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

The struggle of feeding a baby

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2:54Most 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 worked, and couldn't understand why I would dedicate my time, energy, and capital to going to making something that the world didn't need.

Building a career in tech

3:32Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

3:47I'm 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.

4:02Baby 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 U.S. alone, it's about a $6 billion market, dominated by giant brands like Enfamil and Similac. And because some

4:33babies' 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,

5:09she wondered if there was room for something different, a powder made with organic, grass-fed milk that felt more modern and more transparent. 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 her 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

5:42public 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 in 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 U.S., which, given the size of the

6:17industry, is a pretty big deal. As for Laura, she moved to the U.S. after college. She was born in the mid-1980s 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-vis jackets, masks and gloves, construction clothing. Like yellow vests. Like yellow vests, like high-visibility clothing. That's a cool business

6:53because you, like unsexy, but one of these businesses that where you need, lots of 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, because 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 jacket and just start directing traffic. And people would just assume, like anybody could do that.

7:24I've always wondered about that. That is so true. You know? You're totally right. You could walk into a store and buy a high-vis jacket and do exactly that. So when you kind of went off to college, university in Dublin, did you think, you know, I'm getting out of this small town and it was great, but I'm going to start my life maybe in Dublin or London or somewhere else? So I'd gone to, my secondary school was in boarding school up 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 years. And it was also during the

8:02tech boom, of which most of that tech boom was happening in Dublin. And I sort of watched the renaissance of Ireland and Dublin happening at that time when the tech companies of the world were setting up. Intel and Google and Rice. Yeah, 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 read that a few years after you graduated

8:35from college, you had an ambitious goal that you set for yourself. You, you decided that you wanted to work at Google in the U.S. Yeah. I think, Guy, 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

9:05visit 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. And it wasn't just the space. It was the mindset. You know, I always joke, you know, back home in Ireland, you could tell someone like, oh, you know, I want to be an astronaut. And they would say,

9:40ah, 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?

10:11And 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 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 are you learning from brilliant people, but the work ethic

10:48was 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, you know, these financial platforms before this, but I became such a fast learner. I found myself day trading. So not only did I love working there and love the job,

11:18I also felt like I was growing in my own sort of knowledge and understanding of a new world. And how'd you do, by the way, as a day trader? Not too bad. Actually, my first home was mainly the proceeds of some day trading. Yeah. All right. So you're, you end up, you're at Google for about five years, I think. Yeah. Just under five years. And you join a small-ish, at that time, startup, Airbnb. It had started in 2008, but still in 2011, it was gaining traction for sure, no question about it. But you got a job.

11:52But tell me about that decision. I mean, it must have been exciting to be part of something that 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. And I lived a real New York life. And I left that week

12:26going, 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. 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 pass 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

12:59from an entrepreneurial family, was there any part of you that was always thinking, maybe one day I'm going to 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 had the most beautiful

13:30opportunity to learn. Right. Okay. So you are at Airbnb, and it's growing. And you also, at a certain point, become a new mom, which is going to, it's transformational for most people who become new parents. It was for me, and I'm sure it was for you. But it really became even more than that. So tell me a little bit about becoming a parent. It's around, I guess, around 2016.

Facing the reality of new motherhood

13:572016. So before my kid was my husband, who I actually met at work. Before you had kids, your kid was your husband? No, no, no, no. Before kids, I met my husband. I met my boyfriend. We met at Airbnb. So we were probably the first, you know, team couple to come from Airbnb and have our first kid as a couple there. I, wow guy, I mean, I went into motherhood just maybe with a certain belief of how everything would work out. I watched my, you know, I had a grandmother who had 13 children. She also built

14:34her 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. But I went into motherhood and I immediately felt the tension between the highest of highs lows and the lowest of lows questioning everything. Yeah. You know, I, I say this all the time, but I, I believe women can do anything,

15:06but maybe not do everything. But all to say, I also found myself in a position questioning society and questioning the policies in the world around me. I come from Europe where parental leave was way longer than what we were offering here in the U S and I was watching the same government tell women that you should breastfeed for six months, but we're not going to 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

15:38were you, where do you remember hearing that? Like the pediatric, you know, American pediatric society? 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. Right. Six months of breastfeeding because they say the data shows that it's healthier for a baby, right? Correct. That there's outcomes 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.

16:15It's just, it's 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

16:48is. 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 at 11 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 locket where they call over the, you know, the microphone, like help

17:19on 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 had 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 hoped that they put it into a bag that wasn't see-through. That nobody would see you.

17:49Yeah. It's interesting because I think many people, certainly men would never think, well, what's shameful? Why would you feel shame? Like it's not like buying cigarettes or, you know, or even like, 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

18:23mothers 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, this is a natural,

19:00whatever, 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 is 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 yet, even with that being true, the other truism that we hold near and dear is that not

19:35everyone can do it exclusively. And if they can't, that's okay, because there is fabulous alternatives and you can thrive on something else. All right. 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 are you, I mean, tell me what you start to notice about baby formula?

Researching the formula market

20:05So as a crazy researcher, just in life, everyone assumes like, oh, 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 40 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

20:38mother-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 40 years? 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

21:12come in and do something better. And I spent the next year going back to work, having Mary in 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 2009, 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 cloth diapers. You're talking about 2016 by this point. It was natural for you as a parent to, like, investigate every single thing

21:46you 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 U.S. comparison to Europe very quickly. And what did you find? Like, what was the difference between baby formula in the U.S. versus Europe at the time? So, the biggest was that the European nutritional standards that were governed by the EC were updating those standards every four to five

22:19years. And then I did the comparison to that over here in the U.S., and I realized the last time that the U.S. updated their nutritional standards was in the 1980s. When I sort of took a step back in it, I think the biggest wake-up call was that infant formula was just ignored here in the U.S. It's interesting because I, like, the European infant formulas were or not, and probably still are not, approved to be sold in the U.S. because, understandably, baby formula is super highly regulated.

22:50And 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 wait that no parent should ever go through.

23:22And 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? All right. So this is 2016. And mainly, I think then and probably still now, the biggest brands were Enfamil and Similac, which are made by Enfamil's Mead Johnson. Similac is Abbott, which is a huge pharmaceutical company. And they have really kind of dominated like the Coke and Pepsi of baby formula, right? Yes. They are the Goliaths of this industry. And they have for decades.

23:57And the standards were more or less unchanged for 40 years. Correct. Obviously, they had nutrition that the FDA had deemed, you know, was necessary and the minimal standards for infants, I guess, fats and certain vitamins. Carbs, proteins. What ingredients did you find that were different between what you saw in U.S. baby formulas and in European ones? DHA was the biggest. And DHA, which is the nutrient that supports brain health. Yep. DHA was not just mandatory in Europe, but there was a level that was higher than

24:33any formula was choosing to do here in the U.S. 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 baby needs is really critical because too much iron early on can have negative consequences

25:06much later in life. So when you look at the iron range in Europe compared to the iron range here in the U.S., 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 U.S. or were you just buying, you know, whatever? Maybe you get Earth's Best or maybe use Similac. I don't know. What were you doing? I originally bought Similac. And then I realized that there was this thriving black market over in the U.S. where parents

25:41were buying European formula and they were packing suitcases 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 U.S.

26:11Okay. But you're still, I mean, as a parent researching this stuff. And I guess a year later, 2017, you get pregnant, you're pregnant again with your second child. It was on the eve of 2018, January 2018. Yep. Okay. But what was the point where you were like, you know, I could do this. I could, 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

26:45the market. It was within days of peeing on that stick, I turned to my husband and I said, I'm going to go do this full time. You were going to, you decided to leave entirely. You're going to leave your job at 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

27:17and 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 consulting here and there, coupled with turning to my bank account over in Ireland, 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 going to go public.

27:50It didn't go public until 2020. 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 going to nail. But I was depleting capital, my funds, way faster than I had anticipated. And meanwhile, you need to start doing more research on baby formula, right? Like, so what did you do? Like, how did you go about that? Yeah.

28:21It was, you know, 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 hire after another, but the bills came in. And, you know, you're cold calling so many people.

28:51Between, I don't know, 8 p.m. and 11 p.m. 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 trimesters taking it from idea to ultimately a formulation and concept. Did you give yourself a budget?

29:22Like, did you say, OK, I've saved, you know, over my career now, I've got $100,000 or whatever, and I'm going to use that and take a risk with that. And if it runs out, did you have an idea number in mind? Yeah. First, it was $50,000. And then it went up to around $80,000. And then I ultimately ended up spending close to $200,000. Wow. And I pulled it from everywhere. All right. So I want to kind of get a sense of what you are facing. I mean, because it's not that different today, right?

29:54The biggest baby formulas are produced by these two giants, right? And this is a huge – I think 75, 80, maybe 80 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.

30:28So 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 started an infant formula business, the reaction was often that, which is, oh, this industry is dominated by these two large pharmaceutical businesses. And it was almost 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.

31:07And there was an ounce of naivety, probably. You know, 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. 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.

31:42All right. So you're working on different recipes with these consultants. And I mean, presumably it's like, can I break down what 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.

32:15And I found one. It was a hardback 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, OK, honey, this book cost $217. If I buy this book, there's no going back.

32:41When 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 Raz, and you're listening to How I Built This.

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Developing the recipe and raising funds

37:47Hey, 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 U.S. 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. So, yeah, how do you do that? You get on a panel of babies. So there's these essentially kitchens, micro kitchens, that you can work with. And they're innovation centers.

38:17And 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 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.

38:57But 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 almost like drug testing, right? That's what makes a drug so expensive because the testing is so regulated and expensive. Because if you break it down, it's like we're talking about like nonfat milk and whey protein and coconut oil and safflower oil and lactose, right?

39:27It'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 farmer's 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 were ready to raise money?

40:00So 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?

40:33You were able to test it 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 – so you – 2018 is when you really start this process. That's right. And by the way, you register this name Bobby, and it's a story behind the name. At the time, I thought I was going to 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 a Bobby.

41:05She'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 named Bobby. It can be Bobby with an I, Bobby with a Y, or an IE. They ultimately responded and said, IE 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 IE. Okay. So you have the name, and you've got a prototype.

41:36Yeah. 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 trying to raise initially? Because this is going to take a lot of money with this approval regulatory process. So what did you think you needed initially? I got to a place at around eight months pregnant and realized taking the next phase meant raising institutional capital. And my husband was all for it.

42:07Like, 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. But 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.

42:40I spoke to 64 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. It was the hustle towards a pitch. But ultimately, after 64 pitches, most of them said no.

43:11And four of them said yes. That's pretty good. I mean, it's not a bad, right? You got to take a lot of shots. But I wonder whether, you know, because 2018, 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. A lot.

43:41That 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. They really say that to you?

44:11Because that, I mean, 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. 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. And couldn't understand why I would dedicate my time, energy and capital to going to making

44:47something 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 belonged to something. You feed your baby. If you think about this, you feed your baby a bottle or you breastfeed them seven times

45:18a day for their first year of life. And yet, parents were hiding their can of formula when a guest came over or they were lying 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 this show, we've had stories of founders who, you know, went out and tried to invest. Part of the story was the resistance they faced and maybe some insulting things they heard.

45:49And in more recent years, I've kind of reflected on this and I've come to maybe a bit of an unusual conclusion, which is I actually have in some ways more respect for a VC who's going to 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 going to focus somewhere else somewhere, you know. And I say that because if a person is giving feedback and explaining why they don't want

46:21to 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. And, you 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 pitching the market size and what this business

46:53could 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 controversial. But the yeses I got were game changing. It was the first sign of belief. And I am so grateful because it was only two weeks before having my second baby did I get

47:27funded. And there was such a deep breath. You raised the money. You raised... 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. Like, Bobby was now, you know, it was like a living, breathing... Your third child. 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

47:58with 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, 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.

48:28And 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 $50,000 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 2019. Tell me what the first few steps are now. What are you like in terms, let's, let's talk about hires first.

49:01Because 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 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.

49:32Sounds logical. Sounds very logical. Yeah. 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. What 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.

50:04And 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 that we were sharing in that experience. And she worked within 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 because it's such an unconventional, I guess I'm kind of giving away the story because you would ask her to become your co-founder and COO, but it's

50:38an unconventional, like everyone's saying, go find a scientist, a CTO, and you would think culture will come later. You know, we can deal with that later. Culture never comes later. It was really important that we built a culture that could last longer than our product, that could sustain the hits of the business, because there was going to be, there was going to 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.

51:09The 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. Now 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.

51:39Yeah. 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, more of an executive team, and you've got this prototype.

Finding a manufacturer and the FDA recall

51:52But 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 U.S. 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 Perigo. They make brands for a lot of different baby formulas. But you're probably really small at that point. So where, where could you make your formula?

52:22So Perigo was the only, it is the only manufacturer of infant formula here in the U.S. outside of the vertically integrated. Yeah. Wow. Outside the big ones. It's the only one that, because they don't have their own label. They make, I think they make like Walmarts and- All of them. And Costco and- Hertz Best at the time. Yep. So I remember calling this contract manufacturer and they declined. You know, we're, we're moms in a basement. They're not going to take us on. This wasn't something that they typically do.

52:55Okay. So what did you do? So I went to the birth land, the homeland 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 infant formula in Europe meant that it didn't match the regulations of making

53:31infant formula here in the U.S. 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. But 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

54:02a 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 formula. So just something else to give your baby. Something else. Exactly. Okay. And the idea was you were going to set up, you say, pilot program. This is going to be a direct to consumer. Direct to consumer. We only started selling it to San Francisco families and we would personally go and deliver

54:33it. Remember, I remember very, we would have 93 customers. And you delivered them canisters of the formula. Canisters. Yeah. Canisters of the formula. And it was branded and everything. Is it Bobby on it? 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.

55:04And 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.

55:24An FDA inspector knocks on the door and comes on in showing their badge? Correct. By which anyone who comes from the food and drug space, the FDA doesn't just normally show up. That just never happens. But the FDA shows up and 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.

55:55I can see that it's positioned as companion formula. However, it looks like a duck. It quacks like a duck. This is infant formula. By the way, how do they even know about it? I mean, how do they even get tipped off about this? You know, here I am almost eight years later and I'm still wondering the exact same thing. We had gotten some media attention on TechCrunch and, you know, our launch of bringing this formula to market created some stir.

56:26And our belief is it probably made its way to the FDA and FDA's thought, this looks like another way to bring formula to market. And this doesn't match the regulations.

56:38And 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

57:14them coming and we had this rallying cry from them being like, this is crazy. We got to figure out how we get the FDA to get this approved. We ended up firing up a 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.

57:44At 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. 100%. 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.

58:16We 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 U.S. Perigo. Perigo. And said, we watched what happened with the recall and we want to make your product. They said that we, because you had approached them before and they were not interested in working because you were too small, presumably.

58:51Correct. And now that they saw this kind of fiasco, they called you and said, 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 we got this email.

59:23And it was actually an internal champion. He led their R&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 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.

59:56And 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. And we spent the next 18 months course-correcting our supply chain to get our product made. Okay. Because 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.

1:00:30But I still have to – I mean because that was a significant setback because all of a sudden you're not going to be able to test this with customers, real customers. And you're going to have no revenue coming in. And 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 so was any part of you like freaking out when this happened?

1:01:00Oh, of course. You go through your own identity crisis. I had investors say, you got to change your name. Bobby could never exist. Because 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 going to 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 this story. This is a story of David versus the Goliath and you need to get out to the FDA and you need to own this moment.

1:01:36I did ultimately decide to own it and stick with it. And we ended up actually getting some press to speak to the full story. You know, 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'd 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. What would have been a fiasco, but it was kind of turned around.

1:02:06And I guess there was an investor who also liked how you handled this. It piqued the attention of those that 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 $4 million, which allowed us to spend the next 18 months, get our product off the line at this facility and into the FDA.

1:02:39Okay, here's my question. You had a formula. You had an ingredient list. And from my understanding, the problem 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 going to get it made by Perigo, which is, you know, they make all this contract formula. Why was it going to take so long? I mean, you had it all ready to go? Oh, because we were obsessed with certain suppliers we wanted to use that they weren't yet using.

1:03:11So it wasn't actually the FDA? It was suppliers? 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. 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.

1:03:42And 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, of people. You're in a queue. They've got to 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've got six months of waiting for FDA 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 gearing up the brand for when we would come to market.

1:04:17And one of those was to meet with community members, meet with parents every week. And there was this belief, 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 what your positioning is. You really hone your brand. And we took that very seriously.

1:04:48We created a blog called Milk Drunk where we would publish articles and we would become a thought leader 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.

1:05:21So the idea comes to you in 2017, roughly, 2016, 2017, and it's going to take over three years before you get an FDA-approved product ready to go. But meantime, it's COVID. COVID's going, right? So are you guys working in an office? Are you working remotely? Like how are you – before COVID happened, how are you – did you rent space? You had a warehouse, I know. Well, we're in my basement. Right.

1:05:52In my basement in San Francisco.

Launching Bobby during the pandemic

1:05:55It's a big team of moms and COVID hits. So everyone goes home and they start working from home. But it was August of 2020. 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. Wow. Now, when most businesses were in a place during COVID of going, will we exist? Do we have the capital to do so?

1:06:26Does 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 – because you've got to order product, you've got to launch direct-to-consumer, and you've got to start a marketing campaign.

1:06:57I mean, look, that second round of capital that came in, that $4 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 going to react? And the amount of times investors would say, what's your forecast for the year? What do you think you're going to 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.

1:07:28You're going out on a hope and a whim that there will be good reception to this and it will take off. When 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. How I Built This

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Navigating the industry and regulations

1:10:15Hey, 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 there's things you can and cannot say or things that you have to be careful of by risking like class action lawsuits.

1:10:51Oh, 100%. 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 Abbott. 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 go like, can't say that, can't say that. Like, what's something that you couldn't say?

1:11:22So the biggest thing to avoid was making any functional benefit claims. Like smarter babies are 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, like tying the nutritional value of this to very specific outcomes was a big no. And as a brand, we weren't here to try and like shame different formulas or point to specifics. At the end of the day, we were a European style formula that was made here in America.

1:11:54And that positioning of our product, it resonated. That's all you had to say. European style recipe. That's all you 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 the stories of those that weren't able to exclusively breastfeed.

1:12:26So 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 2021. And it's still COVID. I mean, people are still working from home. 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.

1:12:57But what we failed to do was that we didn't have really business model fit or maybe forecasting fit. We ran out of product very quickly. I remember in that 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.

1:13:30What 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 in a container. No. This is, wow. When you make product for infant formula, you actually have to let it sit for a period of time. And you have to have the testing go out. And you've got to wait until 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.

1:14:08But 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 a 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 $16 million in sales.

1:14:38That's right. We had hoped we would do around $4 million. And we ended up doing $16. Wow. So that year, 2021, 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, D.C. I mean, 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, were working with government agencies.

1:15:16Oh, because your products were regulated by the government. Exactly. And he's an AI, I think, right? He's an AI. 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 FDA. Correct. You're close to HHS. 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, 800-pound gorillas in this space are Similac and FAMIL are, you know, they're widely used for a reason.

1:15:52But they're also, a huge amount of their revenue comes from government programs, WIC, women, infants, children, I would imagine, right? That's right. Basically, the formula is eligible for these government programs that help people who can't afford these products. That is huge if you have that contract, right? If you have the ability to get your product approved for WIC. So WIC, these behemoths, these Goliaths, saw an opportunity to be able to subsidize the cost of this for the government.

1:16:28Every 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 WIC, you can only choose that brand. One product. Exactly. And the fact that 50% of babies born in this country are choosing a formula under WIC, which means they are limited by choice, huge opportunity to reform this program. But it starts with more businesses and brands existing.

1:17:02And it takes companies like Bobby to gain more market share, because the reality is, even though I want to see a change, I'm not yet big enough to be able to serve WIC either. Okay, so this is still an ongoing thing, right? Because you're, I think, I looked into it. I think Enfamil and Similac are primarily what's available across the country for WIC. In the meantime, you've got this first year, a great first year, right? And then comes 2022.

Surviving the formula shortage

1:17:31And there's this, like, crazy infant formula shortage, which some people might remember. I mean, the shelves were, like, empty. People could not get baby formula. And I think part of the reason was that Abbott, which makes Similac, 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.

1:18:02They had to shut down that facility. But at the time, I turned to the team and I was like, this is going to have a very negative consequence on the industry. Because a market, we've gotten to a place now where they'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.

1:18:34You 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 2022. But at the same time, it's like 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.

1:19:04We'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 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 going to end up acquiring too many people and we won't be able to serve them.

1:19:35Now, this was like a COVID situation. You're going, yeah, yeah, yeah. But it's all going to 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 going to 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 were 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.

1:20:15You've lost my 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 loyalty has paid off years later.

1:20:37That year, year two, full year, 84 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 are constrained because you have, you're depending 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.

1:21:09Correct. And the idea of owning manufacturing, you know, even 18 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.

1:21:41And 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 2019. And this was for the brand Nature's One. 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.

1:22:13And 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.

1:22:45That's right. Got it. Okay, so you buy this facility in Ohio. But from what I understand, because it's 2023, 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 re-approve the facility, you had to re-approve your formulations, and nothing happened overnight.

1:23:16I still relied on my contract manufacturer to serve our essentially our demand for the next two years. And we went out of stock again in 24 for almost seven months. Wow. I mentioned earlier about the two, you know, Abbott that makes Similac, and I mentioned Mee Johnson that does Enfamilac. And I should have said that Mee Johnson was acquired by Reckitt, another company. So I guess technically they oversee it. And I mention this because I know that it's just a weird moment in history where everything is a minefield, right?

1:23:52You have dealt with some of this. You were invited to the White House, to the HHS in 2025 by the Secretary of Health, Robert F. Kennedy. Lots of people love him. Lots of people don't love him. It's just the world we live in, right? And you were invited along with the heads of these other big baby formula companies, like Reckitt and Abbott and Perrigo, to come meet with them. And you got some grief and pushback from your customers who are like – they think that the brand should represent, you know, certain political perspectives.

1:24:29So, yeah, tell me about just navigating that. I mean, 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 you're getting a crap for that. As an infant formula, you're regulated. So, you know, to put it another way, it's like 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.

1:25:02Now, 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. So, 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 going to 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.

1:25:34And if we are building a legacy business and we're doing this right, it will mean that we're going to be dealing with characters that are polarizing. It will mean we're going to be dealing with different administrations along the way. And our job is to remain as centrist as possible through this position. So, I think it makes a lot of sense. Here we are in 2026 now, 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 read, about 4% market share in the U.S. now, which is pretty great.

1:26:08Just under 4%. Just under 4%. And tell me about the ambitions here.

Looking ahead at future growth

1:26:13You know, in 10 years' time, what do you want Bobbi to look like to be? I'll start first just with the culture change. No one should be embarrassed about how they're feeding their baby. When I look back in 10 years, I want to 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 want to see her wear a sweater. Wear a sweater with a brand across her chest. Because this is something that is playing such a big role in her life that she has that emotional connection to it. Secondly, I hope we change policies because they're broken.

1:26:46Mothers 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 as the Similax and Infamils of the world because I don't think anyone should be. But ideally, we're serving a good 10% of the market.

1:27:08When you look at the journey you took, you know, and how quickly. I mean, really, they started selling in 2021. Here we are five years later and you're in hundreds of millions of dollars and a respected brand. How much of that do you attribute to the work and the grind? And then how much do you think just had to do with like luck and circumstance and what was going on in the world? I mean, as an Irish woman, I have very strong belief 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.

1:27:43We would not be where we were if we did not hustle with heart and a lot of hard work to get us here. So luck 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.

1:28:14And one of the things the group has done is to help introduce a bill in Congress that will allow women who've had breast cancer to get insurance coverage for infant formula. 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 GuyRoz.com or on Substack. This episode was researched and produced by Alex Chung with music composed by Ramteen Arablui.

1:28:45It was edited by Neva Grant, and our audio engineer was Robert Rodriguez. Our production staff also includes J.C. Howard, Casey Herman, Chris Messini, Carrie Thompson, Carla Estevez, Sam Paulson, Catherine Seifer, John Isabella, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

1:29:15How I Built This.