How did Hamdi Ulukaya go from being the owner of a decrepit yogurt plant in upstate New York to the CEO of billion-dollar behemoth Chobani?
Here's a hint: Sometimes, Ulukaya said, common sense is no help. "You have to find a way to elevate yourself to be above common sense," he said, speaking to an audience of entrepreneurs at the Inc. 5000 conference in Phoenix on Friday. "We cannot do what we have done through the mirrors and lenses of common sense. We have to think something different."
Ulukaya said that ability to generally ignore common sense, comes from passion. "When you're elevated then you're not looking at an opportunity or problem or dream from a common perspective," he said. And from his telling of the Chobani story, it was clear that a little bit of "elevation"--what some might call craziness--certainly played a role.
It started when Ulukaya got a flyer in the mail that a yogurt factory about 70 miles from his office was being closed down and sold. Ulukaya initially threw the flyer in the garbage, but for some reason picked it out. When he visited the factory, he said, the atmosphere was akin to a cemetery.
Ulukaya wanted to buy it anyway, but his attorney came up with some very common-sense objections. First, Kraft knew more about the plant than Ulukaya. If that company thought it was essentially worthless, it probably was. Second, Kraft had just sold its yogurt division. Would they have done that if yogurt was a great market? Third, said Ulukaya, "My attorney said, 'You're buying as-is. That means you own all the guilt in that plant.' Finally the lawyer said, 'Look man, you have another problem, you haven't paid me in six months, and you have no money to buy this place.'"
Ulukaya, of course, did buy the plant, with help from a Small Business Administration-backed 504 loan. He hired back five of the employees, and had their first board meeting. "I said, outside, the wall is really bad. The whole wall, you can tell it was white at one point. So I said, let's go the Ace store and grab some paint and paint the wall."
"The guy looks at me," said Ulukaya. "These people are looking for someone to give them an idea. All I can come up with is, 'Let's plaint the wall outside.' He's like, 'Tell me you have a better idea that that one.'
In retrospect, painting the wall wasn't a bad idea, said Ulukaya.
While you are doing something, always ideas come. There is this philosopher, Rumi, who lived in Turkey, who said, "When you start walking the way, the way appears." I had a lot of fear, a lot of doubts. But you have to start with something. That something might be as simple as painting the walls. If I look back, I will say one of the best things I've ever done on this journey, other than picking up that junk mail, was painting the factory's walls that summer.”
Ulukaya's next leap of faith came after his first Shop-Rite started selling out of his yogurt. That's when he knew his success would not be about his ability to sell yogurt, but to make it. He moved into the factory, essentially, for five years, eating pizza "breakfast, lunch, and dinner." If someone had told him that he’d go from shipping 3,000 to two million cases a week, "I would have said, 'What are you smoking?'"
"In a common sense world that's not possible," he said. "Because buying a filler [to put yogurt into cups] and installing it takes twelve months. How are you going to build 14 fillers and you only have a million dollars? But when you get in it, you don't even realize what you’re doing."
Over the next five years, Chobani went from five employees to 2,000. From $3 million in revenues in 2007 to over $1 billion in 2012. The comapny built the largest factory of its type in Idaho, and sponsored the U.S. Olympic team.
Ulukaya says there's plenty of growth left in yogurt. Americans eat half as much yogurt as Canadians, he said, and a quarter to a fifth as much as Europeans. He thinks there is massive opportunity in other areas, too. "There is specialty, expensive food, and there is bad food made by big companies. We want delicious natural food for all," he said. "I think the whole supermarket is our playground."