Manoj Bhargava Hometown: Lucknow, India Residence: United States Age:1953- Industry: Energy Stimulants
“It’s not the little bottle. It’s not the placement. It’s the product. You can con people one time, but nobody pays $3 twice.”
Manoj Bhargava was born in a wealthy town in Northern India. His family came to America in 1967 so that Bhargava’s father could get a PHD at University of Pennsylvania. They lived in a low income part of Philadelphia. In this tough environment Bhargava purchased a cheap truck so that he could earn money clearing junk out of old buildings and made $600 over the summer, as well as getting his money back when he resold the truck. He excelled in school, especially in math, and got into a prestigious boarding school followed by Princeton. Yet Bhargava didn’t feel particularly challenged by Princeton and dropped out after a year. Uncertain of his life goals and without any job Bhargava decided on a spiritual journey through India in 1974. For the following twelve years he travelled between “ashrams” (a sort of dojo), practicing meditation and helping out with daily tasks. Bhargava needed to intermittently return to the United Stated during this time to earn money, driving cabs and performing random jobs. Finally his parents requested his assistance with their plastics company, so he returned to the United States.
Bhargava found that he had a knack for purchasing small companies and managing them into profitability. In 1990 he had a successful venture with a random vinyl producing company, which he noted had assets worth more than the company’s cost. This helped convince banks to fully back the purchase of the business, which he quickly made successful. He eventually purchased another company, Prime PVC Inc., and helped the company up from zero sales to $25 million profits in 2001. Bhargava went into early retirement, but became bored after two months, realizing he was able to profit heavily in plastics.
One day as he was walking around at a trade show for natural products in California, Bhargava was enticed to drink a substance that the seller described as hours of productivity. When Bhargava had tried it he knew it was a winner because it worked. Bhargava had a history in consumer products, having started Innovative Ventures LLC in 1998 with a hangover cure called Chaser. He offered to work with the company, which declined his offer, so he took note of the ingredients of the bottle. Bhargava paid a scientist to create his own version, only it would be sold in a much smaller two ounce bottle instead of the sixteen ounces sported at the trade show. The company 5-Hour Energy was created with a holding company named Living Essentials LLC, which also has a holding company named Innovation Ventures LLC.
Bhargava’s sales representative had a difficult time getting the brand in stores because stores thought it was unhealthy, until a few months later GNC placed the product in over a thousand stores. Afterwards other large companies such as Walgreens and CVS began selling the product. Now it is very difficult to find a convenience store that doesn’t sell 5-hour energy. Many companies have since copied 5-Hour Energy, most of which Living Essentials has sued. That includes N2G, On Go, 6-Hour Power and 8-Hour Energy. Furthermore, the three dollar price tag on the two ounce drinks is so enticing (a soda is usually twelve or sixteen ounces and costs $1.59) that counterfeit bottles were being manufactured, until Living Essentials sued them for $25 million and had the machinery and products of the counterfeit factory seized. Bhargava firmly believes that it is the product itself that sells. Furthermore, the product is right on the counter where it receives the most views and the most impulse buys.
The company technically donates forty-five percent of profits to charity; the charity is named Rural India and was set up by Bhargava with David Lieberman, also Bhargava’s attorney, as the principal officer. The donation came in the form of a 45% stake in the company, which was then sold to Nevada 5 for $623 million. According to an associate of Bhargava’s and official Nevada State Incorporation Documents, Bhargava is president and director of Nevada 5. Of Rural India’s $1 billion only $5.1 million have been donated. Bhargava has invested $100 million in Stage 2 Innovations, which has many developments, including hybrid truck motors and hydroponic super growth kits.
He also owns ETC Capital, a private equity fund, and Lifeline Ventures, a medical incubator fund. It is estimated that, should his company go public, his net worth will grow to substantially more than its current level of $1.5 billion.