next wave of industry?
Yeah. And I guess you were really drawn to tech because I I read that a a few years after you graduated from college
You had a b an ambitious goal that you set for yourself. You you decided that you want it to work.
At Google.
In the US.
Yeah.
I think I it was it was such a dream.
You know, the idea that
I would get on a flight and I would go live in California. So yeah, I applied for a job at Google.
I got the job and I'll never forget turning to my parents. We were joking about what we wanted to do that Christmas that was coming up and
I looked at them and I said, Well, why don't you come visit me and the whole family come visit me out in California? That pride and shock and excitement, and my siblings as well. I mean, it was such a beautiful moment.
So yeah, I packed my bags and I I headed out to California. I'd never been.
And
It was the dream.
that I was totally imagining everything felt like a movie.
Everything.
А не важен тей.
It was the mindset.
You know, I always joke.
You know, back home in Ireland you could tell someone
Like, oh, you know, I I want to be an astronaut, and they would say, Ah, would you get away from me? You're not going to space. Like they'll keep you grounded, and they'll keep you grounded pretty quickly. You tell someone over in San Francisco, over on the West Coast, they'll say, I have a friend. I have a book. Let me give you the book. I can get you there.
There was this beautiful open mindset to anything being possible. And when you go from the West of Ireland and find yourself in the epicenter of it all, which is Google.
Wow, do you feel it?
And tell me about Google. What did you you know, this was sort of the the heyday of like people riding scooters around Google and lunches and p snacks everywhere. I think it still has some of that. Tell me about your impression of the place. It solved everything I wanted.
in my early twenties. I got my laundry done, I was fed, I was maybe fed too much.
I was given a level of work autonomy and freedom, but also I got to watch and it was it was like
Doing an early MBA.
Not only you're learning from brilliant people, but the work ethic was just next level.
And my day-to-day job was supporting product operations for Google Finance, which almost felt like a little startup within itself. The goal at the time was to go up against Yahoo Finance, which was the number one platform. And I had no real understanding of the stock market and using these financial platforms before this.
But I became such a fast learner, I found myself day trading.
Mm. So not only did I love
working there and love the job.
I also felt like I was growing in my own sort of knowledge and understanding.
Of a new world.
Uh and how'd you do by the way as a day trader?
And not too bad, actually, my first home.
Was mainly the proceeds of some day trading.
Yeah.

All right, so you're you end up your Google for about five years, I think. Yep, just under five years.
And you joined
A small ish at that time.
startup Airbnb had started in two thousand eight.
Um but still in two thousand eleven it was gaining traction for sure, no question about it.
But you got a job. But tell me about that decision. I mean it must have been
Exciting to be

you felt had
A lot of potential.
So
I remember I had to do a work trip to New York while I was working at Google.
And I had a colleague turn to me and said, Well, why don't you just book an airbed and breakfast?
I was like, what the hell is this? So I go on the site and I book myself a two bedroom flat.
And I remember calling my friends back in Dublin and Ireland, I was like, Guys, I have my own apartment in New York City.
А найвдив реалі Нью-Йорк Лиф.
And I left that week going, I have to work for this company.
And I will do whatever it takes because whatever they're doing, whatever they're on.
Is game changing. Yeah. There was an ounce of it that sort of felt a little bit Irish, honestly. It had that real community feel.
And you just you could feel the disruption.
And when I said I would take on any job, I mean that's what I did. I joined to lead parts of operational roles.
And I was sort of baton passed through the business in multiple ways, but
I knew I had to work there.
Was there any part of you and especially given that you'd come from an entrepreneurial family, was there any part of you that was always thinking
Maybe one day I'm gonna start my own thing, or was that not that important to you?
Always.
I had a folder, my parents love to remind me of this. Just even growing up I would
brainstorm ideas all the time. I would
make up businesses.
And you know, you're always looking for that spark.
But I wasn't rushed. I think I got some great advice early on too, which was
And especially knowing I was at Airbnb and Google.
I have most beautiful opportunity to learn.
Right. Okay. So you are
At Airbnb and it's growing and and you also at a certain point
become a new mom, which is going to
It it's transformational for most people who become new parents. I was for me.
Um and I'm sure it was for you and but it really
Yeah.
becoming a parent.
This around I guess around twenty sixteen.
Twenty sixteen. So
Before my kid was my husband who I actually met at work.
Before you you had kids, your kid was your husband, is that before before kids I met my husband. I met I met my boyfriend. We met at Airbnb.
So we were probably the first
You know, team couple.
to come from Airbnb and and have our first kid as a couple there.
I
Wow, guy. I mean I went into motherhood just maybe with
A a certain belief of how everything would work out.
I watched my you know
I had a grandmother who had thirteen children. She also built her own empire while doing it. I
I had a lot of examples around to say that you could become a mother and you could do it all, and no one ever talked about all of the things that could go wrong.
Yeah.
Boss.
I went into motherhood and I immediately felt the tension between
The highest of highs.
And
The lowest of lows questioning.
Ever
Yeah.
You know, I I say this all the time, but I I believe women can do anything.
But maybe not do everything.
Була сей.
I also found myself in a position
questioning society and questioning the policies and the world around me. I come from Europe, where parental leave was way longer than what we were offering here in the US.
А найз вачні сайм Гормент.
Tell women that you should breastfeed for six months, but we're not gonna give you the paid leave to stay home and do so.
Let me just clarify that. I mean
that was the message I have you know remember that, but where were you
Or do you remember hearing that?
like the pediatric you know American pediatric site Yeah, exactly. The American Academy of Pediatrics. That's a it's a line that they use to advise
That this is the duration by which you should be.
Feeding your child. Six months.
of breastfeeding because
They say the data shows that it's healthier for a baby, right? That there's
outcomes of with allergies and things like that and um
Tell me about
how you handle that,'cause it's a lot, especially
Because some
Mothers can't produce enough.
Milk for the baby. It's just is a very common thing.
My
Sort of founding story has been repeated multiple times. You know, I'm I'm in a pharmacy late at night recognizing that I'm unable to exclusively breastfeed her.
Yeah.
And Mom.
You are the only person responsible for doing that.
This is something it's the one job that you are expecting to do.
And that you were naturally
Able to do. The skies would open up and it would be easy and beautiful and natural. I mean, this is what the narrative is.
And
I found myself with an infection.
Five days into having her, it's a common infection, of which if you get the right support, you can also navigate through that. And I didn't.
I didn't get the right lactation support, so
It was I had a high fever eleven pm at night, and I'm walking through a pharmacy.
Now looking for the bell.
I have to go ring the bell.
to get someone to come on lock it where they call over the f you know the microphone like
Help on the formula aisle, and I'm going.
Oh my god.
The shame that I need to have someone come unlock.
The food to feed my baby that my body was meant to be able to do naturally. I just felt like I had failed her, I'd failed myself.
And I was disappointed, I was disappointed in it all.
So I did the walk of shame.
I'll never forget buying that first can.
And all I did was hope.
That they put it into a bag that wasn't see through.
That nobody would see you.
Yeah.
It's interesting because I think many people, certainly men, would never think, Well what's shameful? Wha why would you feel shame? Like something like buying cigarettes or you know or even like um you know, condoms or something, right? Like but actually
I mean if the message is
You should only breastfeed.
then yeah there's this feeling of like what's wrong with me
In society we love a binary narrative.
There's right, there's wrong, there's this, there's that. And
In that moment, what I realized is that we have failed all women and mothers in recognizing that it's not binary. It is absolutely a journey, and there's a million and one ways by which you can feed your baby. But for whatever reason, when I open up social, when I read an article, when you pick up that first parent book.
There is a message being put back at you that breast is best, and that is the only way that you should feed your child.
And I get home and I think
Something about this doesn't feel right.
Yeah.
We can do better.

I think the intention behind that
is good, right? It's like
Hey, you know, um this is a
natural whatever, our bodies have been producing this since, you know
And this is
proven over, you know
Tens of thousands of years to be the best.
model.
A hundred like
I want to make sure that is extraordinarily clear.
Breast milk із the most beautiful dynamic.
Liquid gold for a reason.
And it is magical, and it has so many properties that can never
be replicated. No formula could replicate the magic that is breast milk.
And yes.
Even with that being true.
The other truism that we hold near and dear is that not everyone can do it exclusively.
And if they can't, that's okay because there is
Fabulous alternatives.
And you can thrive on something else.
Alright, so you are a new mom and you're experiencing this and you are on leave.
At the time.
And
Does it start to spark a germ of an idea right away, or or are you I mean
Tell me what you start to notice about
Baby formula.
So as a crazy researcher just in life.
everyone assumes like oh you you had the problem and then you went and you decided to start a business and it was nowhere near that at all. I mean like you know I was uh forty pounds overweight, I was exhausted, I was a shell of a human.
But I go home and I pull out this can of formula.
And I did what every crazy researcher mom does.
I went to Google.
And I started going, What is this ingredient? And what's the impact of feeding my baby this formula? And how do I make a bottle? And how do I tell my husband? And how do I tell my mother in law? And you're just one question, one question, one question. You're going you're going deep.
And now it's two in the morning, you're under the sheets.
Those questions ended up turning into industry questions like
Why is it that two companies in the US own the market?
Why is it that the formula hasn't changed in forty years?
Mm-hmm.
The questions evolved from
The basic mom questions to now the curiosity I had.
as a budding entrepreneur to go
Something is here.
There is an opportunity to come in and do something better, and I I spent the next year
Going back to work, having Mary and what I would refer to as my mini PHD.
And just kind of I mean as a parent, right? Like
I remember when our first kid was born in two thousand nine.
the BPA thing just started to get a lot more traction. And so
I mean we used glass bottles. Like we were using, you know, we were sort of freaks, like we used uh cloth diapers.
You're talking about twenty sixteen by this point. That's right.
It was natural for you as a parent to like
Investigate every single thing you were putting in your baby's mouth. Yeah. And look
Also
I was a European mother.
Now having my first American baby.
So I went straight down the rabbit hole of doing the US comparison to Europe very quickly.
And what what did you find? Like what was
the difference between baby formula in the US versus Europe at the time.
So the biggest was
They
The European nutritional standards that were governed by the EC were updating those standards every four to five years.
And then I did the comparison to that over here in the US, and I realized the last time that the US updated their nutritional standards.
was in the nineteen eighties.

When I sort of took a step back in it, I think the biggest wake up call was that.
Infant formula was just ignored.
You're in the US.
It's interesting because I like the
European
Infant formulas.
were or not and probably still are not.
Approved to be sold.
in the US because
Understandably, baby formula is super highly regulated.
And it has to be.
I mean
It is an essential food being fed to the most vulnerable audience. It has to be highly regulated.
And you know, in the same way
That I believe in not shaming how one feeds. I also don't believe in the shaming of different formulas.
There's going to be a level of access.
And affordability and choice that you never want to look back on as a parent and go, I should have and I could have and I would have.
That is an unfair weight.
That no parent should ever go through.
And again.
We can also all look at each other and go, but shouldn't there be choice and shouldn't we be evolving to be better?

Alright, so this is twenty sixteen and mainly
I think then and probably still now the biggest brands were Enfilm and Similac, which are made by
uh influence me Johnson similar like as Abbott, which is a huge pharmaceutical company.
And they have
really kind of dominated.
Like the Coke and Pepsi of
Uh um
Baby formula, right?
Yes, they are the Goliaths of of this industry, and they have for for decades
And the standards were more or less unchanged for forty years. Um
obviously they they had nutrition that um the FDA had deemed you know was necessary and the minimal standards for infants. Um
I guess fats and and certain vitamins. Carbs, carbs. What ingredients did you find that were different between what you saw in US baby formulas and in
European ones.
DHA was the biggest.
And DHA, which is the the nutrient that supports brain health.
Yeah.
DHA was not just mandatory in Europe, but there was a level that was higher than any formula was choosing to do here in the US.
So
There's a lot of examples.
Where the levels are different.
Example iron's a great example here.
Where there's a belief, and I really think this is also an American belief, that fortification and more is always better. That's not always the case.
Designing especially something like the Soil Nutrition to be optimal for what the babies is really critical because too much iron early on.
can have negative consequences much later in life.
So when you look at the iron
range.
In Europe compared to the iron range here in the US.
They're wildly different.
So
As you start to
figure out what to do. Did you get friends to bring you
Baby formula from Europe to the US, or were you just buying, you know, whatever like maybe you get Earth's best or I don't know maybe you Similec, I don't know. Wha what were you doing?
Uh I originally bought Similak.
А те реалізда
Black market over in the US.
where parents were buying European formula.
And they were packing suit cases.
full of European formula and shipping it into the country.
And selling it on Amazon or
Selling it in the local car park. They were really hoarding it for themselves.
And that was another signal. It was like, okay, there's a black market bubbling here. So clearly there's a desire to create better formula.
And I just couldn't get off the idea that we should be able to make European quality formula here in the US.
Okay.
But you're still I mean as a parent researching this stuff.
And I guess a year later, twenty seventeen, you get pregnant, you're pregnant again with your second child.
It was
On the eve of twenty eighteen. January twenty eighteen. Yep. Okay.
But what was the point where you were like
You know
I could do this. I c maybe I should
Do something here.
Well
I peed on the stick and I found out I was pregnant for the second time. And that feeling
Of
Okay, I'm not having this kid until there's a better formula in the market.
It was within days of of peeing on that stick I turned to my husband and I said, I'm gonna go do this full time.
You were gonna you decided to leave entirely, you're gonna leave
Your job, Airbnb.
Exactly.
And
You know, the conversation even with my husband at the time
You're pregnant with your second kid.
You're living in an expensive city.
You have a dream.
you have strong belief in it, and you also need to have him believe in it because
I'm deciding to leave
A salary aside.
and take parental leave.
To now go
build a company and have to also self fund this and get it off the ground. And that meant
picking up some part time work and doing some some consulting here and there, coupled with
turning to my bank account over in Areland where I took all my communion money and everything I had built over the years.
And start a little nest egg to get this going.
Yeah, because I mean
You presumably had shares from Airbnb, but it wasn't gonna go public. It didn't go public until twenty twenty.
So you didn't have any liquidity probably at that point.
Zero.
No liquidity.
I think I had also mapped out a business plan that matched my trimesters at the time. I was like, okay, trimester one, here's what I'm gonna nail.
But I was depleting
Capital my funds.
Way faster.
than I had anticipated.
And meanwhile you need to to start doing more research.
And baby formula, right? Like so what did you do? Like how did you go about that?
Yeah.
It was
You know, I I'm not a scientist. And I turned to Google and I typed in baby formula expert and I found a baby formula expert. I ended up contracting her and we worked hand in hand every day together. She took my vision of dream ingredients and recipe.
And she helped formulate it.
And it was one sort of higher after another, but the bills came in.
You're cold calling so many people. Yeah.
Between I don't know, eight PM and eleven PM at night, I was on LinkedIn aggressively, and I was pinging everyone and
Anyone who had a name that could relate to formulating something I knew I needed to get off the ground, I built a small little team around me, regulatory experts, scientists.
Doctors.
And we spent those trime st
Taking it from idea to ultimately a formulation and concept.
Did you give yourself a budget? Like did you say, Okay
I've saved, you know, over my career now I've got a hundred thousand dollars or whatever and
I'm gonna use that and take a risk with that and if it runs out. Did did you have an an idea number in mind?
Yeah.
First it was fifty thousand.
And then it went up to around eighty.
And then I ultimately ended up spending close to two hundred.
Well.
And I pulled it from everywhere.
Alright, so I wanna kinda get a sense of what you are facing. I mean,'cause it's not that different today, right? The the biggest
baby formulas are produced by these two giants, right? And this is a hu I mean they I think seventy five, eighty, maybe eighty percent of the
baby formula market.
in the United States is kind of dominated by these brands.
And I would imagine that
If you are so huge.
You're kind of calling the shots, right? Like I would imagine at that point.
The FDA and other regulatory agencies have a good relationship with these companies already, and trust that
You know, with some justification that they're doing everything more or less correctly. Yeah.
So they probably have a lot of
Power.
Just simply by virtue of being so big and connected.
That was also a lot of the reactions I would get. When I would tell people I I was
It started an infant formula business.
The reaction was often that.
Which is oh
This industry dominated by these two large pharmaceutical businesses. And it was almost a a series of questions to see if I was ready.
Did I understand what I was about to get into?
Because anyone who was
up against really a monopoly or a duopoly in any industry.
is entering a fight.
To some extent.
And
There was an ounce of naivety, probably, you know. I I knew it was heavily regulated.
And look, I credit a lot of the experience being at Airbnb. I watched Airbnb go up against the hospitality industry. Right. The hotels, right. The hotel lobbyists. Yeah.
So I got a taste.
For what disruption was like.
And
Nothing fuels a mother more than knowing that what is blocking them from developing something better and giving them their baby something better.
Was
An industry that was ripe for disruption.
All right, so you're working on different recipes with with these consultants and
I mean presumably it's like

Infant formula is it's powdered milk.
Right, presumably.
Powdered milk. So it needs to mirror breast milk in its macro components, which is carbs, proteins, and fats.
Look, even going back then, this was me going to Wikipedia to learn this. I'll never forget looking for a book, trying to figure out how to understand recipes and manufacturing and all of it. And I found one.
It was a hard back book.
called the biochemistry of infant formula manufacturing practices.
You can imagine how dry this book was.
And I found it on Amazon. I remember turning to my husband and saying
Okay, honey.
This book costs two hundred and seventeen dollars.
If I buy this book.
There's no going back.
When we come back in just a moment.
Laura gets an unexpected visit from the FDA.
Which sets her business back?
By a year and a half.
Stay with us, I'm Guy Roz, and you're listening to How I Build This.
Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2018, and Laura's committed herself to creating a European-style infant formula for the US market. But unlike most food startups,
You can't just mix up formula powder in your home kitchen and test it on people, you know.
Yeah, how do you do that?
Do you get a panel of babies?
So there's these essentially kitchens.
Micro kitchens that you can work with, and they're innovation centers. And a lot of big companies would turn to them and say, I have this idea.
I want to go formulate it, but they don't have a pilot plant or a pilot kitchen to go do it in.
And this is this is where the money went, right? So as soon as we
got to a place of having this formulation in hand. It was a spreadsheet. It was a spreadsheet of numbers and a list of ingredients.
I would then drive down to the innovation center, which was about an hour outside of San Francisco, and I would meet with the team there who were just a big beautiful team of nutrition scientists.
They would go order the ingredients and we would work in a lab, essentially.
to formulate the product so that we could do some taste testing and sensory analysis.
But one thing to note, unlike other CPG products, Infant Formula has to be made.
Under
a commercially ready manufacturing facility.
Part of the expense of this process is
It's like dr almost like drug testing, right? That's what makes a drug so expensive because of the testing is so
regulated and expensive. Because if you break it down, it's like we're talking about like nonfat milk and and whey protein and
Coconut oil and and and safflower oil and lactose, right? It's not
But it's the fact that it has to be done in a highly regulated and highly controlled environment that makes it expensive to even
Like experiment with?
And that's where thousands of dollars went.
But yeah, you hear the stories of CPG companies who go down to the farmers market.
And they go sell their first product and they get some feedback and reactions.
We couldn't do that.
Okay, so
When did you know that you had something good enough?
that would let you kind of show it to people, you know, when you're ready to raise money.
So as soon as we got to a sample.
Which was a sample that you could pour into a drink and you could taste it.
And you could also do a side by side. You could make up similac and infamil.
And you know, I remember sitting in the room and you're looking at all of the different samples and once the color and the sensory and
Now the nutrient testing of that product was coming back.
and meeting all of the regulations that we knew we needed to hit.
We were ready.
And that took several months.
I mean
Presumably you were also able to I mean.
And it's safe, right? You were able to test on your own kids.
Oh, I was able to test it on my own kids. And they all got different versions.
Right.
Okay, so let's get lo so you've you twenty eighteen
is when you really start this process. And by the way, you register this name Bobby and tell the story behind the name.
At the time I thought I was gonna call it reform because I wanted to reform the industry.
But then someone said, Like, you know, cute baby names are always good, or just using a human name. And I was like, You know what? My daughter
Calls her bottle of Bobby.
She'd ask for it at night, she wants her Bobby.
I didn't even think twice.
I
sent an email to my lawyers and I said, I want to register the company name Bobby. It can be Bobby with an I, Bobby with a Y, or an IE.
They ultimately responded and said
I e is open, it feels safe. I was like
beautiful. It even has a bit of an Irishness to it.
And that's the story of how we landed on Bobby with an I.
Okay, so you have the name.
And you've got a
Prototype.
Yeah. And you have
I mean at this point you have some deep experience. You've been at Google, you've been at Airbnb, so you have
developed connections, contacts
And how much were you were you trying to raise initially? Because this is going to take a lot of money with this approval regulatory process. So what what did you think you needed initially?
I got to a place at around eight months pregnant and realised
Taking the next phase meant raising institutional capital.
And my husband was all for it, like this is the time we've burned through every dollar that we've had here. And I remember going
I
Will give myself until this baby comes, and if I don't raise money then.
I may put my pen down.
And have to revisit this at a later point.
You're still in the I hope this works moment.
So I thought I needed to go out and raise a million.
And that million sort of divided up in use of funds was really to just create the first batch of product.
And I hit up every Silicon Valley investor I knew.
I spoke to sixty four investors.
Every day I was on the phone making introductions, driving all across San Francisco with my baby bump.
And pitching Bobby and it you know, the other things that happened during this period.
I hired a designer to develop the first look and feel and the logo.
We designed the packaging and
It was the hustle towards a pitch.
But ultimately, after sixty four
Pitches.
Most of them said no, and four of them said yes.
That's pretty good. I mean it's it's not a bad right, you gotta take a lot of shots, but I I
I wonder whether
You know, because twenty eighteen this is like the D to C boom is really
in full throttle.
And this was a category that hadn't really seen any
you know, modernization. So I would imagine that there was even those who may have said no, some excitement, or am I wrong?
There was a lot of skepticism.
Alas.
That journey of raising that first round was the biggest education to how I would go on to build a brand.
I remember one investor just couldn't shake the idea.
That there was anything wrong with corn syrup.
Corn syrup was in the bigger formula brands. Correct.
I'm in the middle of the pitch.
And he says, Well what's wrong with corn syrup?
I met with another investor who said what I was doing was terrible, that women should be breastfeeding.
Did they really say that to you? Because that I mean that that's surprising to me that somebody would be even if they thought that in their brains, that they would say that to you.
I know I really wish I could say that that wasn't the case. We I said this earlier, but everyone has their own story.
And what he shared back with me when he said that was.
That his wife had breastfed.
All of their kids exclusively.
And
He only knew the world by which breastfeeding worked.
Mm-hmm.
and couldn't understand why I would dedicate my time, energy, and capital.
to going to making something that the world didn't need.
It was such fuel because it made me realize that the silent majority
That were experiencing
The shame.
And the guilt.
And also having to turn to something they weren't proud of they weren't talking out.
And there wasn't a brand that was speaking for them.
And making them feel like they belong to something.
You feed your baby, if you think about this, you feed your baby.
A bottle.
Or you breastfeed them seven times a day.
for their first year of life.
And yet
Parents were hiding their can of formula when a guest came over.
Are they relying to their pediatrician?
Yeah.
You know, the reason why I'm pushing back a little bit isn't because
I doubt the veracity of the story. It's more that
You know, in years past on on this show, we've had stories of founders who
you know, w went out and tried to invest. And part of the story was was the resistance they faced and maybe some insulting things they heard. And
In more recent years, I've kind of reflected on this and I've come to an a maybe an a bit of an unusual conclusion, which is
I actually have m in some ways more respect for
A VC who's gonna be honest about how they feel and give
their honest feedback and pushback and then reject it, rather than somebody who's like, Great, love it, and then you just get a note saying, Hey, we're gonna focus somewhere else somewhere, you know.
And I say that because
If a person is giving feedback
and explaining why they don't want to do it and are pushing back in ways that might even be a little bit offensive.
It is still a data point.
I would not be
Who I am.
And the company would not be where it is today without that feedback.
Yeah.
I know remember at the time I'm also eight and a half months pregnant.
And
Most people thought I was building something as a passion project.
For my own baby.
I found I was dismissed.
as the potential entrepreneur and and pitching the market size and what this business could be.
Because there was a lot of personal storytelling tied up in this.
You know, I wasn't
Think about the pitches.
that were coming in.
These pitches were
Scalable and sexy.
I'm walking in talking about powdered milk.
That is owned by the pharmaceutical industry.
That is is controversial.
Mm.
But the yeses I got
were game changing.
It was the first sign of belief.
Ам со гратф.
It was only two weeks before
having my second baby did I get funded.
And there was such a deep breath.
You raise the money. I ended up raising two and a half million.
So you've got some validation.
And
Then you have your baby and tell me about um
Tell me about your life at that point.
Bobby was now
You know, it was like a living, breathing.
It was my third child.
And
I took a few days off with my second baby
But it was a very different emotion than I had with the first.
I wanted to get back to building the company.
I wanted to get back to it so badly that my son Colin sort of came along that journey with me. He was side by side. This is your second kid. My second kid. Yep.
He's
Under the desk working with me.
And your husband, he's working too, right? He w I'm presumably you guys are
He's helping, but he's also
Doing something. Yeah. He's he's helping.
He was a founder and CEO of his own design firm.
And he was heads down, you know, making
I wasn't
yet really earning much money. Our first round of funding, I gave myself my first salary, which was I think I paid myself less than fifty thousand dollars.
And you know, we're living in San Francisco with two kids, so
My husband was very, very supportive and also really helped bridge our needs at that time.
Okay, so now you've got two and a half million dollars.
It's twenty nineteen.
Tell me what the first
What are you
Like in terms let's let's talk about hires first.'Cause up until this point it's you and and just contractors, right? Contractors. I had two I had two full time scientists at this point.
On staff.
That's right.
And
Something
that really I I knew deep down.
was that I wanted to build a culture and build a team. The constant question on my mind was, do I do that with a co founder?
And at the time I had so many investors say to me, You know, your co-founder needs to be a scientist. They need to they need to be the opposite of what you are. Sounds logical. Sounds very logical. Tech business, they would say, Go get your CTO.
And I spent a long time thinking through that, but I didn't come from that world.
Which means I didn't have a long term relationship with someone that would have played that opposite.
But I did have
Was someone Sarah Hardy?
Who I had worked hand in hand through thick and thin.
Through building Airbnb, you're going through a lot of highs and lows. And she was at Airbnb at the time. Correct. She was at Airbnb at the time and I'm telling her all about what I'm doing.
And remember, we had worked together while having babies and we never talked about our problems, breastfeeding or going through motherhood.
And this was the first time.
Да ви с рівень that experience.
And she worked within the the Hr and People Organization.
And not only was she totally understood on the mission,
But she was also bought in on building a next generation workplace and culture.
And it's interesting'cause it's such an unconventional I guess I'm kind of giving away the story,'cause you would ask her to become your
Co foundered C O.
But it's an unconventional like everyone saying go find a scientist, a CTO.
And you would think culture will come later, you know, we we can deal with that later.
Culture never comes later.
It was really important that we built to culture.
Des
could last longer than our product.
That could sustain the hits of the business.
'Cause there was gonna be. There was gonna be hard times. But a really good culture can get through those.
Okay.
So she she comes aboard. She comes aboard and then it was a series of unconventional hires.
The next hire I made was an Emmy Award news anchor.
And the Emmy Award news anchor is now my chief brand officer.
And I would say when you look across all of our key hires.
Every single one of them, their resume does not match what they have built or done at Bobby.
Were they all women?
You know?
They were.
And we we do have diversity. We do have men on the team. But most of the unconventional hires were women.
That is true. And the early hires, I guess.
Yeah. All of the early hires were women.
I mean it makes sense because you can relate based on obvious experiences. So
Okay, so you start to build a team, a more of an executive team.
And you've got this prototype, but now
First of all, where are you
Where were you able to make it? Because you don't you know I mean, if you want to make a food brand, there are lots of places in the US where you can do that. They are regulated, but not like a
I mean this is like making a drug.
Right. And I can't imagine
probably the existing big brands have their own vertically integrated systems. I know there's one big company called Parigo, they make brands of different baby formulas, but
You're probably really small at that point. So where where could you make your formula?
So
Perigo was the only.
It is the only manufacturer of infin formula here in the US outside of
The vertically integrated. Yeah, wow. Outside the big ones.
It's the only one that'cause they don't have their own label. They may
I think they make like Walmart and Costco and
Yeah.
So I remember calling this contract manufacturer.
And they declined.
You know, we're we're moms in a basement. They're not gonna take us on. This wasn't something that they typically do.
Okay, so what do you do?

So I went to the birthland, the homland.
of infant formula which is in Germany.
And I came across a family run manufacturer led by a woman led by a mom.
We spent
many a week going back and forth about the potential of her being able to make our product.
And
She ultimately said yes.
But there was one major dilemma.
Which was
manufacturing a product like Infinformula.
In Europe.
Meant that it didn't match the regulations.
of making infant formula here in the US.
Yeah.
And by the way, they couldn't match them, it was not possible.
It's a manufacturing process.
So you would have to change the way you were manufacturing again.
Is it because anything was wrong? No, they were just different.
That didn't stop me. This was the only place I was able to get my product made. And
Made Bobby.
brought it over as a pilot and decided to make what I thought was a very smart
Decision.
to position it as a supplement.
as a companion formula to breast milk, which means that it moved out of the category as being the sole nutrition.
And now
It was in the supplement category.
companion for me. So just
Something else to give your baby. Something else.
Exactly.
Okay.
And the idea was
You were gonna set up uh you say pilot program. This is gonna be a direct to consumer. Direct to consumer. We only started selling it.
to San Francisco uh families and we would personally go and deliver it.
Memory I remember very spinety three customers. And you delivered them
Canisters of the formula. Canisters, yeah. Canisters of the formula. And it was branded and everything. Branded and everything. Okay.
Companion formula.
Correct.
And again
Because if it said infant formula that triggers a different set of rules, that's exactly right.
Now coming from a world of tech and disruption, I thought this was a genius way to enter.
Yeah, you just go for it. You know, good start, we got a product into market, we'll see how this goes for a while, and then we'll move into the process of maybe going back to that contract manufacturer and seeing if they'll make our product then.
But
We were not on the market for less than two weeks.
before I got a phone call.
From our warehouse manager who said the FDA is at the warehouse.
An FTA inspector knocks on the door and comes on in, showing their badge.
Correct.
By which anyone who comes from the food and and drug space, the FDA doesn't just normally show up. That just never happens.
But the FTA shows up.
And I I go down to the warehouse, I meet the FDA officials, and they look at the product and they say, Hey, we hear that you're selling infant formula.
And they pick up the can, they look at the ingredients, they look at the formula.
And they said, Yeah, I see what you're doing. I can see that it's positioned as companion formula.
However
It looks like a duck. It cracks like a duck.
This is infant formula.
By the way, how do they even know about it? Hundred of
They I mean, how do they even get tipped off about this?
You know
I here I am
Almost eight years later, and I'm still wondering the exact same thing.
We had gotten some media attention on on Tech Crunch and you know our launch of bringing this.
This formula to market.
created some stir.
And our belief is it probably made its way to the FDA and F DA's thought
This looks like another way to bring formula to market.
And this doesn't match the regulations.
And
They issued a national recall.
They shut you down right then and there. Right there and then.
Issued a national recall of what was a pilot.
And at the time I remember feeling like
This is unfair.
That there's nothing nutritionally wrong, but you're putting us into this position where
Now people are questioning our motives.
And it's hard to recover from a recall, especially.
when it's something related to infants.
But we were so small.
And
the very fiery group that we were serving at the time, I remember them coming

And we had this rallying cry from them.
Being like this is crazy.
We gotta figure out how we get the FDA to get this approved.
We ended up firing up.
Community.
To support our next moves.
But you were angry.
You felt like this was unfair and you were angry. I mean
On the one hand I'm very sympathetic to this idea because it's like let's just get it out there and try it.
And it's very much a Silicon Valley entrepreneurial
In that spirit, at the same time, I'm like, Yeah, but it's like you can't this is like one of those things.
You can imagine
If there wasn't this regulatory
environment it could be abused and you could have
really dangerous products going into babies.
One hundred percent.
And
We were used as an example.
And to be fair, if they didn't use us as an example.
It invites more
As you said.
More ways to be able to enter the market that could potentially be dangerous.
But you got bad press probably right away.
We got some bad press, but we were so small. We barely existed.
But what did come from it
Was that
I sat there for it was a few weeks, we debated what the next moves were. There was no manufacturer to turn to.
And one day I opened my email and there was an email.
from the one contract manufacturer that makes infant formula in the US.
Parigo.
And said,
We watched what happened.
With the recall.
And we want to make your product.
They said that we'cause you had approached them before and they n were not interested in working because you were too small, presumably. Correct.
And now that they saw
This kind of fiasco.
They called you and said we why would they call you and say we want to work with you?
They pointed a lot to how we handled it.
Yeah, how did you handle it? What was your public response?
My public response was I put out a letter of apology.
It wasn't about being defiant, it was about being compliant.
very different to maybe what it was like being in the tech industry.
And that letter resonated.
And I I we got this email.
And it was actually an internal champion.
He led their R and D team.
And he was watching all of this, but what he was so impressed with was
The product that we had developed was the one that he was internally championing for years. That he wanted to develop a the new kind of baby formula.
He wanted grass fed milk.
He wanted to lean into European nutritional standards. He was a huge fan of DHA.
So you can imagine being in a big company.
And you are a voice in there trying to champion change, and he's watching that change.
Happening outside with us.
But I give so much credit to those internal like.
Pedro is his name was really the internal voice.
To tap his manager on the shoulder and say, we should give them a call. Right. And we spent the next 18 months course-correcting our supply chain.
to get our product made.
Okay, because the the actual recipe
was going to remain largely the same. It was just the
production process that violated that meant that it could not be labeled as infant formula or described that way.
But I I still have to I mean'cause
That was a significant setback because all of a sudden
you're not gonna be able to
Test this.
with customers, real customers and
You're gonna have no no revenue coming in.
And
Right, in theory you should have done that from the beginning, but at the same time it's so onerous and slow and can really in the meantime, there could be competitors coming in who are better funded or more connected and and so was any part of you like freaking out when this happened?
Oh, of course. You go through your own identity crisis. I had investors say
You gotta change your name.
Bobby could never exist.
'Cause it was black the name was blackened now.
And
I would have other people say this is going to be like your
C section scar. You're gonna go, it'll always be there.
And then on the other side, there was a lot of folks who came forward and said like
You need to lean into the story.
This is a story of of David versus the Goliath and
You need to get out to the FDA, and you need to own this moment.
I did ultimately decide to own it and stick with it.
And we ended up actually getting some press to speak to the full story.
No, even part of that press makes you cringe and you wonder if we didn't make this move, what would we do? But I also don't believe in playing hindsight.
And that email that came in from that contract manufacturer to say we would make your product, I don't know if that ever would have happened.
I think you also attracted
another investor because of that. We did.
And I guess there's an investor who also liked how you handled this.
It piqued the attention.
Of those there's
Wanted to see this industry change and probably recognized.
Oh, this isn't easy. And if Laura does get through this, this could be very big.
So we had an investor come forward that we had spoken to in the past as well.
And they ended up funding the business another four million dollars.
Which allowed us to spend
The next eighteen months.
Get our product off the line at this facility and into the FDA.
Okay, here's my question.
You had a formula, you had a ingredient list, and from my understanding
The problem with with how it was made in Germany wasn't the ingredients, but how it was made, like the order of operations or whatever. It's not an FDA approved.
factory. Now you're you're gonna get it made by Perigo, which is
you know, they make all this contract formula.
why was it gonna take so long? I mean you had the you had it all ready to go
because
We were obsessed with certain suppliers we wanted to use.
That they weren't yet using.
So it was it wasn't actually the FDA, it was suppliers or it was b it was both. It was both. So shifting your operation from one place to another means sort of shifting the entire supply chain to be able to get made there.
And if there was a supplier that they weren't yet using.
That means they would have to run a product trial of that off their own line. So there's a long process to it's not as simple as just switching it and getting it made.
And that process took some time, and then once they were ready.
You then have to submit it to the FDA.
And submitting it to the FDA.
We waited another six months before we were able to get the green light. Because you're in a queue, right? You're in a queue. They they gotta go through a bunch of applications.
That's right.
So what is your team doing at this point? I mean you're waiting
You've got a formulation, you're waiting, and then you got six months of waiting for FTA approval. What in the meantime
Is your staff your team doing?
So we're still a relatively small team.
But one of the things that we started doing was
sort of gear up the brand for when we would come to market. And one of those was to meet with community members, meet with parents.
Every week.
And there was this belief I I had someone share with me once
There is a before you launch and there's an after you launch.
And the before you launch moment is a period of time and freedom that you'll never get back once you're out.
And you use it really wisely.
You build your founding community.
You decide where your positioning is, you really hone your brand.
And we took that very seriously.
We created
A blog called Milk Drunk.
Where we would
publish articles and we would become a thoughter on the world of feeding.
We would meet with community members every week that we would find on
Instagram.
and different socials and Twitter who were talking about the feeding journey and we would invite them into conversations.
They were the founding community.
That helped accelerate the business when we ultimately launched. And they still do. I see them chiming in on Instagram all the time.
And during this period, by the way.
I also went on to have my third baby.
So the idea comes to you in twenty seventeen, roughly, twenty sixteen, twenty seventeen.
And it's gonna take
over three years before you get an FDA approved
Product ready to go.
But meantime, it's Covid.
Covid's gone. Right. So
Are you guys working in an office? Are you working remotely? Like how are you ev before Covid happened, how were you did you rent space? If you had a warehouse, I know.
We're in my basement.
Right.
In my basement in San Francisco.
Uh it's a big team of moms.
And
Covid hits.
So everyone goes home and they start working from home.
But it was August of twenty twenty.
We were on a Zoom call and my head of regulatory sends me a slack.
And she said, Laura the IFN, which is essentially the letter from the FDA, just came through and she said, We got the green light.
Well.
Now when most businesses were in a place during Covid of going
Will we exist? Do we have the capital to do so? Does the world even need us?
In this moment.
The most reassuring thing during this time was that we were making a product that no matter
A recession or another pandemic this product was needed.
and not only needed
People were looking at the quality and safety of what they were consuming in a completely different way.
But you had no money coming in, so did you have to
raise more money to'cause you got to order product.
He gotta launch direct to consumer and he gotta start a marketing campaign.
Correct.
That second round of capital that came in.
That four million really did help.
So
The intention was not to go out and raise just yet.
It was to get to market.
We're all sitting on the edge of our seat wondering.
How are people gonna react?
And the amount of times investors would say
What's your forecast for the year?
What do you think you're gonna do? I'm like, I have no clue. Come on.
It's putting a finger in the air.
And anyone who says before they launch that they're setting a forecast they believe is accurate is totally lying.
You're going out on a hope and a whim.
That there will be good reception to this and it will take off.

Well we come back in just a moment.
Bobby finally launches, and Laura suddenly has to take manufacturing
Into her own hands.
Stay with us, I'm Guy Raz, and you're listening to how I built this.
Hey, welcome back to How I Built This. I'm Guy Raz. So it's January 2021, and after years of setbacks, Bobby Infant Formula is
Finally ready to launch.
But Laura has to be very careful about how they promote it.
What was your message because I imagine
The messaging is also highly regulated. Like you there's things you can and cannot say, or things that you have to be careful of.
By risking like class action lawsuits.
Oh, a hundred percent.
One of the earlier hires during that founding team build.
was my head of regulatory.
and she came from having worked at the FDA.
She had worked at Abbus.
She schooled us.
On what we can or can't say, and today she will still turn to me years later and be like Laura, you cannot say that.
The marketing team needs to remove this.
But it must have made the marketing team crazy to have somebody Oh it's still does like can't say that. Can't say that. Like that's something that you couldn't say.
So
The biggest thing to avoid was making any
functional benefit claims. Like smarter babies or better for your brain health. Exactly. You could say maybe brain health, you could say. Your kid has a chance to go to Harvard. You know, tying the nutritional value of this to very specific outcomes.
Was a big no.
Yeah.
And as a brand.
We weren't here to try and like
shame different formulas or point to specifics. The end of the day
We were a European style formula.
That was made here in America.
And that positioning
Of our product.
It resonated.
That's all you had to say. European style recipe. That's all we had to say.
And then where we put a lot of the positioning and the brand work was around the emotional claims, not the functional ones. And the emotional ones
were really about
What is the help and support and the recognition that parents are going through in this moment?
It was telling stories of those that weren't able to exclusively breastfeed.
So
There was the product piece of it, but then there was also the cultural society and stigma pieces of it that really resonated.
When we came to market.
So you launched this in January twenty twenty one.
And it's still
Covid. I mean people are still working from home and
But this is direct to consumer only.
I mean you hit the go button and what happens?
Oh it took off.
We realized we had immediate sort of
Product market fit, brand market fit.
But what we
failed to do was that we didn't have really business model fit.
Or maybe forecasting.
F
We ran out of product very quickly.
I remember in the moment being told, you know, you're either great marketers or terrible forecasters, or maybe both.
And the lead times to produce more infant formula, again, because of it being so complicated and regulated, and also capitally intense.
We stocked up just enough.
But we weren't ready.
for the amount of demand that came through.
What was the lead time?
Lead time is five to six months.
Five to six months from the time you order it until the time it's delivered?
Correct.
And this is not being put on a ship from China container.
No.
Wow.
When
You make product for infant formula, you actually have to let it sit for a period of time.
Hm.
And you have to have the testing go out and you gotta wait till those testing
results come back and you're in the full clear.
before you can bring product to market.
So the forecasting and when you're a new company, you want to be careful that you don't order too much.
And then find all of your capital wrapped up in inventory, but also when it comes to feeding babies.
You also don't want to have gaps.
In serving those that you promised.
So we ended up running out of inventory, but not on our existing customers.
We were able to because we were subscription business manage
Who got that product and who didn't. So we actually turned off our growth and our top of funnel. And that was a very intentional decision.
I think in that first year, which is
Just remarkable.
You did sixteen million dollars in sales.
That's right.
We had hoped we would do around four million.
And we ended up doing uh sixteen.
Wow. So
That year, twenty twenty one.
you decide to move to Washington D C from San Francisco.
Because I guess at this point it's because of Covid era
You guys are totally remote anyway. Tell me the decision to uproot the whole family.
And move to Washington, DC.
I mean it was it was a few things. It was definitely post Covid, three kids.
And then there was an element of this which was both me and my husband.
Directly or indirectly.
We're working with government agencies.
Oh, because your products were regulated by the government. Exactly.
And he's an AI, I think, right?
He's an AI. Okay. And he was doing some work with the government as well, also supporting on some design.
At work during covid.
And the advantage is you are close to the FTA.
Correct.
So it was also strategically important for you to be there.
It was.
Okay.
I imagine I think it's the case that one of the reasons why the two
big, you know, eight hundred pound gorillas in this space are Similec and and Famil are, you know
They're widely used for a reason, but they're also um a huge amount of their revenue comes from
government programs, WIC, women, infants, children I would imagine, right? That that's right.
For
these government programs that help.
People who can't afford.

That is huge if you have that contract.
Right, if you have the ability to get your product
Approved.
Fourwick.
So wick.
These behemoths these galaits.
Saw an opportunity to be able to
Sub size.
The cost of this for the government.
Every few years you go and you bid for a contract.
And then a brand will win that state.
What that means is as a mother
You're going in, and if you're buying your formula on wick, you can only choose.
Yeah.
Brand. One product. Exactly.
А на факт, фіті перцента бебіс борни з контри.
Or
Choosing a formula under wick, which means they are limited by choice.
Huge opportunity to reform this program, but it starts with
More businesses and brands.
Existing.
And it takes companies like Bobby to gain more market share because the reality is, even though I want to see it change.
I'm not yet big enough.
To be able to serve Wick either.
Okay, so this is still an ongoing thing, right?'Cause you're
I think I I looked into it. I think Enfomil and Similac are primarily what's available across the country for WIC.
In meantime, you've got this
first year a a great first year, right? And then
Comes twenty twenty two.
And there's just like crazy infant formula shortage uh which uh some people might remember. I mean the shelters like empty. People could not get baby formula. And I I think part of the reason was that Abbott
Uh, which makes Similec had this huge recall, right?
Correct.
So the recall happened because Abbott
Had
A contamination.
in one of their facilities.
And that contamination led to very sick babies, some fatalities. It was very serious.
They had to shut down that facility.
But at the time.
I turned to the team and I was like they're
This is gonna have a very negative consequence on the industry.
Because a market, we've gotten to a place now
We're not just serving a large percentage of it, we've become reliant.
on them.
To feed babies.
There wasn't more manufacturers like we've already talked about that could just turn on
the faucet really quick and just all of a sudden start producing more.
You could not do that. You couldn't get I mean Perigo couldn't just do that for you.
You couldn't just flip it on. Now we immediately started ramping up.
And we started producing more product than we had even dreamed of.
In twenty twenty two.
But at the same time
It's like um
How many rooms are in a hotel? Like when the inn is full, the inn is full.
So I imagine that parents who are looking for alternatives all of a sudden start flooding your website.
They do.
And you can't serve all those people, presumably. Yes, exactly. And at the time
We're fully stocked up. We've learned from our first year. So now we're sitting on a lot of inventory.
But what ended up happening was that recall happened and
And our growth.
Skyrocketed.
It was numbers that we had never seen before.
But the problem is that we're growing faster than our ability to replenish product.
And if we keep growing
We run the risk.
Of using inventory that we have that should be given to our existing subscribers.
we're gonna end up acquiring too many people.
And we won't be able to serve them.
Now, this was like a Covid situation. You're going, Yeah, yeah, yeah, but it's it's all gonna be over in a minute. Like there's no chance this could go on forever.
And you know, you can't forecast how long this stuff's gonna go on. So I did a round of phone calls I called my board, I'm going, look, here's a little bit of the dilemma.
Most of them.
We're like this is crazy, just keep the growth going. Like these moments don't come around often, like
Great moment for the brand.
But I went to bed that night and I remember taking off my CEO hat and playing the mother and going
If I signed up to feed my baby Bobby and then one day received an email to say sorry, we don't have product to send you this month.
You've lost me.
You've lost my lo loyalty.
I can no longer stand behind the company.
And the next day we decided to turn off the website.
Existing customers could order, but new customers could not.
That's right.
It made people realize what we were prioritizing, which was our existing subscribers. And that that loyalty has has paid off.
Years later.
That you're
Year two, full.
Full year.
Eighty four million in sales, so just growing like
crazy, but you have a dilemma and an opportunity which is you know
You know there's demand, and you also know that you're constrained because you have
You're depending on on one manufacturer who a lot of other people are depending on, and their capacity is probably at full throttle. So
You have to presumably start to think about
How to solve this.
how to become more vertically integrated.
Correct. And I the idea of owning manufacturing.
you know, even eighteen months into starting a business was not something that was on the agenda. That was not a roadmap item in any way.
But I changed my mind very quickly.
And when I realized that I was one phone call away from potentially being out of a business and not being able to serve this beautiful demand.
I had to own my own destiny.
And I was introduced to
Really a founding father of formula. He had built a company 22 years before that selling toddler formula, and he made a much wiser decision.
than any of us to go break ground and build a modern
Infant formula facility in the heartland of this country in twenty nineteen.
And this was for the brand uh Nature's One, right? Correct.
He so this was a small brand.
That decided to build their own facility.
And I imagine it's not cheap to build something like that.
He raised capital.
But this was happening.
behind the scenes. There was a building of a facility that was still underway.
And by the time we had come to the conclusion that we needed to own manufacturing,
They were now completed.
When we came forward with huge demand.
And he had the perfect facility.
And also the need now for capital.
To be able to invest in this.
We decided to purchase this facility and combine our businesses.
And also the brand.
Correct.
So you acquire Nature's One, and does Nature's One still exist as a standalone brand?
There is still the baby's only toddler formula.
That's right. Got it. Okay. So you buy this facility in Ohio.
But from what I understood'cause it's twenty twenty three.
You're not actually producing right away.
There's still things you have to do there. Yeah, and this is the most painful part of it all, which is I've now acquired
An expensive fixed asset.
But we had yet to get full FDA approval.
Uh-huh. You had to get right, okay. You had to reapprove the facility, you had to reapprove your formulations, and nothing happened overnight.
I still relied on my contract manufacture to serve.
are are essentially our demand for the next two years.
And we went out of stock again in 24 for almost seven months. Wow.
Um
I mentioned earlier about the two, you know, Abbott that makes Similac and I I mentioned Me Johnson that does infomil and I should I should have said that Me Johnson was acquired by Recett, another company. So I guess technically they they oversee it.
Uh, and I mention this because I know that it's just a weird moment in history where everything is
is a minefield right um you have
dealt with some of this, you were invited to the White Ho to the HHS, um in twenty twenty five.
by the Secretary of Health.
Robert F Kennedy.
Лосапи лам, лацепіль донтовим.
It's just the w world we live in, right? And
You were invited along with the heads of these other big uh baby formula companies. Correct. Like Rick and Abbott and Parigo.
to come eat with him and uh
You got some grief and pushback from
your customers who are like
Uh they think that the brand should represent, you know
Certainly.
political perspective. So
Yeah. Tell me about just navigating that. I mean you you're invited to meet with him. He's the head of the health and human services department. You are in this space.
It kind of is a no brainer to me.
But
Giving you a crap for that.
As an infant formula, you're regulated.
So, you know, to put another way, it's like um
The head of HHS is like my principal.
And
When the principal in your school calls you to the office, you go to the office.
And it happens to be
A person who
has raised some eyebrows.
Now
What is not being spoken about is that
For the multiple administrations that have been in seat.
I am not choosing when and if I walk into that room or whether I take that invite.
previous administration, this administration, if I have an opportunity to shape the face of our industry and to be the voice of parents and be the voice of mothers.
You better believe I'm gonna take that call.
And we can't look at what we do as politicized.
There's nothing more bipartisan than what it means to feed babies.
And if we are building a legacy business and we're doing this right, it will mean that we're gonna be dealing with characters that are polarizing.
It will mean we're gonna be dealing with different administrations along the way.
Арзі ремай а центріст.
As possible.
Through this position.
So
I think it's a it makes a lot of sense. I'm I'm here we are in twenty twenty six now. We're we're talking and
You guys are growing and growing in hundreds of millions of dollars in sales now. That's right. And
You have, I've read, about four percent market share in the US now, which is pretty great. Just under four percent. Just under four percent.
And tell me about the ambitions here.
you know, in ten years' time, what do you want Bobby to look like to be?
Start first just with the culture change.
No one should be embarrassed about how they're feeding their baby. When I look back in ten years,
I wanna be at a dinner table conversation and to be able to hear a new mother talk about the formula she's using. In fact, I wanna see her wear a sweater, we're sweater with a brand across her chest.
Because
This is something that is playing such a big role in her life.
Yeah.
She has that emotional connection to it.
Secondly, I hope we change policies because they're broken. Mothers are overlooked.
Parents today are
Up against too much society pressures.
And then lastly
I think growth will follow.
And hopefully one day
We're not as big.
And the simile and infamil of the world because I don't think anyone should be.
But the
Ideally we're serving a good ten percent of the market.
When you when you look at at the journey you took, you know, and and how quickly I mean, really this started s they start selling in twenty twenty one. Here we are five years later and you're in hundreds of millions of dollars.
and a respected brand. How much of of that do you
a tribute to the work and the grind and and then how much do you think just had to do with like luck and circumstance and
what was going on in the world.
Амі аз на іришвомен, а верий строг.
In luck.
I don't believe there's a shortage of luck, I believe that there's a shortage of awareness.
To how you use that luck.
We would not be where we were.
If we did not hustle with harsh
And a lot of hard work.
So
Look is the invitation.
But hard work is why you're sitting at the table.
It's a good mix.
It's a very good mix.
That's Laura Modi.
Co-founder of Bobby.
By the way, Laura says one of the things she's proudest of is the company's advocacy group, Bobby for Change.
Which is working to influence policy in the industry. And one of the things the group has done is to help introduce a bill in Congress that would allow women who've had breast cancer.
To get insurance coverage.
For infant formula.
Yeah.
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. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please do sign up for my newsletter at guyros.com or on Substack.
This episode was researched and produced by Alex Chung with music composed by Ramtine Erablui.
It was edited by Niva Grant, and our audio engineer was Robert Rodriguez. Our production staff also includes JC Howard, Casey Herman, Chris Massini, Carrie Thomson, Carla Esteves, Sam Paulson, Catherine Cyfer, John Isabella, and Elaine Coates.
I'm Guy Roz, and you've been listening to how I built this.