See all How I Built This with Guy Raz transcripts on Applepodcasts

Hey Prime members, you can listen to how I built this early and ad-free on Amazon Music. Download the app today. It's Guy Raz here. On the Wisdom From The Top podcast, I talk to leadership experts and some of the world's greatest business leaders about how they lead, innovate, and transform the people around them. If you're trying to make it in business or just wanna think more like a leader, this show's probably for you.

Listen now to the Wisdom From the Top podcast from Luminary and NPR. Hey, Before we start the show, you know, we hear a lot about pivots on how I built this. How a simple change in perspective can create a whole new opportunity. This made me think of a conversation I recently had with Seth Meyers. He told me about the moment he realized that he could find success and fulfillment on Saturday Night Live, not as a performer, but as a writer.

Check out my interview with Seth Meyers over on my other podcast. It's called The Great Creators. Just search for The Great Creators with Guy Raz wherever you listen to podcasts or go to thegreatcreators.com. And now, on to today's show.

I was in a women's healing circle, And so I went to my group and I said, you know, we need a name, and 1 of the women said, it should have your name in it, and it should be something like Mary's Crackin' Up or something like that, which we thought was funny, and then my other friend said, yeah, Mary's Gone Crackers, and that was it. The angels started singing, the sky opened up and that was clearly the name.

Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, Mary Waldner solved her gluten sensitivity by creating a cracker she could eat and others would love, and grew it into a snack food worth millions. 2 of the greatest entrepreneurs in history were older than you might think. Sam Walton was 44 when he launched Walmart. Ray Kroc was 52 when he stumbled across a hamburger stand and turned McDonald's into a global powerhouse.

Experience matters, and the research bears this out. A Harvard Business Review study found that when you measure for growth, most successful businesses were started by people with the average age of 45. Mary Waldner wasn't just older when she started her business in her 50s, But she was also an accidental entrepreneur, someone who really didn't ever think about starting a brand. For 20 years, Mary worked as a psychotherapist in the Bay Area. That was her job.

But Mary also had a problem, a lifelong struggle with her health, especially her digestion. So she had to change her diet and the things she baked. And 1 of those things were crackers, basically a mixture of seeds and gluten-free grains. And as these stories go, her Friends wanted them, and then their friends wanted them, and then, well, a business was founded. Mary called it Mary's Gone Crackers.

And today, it's sold in tens of thousands of stores across the U.S., including Walmart and Target. And The idea for the crackers only came about because of a diagnosis later in life. As a child, Mary was always in pain, especially after meals.

My mother decided that it was emotional because Doctors couldn't figure out what was wrong. So that was kind of what they did, you know, they couldn't find anything wrong, so it must be in my head. I did have a lot of allergies, so they gave me allergy shots, but this isn't an allergy, so it didn't show up on any tests. And back then, at least where I was living, doctors didn't think about celiac disease.

Right. So it wasn't until you were 43 years old that you were diagnosed with celiac.

Yeah, finally, yeah. And when

you got that diagnosis, it it must have been like a relief, like a validation of everything that happened.

Oh God, yeah, it was wonderful. I mean, it's funny because I've met a lot of people since then who get diagnosed and they're really bummed out, you know? And that wasn't the case for me. I was ecstatic to have something specific that I could do to make myself feel better, which was pretty quick too.

Because you presumably were consuming bread and wheat. Oh yeah. Yeah. I mean, you just ate those things.

It's everywhere. Yeah.

And so when you got that diagnosis You must have thought my god 43 years of not knowing this thing and I cannot so I have to assume Immediately you changed your diet in your life.

Yeah. Yeah, what's interesting is that? The the diagnosis came from my chiropractor. Again, doctors never figured it out. A lot of my symptoms were structural.

So my back would go out and I would never, it would be really hard to hold a chiropractic adjustment. So like, cause I had muscle weakness and I also was seeing an acupuncturist and she and her whole family had celiac disease. So when I discovered this, I had this incredible resource that most people don't have, which was amazing. So I just went home and emptied out my kitchen and started to learn about ingredients. And through my acupuncturist, I learned that there was actually a celiac disease association.

And so, you know, I got the newsletter. I just, you know, went gung ho and started learning about different ingredients. And, you know, the joke I said was that I could live without bread, but I couldn't live without my Auntie Nid's brownies. So that was the first thing I made that was gluten-free.

So you, the moment you went gluten-free, how quickly do you remember feeling the effects on your health?

It was, I would say maybe 3 to 6 months I was noticeably different. And I remember going out to lunch with somebody who I hadn't seen in a few years, actually, And she took 1 look at me and said she almost didn't recognize me Because I look so different so

well

I started getting that kind of response from people You know you look at yourself in the mirror every day. You don't see any changes, But when people who I hadn't seen in a while saw me, they were stunned. So.

Pretty soon after you were diagnosed, you started to like, mess around with recipes for things that you could, you could eat, right? What were you making?

Well, like I said, brownies, sweets, because that was my issue, brownies, cookies, any. I started playing with different flours to make a blend that would work.

Were you always a baker, a home baker?

Yeah, me and my grandmother. Yeah.

And so baking was a big part of your life?

Yeah. Yeah.

Wow. So flour, like wheat flour was like a part of your life.

That's that's right. Definitely.

And all of a sudden you could not use wheat flour or rye flour, yeah. So you had to switch to rice flour or potato flours.

Rice, tapioca, potato,

yeah. And how were the results of like the brownies?

Well, you know, if you put enough eggs and butter in something...

And sugar, you're good to

go. And sugar, it's not bad but trying to bake things where you rely on gluten, things just fall apart, you know, they're just, just puddles. So there was a lot of just disasters for a long time.

And this is when, I mean, the mid-90s, like gluten free is, I mean, now

it doesn't exist. Yeah.

It's not a thing. Yeah. So you really had to make your own stuff and so tell me what what were some of the challenges that you faced when you knew that you could not eat bread anymore and You were living in a world where everyone out around

you was eating bread Yeah and pizza and stuff So imagine going to a restaurant and they bring you a basket of bread and you're hungry and everybody's diving in and filling themselves up and you can't eat any of it. And So many times when I would be sitting in restaurants hungry and then order a bunch of appetizers or try and fill up, it was a really unpleasant experience. So that's when I thought, I really wanna make something that I can bring when everybody's eating bread and butter to have something, because so I'm not starving.

So yeah, so what'd you do?

So that was when I started, and again, remember I'm a hippie food nut so I wanted something whole grain, I wanted something healthy so I had the idea for the for the ingredients, but it wasn't gonna be a cracker in my mind, it was gonna be some kind of a biscuit or something chewy, you know, so I want. Yeah, like more bready. Yeah, more bready.

Like Ezekiel bread or something.

Yeah, or like a biscotti kind of

thing too.

I wanted something really, you know, I'm hungry. I want something to chew on.

Like a gluten-free breadstick.

Yeah. Yeah. Wouldn't that be good? Yeah. Yeah.

So that's what I started to play with. Brown rice, quinoa, flax seeds. Flax seeds were really big then, and sesame seeds.

Yeah. And you would take brown rice flour or cooked brown rice?

No, it had to be whole grain.

You took brown rice, you cooked it. Cooked it.

So it

was soft.

Cooked the quinoa.

Cooked the quinoa. OK.

Put it together with these seeds

and in like a gloopy gloop

like I'm thinking exactly

You like mashed it with a masher. You just mixed it around.

I put it Eventually, I put it in a food processor. I'm giving away secrets here.

It's not a huge leap to figure this out. The food processor part, but I got you.

And then I wanted, then I would make it, you know, bake it, try to bake it.

Wait, so you would take this, you would just take these whole grains, the cooked whole grains, and then the quinoa and rice, and then throw some flax seeds and sesame seeds and put it in the Cuisinart, right? I got it. And then you would just spread it on a cookie, like a cooking sheet?

Well, no, I tried to make it into little blobs.

Oh, okay, like little dots, like you would do with cookies, like drop cookies.

Or a little bigger, like a little, like a roll size.

Okay, I gotcha.

And of course, that didn't work at all

because- What happened?

Well, the outside would get done and the inside would be raw because it was so eventually what happened is I just kept flattening them and flattening them and flattening them to the point where I had a very thin and that was the only way they would bake through.

You would basically take, so you'd still drop them on, because like a meringue or something, but you would just, or a cookie, but you just push them down into a disk.

Flatten them, yeah.

But these are like sticky, I imagine this would be super sticky.

Well, okay, so here's another trade secret. So what I did was I got Yeah, they're very sticky. It's like, you know, it's like glue. And so I got a glass that had a flat bottom on it and I put a piece of Saran wrap over

it.

And then I put, I had a paper towel with some oil on it and I wiped the bottom of the glass on some oil and then I flattened the blobs into crackers with that. And it didn't stick and then I'd wipe it on the paper towel each time and that's how I that's how I was able to make it a cracker.

All right so it's like a smash burger except for a cracker.

Yeah. Yeah.

Yeah. That's how I make my smash burgers not with a glass.

Very labor-intensive.

Very labor-intensive. You gotta take the whole sheet pan and each, you know, a tablespoon of

this

gluey stuff and you would just put, and then you would bake them and they came out like crackers.

Yeah. They would release from the pan. It was amazing.

All right, so you, this is 98, and this is like a little fun kind of thing that you've come up with. And, and you what, you started to just like bring them with you wherever you went?

Yeah, I had them in little baggies so that when I went to restaurants or parties, I had something to eat. And yeah, it worked.

All right. So you're making these crackers. This is not there's no nothing in the horizon that's saying this is going to be a business. This is going to be right. Let me just pause and ask you for a moment why you were why you had your practice because running a psychotherapy practice is a business.

I mean, you had to do accounting, you had to do accounts payable and you had to pay your quarterly tax, whatever it was,

you were running

a business. Did you ever have any visions or daydream about maybe starting a business at some point in your life? No. Never?

None, ever,

ever, ever. None. You had no, you had not a single entrepreneurial bone in your body.

Well, not other than being a therapist.

Yeah. That you thought you didn't think you did. No. Yeah. It was like you were happy, I mean you were content.

Yeah. Being a therapist. That this was.

Yeah. It was what I imagined myself doing my life. For my life. Yeah.

And financially were you struggling or were you making a perfectly fine living?

I was doing okay. It wasn't great. But you know, having a kid and I wasn't getting much support, financial support.

From your son's father.

From his, yeah. So it wasn't, I did okay, but it wasn't great.

Yeah All right, so no thought at all about a business but you're making these crackers and and I guess eventually there are other people who try them or friends of yours who try them and like them.

Well that's what happened is you know that's the other The other piece of information is that I love feeding people, I always have. So I would never just make enough for me. I would always I just kept making them and I would bring them and people would taste them and yeah, everywhere I went. And the response was just kind of unusual to me.

What do you mean?

Well, people just loved them. It wasn't like, oh, these are good, but they would go, oh my God, these are amazing. Where did you get these? Oh my God, give me more, give me more. So I started, you know, it got to be a joke where I was just working and making crackers.

That was kind of became my life because they were, it took me a long time to make the crackers. Like I said, they were very labor intensive. I bought a new oven so that I could have 6 racks in the oven instead of the normal 2 or 3. And the most I could make were like 240 crackers at a time. But that's what I was doing because everybody I knew wanted them.

You were doing like just like multiple sheet pans in your oven of the crackers. And I have to imagine, I think you probably cook, I'm a baker too, you cooked it on low temperature for like a

long time.

Yeah. Yeah. I mean, making them for people and, you know, people responding to them and then crossing the Rubicon so to speak to saying well maybe I should sell these is of course it's a moment not everyone gets to but tell me how you even got to the moment where you start to think about that?

Well, it was, this is another kind of typical experience in my life where I just woke up with a very clear voice in my head that said, I have to manufacture these crackers. I mean, it was just so clear that everyone loved them. I think what happened was, I went to my cousin's house for dinner and she had a friend who had a two-year-old there. And all the adults loved the crackers, but when the two-year-old loved them, that sort of did it for me.

When we come back in just a moment, Mary realizes that lots more people would love her crackers if she could only figure out how to make them on a much bigger scale. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey, I've got a quick request for all of you. Could you please let me know the very first time you discovered how I built this and what kept you coming back for more? You can just add your answers to the how I built this community Miro board.

It's super easy. Just head on over to miro.com slash built. That's M-I-R-O dot com slash built. And I can't wait to read your responses. Miro is actually sponsoring this episode.

And if you haven't heard of Miro, it's the most incredible visual collaboration tool. It basically serves as your team's online workspace, becoming a canvas where you can build on each other's ideas and create something great together from anywhere. While you're leaving us your answers, please feel free to play around with Miro. You can pick from thousands of templates to get started, like a quick brainstorm, an icebreaker, or a flowchart. I really look forward to seeing what you'll add to our board.

Go to miro.com slash built to leave your thoughts with sticky notes, comments, reactions, and more. That's miro.com slash built. Miro.com slash built. Once a company knows what they do best, where do they go from there? Well, If you're Burrow, the furniture company known for reinventing everything you thought you knew about furniture, you go outside.

Burrow's new outdoor collection just launched. With a strong, chip-resistant, galvanized steel frame and easy-to-clean fabric, Burrow's outdoor collection is built for everyday use and to withstand the elements. The modern sleek look and quick-drying plush foam cushions bring the comfort and style of indoors outside. And it's also customizable. You can choose from 19 different configurations and purchase individual pieces or bundles to fit your seating needs.

And as always, get free shipping on every order. How I Built This listeners can get 15% off their first order at burrow.com slash built. That's burrow, B-U-R-R-O-W dot com slash built for 15% off. Burrow dot com slash built. 1 more thing before we get back to the show, please make sure to click the follow button on your podcast app so you never miss a new episode of the show.

And it's totally free. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1999 and Mary Waldner is living in the Bay Area with her husband Dale. And she's discovered that her gluten-free crackers are a hit and that gives her an idea.

I went to Dale and I said, you know, I think we have to manufacture these and he said, okay. I mean, it's great because if he hadn't done that, obviously nothing would have happened or would have taken a long time, but also because neither 1 of us had a clue what that meant.

Dale was, I think he had a job as a general contractor. He built homes

mainly. He was really the entrepreneur. He grew up, his dad was a, had a lumberyard and they build fences and so he grew up doing that and he became a general contractor and he worked for himself a lot. He also started a data business, He called it Profit Information Services where he collected data. This was again, the very beginning of the internet and of technology.

And he put together construction data and then would sell it to people in the building trades that wanted data, new construction data. So he was very entrepreneurial.

But how did you test out, I mean, I know your friends liked it, but how did you even test, you know, prototype the idea, you know, beta test the idea that maybe these would sell in a store? Did you at least make some and bring them to a store to sell to see if people would buy them?

That's what ended up happening. This friend of mine owned the local health food store and I brought her a bag just personally to taste them, to see what she thought. And instead of eating them, what she did, she opened up the bag and put them on the counter by the register. And I went shopping in the store and then I hear all this hubbub and people are eating them at the register going, oh my God, where can I get these? I want some.

And by the end of, you know, that half hour or whatever I was in the store, an hour, she came to me kind of sheepishly and said, you have to bring me more of these. And so that's how that got started. So then I was making bags, we, you know, handmade, we had, I bought a bunch of coffee bat, brown coffee bags with the window in them. And I made them by hand and brought them to the store and she sold them. And so she kept running out and she would call me every few days and say, they're gone, you have to, you know, so this is, this was nuts because then I was making, literally doing nothing but making crackers and working.

Just working at the clinic with patients and then making crackers. And obviously the name Mary's Con Crackers, it's a little bit of a nod to what you did professionally. Was it kind of?

Yes. Well, I was in a women's group that I started and I was having a hard time coming up with a name and Dale said, you know, you have to find a name you have to find a name. It doesn't matter and I said Oh, no, it matters a lot and so I went to my group and I said You know We need a name and 1 of the women said it should have your name in it, and it should be something like Mary's Crackin' Up or something like that, which we thought was funny. And then my other friend said, yeah, Mary's Gone Crackers. And that was it.

The angels started singing, the sky opened up, and that was clearly the name.

Wow. All right. So you are selling them at this little health food store

in

Lafayette, and clearly people are buying them. You are working full time With your patients as a psychotherapist, but you've decided you and Dale decide to pursue this as kind of a side project, right? He's still doing general contracting. You're still doing working with patients and the idea was to figure out how to mass-produce this recipe you came up with and then Get into the into the food business, I guess And did initially did you guys think well, maybe we can just like license the recipe to a another company or something?

I thought of that. I all I thought of putting the recipe in a cookbook. I thought of a lot of things. First of all, I knew nobody would make them. It was too hard.

Yeah.

If I gave you the recipe, you wouldn't do it. And then, and the same thing for licensing, because there were a few gluten-free companies by then, but not really. And yeah, I knew it wasn't gonna happen. You know, and again, we learned enough in, I don't remember the order of things, but we knew that most food is co-manufactured, right?

Yeah. Most food is not made by the companies, well, except for the huge big companies, but most things you see at Whole Foods are not made by brands, made in a co-packing facility. That makes tons of things for other people.

Yeah. And so you give somebody the recipe and you know, you supervise that process, but somebody else has the equipment, somebody else has the expertise, all of that. And I, you know, this was a big point of contention in the beginning because Dale thought that we had to manufacture them ourselves and I kept saying, no, that's impossible. We don't...

Expensive, right?

Yeah, we don't know what we're doing, neither 1 of us. And he said, well then find me a, because I bought, there was a book about, you know, with a list of co-packers and of course nothing was gluten-free.

You contacted these manufacturers? Yeah. And you called them and you would say what? You'd say, hey, I've got this recipe, but gluten-free, like what would you say?

Yeah, well also what kind of equipment is even gonna make these? We didn't know. So that was part of the process too.

Just calling and asking questions and trying to figure it out.

Yeah, what kind of equipment do you have? Most cracker places use a pretty standard dough machine that rolls out the crackers and cuts them, and that wasn't going to work.

Right, because it's too gluey.

Yeah. So I mean, what ended up happening is I took now in the Bay Area there were a couple of food manufacturer facilities and I would I took big bowls of dough to a couple places because there's another process that's like a form and fill where they would put the dough into these molds and you know drop it out onto the tray but again nothing's gonna drop. Right yeah exactly. So 1 guy helped me and he was a real equipment specialist. This is

a guy in the Bay Area?

Yeah, and I gave him a bowl of dough and he said, let me play with this for a while. And he worked on it and decided that 1 of the machines that's a cookie depositor could be adapted to at least get the blobs onto the pan. And then what ended up happening is we had to invent a machine that would flatten them because that was the challenge. So we got the blobs on the pan but then we had to create our own piece of equipment that flattened them.

Alright, So you start this process of trying to find a you know a way to make these.

And

and this is going to take I think roughly 5 years. More or less. And while you're doing this because you're still running your business and yeah, you know You're meeting with patients and Dale's doing his work. Did you have any money at all to finance this? How were you I mean, I guess it you know, he was just taking trips to these factories But

yeah,

I get to buy equipment. How are you gonna do that? Did you

well so I was I was working more on this on the manufacturing side of things and Dale was working on the business plan Yeah we were both Thinking about who to start approaching for money.

How much money did you think you would need to get this off the ground?

Well our original raise was

$750, 000

and we thought, it's just the whole thing is so funny when I think about it, but we thought that would be enough, that that's all we would need.

And how did you approach people? Who did you go to? Did you go to friends?

Well, again, remember now, everyone and their brother has tasted these crackers and everyone loves them. 1 of my close friends who was in my women's group, her cousin loved them and she was married to a very high-level person at Bechtel Corporation. This was where Dale got a PhD in business, in business plan writing and in finance. So this guy was not going to put a penny into it until that business plan was perfect and until he could sell it to his friends. So he ended up becoming a lead investor and he brought in a lot of, a few other Bechtel people and other people that he knew, he brought in half the money.

Wow. Did you, I mean, in that business plan that Dale wrote, was he also talking about the growth of the gluten-free sector? Because we're now talking about the early 2000s, and this is just as it's starting to really... Right. Right.

It's not going to blow up just yet, but it's on the cusp.

Right, exactly. We were on the wave and it was so hard to see. Obviously, we had no idea how huge it was gonna be, but we knew something was happening. And I remember 1 point him saying, we're gonna miss the window, we're gonna miss the window. Because everything took so much longer than we thought it would take.

But we knew that there were something like 400 Celiac support groups all over the country that we knew about. We knew they were, like me, they were very loyal to food that you find that you can eat. They read the labels. They also go to the stores and make sure if there's a product they want, that store will carry it. You know, they're they're huge advocates for themselves because they have to be.

So we knew that existed.

So So as you're really diving into all this, you're meeting with potential manufacturers, you're doing all this research. At what point, because this really starts in 1999, How were you able to manage your day job? And how was Dale able to manage his day job? Were you just, was it like, was it just a slow creep of like reducing your hours and reducing your hours?

Well, no, It was the year before we started the actual manufacturing that Dale quit his job. And I was still working because I had more flexibility. But otherwise, up until then, yeah, we were both working and doing this.

All right. So you're trying to figure out how to get this done. But really, I mean, it seems like the ultimate goal, really, Dale was really focused on making it yourself. He was still committed to this idea that you guys would manufacture the crackers yourselves and not work with a co-packer. But to get this off the ground, Was that even possible?

No, I didn't think so. And so this is where what ended up happening was, like I said, I had gone through all the co-packers and nobody could do that. And then I started pulling products from my cabinet and my freezer to look at who was making gluten-free food and where were they and could they help us. And that's when I found this this company that was making this rice crust pizza. And they were in California, they were in Chico.

I told them what I was doing and I asked if they had room and if they were interested and they said yeah they thought they could probably do it.

And they were making rice crust pizzas?

Pizza, right. Frozen frozen rice crust pizzas.

And they were game for working with you somehow. But you presumably would have to supply the equipment.

Well, when we went up there, we saw that they had 1 piece of equipment that we needed, which was this huge rice cooker thing. It's hard to describe, but it's kind of the combination of the food processor and the rice cooker and everything that would make the dough.

So like so what else did you need to get to the next step because you get the dough but then you've got to actually get the right get some machine to automate it So you can make them quickly, right?

So, how do you get that the dough out of that that into these cookie depositor thing?

And there was nobody who could answer that question right now because nobody was making anything like this No wonder it took you 5 years to figure this out. Okay, so how did you solve that problem? And who had the answer to that?

Well, this was again, a lot of experimenting. They had experience with this hot gooey dough. And when they followed the proportions of my recipe, the dough would get stuck in the machine because it wouldn't flow through the stainless steel tubing. And my recipe, it wouldn't flow, It was too dry. And they kept saying you have to add more water.

And I kept saying no, because that's not my recipe. This went on quite a while. And eventually what I did was I said, okay, we'll make some your way with more water and see what happens. So anyway, we made a batch with more water And then we did a blind taste test, and everybody liked the ones with more water better than my handmade ones. So that's what did it.

That's what allowed me to add more water to my recipe.

So when you, when you, I mean, when you were ready to go, and while you were doing the sort of laying the groundwork, right, because you were focused on figuring out how to make these at scale, and Dale was focused on the business plan, But there are other things to do too. I mean there's there's branding there's

right packaging design

I'm getting design and then where to sell them right so were you did you start to go to food? Conference conventions and

we did that before yeah, we we had started going to food shows

And you would just what were you you were looking for presumably connections to, to, to stores?

Well, there was so much to learn. I was looking for packaging equipment. What kind of boxes did we want? We spent a lot of time in grocery stores buying cookies and crackers and looking at packaging and calling lots of cold calls. So I have all the people that I was making cold calls to, you know, for packaging, for ingredient supply, for design.

We found a graphic designer before we got our money, which was just a huge boost to have somebody like that, who was amazing.

And she designed the logo and the look for Mary's Contract?

Yeah. Yeah. She helped. It was the 2 of us, you know. She and I were a great team.

And she made us look so much more together than we were.

So how did you find, I mean, even before you did your first production run, did you have a store that was on, like ready to go on deck to sell them?

No, you know in the food business it's you don't sell to stores you sell to distributors and there was 1 distributor at the time that specialized in gluten-free stuff so but our strategy was different We wanted to get the crackers into people's mouths because we knew, obviously, by that time that anytime anybody ate them, they would love them. For example, the gluten-free distributor, we gave them little sample packs and they gave them to their truck drivers. And so the truck drivers would taste them and they would deliver them with whatever they were delivering. And so again, we knew these crackers were going to get into the hands of the buyers, which is what we wanted. We sent out our samples to those 400 celiac support groups for the same reason.

We got the list of, you know, UNFI is the largest natural food distributor. Back then it was divided by regions, now it's all 1 all over the country. But we got their top

100

stores. And we sent a package of our crackers and a letter from me in a nice box, because we had a great logo and we had great packaging, and we sent them to all the grocery buyers of those top

100

stores. So we were just going directly to the people that we knew would love these crackers and would want them.

In those first 2 years, where was your product sold? What markets?

Well, this was mostly little independent co-ops, independent health food stores. Those were the guys that liked us.

And how did you get people to find out about it? Because you go to a health food store, there's hundreds, thousands of products in there.

Well, we did demos. It was all, you know, we tried everything. It was really, there were events, like outdoor events, where we would set up a booth. It was a lot a lot a lot of sampling.

Tell me in in in that first sort of first 2 years after launch I've read you talking about you were stressed out super stressed out

about

about money You guys were in debt and some some serious debt, personal debt yourselves.

Right.

By the way, why were you in personal debt? I mean you had taken on 750000 dollars and...

Well we we spent a lot of money before we raised that money to get there.

To get equipment, to get...

Well, to do everything we had to do to get to raise money even. So we didn't buy equipment on our own, but the graphic designer or going to trade shows or you know, all the things that we were doing You know, we we were probably Probably about a hundred and 50000 dollars in debt

in meaning you took a loan out.

No, we just were using credit cards.

I see. Okay. Yeah. And, and did that make you nervous?

Yeah, it made me nervous. Dale and I would talk a lot about if it, you know, if this didn't work, how long would it take us to pay this off? And could we do it? And yeah.

Yeah. Um, so you, you, you've got this initial funding and, and, um, and I have to assume you are still majority shareholders even with the seed money you raised. But you get to the point I think about 2 years in where you need more money.

Right.

And this is around 2007 and you guys decide to seek that money out. First of all tell me is that is it true like you needed more money to expand?

Well, okay, so in

2006,

we moved up there.

You moved up to Chico.

Yeah, so that's when I closed my practice and we moved up to in that area because we moved out of that Copacker and got our own space because we were growing really quickly.

Yeah. So you own, now you own the production facility.

Well, not the building, but everything in it. Yeah. So we needed more money to do that. That was with with our original investors, we raise more money. That was another whole other stress because mostly because they didn't understand the food business and they were engineers, a lot of them, and they thought we should be profitable by now.

And so they were giving us a lot of pressure and telling us we were a failing company.

These are the friends and family round that you did. Yeah, a lot of the Bechtel engineers, they were saying, hey, why aren't you profitable?

This is failing, you should wind up, close down the business. The food world was telling us we were an incredible phenomenon, that nothing happens like this in the food world. And our board was telling us, you know, shut it down.

Why were they saying shut down because you were you were...

We weren't profitable we were you know because we were growing so fast and the more you grow which I didn't understand I don't think Dale did either that you need more cash because you have more product in the pipeline and you're not getting your money back as quickly and you just need more and more cash as you get bigger and bigger. And then on top of that, we had to move into our own space. We never could have grown at the rate that we needed to grow in the Copacker. We almost went out of business with them because they just didn't, they just really didn't care and they were very sloppy and we needed to take over. So in 2006 we moved up there.

I closed my practice and did that.

So, but you did raise them, you did raise additional money, but, but not from everybody, some of them, Some of them dropped out.

So half of the people were our friends, and they were always supportive. And the people who were on the board were the larger investors. And they did help us raise money. They did invest, but they gave us a really hard time about it and kind of made us wait until we were terrified that we wouldn't be able to continue. It was it was just very stressful.

So you needed to raise like significant cash, right? Like in the millions. And how much did you think you needed to raise?

Well, I don't know how much we thought we needed to raise, but once we moved up there, we wanted to raise a million.

A million, OK. And you needed institutional money for that, or some venture money for that?

We probably didn't need to, but that's what we thought. That's who was courting us, let me put it that way.

And what, a particular venture firm was courting you that had heard about you had met you at a trade show

They'd been watching us for a while. Yeah,

okay And this is a venture group that I think specializes in investing in food startups.

Right.

All right. And so you took a meeting with these investors, this venture, this VC group. And so how much did you end up raising from them?

We did get a million from them and more I have to say, more than that they were gonna give us some money is that they were gonna help us grow and be at the level that, you know, we were in over our heads by that time, you know, to be our own manufacturing facility, to be this incredible, fast-growing company. There was so much, the learning curve was so steep, and to meet people who had done this before, who had been very successful in a variety of fields, who knew everybody and could, you know, we wanted some partners is really what we wanted.

Yeah. With your new partners, and they, did they buy a majority share? No.

God, thank God, no.

14%

actually, it wasn't a significant share or we would have lost the company.

All right, so 14%. And were they helpful?

Maybe for a minute, but no, not really.

Well, what happened?

They had a very different agenda. I think it maybe took about 3 months where we had a little bit of a honeymoon phase where they did connect us with a better sales force and better manufacturing expertise and things like that. But it was very soon that it became clear that what they wanted was to take over the company.

When we come back in just a moment, Mary draws on years of experience as a psychotherapist to try and keep her company from going off the rails. Stay with us. I'm Guy Raz, and you're listening to how I built this. You know, I have to say, in recent years, I've been kind of vigilant about wearing sunscreen every day, even in the winter, and also just kind of making sure to take care of my face as I get older. Fortunately incorporating skincare into your daily routine can be effortless and that's where Caldera Lab comes in.

With their products clinically proven to reduce wrinkles, fine lines, and signs of aging, Caldera Lab proudly stands as a leader in men's skin care. The regimen leads off their product lineup. It's a twice-a-day routine to transform your skin. Inside this bundle, you'll find the Clean Slate, the Base Layer, and The Good. The Clean Slate is where you start your day.

It's a balancing cleanser that uses gentle plant-based cleansing. The Base Layer is a nutrient-dense, fortifying moisturizer that hydrates your skin and absorbs it fast. And The Good is your go-to at night before bed. It's a serum that helps your skin look tighter and smoother. Get 20% off with this exclusive link calderalab.com.

That's 20% off by going to calderalab.com. Experience a whole new level of health and skin care with Caldera Lab. I talk with so many business leaders who use Squarespace as their all-in-one platform for building their brand and engaging customers online. Squarespace lets you easily create a dynamic website and sell anything, your products and services, and even the content you create. Squarespace makes it really easy to get started, with best-in-class website templates for all types of businesses that can be customized to fit your specific needs.

Squarespace also provides the tools you need to run your business smoothly, including inventory management, a simple checkout process, and secure payments. And with Squarespace email campaigns, you can build a community of email subscribers and customers. Start with an email template and customize it by applying your own brand ingredients like colors and logo. And once you send, built-in analytics measure your email's impact. Check out squarespace.com slash built for a free trial.

And When you're ready to launch, use offer code BUILT to save 10% off your first purchase of a website or domain. Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2007 and Mary and Dale have partnered with a venture capital group to help grow the company. But that investment has come with an unexpected burden.

Neither Dale or I in the beginning had a clue that this is what it meant to take money from a VC. They started undermining, especially Dale, questioning everything, accusing him of things. Just, it started to get hostile, and then Dale started to study what it meant, what VCs, you know, what their dynamic was, especially back then, and started looking at how they had treated other companies, and it became very clear we were so naive.

What did they want you to do? They wanted you to, I mean, presumably, I'm just, I don't know, obviously it wasn't in the room, but I have to assume they're making recommendations based on what they think will be best for the health of the business.

They said, just don't worry about the money, don't worry about the money, just grow. But what that meant was, the faster we grew, the more money we needed, and they had set it up that we couldn't get more money beyond a certain amount without their approval. And so they would, they almost did it, they didn't do it because Dale was smarter than them. They wanted us to be dependent so that the money would cost us more and more.

In other words, you would lose more and more equity in the business.

And more and more board seats, which is more important to them.

They wanted more board seats because they want to you felt that they wanted to eventually take over and control the

business Absolutely.

So so when you started to to when the tension began Well, what did that mean? Did you did you stop to stop communicating with them? What What started to happen?

No, we never stopped communicating with them. They just had this kind of party line that everything we were doing was wrong. So the first thing they did was, so Dale and I had always been co-whatever, CEOs, co-presidents, partners in every way. The first thing they did was they said Dale had to be CEO because someone had to be financially responsible, right? So they made Dale CEO and what did they want me to do?

You can be whatever you want. You can call yourself whatever you want. So, it was very demeaning. They were really demeaning to me, and that was, you know, this kind of divide and conquer mentality of so they would question Dale's mental health at 1 point they just undermined everything

I'm just I'm confused I'm confused How did they even have that kind of power? If they had 14% of business...

Because we trusted them, you know, these are really experienced business people. I don't remember the details of their contract, but they were the preferred, you know, shareholders and everybody else was common. So that gave them certain privileges.

I see. So they had the right under the agreement to make certain demands of you guys.

Like we had to become a Delaware corporation instead of the LLC that we had been, you know, they started changing the structure.

PETER That's not abnormal. That happens. KATHY SIEGEL No, right. PETER And obviously there's, you know, there are conditions that come with taking outside money. But it doesn't sound like they did anything that was out of the ordinary from what VCs tend to do.

I mean, they want to see quick growth. They want to see fast growth. They want to see a return on their investment. They usually want to see a 10x return. And they're putting in a million bucks.

Right, but we didn't know any of that. We didn't understand that. That's not what they told us. There was nothing verbalized ever about what their agenda was or what their plan was, other than to help us grow and to partner with us.

But again, I mean, I don't know the circumstance. I don't know the people who are involved, and they're not here to defend themselves. But I mean, it can't just be a story of the evil VCs versus the pure founders here. I mean, you guys did take the money, and they were making an investment. And in their defense, that means you want a return on that investment, and you want to get it as quickly as possible?

Well, see, the quickly as possible, we didn't know. The return on investment was fine. We were a hugely successful, fast-growing company. I still, to this day, think that if they had really partnered with us and had helped us grow instead of battling us, which is all they did really, they really never helped us grow, that we all would have made out much better than what ended up happening. But they were so desperate to just get rid of us and do it the way they thought it had to be done.

Forget for a moment about wanting to get rid of you guys, but was there a difference in view on branding and where to sell the product? No. That was all, you were all aligned there.

No, we had great conversations about the vision of the company and they really had their recipe and we were not allowing them to do that. And then then it became a battle between them and us personally, where they they just hated us because we kept beating them at the at this game.

Beating them at what game?

Well the game of trying to get rid of us. They were, you know, we were older, we weren't in our 20s. Because of our friends, not because of us by that time, but because of our friends, we still had a majority share of the business because they voted with us any time we asked them to.

And so basically, I mean, I have to imagine that, you know, 3 months into getting this money, you guys realized it was a mistake from your perspective to take the money because These were not the partners that you wanted. They probably realized maybe they had made a mistake because you were not the founders that they wanted. And so I have to imagine, you know, this is gonna last for a long time. You guys were still gonna be in the same business together for a while.

We asked them if we could buy them out. They refused.

They would not take it. Okay. They didn't even accept an offer. They wouldn't even...

No, that's what I say. I think It felt like personal by that time, you

know. So while this is going on, I mean, you're juggling running a business and trying to grow the business and also this like constant, you know, sort of low hum of legal issues in the background always. How are you just personally doing? I mean, you are a therapist, so your job is to help other people figure out how to cope. How are you doing?

Let's see. So when we moved up to Paradise, which is near Chico, the first 2 years, so between 2006 and

2008,

so we took the money in

2007,

and so now we're running the factory full-time. We're up, you know, Dale's up at 4 in the morning And he's on the factory floor. I'm there pretty much right behind him, but my body starts to give out and by 2008 I decided that we now have a toddler business on our hands, not an infant business. And with toddlers, you can start hiring babysitters, you know?

So at this point, you could start hiring other people.

Yep. Yeah. So I decided that I was going to, I had to take care of myself and I decided not to go in first thing every morning. I would not go into the office until, you know, 10, 11, even 12 sometimes, so that I would have time in the morning to do yoga, to walk, to breathe, you know, to feed myself, all the things that I had stopped doing. Yeah.

So I'm good at that, because I had learned what I needed and I'm good at that. Dale not so much. He's just really good at pushing and that's what he kept doing.

He was working, working, working.

Yeah.

And dealing with the legal issues.

Right.

But despite all this you're growing, I think, by 2012 And this is like, you know, you're still in the midst of legal battles with these investors. And at the same time, you guys are growing, I think, about 40 percent year over year. I think by 2012, you had like, 250 or so employees.

Yeah. Yeah, I think we were at 30 million as a company then.

Wow. And you were in every Whole Foods by that point. And even yeah, supermarket chain. So you really, I mean, the product had kind of had really kind of just grown and sold itself because

right at

that point You're everywhere You're 04:30 plus million dollars in revenue, but still have this thing hanging over your head these investors And so were you constantly thinking were you and Dale constantly thinking how can we get rid of them? How can we get, how can we figure that, figure out a way to get, get them out?

They really wanted us to sell the company because that was the only way.

That they could make a profit.

They could get out, that they were willing to get out. We, like I said, we asked if we could buy them out earlier and they refused so So it was us holding on as long as we could and them pressuring us to sell and A couple of years before that we had been approached by this Japanese company that wanted to buy us way before we were ready. But they, being the Japanese, they're very patient. Time is not the same for them as it is for U.S. Companies.

And they hung around.

And they, this is a company called Kameda.

Kameda,

right. And they are, I think, the biggest, like, they, like, sort of, kind of own the Japanese rice cracker market.

Yes, they're the largest rice cracker manufacturer in Japan. Yeah.

And they have a US subsidiary. That subsidiary made an offer that you guys accepted at the end of 2012.

Right.

And so in the end they bought I think a little less than 80% of the company for around, around $45 million. And basically, at that point, everyone's off the cap table, it's just you and the remaining shares you and Dale owned,

right?

And so what did that mean? I mean, presumably that was both a relief, but maybe a bit bittersweet. I mean, on the 1 hand, you don't have to deal with those investors anymore. Now you've got this massive, multinational, huge company.

Yeah, and they knew how to manufacture for the first time we were gonna well they they already you know the first 2 years they were there they brought people from Japan their Manufacturing experts right away to clean up our I mean there was so much room for improvement but they also Made the commitment to we needed an automated line

Yeah,

and they were willing to do that.

And so you and Dale both had a to your commitment you would become chairman but I think not too long after the acquisition your marriage with with Dale ended right?

Let's see he moved out around the same time that two-year period was up. So it was probably about a year after the acquisition. I mean, things had obviously, the issues were there all along, but it was really clear to me after a year that he couldn't stop. I was ready to celebrate, I wanted to relax, I wanted to stop traveling as much. We didn't have to do what we did up until that point.

And he didn't want to. He wanted to keep going. And we were on very different paths by that time.

I mean, imagine just the toll of the business too is going to have an impact on your relationship.

Yeah, you know, I guess It was funny because Dale used to say when I would ask him to stop, you know, to take some time off, and he always felt like he was in way over his head, which we both were, but he was on the front line way more than me, and I understand that. But I also know that you can only do so much, and taking some time to yourself would only make things better. And he would say things like, if this business fails, our marriage won't work. You know, he would, that was his big fear. And that was not my fear, but the irony, which was that when it succeeded, it was when it failed, our marriage failed, because he couldn't get off of that that merry-go-round.

I think he enjoyed it on some level or he was hooked on it or whatever.

So he he fulfilled his two-year commitment and left and was able to sell his shares. You fulfilled your two-year commitment, but then you signed on for another 4 years.

They wanted me to stay, yeah.

And as a consultant and sort of slash brand ambassador?

Well, in the beginning when I was still full-time, I became a consultant the last 2 years, but there were 2 more years in there that I was full-time and I was there. I was still in that area. But I wanted to make new products. I had a lot of ideas and That was really why I stayed

You left I think in 2018 Finally, and there's something that you said in an interview a couple years ago, and it's interesting, you said, I want to read this to you, you said, when I look back on this journey, this was not a generally joyous experience for me to do this business. There was very little joy on a day-to-day basis. That sounds like, part of me is like, God, was it worth it? You know, like when I hear that, when I hear you say that.

Well, what was joyful for me was how many people loved my product and how many times I would go out into the more of the public domain and be told that not only do they love my product but they love me because of how the product saved their lives And so that made it worth it to me because I understand that. It saved my life too. And I was surprised by the response, but I shouldn't have been because it was what I was going through so that brought me and still brings me incredible satisfaction to know that that I helped a lot of people and and still do.

And all that went into I mean 5 years of just R&D and uncertainty over money and and and then the you know the another you know 7 years of challenges legal issues growing the business but travel trying to get it on store shelves, dealing with people who were not always straightforward. Still worth it?

Yeah, I would say yes. I think, I mean, I'm obviously a different person. There was a point in there where I said to myself and I said to God, you know, why am I having to learn this in my 50s? You know, why am I having to deal with people who lie and look you straight in the face and lie and want to steal. And my other joke is that I never dealt with crazier people and as a therapist, I stopped, until I stopped being a therapist and went and started this business.

And I wondered, why am I lived all these years without having to deal with people like this? Why am I doing this now? And I don't exactly have the answer. I think part of it is this kind of venue where I get to talk about it and where I get to where I, you know, I've spoken a lot over the years where I get to warn people about starting businesses and and what, you know, what to look out for and I'm not sure about what my development you know like I said I'm put everything in the context of my own growth in my own development and obviously I'm a different person having gone through this.

Yeah when you think back on on this journey that you took you know and you were a therapist until you were, you know, really into your mid-50s, and that was your career. And then you kind of go on this quixotic adventure, which turned out to be a good call, um, starting this brand, which is available everywhere. You can get it at Walmart, Kroger, every, I mean, Mary's Gone Crackers are available everywhere. It's your name is on it. It's like, um, we had, um, Stacy Madison, Stacy, Stacy's Pita Chips on the show a few years ago.

And you know, doesn't matter. She can go to a Costco or Walmart, wherever she goes, and she's going to see her name on a bag of chips in a shopping cart somewhere. She just knows it's her. And you're going to see that. And you probably still see that.

How much of your story and what happened to you do you attribute to how hard you worked in them and and just your The way you approach this and how much do you think had to do with with luck?

The way I look at it is that when you get a message from the spirit world or whatever you want to call it, you hear a voice, you have an idea that really touches to your core, whatever language you want to use. And you don't honor that, that that's a mistake. Because when you honor it, the universe works with you and supports you. And yes, we worked really hard, but there was a lot of magic involved. There were so many moments when it could have gone the wrong way, and it didn't.

And so, I don't think of, I don't think luck is the word that I would use. I would think, I would say that we dove in 100% and we made that commitment and the universe supported us. And it's always a team effort between what we do in this physical world and making sure that the message that we're sending to the other realm is that we really want this, we're really committed to it, and we're gonna do whatever it takes to make it happen. Because when you do that, the rest of the world, the other, the invisible realm, lines up behind you to make it happen.

That's Mary Waldner, founder of Mary's Gone Crackers. By the way, whenever Mary sees her crackers out in the wild...

It's fun. I saw a guy in the grocery store the other day and he was standing in line behind me carrying like 4 boxes of my crackers. I said, oh you're buying a lot of those. He said, oh yeah they're on sale. I didn't say anything but it was just fun, you know.

Hey, thanks so much for listening to the show this week. Please be sure to follow How I Built This. Just click the follow button on your podcast app. It's usually a plus sign right at the top so you never miss a new episode and it's totally free. If you wanna contact our team, our email address is hibt at id.wondery.com.

This episode was produced by Kerry Thompson with music composed by Ramtine Arablui. It was edited by Casey Herman with research help from Sam Paulson. Our production staff also includes JC Howard, Neva Grant, Elaine Coates, John Isabella, Chris Messini, Carla Estevez, and Liz Metzger. I'm Guy Raz, and you've been listening to How I Built This. Hey Prime Members, you can listen to How I Built This early and ad-free on Amazon Music.

Download the Amazon Music app today. Or you can listen early and ad-free with Wondery Plus in Apple podcasts. If you want to show your support for our show, be sure to get your how I built this merch and gear at Wondery Shop dot com. Before you go, tell us about yourself by completing a short survey at Wondery dot com Slash survey. Do you spend sleepless nights worrying about being submerged in quicksand, being attacked by an unrelenting swarm of killer bees or how you'd outswim an angry giant shark?

I'm Anthony Tamenek, and I'm here to tell you to stop worrying and let me, an anxious and overly informed comedian, be your guide to solving your most worrisome what-ifs. Don't Panic, a new comedy podcast from Wondry, leans into our most absurd anxieties and diffuses them with humor and actual advice for how to deal should you find yourself facing your fears. You'll laugh, learn, and possibly sweat profusely. Enjoy Don't Panic on the Wondry app or wherever you get your podcasts. You can listen to Don't Panic early and ad-free on Wondry+.

Join Wondry in the Wondry app or on Apple Podcasts.