Gary HIRSHBERG

President and CEO of Stonyfield Farm, Inc.

Shortly after the crash of 1987, my then little and struggling yogurt company took a severe nosedive. A contract packer had gone bankrupt and we were left with all the bills but none of the manufacturing capacity. So we moved all of the production back to our little hilltop farm, back to our long-since-outgrown prototype yogurt “plant,” dusted off the cobwebs, and proceeded to meet orders, albeit unprofitably for the next fifteen months. This location had about eleven months of winter and one month of poor sledding, so our employees were busier plowing, shoveling, and otherwise plugging leaks than making yogurt. As a consequence, I went into a severe and pitched search for funds. Every week that passed would be a week when I had yet another $8,500 payroll to meet and $25,000 in milk, fruit, and packaging to purchase. Ultimately, we lost about $20,000 per week, looking like a pretty ugly duckling when it came to impressing the investors.

I met dozens of venture capitalists in this era and all of them left me pretty disheartened. Many saw through the chaos and recognized a potentially valuable brand, but all tried to steal us blind. During one especially dark period, a friend sent me an L.L. Bean walking stick that contained a flashlight and a compass neatly screwed inside. Attached was a note that I immediately tacked on my wall and have looked at every day of the sixteen years that have elapsed since. His note read: “Dear Gary, Use this to walk tall, find your way out of the wilderness, and pierce the darkness of despair.”

Today, as I sit at the helm of the nation’s third largest and fastest growing yogurt company, I now know that determination is probably the most undervalued and underappreciated prerequisite to success, and this little note did a lot to get me pointed in the right direction. By the way, I never did take any money from those slimy venture vultures and found my own way instead.

Another guiding principle came to me when I was just starting out in the yogurt business. Then we were milking cows and putting our thumbs in countless dykes as we tried to stay afloat, and I had no idea what I was doing and could not distinguish which among the countless tasks that lay before me should be the highest priority. I knew that we needed to keep our quality high, manufacturing and transportation costs under control, sales pitches sharp, marketing materials magnificent, employees satisfied and growing, cash flowing, and all the while ensuring that our mission and core values were not compromised. But in the inevitable pressure cooker of rough times, particularly in start-up, it was clear that something had to give. As a pathological optimist, I had no clue which of these fundamental requirements could possibly be allowed to slip a bit.

So I cold-called the CEO of Veryfine Juices, another local brand that I admired enormously, and which had been owned by the same family for over a century. I weaseled an invitation to go down to the Veryfine plant for lunch. After sizing me up for about an hour, the CEO offered this poignant, terse, and very Yankee summary that has been among my guiding principles ever since: “Keep it tight,” he offered. In other words, keep your expectations for income conservative, and ruthlessly watch expenses. I have run things pretty tight ever since, and today we’ve grown from five cows and about $50,000 in local sales to a national firm with over $150 million in sales—the largest organic yogurt company in the world.

Stay determined (but keep it tight)