The people who run fast-growing companies are driven by optimism and a passion for what they do. And the people married to them? The author remembers worrying about money and trying to keep her doubts to herself as her husband, Gary, built Stonyfield Farm into a $330 million company.
My husband, Gary, and I met about 25 years ago at an organic farming conference. He and his business partner, Samuel Kaymen, a pioneer in organic agriculture, had just started churning out delicious cream-topped yogurt at their New Hampshire hilltop farm. Stonyfield Farm was more a place than a brand then, featuring "seven cows and a dream," as company literature would later romanticize that era.
Gary delivered the keynote about turning the organic movement into an industry. I was in the audience, thinking he was cute. The stars were bright that night, the bonfire lit, and a romance was kindled. Years later, Gary confessed that by the next morning he had forgotten my name and had conducted a surreptitious early-dawn search among my scattered clothes for my conference name-tag. We began a commuting relationship on the now defunct People Express airline, Newark to Boston, $29 each way. Some weekends, he headed to Logan airport from Stonyfield Farm. Other times, I navigated the New Jersey Turnpike, driving east to the airport from my organic vegetable farm near Princeton.
Knee-deep in muck and milk, respectively, we fell in love. Gary had big dreams and a twinkle in his eye. I liked the twinkle -- though I wasn't so sure about the big dreams. But when we married, I also became hitched to his entrepreneurial vision of changing the world, one yogurt cup at a time. I left a job I loved to move to his farm, where he and Samuel were making the world's best yogurt while losing tons of money -- one yogurt cup at a time.
In January 1986, we moved my things into a rambling, dilapidated 18th-century farmhouse, which was partitioned into our apartment; that of our partner (along with his wife and five daughters); the offices for the yogurt business; and the tiny yogurt factory. Donning factory whites and a hairnet, I assumed my role as helpful passenger on my new husband's arduous journey.
We labored in those early days under scowling creditors, mountains of debt, and looming bankruptcy. Business-as-usual consisted of an endless parade of catastrophes: spoiled product, broken filling machines, delivery trucks futilely spinning mud-spattered wheels as they groaned up our mile-long dirt driveway. There was no privacy -- no doors had locks. Our first two children were born at the farm. God knows what the employees were thinking as they vicariously endured my labor pains, which were audible through the house's thin walls.
Our wood stove could not compete with the farmhouse's leaky windows -- my hair would ruffle in the winter wind, indoors. Unidentified furry creatures often skittered over my slippered feet as I loaded laundry in our dirt-floor basement. One winter, when my brother Bob was visiting, the Dumpster caught fire and nearly incinerated our barn, which contained all of our nonperishable inventory. After Gary dealt with the fire, Bob headed up to his freezing bedroom and deemed Stonyfield Farm "a hard place to crash." The moniker stuck.
Even the coming of spring heralded problems. The effluent from the yogurt plant was piped into the leach field adjacent to our bedroom. As soon as the weather warmed, the sickening odor of fermenting curds and whey wafted through our windows as we tried to sleep. When I was nine months pregnant with our first child, Gary and I laid polyethylene tubing through an overgrown field to direct the effluent away from our bedroom window so the stench would not be drawn in with our newborn's first breath. The field turned out to be overrun with poison ivy. I went into labor a couple of days later, my skin itchy and red.
I hadn't bargained for this level of turmoil and stress. Like most people, I never really knew what I wanted to do when I grew up. I vaguely knew that I wanted to work to make a better world, which eventually led me to apprentice on an organic farm. I went to ag school and got a job managing an organic vegetable operation. I didn't have two nickels to rub together, but it was satisfying work, and I felt like I was contributing to an important cause. I was thrilled to meet a man whose dreams were similar to mine -- only his were incubating in little plastic cups. My vague desire to heal the world by cultivating one small piece of it was trumped by his very concrete, bold, and much grander vision. I got sucked into his enterprise -- our livelihood now depended on it -- and though I had little input into its direction, I stood to lose everything if it failed.
Gary often quotes Winston Churchill's famous remark that "success is the ability to go from one failure to another with no loss of enthusiasm." We certainly became practiced at ricocheting from failure to failure. It's hard to say when we had our darkest hour. There are so many that could qualify. Was it in 1987, when my desperate husband asked me to lend the business the only cash we had left? A year earlier, I had told Gary that we were going to pretend that the $30,000 my father had left me in his will didn't exist; it would be the down payment on our home, if we could ever afford one. But our new co-packer had suddenly gone belly-up, and we had to start making yogurt at the farm again. "I need the cash to buy fruit," he said simply. Numbly, I pulled out the checkbook.
Or perhaps the worst moment occurred the following spring. A large dairy had agreed to partner with us and retire our debt -- Gary had worked with the company for months on a detailed agreement. I was excited and relieved on that day in April when he and Samuel drove to Vermont to sign the deal; in our recently completed fiscal year, we had burned through $10,000 in cash each week and lost $500,000 on sales of about $2.3 million.
The meeting did not go as planned. The dairy executives and their lawyers knew we were strapped and in trouble, and had changed the terms of the deal. They basically offered to run off with our company for a song. Defeated but unwilling to sign on the dotted line, Gary and Samuel got back into their car for the long, dreary trip home -- during a freak spring blizzard, no less. But as they drove, the two men quickly emerged from their funk. Turning on the car's dome light, they came up with a bold plan to raise money to build a bona fide manufacturing plant.
When they arrived back in New Hampshire late that night, I excitedly greeted Gary at the door, eager to get confirmation of the newly minted deal. "Oh, no, that didn't work out," he said, "but for just over half a million, we can build our own plant!"
I wept that night, pressing the damp pillowcase against my nose and mouth to filter out the stench from the yogurt waste still souring in our backyard.
Gary was driven, in equal measure, by lofty vision, desperate hope, and abject fear. He dreamed of each little cup of yogurt serving as a billboard to educate consumers about the benefits of organic agriculture and the power of voting with our food dollar for a saner world. Starting with Gary's mother, Louise, many friends and family members bought into that dream. They invested in our young business, and Gary toiled around the clock to make sure their money wasn't lost -- a possibility that I found deeply chilling.
We joke about it now, but it's true: On several occasions, he tiptoed into another room on a Wednesday night, before Thursday payroll, to call my mother, Doris (an early and major investor), to beg for just one more loan, one more investment -- while I, wise to his midnight mission, dialed her on another line and implored her to say no. In my view, this was money she could ill afford to lose. I was also haunted by the specter of possible changes, profound and subtle, that might occur in my relationship with my mother and my three brothers should Stonyfield fail: How would my mother's financial loss affect her retirement? Would my brothers blame me for jeopardizing her future? Would they blame Gary?
It's good money after bad, I'd say to my mother. The more yogurt we make, the more money we lose, I'd add, sensibly. "Meggie," she would reply, "I'm a big girl, and it's gonna work." They're both insane, I'd think. The two people I love the most are nuts.
I shared Gary's vision, but not his method or his madness. I admired -- and still do -- his passion and determination. I wanted to believe that we could expand this business and make a difference in the world, but over time my confidence faded. The level of risk that Gary and I (along with our partners) had assumed was way beyond my comfort level. We had come perilously close to losing the business dozens of times. Frankly, there were many times I wanted to lose the business -- anything to be put out of our misery.
Gary and I were bound by love and, eventually, three children. We worked all the time, had few friends locally, and were jealous of the saner lives that our old college friends seemed to enjoy. At times it seemed Gary was working as hard as he possibly could in order to lose as much money as he possibly could. We had no savings and lived paycheck to paycheck, but our personal overhead was low; in our remote neck of the woods, there wasn't much to do or buy. Each night, I'd hate to ask Gary about his day, which was always dreadful, and yet my life and those of our children depended on the success of his unlikely dream.
I was no stranger to hard work. At my old job in New Jersey, I had regularly shoveled manure. I didn't expect the white picket fence. But I had to wonder: Wasn't there a less harrowing way to save the world?
From 1983 to 1991, Gary raised more than $5 million for the business, all from individual investors, none from venture capitalists. He raised $1 million in 1989 alone to build the plant that he and Samuel had cost out on that car trip the previous spring. We eventually had 297 shareholders, even though we had never closed a quarter with a profit. We didn't see our first profits until 1992, when Stonyfield's revenue reached $10.2 million. You can do the math -- it took us nine years to break even. Gary and Samuel's gamble on the promised efficiency of the new facility, located in Londonderry, New Hampshire, was, in fact, the turning point.
Frankly, I was amazed that Gary was able to persuade so many investors to write a check, given the bleak history of our little company. I'm certainly grateful that none of them ever asked me about my own confidence level in our enterprise. My sense is that they were investing in Gary -- his smarts, his persistence, his commitment, and his confidence. They were also persuaded by the quality of our product (though my mother, Doris, the third-largest shareholder at the time, didn't even eat the stuff).
By 1988, when my eldest child was born, I had already begun distancing myself from the business; I quit the jobs I'd held in sales and as a yogurt maker. By 1990, I had two babies and decided that the best way I could protect my sanity and still contribute to the company was by promoting the culinary use of our product. In 1991, the first Stonyfield Farm Yogurt Cookbook was published. I wrote a second cookbook in 1999.
In 1994, with the company finally profitable, Gary and Samuel were persuaded by a slick dealmaker to set up manufacturing in Russia, with the idea that it would be cheap to backhaul the product to Europe in the trucks that carried goods from Europe into Russia but returned empty. "We had just enough free mental energy to get into trouble," Gary later explained.
Just when I had begun to think that my husband was not so crazy, I found myself begging him not to do something that was patently insane. Gary and Samuel made several trips to St. Petersburg and set up a small facility there. Everything went wrong. Finally, after someone was shot and killed in Gary's hotel while he slept, and an American colleague was briefly held hostage, Gary called it quits. "I lost half a million dollars and my innocence," he says now.
At that point, even Gary started to wonder if it was time to bring in some bigger guns to move the company to the next level. In 1997, he began to hire professional managers in sales and marketing. Corporate people from Kraft (NYSE:KFT) and Harvard M.B.A.s now started to populate the company. By and large, these new hires did not work out, and Gary and I both learned important lessons about the company's culture. I had been vastly relieved to see the infusion of what I termed "grownups" into our company, but now we both came to realize that a mission-driven business requires employees with more than flashy resumés; energy, spirit, and dedication to the work are essential.
After the grownups failed to produce, Gary decided to redouble his focus on expanding Stonyfield. But tending to our 297 shareholders -- constantly answering questions by phone and in meetings and providing financial exits for those who needed them -- consumed too much of his time. (My family owned a fair amount of stock; in those years, our Thanksgivings were more like Stonyfield board meetings conducted over turkey. Pass the quarterlies along with the cranberries!) Gary had avoided venture capitalists (whom he likens to Venus flytraps -- attractive flowers luring entrepreneurs to their doom), but he took seriously the personal obligation he felt to his investors. It was an emotional burden for us both.
Gary started looking for a way to get the shareholders an exit, to give them a well-deserved high return on their risky investment and allow him to focus on expanding the company. He often spoke with Ben Cohen of Ben & Jerry's during this period and eventually soured on the idea of going public after Ben was forced to sell his company. In 2001, when sales were $94 million, Gary sold 40 percent of Stonyfield to Groupe Danone (owners of Dannon yogurt); it bought an additional 40 percent in 2003. The deal, finalized in 2001 after a two-year negotiation, gave our shareholders a highly profitable exit, allowed Gary to retain control of Stonyfield, and provided us with financial security.
But I was mistaken in believing that the deal would bring with it some measure of calm. Gary doesn't reach a plateau and then stop. Financial security was never his ultimate goal. There's always that next venture, that new new thing, that (in Gary's case) will reach more people with important messages about organics or climate change.
After we got some cash, Gary created and invested heavily in what is possibly the only business riskier and more likely to fail than yogurt-making: restaurants. He conceived of and co-created O'Natural's as a healthful, organic, and natural fast-food alternative. The concept is excellent, as is the food, but its fate, like that of all restaurant start-ups, remains uncertain. Gary has poured a lot more money into it than I expected. Once again, I try not to ask. Gary also co-founded the nonprofit Climate Counts, which measures the climate change commitments of major companies. Recently, he has been busy promoting his new book documenting how businesses can make more money by going green. People say they don't know how he does it all, and the truth is, neither do I.
It's all exciting, but I'm a slower, more deliberate, and (as Gary would say) "evidence-based" person. Gary is a consummate multitasker, while if there are more than four things on my plate, the fifth slides off. The person who runs faster sets the pace; usually, I am the one who must adapt.
We still have tension around our differing levels of comfort with risk -- business, personal, and physical (I leave the paragliding and ski racing to him) -- and around the difference in the speed with which we move through the world. His frequent business travel is still hard on our family, though less so now that the kids are almost grown. Still, the life of an entrepreneur's spouse can be quite lonely.
But because we found each other, it's clichéd but nonetheless true that Gary smells (OK, quickly sniffs) more roses, and I hike (mostly mosey up) more mountains. And you'll hear no complaints from me about business-class trips to Paris for meetings with Danone. Our financial success has allowed us to give to causes and candidates we believe in and, most gratifyingly for me, enabled us to create an interest-free loan fund for New Hampshire dairy farmers to help them become organic. My recent pursuits of teaching and writing are more feasible now, because I don't have to rely on them for my kids' college tuitions. And my wonderful mother is thoroughly enjoying her retirement. Miraculously, through it all, Gary has created and maintained a tight relationship with our three kids -- Alex, Ethan, and Danielle -- coaching them in soccer, getting to know their friends, and tuning in to their lives in an intimate way. The kids are proud of their father and of Stonyfield's success.
So with the benefit of hindsight, now that everything has worked out pretty well, what is my seasoned perspective on our entrepreneurial experience? Still crazy, after all these years.
for richer or poorer
About 10 years ago, Gary led a business seminar at the Omega Institute in Rhinebeck, New York. He told some stories from what I refer to, not fondly, as the bad old days, and instantly the entrepreneurs in the room redirected their attention to me, sitting among them in the audience. Many had tears in their eyes. How did you survive as a couple, they asked? Tales of woe began to emerge: My husband left me, my wife divorced me, my mother's not speaking to me, my girlfriend walked. He couldn't take the financial exposure. She's risk-averse; I'm a gambler.
Our stories had tapped into a gusher.
It's not easy to find yourself hitched to someone else's dream. Gary and I often liken it to riding shotgun on a curvy stretch of road: Rarely does the driver get nauseated; usually it's the passenger who suffers. In getting to know scores of entrepreneurs over the years, I find it's uncommon that both partners are equally comfortable with high-wire levels of financial risk. They know the statistics are against success; most start-ups fail. If the spouse has qualms about refinancing the house or taking out another loan to fund the fledgling business or voices concern about the entrepreneur signing a personal guarantee on a piece of equipment, these worries can be construed as a lack of faith in the business, which quickly transmutes to a lack of faith in the entrepreneur him- or herself. It's personal.
I don't know if divorce is more common among entrepreneurs than others. It wouldn't surprise me. Like many businesspeople in the start-up phase, we led pretty grim lives on the emotional and financial edge. More than once, I longed for my old job in New Jersey, where life had been saner, more predictable, and a paycheck was handed to me every week. Both spouses need to believe in the mission of an entrepreneurial venture, because both people will pay a high price for bringing a new business into the world, no matter what the outcome.
Sometimes people ask me why I didn't leave my husband back then. For one thing, it never occurred to me. He was, after all, still that cute guy I'd met at a conference. On alternate days, I was either infected by his manic optimism or terrified of it. And then there were the kids. And the cause, which we shared. Mostly we just woke up every day and did what was necessary to survive; we were treading water together, just trying to stay afloat. There wasn't any romance to it then, but there is some now, in retrospect.
Today the business is thriving, with $330 million in annual sales. Stonyfield has managed to remain true to its mission of environmental activism and helping small farmers, is the third-largest yogurt company in America, and is the largest producer of organic yogurt in the world. Our kids are teenagers; we have a vacation house. What would have become of our marriage if we had lost it all -- our cash and sweat equity, the investments of my mother, our families, our friends?
I honestly don't know. I'd like to think Gary and I would have kept cruising together, just down a different road. Maybe we would have taken turns at the wheel. But I can't change Gary's nature any more than he can change mine. So it's more likely that had Stonyfield failed, I'd have found myself swerving down that road again, riding shotgun on yet another wild ride.
Meg Cadoux Hirshberg lives in New Hampshire. She is collecting stories about couples and entrepreneurship.
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