Hamdi Ulukaya: Creating the Right Environment
In this podcast episode, the CEO of Chobani shares his lessons from the factory floor to the C-suite.
“People will give you credit, but 99% of it is not you,” said Hamdi Ulukaya, CEO of Chobani, in a View From The Top interview on campus. “It’s the environment that you created.”
Interviewed by Alexandra Eitel, MBA ’22, Ulukaya also discussed how businesses can benefit from hiring and training refugees in their community. “Refugees can come into society and a community. It’s very simple, as a CEO: Hire them; train them. You will benefit greatly and so will they.”
Stanford GSB’s View From The Top is the dean’s premier speaker series. It launched in 1978 and is supported in part by the F. Kirk Brennan Speaker Series Fund.
During student-led interviews and before a live audience, leaders from around the world share insights on effective leadership, their personal core values, and lessons learned throughout their career.
Hamdi Ulukaya: If you want to make business joyful, but also very successful, it has to be embedded very, very early on. Day one.
Alexandra Eitel: Welcome to View From The Top: The Podcast. That was Hamdi Ulukaya, founder and CEO of Chobani. Hamdi visited Stanford’s Graduate School of Business as part of View From The Top, a speaker series where students like me sit down to interview business leaders from around the world.
I’m Alexandra Eitel, an MBA student of the Class of 2022. This year I had the pleasure of interviewing Hamdi on campus. Hamdi recounted his entrepreneurial journey from a shepherding farm in Turkey, to five people in an old factory, to a billion-dollar food business. He also discussed his belief in focusing on people over profits and his commitment to hiring people from refugee communities. You’re listening to View From The Top: The Podcast.
Hamdi, welcome to the GSB. We are so excited to have you here.
Hamdi Ulukaya: Thank you. Thank you so much. This is so hard.
Alexandra Eitel: Just a little extra challenge.
Hamdi Ulukaya: Yeah, it’s OK.
Alexandra Eitel: Well, campus has been buzzing with your arrival. And in fact, there’s actually been a bit of a debate about what is the best flavor of Chobani yogurt. So, in the true spirit of business school, I set out to do a bit of market research and polled the class to see what was the most popular flavor. So, out of strawberry, peach, blueberry, and raspberry, Hamdi, would you like to guess which flavor won?
Hamdi Ulukaya: It’s blueberry.
Alexandra Eitel: Blueberry. Oh, well. Actually, strawberry won.
Hamdi Ulukaya: Stanford.
Alexandra Eitel: But that’s OK. We at the GSB love to be outliers, so it’s OK. I understand. Well, and then here’s some behind-the-scenes footage. If you’d like to use these as marketing materials, feel free. Great. Well, thank you for playing along.
In preparation for our conversation, I learned that Chobani can be loosely translated to shepherd. Can you tell us about the significance there?
Hamdi Ulukaya: Sure. And your background is Greek, as I understood just now, which is beautiful. I mean, I don’t know if you speak Greek, but it also sounds like Chobani, but I won’t kill it. It’s like [sophani], something like this. And in Turkish it’s çoban. And by the way, I want to say merhaba to my Turkish brothers and sisters [I have] here. And of course, all of you. I’m just a little homesick.
I grew up on the eastern part of Turkey, northeast, and nomad, a tribal life. So, my earliest memories are with shepherds. And çoban means shepherds. So, my earliest memories are all shepherds: shepherd stories, interaction with shepherds, family members being shepherds. I was too little but eager to go with them to the — caring for the animals.
So, when I was looking for name, I was traveling from Chicago to Madison, Wisconsin. And the reason for that is I drove from that road to go to this old equipment dealership in Madison, Wisconsin, so I can buy this separator. It’s essential to make Greek yogurt to separate liquid from the mass.
And in that drive — I don’t know if any of you have done that drive — it’s a very boring drive. It’s a long drive. Not much radio working. It’s 2006. I don’t know if I was bored, or if it was the Christian radio I was listening that they were talking about shepherds all the time. I came up with the name Chobani at that drive. And when I came back to Chicago and I looked it up, and chobani.com was available, and that’s how we came up.
Alexandra Eitel: Amazing. Well, we’ve learned in a lot of our classes and case studies the importance of a brand connection and that brand history, and you obviously have a fantastic one.
Hamdi Ulukaya: Yeah. I started Shepherd’s Gift Foundation day one. A lot of people don’t know what meanings of it. Inside the company people do know. But they had significance for me was, OK, Chobani sounds really nice. As a sound it sounds nice. But then the emotional — the weight of that word for me was — you look at it throughout the history.
And we can call it a new shepherds now, but you look at throughout the generations of humankind, we look up to shepherds. And they represented pureness. They represented unconditional giving. They represented humanity, safety, and wisdom. And I have seen those in my own experience as growing up.
So, I thought if I can bring the elements of those right from the beginning with the name into this company that I’m launching, it would be a great success. And I had no idea how long would I go. I had no idea how far I would make it or if I would be able to put the elements of it in there. But my personal connections, but also that was the idea that Chobani worked with well.
Alexandra Eitel: Well, it all started on a small farm in Turkey, but now obviously Chobani has found incredible success. There are countless business ideas and aspiring founders out there who are all trying to create the next big thing. In your opinion, what are some of the key magical ingredients that help create a breakthrough company that scales?
Hamdi Ulukaya: Oh, wow. And I have to be very honest. I did not have a previous knowledge or experience of business. So, my earlier experience is, as I said, with the shepherds. Later on, I went to university in Ankara, became an activist, started publishing newspapers and get into trouble with the government and I had to get out. Some experience with the police station but then out. And then I found myself in Upstate New York working in a farm. So, basically, I was home again in Upstate New York, and not necessarily know what I was going to do with my life. And there was not a massive urgency of what I’m going to do with my life.
And really, one thing that I can tell about myself — not in a bragging way — is I was never nervous about life. Not that I had anything about it, but I didn’t have this urgency of, “Oh, I have to do this” or “I have to do this.” I always had growing up, being up into those [unintelligible] mountains where we grow up as nomads, I was always wondering what was behind the tallest mountain that we could see from our tents. And I had that curiosity that what would be beyond those mountains. So, my journey was always I wonder what life is going to be bringing. So, I’m just going to go.
And I found out later on that I was never rigid. I never made plans that would stop me from changing it, going this direction or that direction. I was in a city trying to learn English, and teacher said, “I had a farm, Upstate New York.” I went up there. She said, “Do you want to stay here?” I said, “Sure,” and I stayed, and I became a farmer for a year-and-a-half. And then somebody said there’s an economic development site that they support businesses. And I went there, and they said, “Do you want to make cheese?” I said, “Yeah, I’d like to make some cheese.”
And then later on I saw an ad and said, “Fully equipped yogurt plant for sale.” I said, “I’ll go take a look at it that evening.” And I went to look at the plant. Right then I said, “You know what? I’ll buy this place.” Despite the fact everybody says, “You don’t have money. You have no idea what you’re thinking. There’s a big company’s leaving.” But I was just curious what would it be like from that emotion that I had in that plant.
So, I’m not in a position to say what makes businesses to scale, because I’ve seen enormous, enormous businesses in front of my eye to start and grow, became extremely powerful. But I can tell you what makes joy in business. If you’re a founder and if you are the beginning, starting person in the journey, I can tell you that you could have enormous amount of experiences through this. And for me, it is tremendous. I’m a kid from the shepherds. I traveled 1,000 years. I feel like I’ve traveled 1,000 years.
If you look at my early days, I’m in a tribe where tradition has not changed for hundreds of hundreds of years. Now it’s changed; shepherds have cellphones. But back then when I left, it was the same way they made the butter, it was the same way they did the weddings, it was the same way they grieve, it was the same way they interacted socially with each other. It had not have changed so dramatically. Only time that they would go see somewhere outside of the town when we get sick, or they went to military service. But outside of that, it was the same thing.
So, for me, it’s been an amazing journey, and I had to adjust as I went through. But the true joy, true power of business comes when you see that it had a direct impact on people’s life. And as you get successful and bigger, it becomes extremely powerful. And this, I had no idea about this until I started.
Now, what I can tell you on that one is if you want to make business joyful, but also very successful, it has to be embedded very, very early on. Day one. And it truly needs to be embedded day one. And then it becomes magical. You just don’t know how things comes into life. You just don’t know how you find solutions. People will give you credits. Ninety-nine percent of it is not you; it’s the environment that you created or you’ve been part of the — be created that inputs come from left and right; ideas come from left and right. People become heroes, people become solution makers, and it becomes this magical environment. And I always said, it’s an elevated environment.
So, how do you make an elevated environment? Yeah, money is good, and you can do a lot of things with it, and people get excited about it. The people I hired that they let go in the factory, in that old factory, that the old factory, old company, they just fired them, left them behind and just left. This is another topic that you could talk about for hours. Those same companies are going to be millionaires. Maybe lawyer said I shouldn’t be saying this. But the factory workers, right?
But I couldn’t motivate them if I told them, “Work with me. I’m going to make you a millionaire.” Maybe, but not that great. But if you create an environment and say, “These people left you and these people left us, these people left this factory, children, this community, these farmers.” And I’ve seen this happen where I come from. This is irresponsibility of business. It’s happening everywhere.
And there is an answer to this. We can go out and scream and protest and all that kind of stuff. Or, even though we don’t have money, even though we don’t have experience, even though we don’t have network, even though we don’t have that kind of capability, but we can put ourself together in this tiny little town, in this very old factory, and we could dream that this factory can become one of the biggest factory in this country next five years.
And we could dream they could be number one brand in this country, and we could kick those people ass who close this factory, and we can give the answer to them this way. And you can talk to [unintelligible] factory workers that way. And if you truly act upon it, you can make them believe as much as you believe, and then magic starts happening.
Now in that moment, if you say physically this is not possible. Because in order for you to be a number one brand in five years or billion dollars in sales in five years from this old factory, you will have 16 to 18 lines. Those lines are 400 to 600 cups per minute, they will cost anywhere $5 million to $10 million, and they will take about two years to build.
So then in order to have them, you make the calculation. So, in five years, this is literally impossible. So, if you’re going to make in five years, you’re probably going to make 2 million cases a week. That means a pallet of yogurt every 15 seconds. I mean, you talk about it — it’s a quiet place. There’s nobody there. It’s an old place.
You can dismiss that idea. You say, “You’re not going to be a billion dollars in sales in business in five years and stay a hundred percent independent. And you will find all the money you needed to make this happen. No, you don’t have to raise a penny of capital. And then you will give the answer to the world. Impossible.”
But then it slowly start happening. Toilets turn into office. Parking lot turns into a cooler space with the trailers. You find used fillers somewhere else and people find it in their nighttime talkings. And we literally turned that place into that place, and I had no previous experience of doing so.
So, what I can tell you in a short answer is, I found magic in purpose. And I found magic and an amazing [unintelligible] of love and anger. It’s OK to be angry. I’ve been angry all my life. But if we can channel it through in a very positive way, that becomes an enormous energy. And the result of it, I can’t put a price of the joy and benefit that you get from it. It’s one of the most beautiful thing that I’ve been part of, of that business effect on people’s life.
Alexandra Eitel: Well, clearly a lot of magic happened in that old factory that you found, a 95-year-old Kraft factory. And you decided to take out a small business loan to purchase the factory to start producing the yogurt. At the GSB, we talk a lot about venture capital, and I’m curious about your decision to take a small business loan versus raise VC money.
Hamdi Ulukaya: Well, I didn’t know about that world. I swear I didn’t know. And I saw this old factory, and I start wondering how I can buy this. And there was this KeyBank’s local — Johnstown, New York, KeyBank regional sales guys, representatives, Pat Mucci and John Rajter. Pat Mucci passed away and John Rajter is still out there.
And I told them. I said I want to do the [unintelligible] plant. John Rajter thought that was a crazy idea; it’s stupid. Pat Mucci, this Sicilian Italian guy, most heavy big guy, and says, “I believe you. You’re going to do something. I don’t know what, but you’re going to do something. I’m going to help you out.”
And he says you have this SBA loan. If you can make a business plan and you come up with 40 percent of the funding they needed. I’m sorry, if you can come up 10 percent of the funding they needed, the bank will come up with 40 percent, and the SBA will provide the 50 percent loan guarantee. So, we can fund a million bucks; we can buy this factory. So, the factory was $700,000 and I needed $300,000 to start it. So, I wrote my first business plan. And basically, that’s what they did for me to start buy that factory.
Later on, I got calls from 2009, 2010. My fear was not that I want to keep everything to myself. My fear was if I bring somebody in, will they affect me, one, to crowd my head with unnecessary noises and voices and talks and all that kind of stuff? The second one is, will they force me to do things that I don’t want to do?
So, I try so hard not to — I keep it simple, keep it pure. And the business really performed. From 2007 October, by 2009, I kept the business so simple. I mean, some people say this is — I was in QuickBooks until $670 million in sales. I’m not kidding. And then since they changed it, I have no idea what the business is now. I have no idea. I understood everything about business until $700 million.
Alexandra Eitel: That’s fair.
Hamdi Ulukaya: But I kept it so simple. And I realized that — and I still give that fight at Chobani today — is there’s a lot of unnecessary noises that happens in boardrooms, in factory floors, in titles and all that kind of stuff. So, I kept it extremely simple, and I’m still giving that fight.
And I was very cost oriented. I was a factory worker. I did not leave that factory for seven years more than three days, maybe a month or so for some sales calls. And I was so into every single detail of happening in that factory and the product and every single detail that you can think of. I mean, I was a little crazy. Maybe I was little bit too much, but — and there you would find opportunities, problems about to happen, or a solution that you need to come up with. And so, that kept it really profitable, so I didn’t have to raise any capital.
Alexandra Eitel: You took a bet on yourself and on your ability to bring Greek yogurt to the United States and it obviously, definitely paid off. But it’s easy to forget that in 2010, there were no Greek yogurt brands being advertised on TV, and then two years later there were eight different brands. What did that competition do to you?
Hamdi Ulukaya: I knew it was coming. And that’s what I said to anybody who come up with the idea of the food items in the United States, especially in the United States. It’s a very, very challenging environment. And I saw this very, very early on. So, there’s separation between specialty stores and the mass market in the United States. But if you go to, let’s say, Turkey, Europe, any other countries, there are some middle-market companies. There are regional businesses. There are businesses are not so big, but not so small. They have capability to supply regionally [across]. And those almost don’t exist in this country if you’re countrywide, systemwide mass food maker.
So, early on, I really understood that the big guys, they never make innovations. They don’t have to. So, when I started, you have a cup of Dannon or a cup of Yoplait at the time. You look at it, 35 grams sugar. I mean, you have the ingredients from top to bottom. I don’t know if you guys remember those days. And they’re advertising all day long how healthy this stuff is. And then the cost is extremely cheap. All the factories are made to make those cups. And they have all the reasons to keep that things that way. You don’t want anyone to disrupt that.
And if you look at mass food environment in this country — which is the reason of a lot of problems that we’re facing today when it comes to health — it’s hold by large corporations, large food corporations, that have massive supply chain capability and enormous amount of one-to-one relationship with the retailers, that those are maybe 10, maybe 12 companies that hold vast majority of food produced and consumed in this country. Because for startups, it’s extremely difficult to create those capabilities so you can be a true partner with Walmart or Kroger or Safeway.
So, what you become is a specialty player. So, specialty, like Whole Foods and all those [classes], it’s only maybe less than 5 percent of the market. So, 95 percent of the market is on the mass. So, when somebody comes, “I have a great idea,” good. So, you just work so hard for two years to create it. And now you went, knocked door on door in all the specialty stores and proved that this works.
And the big guys come for two questions. One is do you want to sell. And sometimes you’re forced to sell because all the capital you raise until that idea come to life. And when it comes to food, it’s very, very capital intensive, capital heavy. They come with questions. “You want to sell? We love what you do, 4 times sales, 5 times sales,” whatever it is. But then there come the second half. “If you don’t, I’ll make the same thing.” It’s not your idea anymore; it’s everybody’s idea. So, it goes into a big guy’s ability.
Let’s say oat milk came up. How many oat milks out there? Right? Anybody can make the oat milk now. So, basically, when you have the supply chain, you can be immune to competition if your brand is very, very strong and your value proposition is very strong and there’s something unique about you. But if you don’t have the supply chain, you got no place to go.
So, what I said when I saw them, I said, “They’re going to come. And before they come, I have to make two decision. Either I want to stay small, or I have to pass certain level that they cannot hurt me anymore.” And I bet on the second one. So, at that time they were so slow, by the time they came up, I was already $600 million, $700 million sales. And I would distribute it all across the country. And I was building a plant in Idaho.
But when they came, they came really, really, really hard. Because you’ve just embarrassed one of the largest yogurt maker in the world in a very bad way. I understand. Somebody come up with an idea and make some nice noises in Whole Foods and all those places, but now I’m losing shares in Stop & Shop and Costco. This is not nice.
So, we have to be very — I always tell my colleagues we have in incubator and say you have to focus on manufacturing fundamentals than you are in the food business. So, at Chobani, people think that I built a yogurt and flavors. Ninety percent of the time I spend, it’s factories, supply chain, these boring details that nobody wants to talk about. But in the end, if you’re going to disrupt any category in this country — which has not been disrupted in a massive way if you look at it — you have to focus on the supply chain.
Alexandra Eitel: Well, clearly you were able to disrupt the industry and rise above the competition, all the while still focusing on the human spirit and not just focusing on the spreadsheets, as you’ve said before. And an incredible example of that, of not just looking at the spreadsheets, is your decision to grant shares to all 2,000 employees, including factory workers, in 2016. I’m sure there were some people who were not thrilled with that decision, but you made it anyway. What was your thinking there?
Hamdi Ulukaya: I always said, and it’s still considered as if I’m the nice guy; I give a gift. And I have seen this unjust from me growing up and becoming a young adult in university in Turkey, and later on here, is irresponsibility of business. What I saw in that little town is that factory was there for, like you said, 80, 95 years. And the things were good. The steam was coming off from the chimney. And the products were going, and the trucks were coming, and people had jobs. When things didn’t look good, somebody made a decision in a headquarter that if we cut off this business and we’ll save so much money, and those people left behind.
So, why is this factory workers? In this pandemic we saw, we call them frontline workers. But who are they? Truck drivers, factory workers, nurses, and all those people that some of them are parents, some of it are relatives, that they move the society forward. But when the bad days comes in businesses, they’re the first ones to be blamed.
So, my scenario, four factory workers — later on 10, later on 50, later on a hundred — with me, we built that things back together. I’ve never made that promise because I didn’t know if I could make that false promise. I didn’t know if I would succeed, so I don’t want to give some. But when I knew that we had it, it was the decision I made day one, that everyone who worked to build this have right to have a share of it or a part of the success that we have generated.
And I truly believe in this new way of looking at business and what it means in society, where comes an enormous amount of strong effect on how society moves forward and business behave in that way. But this income inequality between working people and people on top — even in this country — is getting deeper and sharper. And the only way you can save that is governments can do policies and all that kind of stuff. But if we can’t make businesses to share its success with the stakeholder, and most importantly with its workers, is the only way moving forward.
And I hope that this becomes a very normal practice, not that you brag about it. It’s the same way all the startups that happen here in Silicon Valley. It’s a very common thing. But it’s not common when it comes to the vast majority of service industry, manufacturing industry, and especially in our food industry.
Alexandra Eitel: You’ve said before that social impact needs to be a key part of a company’s DNA, and you clearly represent that from the top down. But do you have some examples of how that’s represented from the bottom up?
Hamdi Ulukaya: How it’s represented from the bottom up, if you could give a [crosstalk].
Alexandra Eitel: The kind of impact that maybe a factory worker can have on making social impact part of the identity.
Hamdi Ulukaya: Yeah. There’s this magic word, culture. And I’ve seen a lot of things that people talk about culture, people talk about all this diversity, inclusion, things that we offer, what’s in the handbook, employee handbooks, and what do you write on the walls and all that kind of stuff. Funny thing about culture is it’s either real, or it’s just not there, or it’s just in the walls and it’s in the papers. When it’s real, then everybody is committed to be part of it. There is this unspoken rule that’s happening in that environment.
And for the founders — you’ll be a founder; a lot of people will be founder here — is the cultures are built mostly in the very early beginning. So, I’d say the first few years. And what happens in the first few years is you’re very intensely together and it’s very close. And there’s a lot of conversation happens, and you face a lot of challenges, and you find a lot of solutions. And then you come close to almost die, finish the whole thing.
In those environments, the real you come out. How you behave in those environments. There’s a recording is happening during that time, and those stories been told later on forever. So, what I can say is my early few years were so intense, and I was so present. And I’m so proud of myself. I really am. I’m not proud of a lot of things I’ve done, but I’m really proud of the first few years that I was in there.
I was in a meeting in the second or third year, and I gather all our employees. These are all Upstate New York Harley drivers. Big guys, some of them. And I brought them all in the cafeteria and I said, “We just started something magical. I can see this is going somewhere really, really good. But I’m not sure if I can handle this. I have never been part of this before.”
So, I said, “I don’t have anyone around me. I don’t have a mother, I don’t have wife, I don’t have girlfriend, I don’t have children, I don’t have family members. I’m alone. So, I have you. You’re my family. And if you see me, I go in a wrong way, if you see me I act in a wrong way — like nose up in the air, start behaving like I’m a big guy, big shot, and start doing weird stuff — I give permission every single one of you to hit me on the face.” I literally said that. And there are some big guys. And I said, “You would give me a service if you do that, because I don’t want this magic gone. And I’m not sure if I can handle it. I’m just a human being.” And nobody hit me.
Alexandra Eitel: Yet.
Hamdi Ulukaya: But — I think if I go back, there’s Maria, there’s Rick, there’s Mike, there’s Frank. I can name a lot of people in that place that has significant — Kyle — significant impact on Chobani as much as I have, but their names are not mentioned in newspapers and they’re not sitting here next to you. So, what I’m saying is if you create that culture, every single individual contributes as big as what you do.
Alexandra Eitel: Well, that’s great. And you’ve shared their names here today, and I’m sure they really appreciate that. Another area you’ve had amazing impact is with refugees. And 30 percent of Chobani’s manufacturing force are refugees or immigrants. Unfortunately, not everyone is as welcoming of these communities as you are. So, could you maybe share a statistic or an argument that you have found to be most effective in convincing people to change their minds?
Hamdi Ulukaya: I’m so happy you brought this up. So, Tent came out of this experience that I had in Upstate New York when we expand the factory and hire everybody that was [unintelligible] before, expand a little bit further. And then [hit the] town in Utica, which I used to live. And people said there are refugees are settled in Utica, and this is 2008, 2009, that area, from all across the world legally being settled as refugees. They’re having very much hard time to find jobs.
So, I went to set in their resettlement refugee agency and I said, “What’s the problem?” And this heavenly lady, she said, “They don’t speak the language. They don’t have cars. They don’t have trainings of jobs that are available here. But most importantly, people really are a little — you know.” I said, “What? Is afraid of them or what is it?” “People are not familiar with people coming from Asia and Africa and Middle East. This is a rural community.”
I said, “OK. I need workers. I had everyone in my community that is available. Let’s do something. So, we’ll get some cars and buses. We’ll get some translators. And we’ll see how that goes.” She said, “Are you sure?” I said, “Yeah. I think this will be good.”
So, that we started not a refugee work, it was a community work where people are left behind, left out. They have no way of getting in. And just breaking those barriers. But just cars, translators, and in-job training. It’s an HR work, really. It’s not a big deal. And I said, “Let’s bring them in and let people to get to know each other and interact with each other.”
And it became this thing, and it brought so much energy to the company. People loved it. Brotherhood, sisterhood was built. And people who have never had seen someone from Nepal or someone from Ethiopia or someone from South America. And it was so magical. And I just saw things that are happening. I couldn’t believe my eyes. So, when I built a plant in Idaho, did the same thing.
And then we saw three years later, four years later, and people will come to me, tell me about their experiences: “I just bought home.” “My daughter is in this school.” So, this magic of having an access to job for a refugee is the moment that they stop being a refugee. That is the only moment they start being part of a community, they start being part of a society, they can build their life for themself and for their children.
So, I thought how could I take this experience that I had into a large scale? So, I went to Switzerland, Geneva, and talked to UNHCR and IRC and some other things. And what I realized, the absence of business in this refugee topic, which is probably one of the most alarming humanitarian crises that we are facing today. We have faced this during World War II when Europe had so much refugees, especially Jewish refugees. They’re fleeing all over the world. And humanity did not perform well at that time. And this is, again, happening, and it’s happening a lot of places.
And I thought the other saddest thing is how this topic is being part of political conversations, and how it’s profiled as so unfairly, so bad. And the only way you can cut this through is if you can tie it into a power of brands and businesses and CEOs, which today have more respect and believability rates than anybody else.
So, I launched it with Airbnb. Joe has been amazing on this topic; Airbnb has been amazing. Mastercard, Ajay has been amazing on this from very early on. And few others. And that was in 2016. And what I said is, we’ll do scientific studies. We’ve done a lot of [unintelligible] with Stern and business schools and some economists and branding people. We did market research in each market — Europe, South America, U.S., Canada — and demographics.
And we said, here, statistics are refugees are staying in the job 30 to 40 percent longer than anybody else. Productivity level — and we had done all these studies — is twice more than anybody would have. And then every dollar you spend on refugees in five years the longest — usually it’s a lot earlier than that — the longest in any society in five years pays back, and then positive after forever. All these studies we’ve done.
And then we’ve done marketing studies and say how people think about your brand and your company if you hire refugees, train refugees, then you’re pro-refugees? We did all these market studies and found out that what it does to brand and what it does to talent coming into your company when they know you’re socially active in the refugee field.
So, one by one we convinced companies to come and join. Today we are over 200 companies worldwide. And when the Afghanis were coming, refugees from Afghanistan just a month ago, we had over 60 companies signed up publicly, very beautifully, and committing to hire refugees, train them right away. So, this coalition that we have built together, it became extremely powerful. It’s the first business coalition that’s been built.
Now, if you talk to anybody. We’ve been to Colombia, we’ve been to Canada, we’ve been to refugee camps all over the world. If you talk to the companies who have gone into this, there’s this enormous amount of effect internally in the company that you have. So, it’s really, really good for business.
And I don’t find any other way other than businesses coming into these topics — and any other topics that society is facing, and make it part of their HR department, part of their manufacturing and people department or service department. And it’s not check the box. It’s organically embedded into operation that you can see the light under the tunnel. But it’s very early beginning. I am extremely passionate about it.
And I think these people have gone through so much pain and sorrow and difficulties that they didn’t want to leave; they didn’t want to go through this. But now they are in these [unintelligible] places that human capacity and potential through business they can come into society, they can come into their life and rebuild their life, and the businesses can benefit and society can benefit from this. So, it’s very simple: Hire them, train them, and use your supply chain to keep them in they whatever they are into the supply chain, and you’ll benefit greatly.
Alexandra Eitel: Well, I love that your answer has statistics to back you up.
Hamdi Ulukaya: Absolutely.
Alexandra Eitel: But of course, as always, you’re speaking from the heart and focusing on the human spirit there. And our theme for this slate of speakers this year has been going beyond, going beyond expectations of a CEO or a leader. And I think you’ve done an incredible job of exemplifying that, so thank you.
Hamdi Ulukaya: Thank you. I’m so honored to be with you and with you all. I am not a graduate from university, so I’m a —
Alexandra Eitel: Not yet.
Hamdi Ulukaya: Not yet. But enormous amount of respect of this institution. Enormous amount of respect that solutions and innovations and the way that— how to form humanity and society better through innovation and business coming out [into] society. You guys are inspiring us all. It’s the most amazing thing. And being here, being with you, is something that I will not forget, and thank you for the invitation, too. Thanks for this moment.
Alexandra Eitel: Thank you.
Hamdi Ulukaya: Thank you.
Alexandra Eitel: Great. We are now going to move to some questions from the audience.
Female Voice: Thank you so much for being here and inspiring us. I love your comment about the joy and creating a culture from the beginning. So, my question to you is, Chobani is doing so much and trying to go forefront in so many, so many topics. And there are two things that capture my attention when looking at what they’re doing. One is this incubator for new businesses. Now when I first read it, I was like, oh, wow, they’re actually funding other companies who could be competition. So, I wanted to ask you a little bit about that initiative of the incubator. And also, what would you like to see more in the sector to help move and push this initiative forward?
Hamdi Ulukaya: What a beautiful question. I find food in the U.S. is one of the fundamental problem that we need to solve. And the problem is you can make food that has very good ingredients, but is very expensive; people cannot afford it. And then the big guys, they make very bad food that that’s very accessible. So, how do you make accessible food that is wholesomely made, is nutritionally made, that every children, every family members across the country can have it?
So, that was my thing is good food for all: delicious, nutritious, natural, and accessible. Because you can make $5 yogurt, but how many people are going to buy that? So, what I did is we found a way. We found a way to make a dollar a yogurt that made extremely wholesome ingredients, that have 11 gram protein, that available in Walmart for $1 or Kroger for $1.20, but everybody can buy. So, I wanted to share that with the startups.
So, I started the incubator, Chobani Incubator. And I said no string attached. I don’t want anything back. I don’t want any percentage or anything. All I want to do is if I was starting my journey in 2007, the things that I wish I had known back then, what would those be? And I made a list of five — five to seven. But I want to share those with people who are starting their journey that had the like-minded entrepreneurs, they had the right attitude and they’d see the same thing.
And we started this. It became very, very popular. And the incubator people will come four months, five months, stay with us. Engineering, quality, plants, branding, marketing, all the doors are open for all of them. And we had amazing women founders came, veterans founders came, and the farmers entrepreneurs came. And then I’d started with Turkey, too. I did it for four years. I brought 30 students from Turkey from all across the country, and then five, six startups every year. That was the summer program. I think one of the most beautiful thing we can do is share the experience and knowledge without string attach, and open it up.
So, the second reason I had is we cannot be alone on this. We need a community. So, that’s the reason. Either another yogurt maker, another food maker, whatever it is, this new good food making movement for all has to be a community for us to be able to make a dent into this problem. So, I thought we might not be as big as all the big guys. But if we are part of a community and we collaborate with each other, we share from each other, then we can really make this a mass thing. So, that was the second reason that I started.
Male Voice: Hi, Hamdi. This is [Unintelligible] from Istanbul. [Crosstalk] So, thank you very much for coming here and sharing your insights about entrepreneurship and impact. And I would like to— your comments on being an international immigrant entrepreneur in the U.S. was very important and was very truly inspiring for all the international students who want to start businesses here. And I would like to ask: What would be your top three tips for them to start great businesses in the U.S.?
Hamdi Ulukaya: What a great question with that. Really get to know America. And what I can suggest for people like us coming from outside. For the Americans there’s politics, there is celebrity, there is footballs and all that kind of stuff. That’s a different thing.
But for us, we come with prejudgments. And those judgments can be because of what we read, because of the politic of background we come from, whatever that might be. And I tell this to refugees, too: Get rid of all those pre-ideas. Get to know America if this is what you want to live in. And I say that because dismissal is extremely easy, like “I don’t like this. I don’t like what they do here. I don’t like what they do here.” But if you look at it for the large part, we are the same. Right?
So, when I went Upstate New York and worked in that farm, in New York City I couldn’t. There’s more Turks in New York City than natives. So, it’s Turkey in New York City if you want to stay in Turkey. But when I was Upstate New York, there’s farmers. The people have been there for generations. You get to know the soil. You get to know the culture. You get to know the background.
And start loving apple pie and Thanksgiving, the magic of Thanksgiving. I was amazed by it. Interactions of the farmers with each other; I was amazed by it. And I celebrated those a lot. When I started celebrating, then I start to get to know the people and the culture and the history. And I think in the entrepreneurship, there’s a little bit of anthropology is really involved in it, and that is your own experience with people without judgment, to understand.
And people look at Chobani, they think that we are very liberal activist brand. You have to understand. Our two plants in Upstate New York and Idaho, they’re 70, 80 percent red states, red areas. And these are one of my closest brothers and sisters. We made human connections because we understood each other.
I still make my argument that they should be minimum wage with the Idaho government. I still make an argument that when they ban transgenders in the schools, and I strongly disagree with that. But in the human level, we understand each other. We can sit down and break bread and talk about things. And I can still celebrate the deep culture of Idaho in a family level and in other levels.
So, one of my recommendation is truly try to understand. And you’ll find more beauty than you ever imagined, especially in the rural areas, especially in the family interactions. Is there some not so good things? Of course. It’s everywhere. So, that’s my first.
And the second one is don’t try to be like them. Stay who you are. What you brought, where you come from, are so beautiful, so amazing, and so valuable. And this country celebrates that tremendously. So, how do you make sure that what you see and what you bring that can beautifully homogenize with each other?
I never forgot being a shepherd’s son from eastern part of Turkey. I never forgot that boy. And if I go back tomorrow and if I put a mask on and nobody recognize me, I can go to that mountain and start being under that tent and be with the shepherds and they would never know I left. Because I never forgot that I lived that every single day.
So, you don’t have to leave who you are to become successful for another place. The most successful person brings the beauty of where you come from, and to take and homogenize it here. And I always said I brought a seed from where I come, and I found a beautiful soil here, and that’s become this plant.
Alexandra Eitel: That’s beautiful.
Yvonne: Hamdi, hi. My name is Yvonne. Thank you so much for being here. I’m a second year. In the 45 or 50 minutes we’ve been with you, you’ve connected so well with us. And I’m curious as a CEO and founder, do you draw lines with your people? And if so, when do you do that and how do you know what lines to draw?
Hamdi Ulukaya: Thank you. Look, I think we have to be— Thank you. I was smiling under my [crosstalk]. And so gracious, thank you so much. Yes. Look, as long as they know you’re real, it’s OK to be angry, it’s OK to draw the lines, it’s OK to have tough conversations, as long as it’s not personal. I always said — I mean, my colleague [Unintelligible] is here. And I love him. We’ve done wonders together, and we have tough times together. And as long as he knows I’m angry about the thing, not at him. And we have not written a lot of rules in the company but is a lot of [knowns].
One thing that I have no patience for is disrespect, either in a social environment or inside the company. To talk about one of your colleagues in a very disrespectful way, or making somebody uncomfortable in the space, is something that I think that is poison in business field if it exists. I mean, that is one of them. Second one is when someone suggests preservatives in food. That’s just like, no, that shit is not going to happen. And I think introduction of poison in a very small way in the business field — and sometimes it’s just a tiny thing — those things later on grows and becomes a really big thing.
So, if you are very — And I have relaxed certain things along the way, which I thought that was really big thing for that time but not necessarily right now. I had this thing that if I open a cup of yogurt and if I see yogurt on the lid, I’ll get so upset. People were so scared of it. So, I will go to the store and I open the yogurt, and I see the yogurt on the lid. And I said, “That means that we have not done our filling right. Those fillers were so fast.” So, I would go and give so much bad time for our operation people. And I give up. I said, “Who gives a shit about it?” But it’s OK. There are trucks and there’s people are — if they’re buying it, if they put it in their shopping bag, it’s going to happen anyway.
So, there are things that is not realistic. But I really do believe that having real conversations — sometimes not pleasant conversation — it’s totally fine and totally OK. We are not a foundation; we’re a real business. And I always wanted to tell people, I’m not an NGO. This is not an NGO. This is a business, and it has to self-sufficient itself. And every year, 10 percent of the people will leave, let go or fired, whatever that is. It’s just function of business. And I think we need to know that if you’re going to build a society where business finds a way to solve these fundamental problems and be part of it, it cannot behave like an NGO. It’s a real business.
And I don’t know if you want to put a tagline of a social enterprise or this and that. I don’t have to sound like I’m from church or I’m from Save America or Save the Children. I don’t have to. I’m business. I innovate; I compete. I don’t like my competitors. If they’re so good, I’ll find a way to hate them one way or another. Kidding aside, this is the excitement part of business that gets me get going is, I can think about things, how I can win the battles in the shelf. For the right reason it makes it even better.
But the field of business is something that you will not find anywhere else where you can put all your capability: leadership, innovation, human connection, interaction, teamwork. I don’t know, you name it. The place that you touch, it’s just amazing, especially if you’re a founder or if you’re a founding partner. So, it’s an amazing place, so let’s keep it business. But there has to be a silent language, knowledge, or conviction, or everyone agrees that we operate within these boundaries.
We know why we do what we do. We don’t have to talk about it and brag about it all the time. We know that we are safe, and we are all together, and this is our space. Everybody is in here. And we know that we have some certain performance so that we have to do it. And if we don’t, it’s not going to be punishment. We’re going to find a way to do it together. But those boundaries can be created. And within that, we’ll have some pleasant conversations and some not pleasant conversation. I think that’s totally fine.
Alexandra Eitel: Thank you to the students for those great questions. Hamdi, I noticed that you often wear what is important to you on your head. And so, in honor to honor your time with us here today —
Hamdi Ulukaya: Oh my God.
Alexandra Eitel: I got a special GSB hat that actually says View From The Top on the back. So, thank you so much for your time.
Hamdi Ulukaya: And in my personal life, I always wear hats. And I wear three hats always. One is Chobani. Today I decide to come here with my Tent hat because I’m extremely passionate about Tent also. And the third one is my colleagues from Turkey [Fenerbahçe] hat, my soccer team. But Chobani is my first love, so I’ll present you this.
Alexandra Eitel: Thank you. Thank you.
You’ve been listening to View From The Top: The Podcast, a production of Stanford Graduate School of Business. This interview was conducted by me, Alexandra Eitel, of the Class of 2022. Lily Sloane composed our theme music. Michael Riley and Jenny Luna produced this episode. Follow us on social media @stanfordgsb.
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