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Narrator
In partnership with Airbnb. Over the holidays, my family and I took a trip to Japan, a place I actually spent time in as a child. And it was incredibly special to return with my own kids.
Guy Raz
And one of the things that made
Narrator
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Guy Raz
Built this, Babson gives you the skills,
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network and hands on experience to turn your ideas into into reality. Learn more at Babson Edu Gradschool.
Guy Raz
From the time that you started with the first hens until the time you could actually sell eggs. Was it weeks? Was it months?
Matt O'Hare
Months? I figured to get started I wanted to start selling to restaurants, but I was getting a lot of no's because they were paying. They could buy eggs from Cisco for $0.89 a and they're not going to pay me $4 a dozen when they can buy for $0.89. And I kept hearing from chefs, an egg is an egg is an egg is an egg.
Narrator
Welcome to How I Built this, a show about innovators, entrepreneurs, idealists and the stories behind the movements they Built.
Guy Raz
I'm Guy Raz. And on the show today, how Matt
Narrator
o' Hare was inspired to buy a
Guy Raz
te and some trailers from Craigslist and
Narrator
built a nearly one billion dollar brand, Vital Farms.
Guy Raz
So for as long as anyone can remember, eggs weren't really a brand business. If you walked into a grocery store
Narrator
20 years ago, you'd likely pick out
Guy Raz
a carton of eggs based on the
Narrator
size or if you wanted brown eggs versus white ones. No one gave much thought to where
Guy Raz
the eggs came from or who produced
Narrator
them, which is strange if you think about it, because Americans eat a lot of eggs, almost 100 billion of them a year. It's a huge industry worth around $50 billion annually. And yet, until recently, almost no one focused on building a brand and a story around eggs. Which is part of why Matt o' Hare decided to do it himself.
Guy Raz
Starting out on a scrubby patch of
Narrator
Texas land with a handful of hens, the idea came to Matt in 2006 after reading an article by the founder of Whole Foods, John Mackey. John, who was actually on the show
Guy Raz
a few years back, wrote about a concept called conscious capitalism.
Narrator
The idea that a business should take care of its employees, customers, the community, and the planet. Now, whether you're skeptical about this idea or not, Matt o' Hare became a true believer. And in eggs, Matt saw an opportunity to take this concept and build a business. And what he wanted to produce were
Guy Raz
eggs that were different than what was
Narrator
available at the grocery store. Eggs that had bright orange yolks and didn't taste like they came out of a factory. The hens would have space to roam outdoors and be treated more humanely than most egg laying birds that are confined cages now. At the time, Matt was in his 50s and had spent the previous few
Guy Raz
years as a charter boat captain.
Narrator
He had absolutely no experience as a large scale chicken farmer and he didn't know much about selling food. In fact, as you'll hear before Vital Farms, Matt had launched a bunch of different businesses which were complex and challenging in their own right. Some of them did okay and others fizzled out. But all of them contributed to the businessman that Matt would eventually become.
Guy Raz
Matt O' Hare grew up in Rhode Island. In the 1960s and 70s.
Narrator
He decided to skip college and made his way to Houston, Texas when He
Guy Raz
was around 20 years old. He got a job there working for a carpet cleaning company.
Narrator
And one day, while sitting in his van surrounded by a bunch of equipment,
Guy Raz
he thought, maybe I should go into this business myself.
Matt O'Hare
I saw the name on the back of the carpet cleaning machine said Chemco Manufacturing, Phoenix, Arizona, model 75A. So I got the phone number and called him up one day and we were just sitting in the. I was in a kind of a commune house that I was living in, and I called him up and said, hi, this is Matt o'. Hare, I'm with. I looked up, I said, super Steam carpet Cleaning. I just came up with a name and I'd like to order a model 75A, you know. And the guy says, oh, we're having a special right now. If you order two, you get a discount. Like, oh, okay, whatever. That sounds great. You need chemicals? I said, well, I need carbon cleaning solution. Like, do you have by the gallon? He says, we have 55 gallon drums. Like, I said, okay, I'll take a 55 gallon drum. And I was just being funny, you know, it's like having fun with it. And pretty soon he had this whole order and it was like three or four thousand dollars, I think. And he said, would you. A 30 day term's okay. And I cupped the phone, I said, anybody know what 30 day terms means? No one knew. And I said, oh, sure, that'd be fine. Two weeks later, a big truck, yellow freight lines, pulls up in front of the house, this commune house, and starts unloading all this stuff in front of the house. And I had to look up what 30 day terms meant. And I was all of a sudden in the business.
Guy Raz
It's amazing to think about how the world worked in the mid-70s where you could just call up a no credit check. No, like. And they say, they just, they said, sure, we're going to send you one out and it's 32 and then they're going to expect a check within 30 days. And you did not have three or $4,000 at the time?
Matt O'Hare
I didn't have three or $400, yeah.
Guy Raz
And you had worked for a previous company. So what did you, you just started kind of like, I don't know, poaching their, their customers?
Matt O'Hare
Well, no, what I noticed is Houston was a boom town. They were taking farmland and converting it at a rapid pace into subdivisions along I10. And the kids go out and play, they run around in the farm fields that hadn't been converted yet and they'd run into these brand new carpets and get them dirty. And I found that we were cleaning carpets out there all the time.
Guy Raz
And were you, I mean, how were you able to come up with the cash within 30 days to pay for the machines?
Matt O'Hare
Well, I mean, it was quick money. Because people would, you know, come and they'd pay cash. It was all cash business or a check. And I didn't pay it in 30 days. What I did instead is every few days, I'd send a small amount of money, so $50, $100. And after 30 days, I probably had only paid 15% of it back. But they thought they were probably laughing at their office because every day they got another check for me, and I had more business than I could handle. So I ended up, you know, ordering a third machine and paid for it the same way. And it just kept growing the business.
Guy Raz
So, I mean, this is the late 70s. And so you were bringing in. Do you remember even how much you were bringing in a year?
Matt O'Hare
The company was. By the time I sold, the company are all in. Because we also got into equipment sales. We ended up being the top sales organization in the country for that company, Silverman Machine, selling their.
Guy Raz
Oh, you became an agent selling their. Their cleaning jeans.
Matt O'Hare
Yeah, I think at the end. But by 1980, we were a million dollars a year probably in sales.
Guy Raz
Wow.
Matt O'Hare
And I sold the carpet cleaning portion and shut down the equipment portion.
Guy Raz
You sold it in 1980?
Matt O'Hare
Yeah, five years.
Guy Raz
Okay.
Narrator
Okay. And I guess you got a small
Guy Raz
chunk of money from that sale, because I think, I guess with that money, you bought a. Like a plant nursery just outside San Antonio, and you had, like, a little
Narrator
farm there and even raised some chickens,
Guy Raz
which would, of course, lay the groundwork for later on. We'll get there. But I guess you were kind of
Narrator
in a holding pattern, right?
Guy Raz
Like you were doing this for just a few years?
Matt O'Hare
Yeah, I had dairy goats, and I had chickens laying eggs and stuff. Um, so, you know, that's when I first learned that, you know, when the chickens were running around on pasture, they made these beautiful, delicious eggs, and I couldn't find them anywhere after that. But, yeah, I saw the opportunity just to at least do that for fun while I decided what my next big move was going to be. And I didn't know what I wanted to do, but I knew I wanted to ultimately move to Austin and I wanted to start. Start a company there, but I didn't know what yet.
Narrator
So you.
Guy Raz
All right, so you're in Austin around, what, 1983?
Matt O'Hare
84.
Guy Raz
Time frame.
Matt O'Hare
83. Okay.
Guy Raz
So, Matt, many of our listeners will. Old listeners will remember an episode we did years ago, maybe 2017, 2018, with John Mackey, the founder of Whole Foods. It's a great episode. And tell me about. Because you met John Mackey, and he was just Kind of starting out at that time, Right. I mean, he was really getting into the natural foods business.
Matt O'Hare
Yeah. What we had in common was we were both entrepreneurs and young entrepreneurs. I was 26 or 27, I believe, and John was a year and a half older than me. But John had a. You know, Whole Foods was a great company. And, you know, but when I met John, he was. You'd see him in the produce department, packing produce, you know, at the first real good sized store that he had, which is 10,000 square feet. And I was starting my company, which is barter exchange.
Guy Raz
Yeah.
Narrator
So you.
Guy Raz
All right, so you're in Austin and you are starting a new business, a barter exchange company. So I know what bartering is like. Hey, I can give you this in exchange for that, right? Not exchanging money, but like services. Help me understand what this business was.
Matt O'Hare
All right, so I didn't invent the concept of bartering.
Guy Raz
No, it's in the Bible.
Matt O'Hare
Well, I mean, but of these companies, you know, where you stop doing a quid pro quo trading, you know, this for that. But instead you were doing. We have a currency. And so the currency was called a trade dollar. And so just to give you how basically how the business ran, we only companies could join and they would pay us 500 to join a membership.
Guy Raz
It's a membership, Right. Annual membership, or just one time.
Matt O'Hare
One time. Okay. And. And then, and then you get a credit card, the barter exchange card. And that credit card enabled you to go and shop at any of the other businesses in that community or nationwide. Because this is a national company. I was starting. I decided right on the bat, I was going to build a national company. I was going to franchise it all over the United States.
Narrator
It was a.
Guy Raz
Your business. And first of all, what kind of businesses are we talking about?
Matt O'Hare
Doctors, lawyers, airlines, restaurants, manufacturers, radio stations, magazines, newspapers.
Guy Raz
All right, so let's say you are a radio station and a doctor. I pay you $500, and then that enables me to shop at any of these other businesses.
Narrator
But why would I even need to
Guy Raz
be part of this network to use their services?
Matt O'Hare
I'll give you a simple example. Let's say you have a restaurant. And your restaurant is operating about 60% capacity every day at lunch, you have 40% of your tables empty. You have plenty more capacity. Your food cost in a restaurant, typically 25%, roughly. But your. Your big cost in a restaurant is your fixed overhead. So you have this perishable commodity called that seat that's not worth anything if you can't fill it right. You got to, you have to have a new driveway put in, parking lot put in, and the asphalt company came to you and said it's going to cost you $10,000 if you join barter exchange. We're going to fill up some of those empty tables with customers you wouldn't have had otherwise. We're going to send them in, they're going to use their trade dollars to eat in your restaurant. And basically you're going to buy that driveway with incremental business.
Guy Raz
And your promise, your value prop was we're going to save you money over the long term because bartering is going to, you know, the cost for you to provide your service is much lower than the cost you would have to pay for someone else's services.
Matt O'Hare
In essence, yes. But unfortunately, that restaurant owner probably can't find a driveway guy who wants to eat $10,000 in the meals at his restaurant. Right. And so what this does is basically the reason why barter is always. It was the first form of trade, right? Was barter. That's why they call it trade, because it was trade early on.
Guy Raz
So this sounds like almost like it was a membership club. It was a certain kind of entrepreneur who would join, who'd be willing to do this. But basically, am I right, it's more like a club. They would operate like a club.
Matt O'Hare
Yeah, but there were thousands and thousands of members. You know, at some point, at one point we were doing 100,000, processing over 100,000 transactions a month.
Guy Raz
And help me understand, so you got the membership fee, the one time fee, but then how, what was your recurring revenue?
Matt O'Hare
We charged 5% cash and 5% to the buyer and the seller in each transaction.
Guy Raz
Every time there's a transaction and there'd
Matt O'Hare
be an invoice, a statement at the end of the month, it would also tell people this should not be how you operate 100% of your business. This is a way to utilize excess capacity. Because there's nothing more perishable, you think about it, than an empty hotel room that didn't get sold last night or a 30 second spot on a radio station yesterday that never got sold. They get nothing for that.
Guy Raz
This is a fascinating business. First of all, do these businesses exist anymore today?
Matt O'Hare
You know, I think there's one or two that might still be around.
Narrator
And how did the business do?
Guy Raz
Was it, was it successful? Did you, were you bringing in was profitable?
Matt O'Hare
Yes and no. The hard part about the business was that you could never consistently meet the customer's expectations.
Guy Raz
Right. Because it's. You wouldn't you don't have predictability.
Matt O'Hare
They come in thinking that's going to save their company and it can help them. Right. Or, or their expectations are that I'm going to be able to, no matter what you tell them, that they're going to be able to use their trade dollars right away for everything. And sometimes it's difficult to find something they wanted right away. So sometimes as people, you know, weren't getting enough business and they, they weren't happy and other people and I, man, you know, I've always said I'm not, I was never, you know, I hate wasting my time being CEO of a company because it really is. Takes a lot of work. That was 13 years of my life in that business.
Guy Raz
And this sounds like just a lot of moving parts like I can. There's thousands of cliches coming into my head like herding cats or you know, just, I'm just thinking you've got your own. You're running a membership organization in Austin. Then you're in charge of a network of membership organizations all over the country. So you're dealing with the franchise owners and then you're dealing with the businesses in your area and maybe businesses in other areas. And I mean this is before email and you know, you have fax machines maybe. But I'm just thinking like how you even deal with all the communication involved.
Matt O'Hare
It was a pain in the ass, I'll tell you what. And it's funny because you just named all the issues, right? It was always something, you know, with always struggling with cash flow. It was a really knockdown, drag out. It was a really good education though because one thing it taught me, I learned about so many different companies because they'd bring me in, clients would come and say I've got this excess inventory and I can't move it and what can I do and how can I turn this into something I need? And I did business with some big corporations. You know, we did big deals with, with airlines for, for. But a lot of, a lot of deals between travel related assets and media related assets. We did a lot of that. We earlier made a lot of money in arbitrage. We could buy something, move quickly because we were the Fed. We could loan ourselves some money or take it out of our trade dollar bank account and buy something and then flip it. But it was always a struggle and can wear on you after a while. Yeah.
Narrator
All right, so you eventually sell this
Guy Raz
business, I think in 1995 and you
Narrator
make a little bit of money off of it. And I Guess because you learn so
Guy Raz
much about the travel industry in this arbitrage in this sort of bartering business, you wound up launching a new business for a very specific market, which is airline employees, I guess, flight attendants and pilots. And the way I understand it, basically what you would like, broker deals with hotels and resorts for inexpensive hotel rooms, and then you would turn them around and sell them to airline employees who could fly somewhere cheap or if they had some time off. Is that right?
Matt O'Hare
Yeah. There were dozens of these little companies that former airline employees would start and they would, you know, they would place or even existing airline employees and they would place, they'd find, get a deal with a hotel in a resort somewhere and say airline employees will let you come for 50% off because they wanted to. Because the airline employees key is they fly at the last minute standby, and hotels like to fill excess capacity. And I had really good contacts in the resort travel business. My previous business at Barter Exchange, you know, I had general managers and sales managers from all the major hotels and the resorts in Mexico and throughout the Caribbean. So we started growing the business and it was, it was easy to grow. There was a travel magazine that was out there at the time called Airfare Magazine, I believe it's called. I bought that magazine for cheap. And we took that and turned into a first class publication with a quarter of a million circulation called Interline.
Guy Raz
And these were only airline staff.
Matt O'Hare
Yeah, there's millions of airline employees.
Guy Raz
And around the world, I would think.
Matt O'Hare
Yes. And this is worldwide.
Guy Raz
Okay.
Matt O'Hare
This is okay. So all right. And there were 25, 30 companies doing this around the world at this time.
Guy Raz
And so there were other companies in the same business.
Matt O'Hare
And I did a roll up. I wanted to go and buy them all.
Narrator
Yeah.
Guy Raz
So you would really, you could say, hey, come, just roll your business up into mine. But then you'll have equity in this bigger business.
Matt O'Hare
And I'd pay them, you know, they made a small amount of money. I really don't remember the amounts, but probably, you know, maybe a 20, $30,000 might be enough to get them on board. And then we'd do an earn out. And they were happy with that earn out.
Guy Raz
Okay. So this is starting to look like this could really go somewhere because you had done the Barter Exchange and that was challenging. But this one really looked, from what I read, it looked like it was really promising. And you did actually take this public in 1998. You took the company public. You guys were doing like 50 million in sales at its peak, I think. Right.
Matt O'Hare
Roughly 50 million. We had a good group of people working at headquarters. We had a first class magazine, but we were still struggling. New company. All businesses are challenged, especially when you're a mediocre operator like I was, I would have to think, you know, I mean, you know, we had a couple of instances that set us back on our heels.
Guy Raz
Why do you think you were not a good operator at that time?
Matt O'Hare
Well, what I've learned since then is I'm really good at growing companies, but I get really bored at the blocking and tackling part, which is really important part of it.
Guy Raz
It's really the most important part.
Matt O'Hare
I hadn't really learned lessons that I learned later in life, which is always hire people that are 10 times smarter than you and 10 times better than you to run every aspect of the business. And I still thought I was the smartest guy in the room and I wasn't, you know, I had a lot to learn.
Narrator
Did you have.
Guy Raz
I mean, because here in this conversation you come across as very mild and, you know, chill and. But you said you act like the smartest guy in the room. Were you argumentative? Were you dismissive of other people?
Matt O'Hare
Maybe not ostensibly, but I'm probably was more than. Certainly a lot more than I am today, that's for sure. I certainly lacked humility, which I think is such an important aspect of being in business. And I didn't do a good job making sure that I had the right people in the right seats in the bus, you know, and that's such an important lesson.
Guy Raz
Yeah, for sure. But I mean, still, the business was doing okay. I mean, I think at its peak, you had like what, like 200 people working for you, people in the US and in Europe.
Matt O'Hare
That's right.
Guy Raz
But then of course, 2001 rolls around and September 11th happens and you're in the travel business and you guys take a major hit, as does everyone in travel. And I read that actually on that day, on 9 11, you were actually in New York City for a business meeting.
Matt O'Hare
Yeah. Got up early in the morning and went for my morning run and came back and was taking off my shoes in my hotel room, midtown. And I see an airplane, I see one of the World Trade center towers burning. Like, what is that? Turned up the volume. I said a small plane had crashed. And while I'm watching it, the second plane hit, I quickly laced up my shoes and decided I'm going to run down, see if I can help at the World Trade Center. So I ran down the west side Highway. By the time I got to Chelsea. The first tower came down and I was surrounded by people that had come out of the, the towers covered in dust. And I realized that my sales were going to go to zero for at least a period of time. And we couldn't afford it. We were still hand to mouth. We were tight, you know, but we were, we're okay.
Guy Raz
Yeah.
Matt O'Hare
So I got on the phone right before the second tower came down, got on phone with London and Austin laid off 140 people that day at that moment before the second tower came down
Guy Raz
because you, well, all air travel had been suspended in the United States. But it just, it's. I guess, well, I guess right away people couldn't travel.
Narrator
Right.
Matt O'Hare
What happened is 20% of all airline employees within days were laid off.
Guy Raz
But you didn't know that yet on that day. You just knew that there was going to be some challenges in your business and just so protectively you lay off people. But still thinking, we'll survive this?
Matt O'Hare
Yes. Well, I wasn't sure, but I knew that we couldn't afford even a small bump on the road at this point. We were hand to mouth, cash flow wise was too tight. So I knew I had to make some immediate decisions. But I was really more concerned with lives at that point. I wanted, I'm pretty good at triage and I thought, well, maybe I can help. And so I got back and started running downtown.
Guy Raz
How long were you in New York City before you head back to Austin?
Matt O'Hare
Well, I got down to the World Trade center, wasn't able to do anything because there was no, nobody now to help. And that was my. And I walked up, back to Midtown with the whole gang of us together and came back to Austin a few days later. I ended up basically selling the company. I, what I saw happen that day is my, my net worth, which I calculated somewhere beforehand, was still in the tens of millions of dollars because, you
Guy Raz
know, of the value of the company.
Matt O'Hare
Yeah, my share of the value of the company to zero overnight.
Guy Raz
Okay, so you are now 45, 46 and
Narrator
broke.
Matt O'Hare
By broke I mean I own my house, which is really great. I had built it largely in barter.
Guy Raz
But you had no long term security.
Matt O'Hare
No, but when 911 happened, I was like, okay, now I got nothing. You know, and I quickly got it like consulting gigs, you know, I came and helped a little bit of that, but it was just, you know, nickel
Guy Raz
and dime and that's it. I mean you spend about a year on help, sort of unwinding it and dealing with creditors and what were you going to do?
Matt O'Hare
Yeah. I had always wanted to sell my company and then sail around the world. You know, I was always looking for the exit back then, you know, but, you know, selling a company, buy a big sailboat and sail it around the world.
Guy Raz
You grew up in Rhode Island. So did you grow up sailing?
Matt O'Hare
Yeah, when I was a kid. I had a paper out when I was 8 years old and from 8 to 12 and it was, you know, I saved my money and I bought sailing lessons at Rhode Island Yacht Club when I was 11. And I really learned to sail and I loved it.
Guy Raz
Okay. So here was the opportunity to do it. Except you didn't have the money to do it.
Matt O'Hare
Oops, there's that one little problem. Yeah. Yeah. But I had a little bit of equity in my house. I had enough to, to borrow 300,000, 330,000. I think I borrowed against your house.
Guy Raz
Okay.
Matt O'Hare
So I decided I was going to be a charter captain. Yep. And I found a boat in, in the British Virgin Islands. It was a charter boat. It was about five, six years old, four cabin. And my new girlfriend and I, she was game to jump on board with me.
Guy Raz
So you would be the captain of the boat and you would bring tourists on and take them for a week long or three day long, usually families.
Matt O'Hare
Yeah.
Guy Raz
Okay.
Matt O'Hare
And I also was doing charters in the Caribbean all winter and spring and fall. But I would move up to New England in charter all summer in New England from Maine to New York.
Guy Raz
And you have a girlfriend who I believe is your wife now.
Matt O'Hare
No, she was my wife, but she was your wife. We were together for over nearly 20 years. Got it.
Guy Raz
Okay.
Matt O'Hare
So I was captain and chef.
Guy Raz
And were you a pretty decent cook?
Matt O'Hare
I was. I had gotten to be over the years. I'd got. I had worked in the cooking business in Blockhound in the summertime and, you know, worked my way up to, I would call it lion cook. Yeah.
Guy Raz
I want to put this in perspective for a minute because you had gone from running a 200 plus person complex business after 13 years of running another very complex barter franchise business. You had been the CEO, you had big staffs, you had, you know, on calls and meetings and, and you are pivoting to a career at 45, 46 as a captain and cook of a charter boat. Just you and your girlfriend. That's a big change. I mean, that is a, that's a very big life change.
Matt O'Hare
That sounds glorious compared to what the reality was, which is I'm taking apart their toilet that they dropped the wrong stuff in and fixing it. And I'm down in the engine room covered in grease, fixing an engine and all this without, you know, I had a generator, I had two big engines down there. Plus you have the sails and, and you're cooking. But you're also taking them to three, four islands a day and your tour guide, and you're teaching them to scuba dive and wakeboard and, you know, all
Guy Raz
this stuff on all the time.
Matt O'Hare
Two. Yeah. One thing I was really learning is that, you know, I was now my ego had gotten pretty well crushed down and. Which is in a good way, by
Narrator
the way, what a gift.
Matt O'Hare
I know, it was really, what a gift. I was, you know, taking care of people. I was a nursemaid, I was a diplomat. I was, you know, solving marriage problems when I could. And I was, you know, teaching people to do a lot of interesting things and, and I had a lot of kids on board. You know, it was, you know, it was really busy.
Guy Raz
Was it a good business? I mean, it's a small business. It's you and Catherine, basically, and maybe some, I don't know, part time employees. But was it a. Was it. Were you saving money?
Matt O'Hare
I wouldn't say I was saving a lot of money, but I was, you know, we, you know, we're getting, I think $15,000 a week. And after you cover all your expenses, you know, you got a little bit left over. And there were tips. Catherine kept all the tips. That was our deal, which is sizable. I think we had, you know, 40, $50,000 a year in tips. But also I saw an opportunity while I was doing this because I'm an entrepreneur at heart and I had a million ideas that I couldn't execute there. But when I could was become a charter broker who would book on other boats because we were oftentimes booked. And I get inquiries from my client base and they say, we need you for New Year's. I'm not available, but I can get you another boat. And that was 15% off the top. So I started booking charters. I started a company. It was called Vital Vacations and the first vital company.
Guy Raz
It's interesting because obviously it's a connection to what you do next, but it's also connected to what you did cleaning carpets. Because you realize that the money actually was about provide, you know, working with third parties and taking a cut. Right. Or even in the franchise business like here, you realize that by brokering charters for other people, it was, it was a much easier way to make money.
Matt O'Hare
Yeah, but I was still doing charters and I really enjoyed being a Captain, I thought I was going to do it the rest of my life. I really did.
Guy Raz
Really?
Matt O'Hare
Yeah. I remember somebody, a mentor of mine, early days, she told me, the average life of a charter captain is four and a half years. And after that, you're done. And I was two years. I'm like, I'm going to do this the rest of my life. Well, right around four and a half years, I was done. I was like, okay, what happened? Well, I had a thousand ideas. Poor Catherine at the time, you know, I feel. Because every time, like, I'd come up with another idea and her eyes would go, oh, my God, here comes another one. And one thing that had happened is I'd read this essay that had been written by John Mackey called Conscious Capitalism. It was.
Guy Raz
Yeah. Which became his kind of mantra.
Matt O'Hare
Well, it was the bestselling book after that. And now it's a whole. A whole movement.
Guy Raz
Whole movement, right.
Matt O'Hare
But at the time was a four page essay, you know, and he described that, you know, businesses need to have a deeper purpose besides just making money. And I was like, well, that's interesting. It was always for me, how could I. Quick can I get in and quick can I get out with a lot of money? And like, that's very interesting. I liked that concept. And then he went on to talk about stakeholders, and I never even thought of a business as having more than one stakeholder. Me, you know. No, they're equal in a way. And describe, you know, what Whole Foods did is for their five stakeholders, which is the customers, the employees, the shareholders, the vendors, which I thought was interesting, treating them as an equal. And then the last one was a communities slash environment where they operate. So I was inspired by that. I knew that whatever I did going forward, I wanted it to be part of that kind of model.
Guy Raz
Okay, all right, a question for you. You were and have been a vegetarian most of your adult life. At that time, you were vegetarian. But was animal, Animal rights front and
Narrator
center in your mind?
Guy Raz
Was it something you thought about or was being a vegetarian just a lifestyle thing that you, you know, that you
Matt O'Hare
just kind of lived? Yeah, well, my friend John Mackie would be angry if he heard me calling me a vegetarian. He says, you're not a vegetarian, Matt. You eat fish. So I call myself a Pesca Vegan, but.
Narrator
Right.
Matt O'Hare
So, yeah, animal welfare is, you know, especially having chickens on a farm. I mean, my chickens, they all had names, you know, they're all named after, you know.
Guy Raz
This is when you ran the farm in San Antonio, outside of San Antonio.
Matt O'Hare
Yeah. That was years earlier. You know, they're jumping your shoulders. And I saw their. You know, I had little baby chicks, you know, that I raised up to full laying hands. And, you know, they know you, that they're sentient beings. You can see that. You know, meaning they. They feel happiness, they feel sadness, they feel anger, they feel hurt. All kinds of. They have personalities.
Guy Raz
I ask that because I, you know, you're thinking about a bunch of different businesses. You read Conscious Capitalism, and you decide to move back to Austin and actually buy a farm once again, which you had done in 1980. Help me understand how you made that decision to a move back to Austin and to buy a farm again.
Matt O'Hare
Well, I knew I wanted to move back to Austin, and so. And then John Mackey and I had gone with him and some friends on a long scuba diving trip.
Guy Raz
So you had always kept in touch with him?
Matt O'Hare
Yes. We had gotten a lot closer since, like, 2004.
Guy Raz
Yeah.
Matt O'Hare
So we were on this trip, and I was asking, you know, what's next for Whole Foods? And he said, you know, this. This thing we're doing, you know, right now I'm funding this guy to. To do pasture raising of eggs. But he. He's decided instead, he took the money and wanted to build a feed bill. So instead of doing what I want him to do, I said, what did you. And I said, well, I wanted him to train farmers around the country to pasture raise chickens, meaning where they're out in pasture, eating the pasture, because we want to sell those types of eggs from chickens that are well maintained. Plus, the eggs taste better. And I was like, holy shit. That's exactly what I was. When I had my farm, I saw this huge difference in those eggs. And I've been looking for those eggs. I look for them all the time. I stop at farm stands all the time, hoping that that farmer has let their chickens out. Because what I found when I had my farm is when chickens wandered around on pasture and they ate something besides corn every day, which is what most chickens just get, primarily corn. A little bit of soybean meal that the yolks get this beautiful orange color, and they're thicker, and they taste much different, much better, and they're delicious. I don't really like the ones with the pale yellow yolks. And what I found is that the 300 million chickens are out there. 330 million chickens. Even at that time, 95, 98% of them were living in cages. 4, 5, 6, 7, 8 birds to a cage, unable to stand up, unable to turn around, unable to stretch their wings their entire lives. What I classify as the most torture farm animal in the world. So John tells me the story about what he wanted to do and I said, well, that won't work. What do you mean it won't work? He said, well, farmers aren't going to give you the consistency you want. You need to have consistent rules and you need to create what I would call a franchise model, an upside down franchise. And I had the experience franchise, like how would you do it? And I said, well, I would recruit farmers to follow our system exactly. I put them on a contract and I would buy all their eggs under that contract, but they'd have to follow the rules that we set for them. And then I would pack all their eggs into a single brand and sell them under that one brand. And I would make sure the farmers did their job right like you would like a franchise would. And he said, oh, that'll never work.
Guy Raz
When we come back in just a moment, John turns out to be wrong
Narrator
and Matt dives headfirst into the chicken business. Stay with us.
Guy Raz
I'm Guy Raz and you're listening to How I Built.
Narrator
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Guy Raz
I'm Guy raz.
Narrator
So it's 2007, and after talking to
Guy Raz
John Mackey about the challenges of the
Narrator
chicken business, Matt moves back to Austin,
Guy Raz
where he decides to buy a farm.
Matt O'Hare
I had a real estate agent in Austin. I said semi, anytime you see over 10 acres available for sale, and he sends me 27 acres in South Austin for sale. And for half a million dollars. It wasn't developed. It was just kind of scrub land. It was a flood zone.
Guy Raz
And you were going to do what on this?
Matt O'Hare
I wasn't quite sure yet. I had different ideas, but one of them was to do chickens.
Guy Raz
Okay. And for half a million dollars, by the way. Did you have half a million?
Matt O'Hare
No.
Guy Raz
Okay.
Matt O'Hare
So I flew back to Austin and looked at it, and it was. You couldn't even. It was covered in brush. I had to hack my way through the brush just to find my way to the water. It was beautiful.
Guy Raz
Okay.
Matt O'Hare
And I offered him half the price, offered him a quarter of a million. And so, yeah, I got owner financing
Guy Raz
and bought the farm for 250,000 bucks.
Matt O'Hare
Well, bought a piece of land that we. I turned into a farm.
Guy Raz
Yeah. Were you going to live there on this farm or are you going to. Or you going to.
Narrator
Oh, you had a house.
Guy Raz
You're going to live in your house?
Matt O'Hare
No, I had a house that we sold it. Sold the house a couple years earlier by that point. And we had. We're living in the rv.
Guy Raz
So this is like Again, you are now in, well, you know, into your early 50s, and you're going to do, I'm imagining you're going to do some physical labor here to start to clear this farm.
Matt O'Hare
Oh, yeah, it was, it was. I bought it. I bought a tractor.
Guy Raz
And the brush, the bramble, what was it like, blackberries? Like, what kind of bramble did you grow?
Matt O'Hare
Oh, it's whatever weeds would grow on it. And there was, you know, a lot of these, you know, little tiny trees. And I got a big shredder and I got knocked over almost unconscious with a tree brown on my head. And it was quite a fun start, but I was having fun. We're cleaning up the property. I put in a vegetable garden, bought 20 laying hens.
Guy Raz
And this is nice, fertile land.
Matt O'Hare
Yeah, but it wasn't made for crops. I wasn't going to do crops. I knew I was going to do chickens. So I started with 20. And they all have names. And then I bought a thousand baby chicks and started raising them up. And I built these pens made of this electroplastic netting to keep the predators out. And we'd move the pens and these little trailers around the property. Bought some old trailers on Craigslist house trailers and outfitted them with nesting boxes. And every week we'd move them to a new plot.
Guy Raz
How many chickens per pen?
Matt O'Hare
Each one's probably call it 2,000 square feet, which are moving them every week, removing them to fresh pasture.
Guy Raz
Oh, gotcha. And they're just eating grass, basically.
Matt O'Hare
Well, what I found out pretty quickly through trial and error is that if they don't get 4 ounces of 18% protein every single day, they will stop laying eggs within 48 hours.
Guy Raz
Which is insects.
Matt O'Hare
I'm assuming in nature it's insect seeds, little pieces of grain, bugs, worms. But we fed them their grain and I try to do all kinds of things.
Guy Raz
Like, you know, you fed them grain.
Matt O'Hare
Well, they all, no matter what, they have to get 4 ounces a day of protein.
Guy Raz
Got it.
Matt O'Hare
And I would, I would, you know, I got these, raise these chicks from a day old. And finally we got production going.
Guy Raz
And, and just to clarify the, the, the purpose here, the idea here was, hey, we can make better tasting eggs. If a bunch of things happen like the chickens have free, like, you know, can roam around that they are eating grass and eating bugs. And the result of that is a really deep orange egg like that. I imagine it took you some time before you, you were like, yep, we got it there. These eggs are consistently orange.
Matt O'Hare
Well, yeah, and there's Seasonality to it also because. And you know, in the summertime in Texas especially, you know, we had everything
Guy Raz
dies, there's no water.
Matt O'Hare
Yeah. Well, even if it rains. Yeah, it does make any difference because if it's 100 degrees, 110 degrees for 60 days in a row. Yeah. That dries up anyway. But the eggs started coming and I started packing into cartons and I had a trailer, but primarily I was going to start packing them into my, my Subaru and take them out to restaurants. I figured to get started, I wanted to start selling to restaurants. And I start calling and calling and calling, calling restaurants. And they didn't want to pay $4 for a dozen. I think it was telling me $3.93 a dozen.
Guy Raz
And it was that much because the costs. Right.
Matt O'Hare
Are. So I knew I could not make money unless I sold it for at least $49 a case for 15 dozen. But I was getting a lot of no's because they were paying. They could buy eggs from Cisco, you know, for these restaurants. Good. Or from the big food, US foods, or whatever, for 89 cents a dozen. And I kept hearing from chefs, an egg is an eggs and eggs and egg. And pretty soon I'm backing that truck or my Subaru up and I'm loading it full of all these eggs and take them to the food bank. It was so disheartening because I had
Guy Raz
basically giving them away.
Matt O'Hare
I had six months raising these chickens from day old and, you know, and they finally got great eggs, but no one knew what they were. And they're like, no one wants those eggs. You know, they're $4 eggs. Who wants to pay $4, $3.90 for a dozen eggs?
Guy Raz
Especially when you're not serving it poached or fried. If it's just going into, you know, cookies or something and no one's going to see it.
Matt O'Hare
Yep. And I finally got one restaurant. The first one came out. I know what a pasture raised egg is. I used to have chickens. It was called Fonda San Miguel here in Austin, Texas. And they bought two cases every week. And I was overjoyed.
Guy Raz
Let me just ask quick, quick, quickly about the, the orange yolk. Right. It's beautiful. Especially if you're making, like, fresh pasta. It's great. Or serving it poached.
Narrator
But.
Guy Raz
But from a nutritional standpoint, is there any difference?
Matt O'Hare
It depends how you do it. I mean, we don't make any claims in my company because every chicken on pasture can eat whatever he wants or she wants what she wants. And so, I mean, and the yolk color can change because some chickens, you know, decide to stay in all day. You know, I'm just going to stay home and eat grain, you know, and you never, you know, they have the option to be on 108 square feet of pasture, but you don't have any guarantee that what they're going to need. So we don't. We stopped on nutritional claims.
Guy Raz
Right. And also it opens you up to all kinds of class action claims and there's all. Yeah, right. Okay, so. So you're. Now you got hens. And on the farm, did you build any buildings at the time or was it just. It was just 27 acres of land. That's a lot of land. And it was just a huge pasture. And you were just moving these trailers around.
Matt O'Hare
We ended up with about four or five thousand birds on the pasture full time. And I had helped live there in trailers because, remember, there's a flood zone. So I had to make sure that if a flood came, we could move in. We had numbers of floods where we'd have to get there in the middle of the night and move the chickens into the trailers and pull them off the farm to a place across the road where it was high water. Wow. And most of these floods for some reason happened at 3 in the morning. I was like. And we were out there loading chickens and pulling them in my Subaru, the same Subaru that I used to deliver eggs to the restaurants in. I'm pulling these trailers off the farm, you know.
Guy Raz
So you now are trying to get restaurants in, interested. Some of them. Mostly it's hard, but you get in a couple places.
Narrator
But you are also friends with John Mackey. Goes way back to when, before he
Guy Raz
was a big success. You'd known him since 19, 1984. I gotta imagine you're like, John, you know, can you, can you help me out here? Like, I've got these great eggs, let's get them into Whole Foods.
Matt O'Hare
I would never ask John to do anything with Whole Foods. I just didn't do it.
Guy Raz
Okay, why?
Matt O'Hare
Number one, I know that I wouldn't. I didn't want to ask John ever to get my eggs into Whole Foods if I could help it, you know, that was not what I wanted to do. I think he did get. He did one time. He actually, he talked to. He sent an email to somebody about it that I was a party to. But other than that, no. But what I do know is that for a decade or more, John was behind the scenes, never directly, but was very helpful in the background. People knew that I knew John, but I met one of the presidents of Whole Foods on a hiking trip we took together with John and. And his VP reached out to me and said, we'd like to get eggs up in the Chicago Midwest region. And it was my first real order outside of the. I was just restaurants at that point.
Guy Raz
And you weren't even in the Whole Foods in Austin?
Matt O'Hare
No, no, not anyone in the Southwest at all.
Guy Raz
Okay.
Matt O'Hare
So this guy got a hold of me, and I shipped him, you know, half pallet of eggs. That was pretty funny because I had no idea even how to load a pallet. I had a brand.
Guy Raz
I had a label and the brand. Sorry, we didn't get this. It was. You called it Vital Farms.
Matt O'Hare
Vital Farms. And I bought. I had cartons and I had a label and I had boxes. And then they said they were going to come pick up this many eggs and had to be on a pallet.
Guy Raz
For one store.
Matt O'Hare
In Chicago? No, for the. For the Chicago region. So it was going to go into four states. And by. By the way, it was probably one case for every one of the stores. And the case was half dozen, 15 dozen.
Guy Raz
Just how many eggs is that, roughly?
Matt O'Hare
Yeah, probably three or 400, 500 eggs, something like that. So meanwhile, we thought the guy was going to come pick up the eggs. So it was onto my farm. So the driver, truck driver pulls up. There's probably a teamster. He pulls in, and he said, I'm here to pick up a pallet of eggs. I said, oh, hi. Great. Can you open in the back of your truck? I said, yep. Meanwhile, we're washing eggs by hand, one at a time. Okay. And so we just had me and my little helper. I started building. I started putting one case at a time on the pallet. And I get it all about three quarters of the way fill. And I'm looking around and, like, I'm out of eggs. And I needed, like, four more cases. And so I'm washing some of the eggs out of the real refrigerators there and getting them in the cart. And he's watching me with amazement. He's never seen this before. And then I'm still short. So I run out to one of those little mobile units, the little trailers that had chickens in them. I'm lifting up hens, and I'm grabbing warm eggs out, and I get these warm eggs and I put them in the carton. And he's like, couldn't believe it. And I finally had enough eggs done. And this is 45 minutes later. And Then I grabbed. I had been to a U Haul and got this shrink wrap because they told me how to be shrink wrapped. And I'm walking around the back of this with this green shrink wrap on his truck, on the semi, just walking
Guy Raz
around the pallet, shrink wrapping it, shrink wrapping it.
Matt O'Hare
And I jumped off, said, you're all set to go. And he just like, he looked at me and shook his head, shut his doors and drove off the farm, my little funky muddy dirt road. And off he went. And that was my first. I was so happy.
Guy Raz
I can't imagine. Here's my question, right? So these initial eggs go to a dozen or so Whole Foods in the Midwest, right? And this is 2008.
Matt O'Hare
Ish.
Guy Raz
Around then. And I'm walking into a Whole Foods, let's say in a Chicago suburb in 2008. I go by the eggs and I see this one brand, Vital Farms. And it's not. It's just like, you know, there's a Whole Foods brand and they are saying cage free. And there's this. And why would I even pick this? I mean, I didn't know, knew nothing about it. How were people gonna even know about what this was?
Matt O'Hare
Whole Foods were amazing partners. They still are. Just an amazing partner. And they stepped up because the thing that they do is that they really believe in what we're doing. It's not just about the money. It's the stakeholder model. And they believe in what we're doing. From an animal welfare standpoint, they believed in that pasture raised eggs were better for you. So, yeah, and so they did. Had great signage in the stores, but I was only on the shelf for about three or four weeks. And all of a sudden I got a call from Bobby Turner, I believe his name, he's the vice president, and said, matt, we've got a problem up here. What? The health department in Indiana has taken all your eggs off the shelf. And why? I said, because your label's not correct. You didn't have the size of the egg in 3, 8 inch type. You didn't have a grade on it.
Guy Raz
It had to say grade A and it had to say extra large and
Matt O'Hare
yeah, all that stuff. So they yanked them off the shelf in all four or five states. Chicago, Illinois, Wisconsin. Yeah, Indiana. So they came off the shelf. So I didn't get paid and I had to go back. And Whole Foods, very understanding. And sure enough, instead of just saying, we're done with you guys, they patiently waited for me to send them the next round of eggs, build the next pallet in the back of the truck and send it back up. And a month, five weeks later, we're back on the shelf.
Guy Raz
Wow. So you had to re. You had to basically have everything to standard. I guess that within a year you also got another lifeline from Whole Foods, which is. And they had. I mean, at the time it was more like this. I think it's less like this now. They were really into local foods. Like really. And you could go to an individual Whole Foods and we've heard these stories in the show, and you could pitch the local manager, but you got a loan. They gave you a hundred thousand dollar loan. Whole Foods had a program to support local food producers.
Matt O'Hare
That's right.
Guy Raz
And it's like a low interest loan, right?
Matt O'Hare
It was. I think it was 5% interest, which at the time was not low. I think it was. It was not a fair Market.
Guy Raz
But 100. But. But was a hundred grand in 2009. Was that critical? Is that like life changing money at
Matt O'Hare
the time, at that point, you know, really wasn't. I had sold my house. I had some capital from that. I had sold my boat. I had a little bit of money from that. I really, you know, financed this thing 100 of myself. I had gotten owner financing on the farm itself. I really got the loan because I knew that what. What came along with that was even more so support from Whole Foods. And I wanted them as a partner. And we signed. We never missed a payment, never laid on a payment. We paid it off exactly in time. And at the time, you know, they had 11 regions of whole Foods. There's almost no national purchasing. Each region made their own decision. So you had five separate billion dollar company, or, I'm sorry, 11 separate one billion dollar companies, in essence, with their own presidents and their own buyers. So you had to do one region at a time.
Guy Raz
So you were in the Midwest. So you were. Not yet. But just out of curiosity, when did you. When were you in all the Whole Foods nationally? What year?
Matt O'Hare
That really didn't happen until 2015 or 16.
Guy Raz
Okay. So that would come many years later. Okay, so this is like 2009. And you are. But there's demand for this thing. And I have to imagine that you can't produce enough eggs on this 27 acre farm in Austin like that. It's just. You don't have the capacity or the cash even to do that.
Matt O'Hare
No, it didn't have. And plus, there's not enough room, you know, at 108 square feet per bird outdoors. You do the math. That's a Thousand birds per hectare.108 square
Guy Raz
feet per bird is what, is what you would require.
Matt O'Hare
Correct. We worked with certified humane and other organizations to come up with a standard. And we worked, adopted the European standard of a thousand birds per hectare, which is again, 108 square feet per bird.
Guy Raz
But that's not like if I start an egg company and I call it pasture raised just because I like that term. Is that regulated? Is that, is that like a, is it legal language or is that still not. No one's gonna know what that means.
Matt O'Hare
It's actually self regulated within the industry. But I see there's been a couple of times when people have broken, broken that standard and they've gotten sued and they've backed off. And so we have competitors that would love to call their eggs pasture raised, but they call them free range instead because they have somewhere between 2 square feet outdoors, which is one animal welfare organization standard.
Guy Raz
And so you can get, you can get away with that?
Matt O'Hare
Basically, yeah.
Guy Raz
So you now have to. You cannot make enough eggs. And you had experience with franchising in the past and working with partners. So I imagine you reach back into your toolbox of having done this in the past and you start to think, okay, to scale this. I can't do this just on this farm.
Matt O'Hare
In essence, yes. So the first thing I did is started. I figured, stick around Austin, it's convenient. And I started adding farms around Austin and basically a lot of them were farms.
Guy Raz
Existing egg farmers or individuals that wanted
Matt O'Hare
to raise chickens our way. Yeah. So I got, after, you know, about a year and a half of, you know, trial and error in central Texas, I got a farmer up in Arkansas that agreed to build purpose built pasture raised barns just for us.
Narrator
Okay.
Guy Raz
And this would actually be the beginning of, of your expansion where you would start to partner with dozens of like, these small egg farmers across the country.
Narrator
But I'm curious, I mean, how did
Guy Raz
you, like, how did you make sure that they were raising eggs to your specifications, that they were going to be, you know, have those orange yolks and they were going to taste the way you want them to taste. And like, how are you making sure that they were doing things the way you wanted?
Matt O'Hare
We had to hire people to go out and actually check the farms. It didn't take much because we were paying a premium for these eggs for these farmers. So they had to do it our methods. And if we found out, for example, that they were not letting the birds out first thing in the morning because, you know, then we'd let them Know that it's not going to work with them. Or if they were, the pasture didn't look great, we would get with them on that. Or, you know, we're much more sophisticated today. But back then it was, it was early on and we were just.
Guy Raz
Yeah, what I'm, what I'm curious about is attracting these farmers. Right, because you're working with people who have had already been raising eggs and selling eggs and people who weren't. But I guess the incentive for them was there was predictability. Like you were saying to them, hey, we're going to guarantee you we're going to buy your eggs at this price. Is that what you could promise?
Matt O'Hare
Yes. What we did is not only we promised that, but one thing we all knew, and that was in this country, farmers always lose at the end of the movie. They just do. And we wanted to take that out. So we also knew that routinely, all the big chicken companies, egg companies, beef companies, they would always break their contracts when it was economically favorable for the big producer to do so of the big brands. And so we went in early on, decided we're going to be different. And we're going to be not only different, we're going to treat them like a full on stakeholder.
Guy Raz
And was, I mean, was it just basically a combination of Whole Foods kind of promoting these eggs and people discovering them, that you, you were, I don't know, you were just, they were just selling.
Matt O'Hare
Yeah, we, we had a hard time keeping them on the shelf. People found out about them at first. You know, we were expensive eggs. You know, back then they were 4.99, which, you know, I was told by the, the buyer, head buyer at Whole Foods early on, no one will ever pay $5 for a dozen eggs ever.
Guy Raz
And now they're like 8 bucks.
Matt O'Hare
I think 8 to 10. Yeah, yeah, yeah. But I had a philosophy early on that I've stuck with forever since then. And it's, I have to really keep explaining this to books. Like we never ever are going to pound our chest and see how great we are. And the key to that is if you tell people how great you are, your customers aren't going to feel compelled to tell people how great you are. You're already telling everybody. But if you never pound your chest and see how great you are, the customers will look at what you're doing and say, someone needs to tell people how great these eggs are. And so we end up with thousands and millions of customers bragging about our eggs. And they became a much better sales tool than we could ever do ourselves.
Guy Raz
When we come back in just a moment, how Matt gets inspired to turn his egg cartons into art.
Narrator
Stay with us.
Guy Raz
I'm Guy Raz and you're listening to How I Built.
Narrator
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Guy Raz
Hey, welcome back to How I Built this. I'm Guy raz.
Narrator
So it's 2010 and as VitalFarms continues to expand the Matt realizes he needs help A new partner to focus on the nuts and bolts of the business.
Matt O'Hare
I wanted a really strong operator that would do with, you know, really run the day to day operation. So I found a young man named Jason Jones who is a. He worked for Motorola and he came to work and, you know, I gave him his second mba, I call it. He came to work for me. He never worked for a startup before. I sold him 20% of the business for $200,000.
Guy Raz
And he knew nothing about farming?
Matt O'Hare
Nothing.
Guy Raz
He was just interested in this idea.
Matt O'Hare
Yeah.
Guy Raz
So you wanted him to come aboard to do what? I mean, he had a business degree, but you also had a lot of business experience. What was he going to bring to the business that you needed?
Matt O'Hare
Primarily, he was going to do all the blocking and tackling. If our hiring was going to take place, he did it. He'd, you know, get on an airplane and fly somewhere if we had to. He was, I was mainly doing. I was going to be focusing on capital formation. If we needed, I would. Which I really didn't because we were. I wanted to make sure we're profitable right off the bat. So at the very beginning, we were profitable every year. I didn't want dilution. I had learned my lesson, you know, about dilution. And watch, my friends had got diluted in their business by having to operate at a loss and having to keep raising capital. But, yeah, he was instrumental in working with our new partners in Arkansas. Right.
Guy Raz
And he could quickly learn enough about how to do this that he could go and also, you know, explain to these partners in Arkansas what they needed to do.
Matt O'Hare
That's right. But pretty quickly we bought out the Arkansas operation after a number of years. We bought out all their farmer network
Guy Raz
and purchased them because they had their own farmer network.
Matt O'Hare
They had built a farming network for me. There were 30 farms at the time. I think in 2014 or 15, we bought them out and that's when the business really started to take off because we're able to much more strongly enforce our standards. And we built relationships with the farmers directly without a third party in between us. And that was a big jump for us.
Guy Raz
All right, let's talk about branding for a moment. It's vital farms. The carton that they were coming in was black, which was very different because most egg cartons are.
Matt O'Hare
It was green. It was green until. Yeah, I love, I kind of fell in love with this chalkboard art you'd see at Whole Foods. You know, they. Seems like every Whole Foods had a chalkboard artist, you know, and they, they put specials in the produce department. It was Looked like it was really cool. We decided, let's, let's see if we can make a carton that looks like that.
Guy Raz
Yeah.
Matt O'Hare
But I remember I had run into Gary Hirshberg, who's the founder of sure. Of Stonyville Farms.
Guy Raz
Stonyfield.
Matt O'Hare
Yeah, Stonyfield. And we had met at a organic trade association meeting in Washington D.C. and we were talking, he'd just seen our eggs for the first time. He said, man, what you have is a great piece of real estate. I said, what do you mean? He said, I've got this little yogurt container about this big, these little cups. You have this big piece of real estate in the egg carton. You have such an opportunity there. And I knew we did. And all labels are just boring, you know.
Guy Raz
Yeah, egg cartons are boring. It's just eggs. There's no, no information on it at all.
Matt O'Hare
Yeah. And I knew to get people to try our eggs, it wasn't just going to be that, hey, these are pasture raised, you know, chickens are well maintained or whatever. We, you know, we take care of our chickens. We love our chickens. We call them girls, call them ladies. But it had to be something more. And so we splurged on that label and we really turned that into a piece of art. And people, their eyes are drawn to our carton and that would, and we knew that because of like little cartoon
Guy Raz
like drawing a banette of a chickens, like, like grass and flowers.
Matt O'Hare
Then they start looking at it and you see. Yeah. All the different little messages.
Guy Raz
Fresh air, sunshine. It would say on it, I think.
Matt O'Hare
Yeah, it was great. And we knew that if anybody would just try an egg. Same thing I learned when I, when chefs were buying eggs. Right. An egg is an egg is an egg. Right. Just try it. Just try it.
Guy Raz
So I imagine that part of the, I mean the plan was to continue to find more and more and more farms and, and to build up the network. But did you need to raise money? I mean, was it capital intensive? I mean, because I don't think you had raised money up until this point. We're talking about like now, 2013, 2014.
Matt O'Hare
In 2013, 2012, I was approached by an investment banker wanting to raise some money for us. And my experience with investment bankers in the 90s was right out of that wizard of Wall Street. The DiCaprio movie.
Guy Raz
Yeah, right.
Matt O'Hare
It was that type of, of pump and dump kind of thing.
Guy Raz
Yeah.
Matt O'Hare
This guy was different. And he said, I only raise money through private equity funds that are what he called impact investors. They're only interested in the triple bottom line, people, profit and planets type of thing. They want to make sure we're making a profit, but they're more interested in what we're doing for the planet. And there's 250 of these private equity firms and we hold conferences with them every year and if you're interested in raising capital. And I said, well, I'm not interested in doing anything right away, but what do you think I could sell a little bit of my personal stock for? And he gave me a number like the company's worth that much. I was shocked. I said, well, let's run a process. I've never had any money personally. I've been blocking and tackling my whole life. Yes, I had been worth money on paper, but I'd never actually had any real money. And so he ran a process for us to sell 10% of the company and came in at twice the number that he had said wow, for the first time I had, you know, some real money. I could do something with it myself, you know, buy a house and do some things. And the company didn't get any of that money. It was basically we sold, I sold a little bit of my stock and so we did a couple more rounds of that and the following year we did one. It was two and a half times it would valuation again. So I had sold about 20% of the company.
Narrator
I want to, I want to focus
Guy Raz
in on something else just for a sec, which is this idea that you didn't really like being the day to day operator of the business. Right. That wasn't where your heart really was. And you eventually gave up the title of CEO. And I think this is around 2019. And the person who took your place is a guy named Russell Diaz Conseco
Narrator
who I guess kind of worked his
Guy Raz
way up the ladder to become CEO.
Matt O'Hare
Yeah. And Russell really took the bull by the horn. He moved up from Director of operations to COO and President. And then when I decided I wanted to take the company public in 2019, we decided it was time for him to move to that title. Yeah, and the stakeholder model is strong in this company today, probably much stronger than when I started. I walk into meetings and no one knows who I am. And I'll hear a bunch of 20 somethings in a room full of other marketing people that work for us now. And they're talking about what the impact could be on this particular stakeholder of doing something like this. And like I love it. You know, it's in the fiber, which is really wonderful.
Guy Raz
One of the things, Right. That I'm sure you've heard, and we'll definitely hear from listeners is like, I buy your eggs. Okay? I can afford to buy them. And it's a price I am willing to pay because I like them and I think they're good, but they are, in some cases, two or three times more expensive than. Right. This battery cage produced eggs. And is, is it really just. Is it just the price of doing business like it has? They have to be that expensive because of how they're produced?
Matt O'Hare
Well, it costs more. It's a lot more expensive to produce eggs humanely. We have to pay the farmers, you know, they buy, they get loans and the banks, you know, when interest rates went from 1 1/2% to 6,7%, to buy a farm that was more expensive for the farmers, we have to pay them more. And we want to make sure the farmers, you know, we take care of our farmers. We have 575 at the end of last year. Farmers, and we hold their feet to the fire. Advice on the other way around as well.
Guy Raz
What I mean, I mean, how much of an impact would you, would you say that Vital Farms has had on other farms and the way they raise their eggs, their chickens?
Matt O'Hare
Well, we haven't changed. I think the factory farming method, you know, the battery cages are still there. Right. But Instead of being 95, 97, 8%, whatever it is, it's around 50 or so today. I don't have the exact numbers, but somewhere in the half. So we've had a pretty big impact. And 330 million laying hens and 150, 160 million of those are now no longer in cages. So it's been a big, big change.
Guy Raz
You know, when you started, you weren't even a rounding error.
Matt O'Hare
Right.
Guy Raz
In terms of how, how much you, how much of the market you had. What, what percentage do you estimate of the egg market does Vital Farms have today? Like 5%, 10% or under? 4 under.
Matt O'Hare
Last time I heard That's.
Guy Raz
I mean, in a country of 300 million people, that's huge.
Matt O'Hare
Yeah, yeah. You think about it, we're, we're in about, I can't remember, 11 million households today. 12 million households. And really, the company has grown every single year. And our earnings have grown every year. I mean, just in line straight, you know, every single quarter exceeded the previous year. Same quarter, every single. For that consistency. And I'm a larger shareholder and always have been.
Guy Raz
Matt, you're only 70. I mean, you know, with modern technology, you could live like 30 plus. More years. Right.
Matt O'Hare
I'm just purging middle age.
Guy Raz
Right, so. And you once had a dream of retiring and sailing off into the sunset, which you did for a few years, but you got bored. What do you think you want to do for the rest of your life? And I don't know. Any thoughts?
Matt O'Hare
I've started four or five new companies this year. This past year.
Guy Raz
You're like incubating them or you are literally.
Matt O'Hare
I mean, we started Blue Zone Kitchens a couple years ago and then hit a $12 million run rate in our second year. Frozen entrees from the blue zones.
Guy Raz
This is with Dan Buettner of the
Matt O'Hare
Blue Zones, Right, Dan Buettner and I. And Scott Marcus, my former CMO at Vital Farms, is the CEO. And then I have a number of other projects. I just bought an aviation company.
Guy Raz
Like building planes?
Matt O'Hare
No, it's a charter air charter service. And I can sit on a beach with my tire Margarita for about 15 minutes, and then I want to do something fun. And I find starting companies and building companies to be a lot of fun. And fortunately, I've gotten a lot better at it than I was, you know, in my 20s and 30s and 40s and 50s. You know, I've just gotten to be. I haven't had a failure in years and, you know, since before really. Before the sailboat days, you know, when I. That. That lessons I learned as a captain, you know, I had to lead people every day and I had to serve them every day. And so when I go into a new business today, it is with first and foremost, what is the deeper purpose of that business? What can I do to really serve? And yeah, I want to be profitable, but at the same time, I don't need to make a lot of money.
Guy Raz
How much of where you got to today do you attribute to the work and the grind? You put a lot of work in a lot of tractors and clearing brush. And how much do you think had to do with timing? Being lucky?
Matt O'Hare
I. That's interesting question. If I had looked at it, I tell you what, 20 years ago, I would have said it's all me. And that that's shifted constantly over the years. I had a really strong realization probably three years ago, and I realized this thing about gratitude. I realized that everything I've gotten in my life is a result of being lucky. You know, my fiance has a hat for me, says I'm luckiest guy alive. And if you think I was not born on the streets of Mogadishu, where with machine gun fire happening around my head, I was born in a middle class family in the United States. Every single thing I've gotten in business has been a gift from other people. In a way, my hard work comes from lessons people taught me about hard work. Every bit of my success has I could name the people, the situations and the people that inspired me to do it the right way. So I would say in one sense it's 100% luck and from just being in the right place at the right time.
Narrator
That's Matt o', Hare, founder of Vital Farms, by the way. The company went public in 2019 and is listed on the Nasdaq. As for Matt, he he formally stepped off the board in early 2026, but will continue to serve the brand in an advisory role.
Guy Raz
Hey, thanks so much for listening to the show this week.
Narrator
Please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas
Guy Raz
and lessons from some of the world's
Narrator
greatest entrepreneurs, sign up for my newsletter@guyraz.com or on substack.
Guy Raz
This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei.
Narrator
It was edited by Neva Grant with
Guy Raz
research help from Casey Herman.
Narrator
Our engineer was Robert Rodriguez. Our production staff also includes Catherine Cipher, Chris Masini, John Isabella, Sam Paulson, Alex Chung, Rommel Wood, Nour Gill, and Elaine Coates. I'm Guy Raz, and you've been listening
Guy Raz
to How I Built this.
Episode: Vital Farms: Matt O’Hayer - How a Serial Entrepreneur Re-branded the Egg
Date: March 23, 2026
Host: Guy Raz
Guest: Matt O’Hayer, Founder of Vital Farms
This episode features the entrepreneurial journey of Matt O’Hayer, the founder of Vital Farms—a brand that revolutionized the egg industry by creating a premium, ethically sourced, pasture-raised egg. Through a candid conversation with Guy Raz, Matt shares his path from serial entrepreneur with early businesses in carpet cleaning, bartering, and travel services, to a “failed retiree” charter boat captain, and finally to a pioneer in bringing “conscious capitalism” to supermarket egg cartons nationwide. Matt discusses pivotal moments, business failures, the creation of a national farming network, and the impact of branding and the stakeholder model on his business. The episode explores not just building a company, but building a purposeful business that lifts up farmers, animals, and customers alike.
[05:23] – [16:44]
[20:25] – [31:08]
[31:08] – [41:43]
[39:19] – [46:46]
[55:04] – [58:38]
[64:25] – [65:57]
[62:14] – [68:26]
[69:41] – [71:03]; [73:29] – [74:34]
Matt O’Hayer’s journey with Vital Farms is a testament to reinvention, grit, humility, and vision. By challenging industry conventions, embracing conscious capitalism, and storytelling through branding, Matt transformed not just the egg business, but also the conversation around animals, farmers, and food. His story offers inspiration on viewing failure as education, the unglamorous reality behind entrepreneurship, and the importance of relationships, timing, and treating all stakeholders—people, animals, customers, and the planet—like true partners.
This summary captures all key insights, quotes, and moments for listeners seeking a rich and practical overview of the episode.