Bobbie: Laura Modi. How a Baby Formula Startup Took Market Share From Two Industry Giants
Laura Modi left her career at Google and Airbnb to build Bobby, a European-style infant formula company, overcoming regulatory hurdles, an FDA recall, manufacturing constraints, and industry giants to capture nearly 4% of the U.S. baby formula market in five years.
Summary
Laura Modi grew up in Westport, Ireland, in an entrepreneurial family that manufactured protective clothing. After studying in Dublin during Ireland's tech boom, she moved to California to work at Google on Google Finance, later joining Airbnb in its early growth phase. In 2016, after becoming a mother and struggling with breastfeeding, she began researching infant formula and discovered significant differences between U.S. and European formulations—particularly regarding DHA levels and nutritional standards that hadn't been updated in the U.S. since the 1980s. Despite facing investor skepticism, including one investor who claimed women should exclusively breastfeed, she raised $2.5 million and officially started Bobby in 2018. Her initial strategy involved positioning the product as a companion formula to breast milk and manufacturing in Germany, but this led to an FDA recall after only two weeks on the market when regulators determined it was effectively infant formula regardless of labeling. Rather than abandoning the company, Modi issued a public apology and remained compliant, which impressed Perigo, the only U.S. infant formula contract manufacturer outside the vertically integrated giants, leading them to offer manufacturing support. After 18 months of supply chain reconfiguration, Bobby received FDA approval in August 2020 and launched in January 2021, achieving $16 million in sales that first year despite forecasting only $4 million. The 2022 Abbott/Similac recall created massive demand that Modi strategically managed by turning off customer acquisition to protect existing subscribers, reaching $84 million in sales. Recognizing her dependence on a single contract manufacturer, Modi acquired Nature's One and its manufacturing facility in Ohio in 2023, though full FDA approval and production didn't commence until later due to regulatory requirements. By 2026, Bobby had captured just under 4% of the $6 billion U.S. infant formula market and generated hundreds of millions in sales. Modi attributes this success to a combination of hard work, cultural timing around clean food and transparency, the 2022 formula shortage, and what she calls 'luck'—which she defines as being aware of opportunities when they present themselves. Throughout the journey, she prioritized company culture and hiring unconventional team members (including a co-founder from HR rather than science) who aligned with the mission of destigmatizing formula feeding and advocating for mothers.
About this episode
<p>Laura Modi set out to build a better infant formula. </p><p>What followed was years of setbacks: a crippling dispute with the FDA, a frustrating search for a manufacturer, and the constant fear that the company would run out of money before it reached customers.</p><p>But today, Bobbie generates over $100 million a year and has captured nearly 4% of the U.S. infant formula market by challenging one of the most protected industries in America.</p><p>In this conversation, Laura explains how she made it through—and why many of the moments that looked like disasters ultimately built a better company, and made her a better entrepreneur.</p><p><br /></p><p><strong>You'll learn:</strong></p><ul><li>Why Laura left a great job to launch one of the most heavily regulated products in America</li><li>How she spent nearly $200,000 of her own savings before raising outside capital</li><li>How 64 investor pitches helped her tell a better story</li><li>How a public apology changed the trajectory of the company</li><li>Why Bobbie turned away thousands of customers during its fastest period of growth</li><li>Why Laura moved to Washington, D.C., and how she thinks about federal oversight</li></ul><p><br /></p><p><strong>Timestamps:</strong></p><p>13:17 – The emotional experience that revealed a massive business opportunity</p><p>23:09 – Laura learns about the two companies that had a lock on U.S. formula</p><p>25:52 – Quitting Airbnb, starting Bobbie while pregnant, risking her savings</p><p>38:52 – Pitching 64 investors—and the brutal feedback that fueled her to keep going</p><p>50:04 – The FDA shuts the company down after two weeks</p><p>1:01:14 – Building a community while waiting nearly two years for approval</p><p>1:09:11 – Launch day, and selling out faster than expected</p><p>1:13:59 – Why Laura shut off new customer orders during the infant formula shortage</p><p>1:17:12 – Buying her own manufacturing plant to control Bobbie's future</p><p>1:20:19 – Navigating Washington, regulation, and building a mission-driven brand</p><p><br /></p><p>This episode was researched and produced by Alex Cheng with music by Ramtin Arablouei. It was edited by Neva Grant. Our audio engineer was Robert Rodriguez. </p><p><br /></p><p>Follow How I Built This:</p><p>Instagram → <a href="https://www.instagram.com/howibuiltthis/" rel="noopener noreferrer" target="_blank">@howibuiltthis</a></p><p>X → <a href="https://x.com/howibuiltthis" rel="noopener noreferrer" target="_blank">@HowIBuiltThis</a></p><p>Facebook → <a href="https://www.facebook.com/howibuiltthis" rel="noopener noreferrer" target="_blank">How I Built This</a></p><p><br /></p><p>Follow Guy Raz:</p><p>Instagram → <a href="https://www.instagram.com/guy.raz/" rel="noopener noreferrer" target="_blank">@guy.raz</a></p><p>Youtube →<a href="https://www.youtube.com/channel/UCNSfrxNEmCruNtjIzxCBHjg" rel="noopener noreferrer" target="_blank"> guy_raz</a></p><p>X → <a href="https://x.com/guyraz" rel="noopener noreferrer" target="_blank">@guyraz</a></p><p>Substack →<a href="https://urldefense.com/v3/__http:/guyraz.substack.com__;!!Iwwt!RZoD751oWzUzoqqdJiqaoL6HdJfRHDUO1TKvYJ424d3Udn7-Pw9Nj6nEsauh9zcgEvLjUEc$" rel="noopener noreferrer" target="_blank"> </a><a href="http://guyraz.substack.com" rel="noopener noreferrer" target="_blank">guyraz.substack.com</a></p><p>Website → <a href="http://guyraz.com" rel="noopener noreferrer" target="_blank">guyraz.com</a></p><p>See Privacy Policy at <a href="https://art19.com/privacy" rel="noopener noreferrer" target="_blank">https://art19.com/privacy</a> and California Privacy Notice at <a href="https://art19.com/privacy#do-not-sell-my-info" rel="noopener noreferrer" target="_blank">https://art19.com/privacy#do-not-sell-my-info</a>.</p>
Key Insights
- Modi discovered that U.S. infant formula nutritional standards hadn't been updated since the 1980s, while European standards were updated every 4-5 years, indicating an entire category had been effectively ignored by regulators.
- The FDA shut down Bobby's pilot program not because of nutritional or safety issues, but because the product 'looked like a duck and quacked like a duck'—meaning it functioned as infant formula despite being labeled as a supplement.
- A recall that would have destroyed most startups actually attracted Perigo's interest because they were impressed with how Modi handled the crisis with compliance and transparency rather than defensiveness.
- The only U.S. contract manufacturer of infant formula outside the two pharmaceutical giants is Perigo, creating an extreme bottleneck where new entrants must convince this single company to work with them.
- Lead times for infant formula production are 5-6 months from order to delivery, including mandatory sitting periods and testing, making demand forecasting nearly impossible for new brands.
- Modi turned off customer acquisition during the 2022 formula shortage despite board pressure to capture growth, prioritizing existing subscribers' loyalty over short-term market capture.
- Bobby achieved $16 million in sales in year one (2021) despite forecasting only $4 million, suggesting extreme underestimation of market demand for an alternative to the two dominant brands.
- Acquiring the manufacturing facility in Ohio in 2023 created a significant fixed asset liability that couldn't generate revenue for nearly two years due to FDA re-approval requirements.
- 50% of babies in the U.S. are fed formula purchased through the WIC program, which limits choices to whichever brand wins the state contract, effectively giving Abbott and Reckitt/Mead Johnson a captive market.
- Modi's unconventional hiring strategy of choosing a COO from HR/culture background instead of a scientist co-founder proved successful because culture became the company's lasting competitive advantage during crises.
- European mothers were importing U.S. baby formula through a black market via suitcases and car parks, signaling that significant demand existed for alternatives that the incumbents weren't serving.
- Modi framed meeting with HHS Secretary Robert F. Kennedy as a regulatory requirement rather than a political choice, arguing that managing relationships across administrations is necessary for a legacy business in a regulated industry.
Topics
Transcript
If you think about it, we track almost everything these days, our steps, our screen time, our sleep. But when it comes to what's actually happening inside our own bodies, most of us are just guessing. I've been using function for about three years now, and it's genuinely changed the way I think about my health. Instead of relying on how I feel, I actually have data. One of the biggest changes I've made is to my diet. By following my results over time, I've managed to dramatically lower my glucose levels. And that's had a real impact on how I eat every day. Function gives you access to more than 160 lab tests that measure everything from inflammation and…
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