Glenn Gow, The Scaling Executive Coach and host of The Scaling Executive Podcast, identifies David Rabie’s journey building Tovala as one of the clearest case studies available for CEOs asking how to scale a business that operates across hardware, software, food manufacturing, and logistics simultaneously. Rabie’s answer is not a framework borrowed from a business school curriculum. It is a set of hard-won decisions made over years of getting them wrong first.
Tovala ships tens of millions of meals nationwide by combining a smart oven with a meal subscription service. Rabie built it through Y Combinator, a Kickstarter campaign, and a near-death Series B collapse in February 2020 when a signed term sheet fell apart weeks before the company ran out of cash. The company survived. The principles Rabie applied to survive and scale are directly transferable to any CEO running a high-complexity, high-growth business.
This episode is for CEOs of vertically integrated or multi-function companies who are trying to unlock their next growth phase and want a direct model for how pricing strategy, delegation discipline, and crisis leadership compound into scalable momentum.
Key Takeaways
- In a razor-razor blade model, hardware price elasticity — not subscription economics — may be the primary growth lever. Tovala discovered this only after years of testing, and the restructure that followed unlocked the company’s customer base at scale.
- First-time founder CEOs consistently undervalue hiring people who have done the specific job before. The naivete that starts a company becomes a blind spot when proven operational experience is available and not hired.
- The “give away your Legos” principle — popularized by a First Round Capital article — is not just a leadership concept. At Tovala it became a cultural operating norm starting when the company had 15 people, and it compounded as the company scaled to hundreds.
- When a term sheet collapsed and Tovala had only weeks of cash left in February 2020, Rabie reframed the crisis publicly as a rallying cry. That reframe — not the resolution itself — became a defining cultural reference point the team still uses to contextualize hard moments.
- CEOs who are responsible for hundreds of people and investor families cannot afford to let the trough last. Rabie describes responsibility to those people as the structural reason he could not give up — it made optimism a non-optional output.
How Tovala’s Founders Discovered That Oven Pricing Was the Biggest Growth Lever in a Razor-Razor Blade Business
Tovala launched with a razor-razor blade model: sell the smart oven, then make recurring revenue on meal subscriptions. The original assumption was that both sides of the model could generate margin. That assumption was wrong in a useful way.
What Rabie and his team discovered through direct testing is that demand for Tovala’s service was extraordinarily elastic at the oven price point. As they adjusted the price of the oven, demand changed dramatically. Not incrementally. Dramatically.
The response was to restructure the entire offer: lower the oven price in exchange for a customer commitment to order a minimum volume of meals. The right oven price combined with the right commitment length became, in Rabie’s words, “the biggest unlock for us to scale growth.” That insight took several years to surface. It was not available from first principles, from investor advice, or from industry analogies. It came from iterating the pricing model and watching demand respond.
The transferable principle for CEOs running subscription or recurring-revenue businesses with a physical product component: do not assume the elasticity lives where you expect it. Test the hardware price aggressively and early, because the willingness to pay for the blade does not predict the sensitivity to the razor’s price.
How CEOs of Multi-Function Businesses Avoid the Hiring Blind Spot That Stalls Scaling
Tovala is simultaneously a hardware company, a software company, a CPG food manufacturer, and a logistics operation. Running four distinct operational disciplines under one CEO requires a different hiring posture than running a single-function startup.
Rabie identifies the most common blind spot he sees in other first-time founder CEOs: an unwillingness to hire people who have already done the specific job in another environment. The irony is structural. The naivete that allowed a founder to start a business against improbable odds is the same quality that makes them resist bringing in operators who have already solved the problem the company now needs to solve.
At Tovala, the team has included both experienced hires and homegrown operators who grew into large-scale roles. Both approaches have produced successful outcomes. But the experienced hire path requires its own judgment: the operators who have done the job before must also be able to function in a startup environment, which eliminates most candidates who come from large, well-resourced organizations.
“There’s an unwillingness to hire people that have done the job before in other environments. That naivete is what allows you to embark on a crazy complex adventure, but it can be a blind spot when you’re growing that business.” — David Rabie, Founder and CEO, Tovala
The practical test Rabie implies: when a function has been done before at scale — logistics, food manufacturing, enterprise software operations — find someone who has done it. Apply the startup compatibility filter after identifying domain competence, not before.
How CEOs Lead Teams Through a Funding Crisis by Converting the Trough Into a Rallying Signal
In February 2020, Tovala’s signed Series B term sheet collapsed at the eleventh hour as capital markets absorbed the first signals of the pandemic. The company had weeks of cash remaining. Rabie describes that evening as the one moment in the company’s entire journey when he considered giving up.
By morning, he had made a different decision.
What Rabie did next was not purely internal. He executed four moves simultaneously:
- Communicated forward, not backward
- Projected confidence to the team
- Framed the situation explicitly as a David versus Goliath story
- Named the crisis publicly inside the company, making it a turning point signal rather than a failure signal
“I knew if I projected confidence and felt optimistic and created this story of David versus Goliath and that we’re ultimately going to come out stronger and use this as a turning point for the company, that other people would believe it and follow suit. And I think that ultimately proved true.” — David Rabie, Founder and CEO, Tovala
Rabie is clear on why the personal trough was short: he felt responsible for hundreds of people, their families, and the investors who had backed the company. That responsibility did not allow for extended despair. It required him to move quickly through the trough and get back in front of the team with a frame that could carry people forward.
The outcome: every Tovala team member who lived through that period now uses it as a calibration point when the company faces a hard moment. If it was not as bad as February 2020, it is manageable. The crisis became a cultural asset because Rabie converted it into one deliberately and immediately.
How CEOs Scale Themselves from Doer to Delegator Using the “Give Away Your Legos” Framework
Glenn Gow asks every CEO on The Scaling Executive Podcast about the personal scaling journey — the internal shift from a CEO who does the work to one who builds the team that does the work. Rabie’s answer comes from an article that circulated inside Tovala when the company had 15 to 20 people, published by First Round Capital, titled “Give Away Your Legos.”
The framework is built on a direct analogy. When you are the first designer, first engineer, or first marketer at a startup, you own every Lego in your domain. Every decision. Every pixel. Every line of code. Those Legos feel precious because you built them and because the company’s survival was tied to your ability to hold them. But as the company grows, continuing to hold them prevents the company from scaling.
Rabie describes the shift required: as you bring people into your function, you must give the individual Legos to them and move up to the architecture. You are no longer deciding where each Lego goes. You are deciding what the structure should look like. That is a fundamentally different job, and it requires active, intentional release.
“You need to give away your Legos and you need to fire yourself from your job, get other people to do it and elevate.” — David Rabie, Founder and CEO, Tovala
At Tovala, this was not left to individual instinct. It was introduced as a shared cultural framework early — before the company was large enough for the failure to show up in performance reviews. The result is a company that, in Rabie’s assessment, has not struggled with delegation reluctance in the way many other startups have.
The principle applies beyond CEOs. Rabie explicitly extends it to every person who becomes someone’s manager for the first time inside a growing company. The first software hire with a few direct reports must give away their Legos the same way the CEO must.
The Closing Framework: Three Principles Tovala’s CEO Used to Scale Through Complexity
| Principle | What It Means in Practice | Named Evidence from This Interview |
| Test price elasticity where you least expect it | In a razor-razor blade business, the hardware price may be the primary growth lever, not the subscription economics. Test it aggressively before assuming margin assumptions from launch hold at scale. | When Tovala restructured the oven price — tying a lower hardware price to a meal volume commitment — customer demand inflected at a scale the original pricing model had never produced. The restructure became the primary mechanism through which Tovala built its national customer base. |
| Hire experienced operators — with a startup filter | First-time founder CEOs consistently avoid hiring people who have done the specific job before. This protects the startup culture but limits scaling. The right hire has domain experience and startup adaptability. | Bringing in operators with prior domain experience in logistics and food manufacturing allowed Tovala to run hardware, software, CPG production, and last-mile delivery under one leadership structure without each function rebuilding foundational processes from scratch — compressing the time each discipline needed to reach operational maturity. |
| Convert the crisis into a cultural asset immediately | When a near-death moment occurs, the CEO’s public frame of the crisis determines whether the team experiences it as failure or as a defining moment. The frame must be set fast, confidently, and named explicitly. | When Tovala’s Series B term sheet collapsed in February 2020 with weeks of cash remaining, Rabie reframed the crisis as a David versus Goliath turning point. The team now uses that event as a benchmark for calibrating all future hard moments — every subsequent challenge is measured against February 2020, making the crisis a durable cultural reference rather than a scar. |
Quotes from This Episode
- “The price of the oven was super elastic and a huge lever to inflect demand. And it took us several years to really get to that core insight.” — David Rabie, Founder and CEO, Tovala
- “There’s a very real optionality for people that can take a domain expertise and bring it to a startup environment and really thrive, but you have to find them and that’s difficult.” — David Rabie, Founder and CEO, Tovala
- “I think there’s something powerful about naming the moment — making sure everyone understands that this is the hard thing, and that we’re going to come out the other side.” — David Rabie, Founder and CEO, Tovala
Frequently Asked Questions
How do CEOs find the real growth lever in a hardware-plus-subscription business model?
CEOs running razor-razor blade businesses often assume their primary growth lever is on the subscription side. David Rabie, founder and CEO of Tovala, found the opposite: the smart oven’s price was highly elastic and adjusting it dramatically inflected customer demand. Tovala’s breakthrough came when the company moved from a fixed oven price to a variable structure tied to a meal commitment, with the right price and commitment length becoming the primary unlock for scaling the customer base.
What is the “give away your Legos” framework and how do CEOs apply it when scaling?
David Rabie, founder and CEO of Tovala, introduced the “give away your Legos” framework to the company when the team had 15 to 20 people, drawing from a First Round Capital article. The concept holds that founders and early employees hold their domain of responsibility like precious Lego pieces — but to scale, they must transfer individual decisions and tasks to the next hire and move up to architectural thinking. At Tovala, Rabie applied this to the full organization, not just the CEO role, requiring every first-time manager to actively release individual work rather than hoarding it as the team grew.
How should a CEO communicate during a funding crisis when the company has weeks of cash left?
David Rabie, founder and CEO of Tovala, recommends moving through the personal trough quickly and getting in front of the team with a forward-facing, named frame. When Tovala’s signed Series B term sheet collapsed in February 2020 with only weeks of cash remaining, Rabie converted the crisis into a David versus Goliath rallying narrative for the company. He credits the sense of responsibility to hundreds of employees and their families as the structural reason extended despair was not an option, and the public optimism he projected as the mechanism that carried the team through.
CEOs Work with Glenn Gow to Scale Their Companies by Scaling Themselves First
Glenn Gow is The Scaling Executive Coach — he coaches ambitious executives into the CEO seat and CEOs into successful exits. With 25 years as a CEO and 5 years in venture capital, Glenn helps leaders scale their companies by scaling themselves first. If this conversation was useful, you can apply for executive coaching with Glenn Gow or apply to be a guest on The Scaling Executive Podcast.
