1. Head to Tundra Express.
2. Head to an area with Varkids (almost anywhere).
3. Don't do anything. Just let the Varkids do their thing, and most of them (not all), will transform into pods. If you have a damage shield, make sure to keep jumping around to avoid accidentally killing them.
4. Once an adult transforms, it will create a Badass Pod. There is chance it will become a Chubby Varkid.
NOTE - Do NOT destroy the Badass Pod, thinking it will become a Badass Varkid. The pod after adult will ALWAYS show as Badass Pod, and there is a small chance that pod, becomes a Chubby Varkid.