Six weeks ago former fashion model Lizanne Falsetto, 52, who never went to college, sold her high-protein energy bar business, thinkThin, to an Irish company corporation, Glanbia, for $217 million. Falsetto had founded the company and she ran it for two decades, making her thinkThin bars early entrants in a now-crowded market. In this edited and condensed interview, she talks about how she built the business, why she sold it and how she feels about walking away from her creation.
Susan Adams: How did you get the idea for your business?
Lizanne Falsetto: I was raised in Seattle, WA and at age 17 I had the option to go play basketball in college on scholarship or to model in Tokyo. I decided I wanted to travel. I ended up modeling for 15 years. I traveled all through Asia. I lived in Tokyo for four years, I went to Paris, Milan, Spain. I was in Australia for awhile.
I came back to the U.S. at 28. In L.A. you have to drive a lot and I was always hungry in my car. I had to keep modeling to put food on the table and I needed something to eat in the car to give me energy between jobs. I started making my own portable food.
Adams: Was that when you made your first energy bar?
Falsetto: I came up with a large cookie sheet that I cut into bars. But I didn’t know what I was doing. I played with whey and soy protein and peanut butter and I added vanilla and agave nectar and honey.
Adams: What made you think your bars would sell?
Falsetto: That was 1994 and there were only three bars on the market, Power Bar, Balance Bar and Clif Bar. One was for triathletes, one was for climbers and the other was for someone on a diet. There was nothing that had protein and no sugar, which is what I ate as a model. I started researching all kinds of different stores and production facilities and I found a consultant named Ivette Morales. She helped me research how much protein a person can have in a meal, which is why we went with 20 grams of protein.
Adams: How did you turn that idea into a business?
Falsetto: I didn’t know what I was doing! Because I was in modeling I knew about PR so I started calling magazines and sending them bars in silver wrapping. I got into the first edition of InStyle magazine in an article about what models were eating. I also went to the Anaheim Food Show and when I left I knew I had to get packaging so I went to a graphic artist who I paid practically nothing. Then I sent the product to five different regions of Whole Foods and the corporate office at Trader Joe’s. The Trader Joe’s buyer from the mid-Atlantic gave me my first shot.
Adams: How did you finance the business?
Falsetto: My office was in my house and my garage was the warehouse. I modeled in between and I financed the business with credit cards. I also gave stores 2% off if they paid me in 10 days.
Adams: What sort of challenges did you have along the way?
Falsetto: Around 2004 I was pregnant with my son Aydan and Walmart asked me to present my line of 12 nutrition bars. They took all 12. Then they said, we’re going to be putting in a low carb set and I’d like to be a category leader. For the next year I was entrenched at Walmart. I built not just the nutrition bars but I came out with seven candies and three pasta sauces. The only bar on the market was Atkins. Low carb became the biggest food industry trend. I almost bought a condo in Bentonville.
Adams: Was it smooth sailing from there?
Falsetto: In April 2003, Dr. Atkins slipped and hit his head and died and the next day low carb hit a wall and I thought, “Oh my god.” At that point I was in negotiations to sell the company to
Adams: You got a lot of celebrity endorsements, including the Kardashians. How much did that help your brand?
Falsetto: None of the celebrity stuff helped much. It’s just good for your ego and you can use it in your press kit.
Adams: When did you get to $70 million in sales?
Falsetto: That was around 2013.
Adams: How did you decide to sell part of your company?
Falsetto: TSG Consumer Partners had become my partner in December 2012. They’re very successful at finding niche brands, bringing them the help that’s needed and then rolling them up and selling them.
Adams: Did they approach you and how much did they pay?
Falsetto: No. I hired a banking group. I knew it was time to take the brand into household penetration. We had the company together for four years. I can’t disclose how much they paid or how much of the company they bought.
Adams: How did TSG affect the business?
Falsetto: They were able to bring resources for new hires. We needed marketing people They also had the knowledge about when to put it up for sale.
Adams: How did you feel about selling the company you’d spent two decades building?
Falsetto: I knew it was time. When I was 50, I was ready. Running the business was grueling and exhausting.
Adams: What was it like to finalize the sale?
Falsetto: To be honest, we inked the deal and I walked away feeling elated. I wanted to dance on the table. I wanted to celebrate. I remember going home and telling my kids. My daughter is 16 and my son is 12. My son looked at me. He was quiet for a minute and then he looked up and his forehead crunched and he said, “What are you going to do now, Mom?” That is probably when it really hit me.
Adams: What hit you?
Falsetto: All my son had ever known was a working mom who ran her own business. What hit me was that this was a major milestone in my life and in my children’s life.
Adams: A lot of entrepreneurs dream of one day selling their businesses for hundreds of millions of dollars. What does the money mean to you?
Falsetto: I never did it for the money. I know that sounds crazy. Of course the money is great but I never did it for the payoff.
Adams: You’ve sold now that your two kids are no longer little. What was it like to build the business while they were growing up?
Falsetto: I think the biggest emotion we women CEOs have is guilt. But I hope my kids know I did all of this for a reason. It was to help them thrive. Also you make a lot of people a lot of money when you start a business like this.
Adams: Are you referring to investors? And is that something you feel good about?
Falsetto: I’m talking about all the people involved in the business, from the people who worked at the manufacturing facility to everybody who touched the wrappers, the boxes, the food. When you’re building a brand this size, you’re impacting a lot of people’s lives.
Adams: Are you completely out of the business or will you continue to play a role?
Falsetto: One hundred percent out.
Adams: Why did you decide to get out completely?
Falsetto: It was time to hand it off and let the new owners take this brand to the next level.
Adams: It’s still fairly fresh, but how are you feeling about the sale?
Falsetto: I feel all kinds of different emotions but I know we sold to the right partner. Glanbia wanted to keep everything the same. All of our employees are still there and trying to keep the brand going with no disruption. My biggest dream was that my great great grandchildren would know that this company was my idea. I want my legacy to be feeding people good food and I wanted to build a lifestyle brand that teaches people to eat well.
Adams: What ideas do you have about how you’re going to spend your time?
Falsetto: I’m a member of a group called the Young Presidents’ Organization. It brings like-minded CEOs together. It has 22,000 members and a little more than 1,000 female CEOs from around the world. I also blog and I’m passionate about different foundations. I’m trying to decide if I want to start my own. It could be interesting to create a female mentors’ program. I think having an all-female fund could be interesting, where you find and fund women-owned business.
