In this month’s Bootstrapped Heroes Stories edition, we bring to you the story of 5-Hour Energy Drink and its founder Manoj Bhargava. Starting on the shelves of mom-and-pop convenience stores, the 5-Hour Energy Drink is today counted among the greatest success stories ever. The initial coverage across 1,200 GNC (General Nutrition Center) stores in 2004 has grown to a humongous 90% share of the energy shot market.
A $3 bottle of an energy drink, often referred to as an energy shot, has made a humble startup guy – Manoj – a billion-dollar company in just eight years. Lying on a single product and some brilliant marketing strategies has made 5-Hour Energy Drink one of the most successful FMCG startups in the United States and globally.
Making the naive 5-Hour Energy Drink formula the most popular and favorite energy-shot drink for a quick boost-up, Bhargava’s path-breaking entrepreneurial journey is worth digging deeper into. Read on!
Quick Company Details
The 5-Hour Energy Drink’s parent company is Living Essentials LLC, whose parent firm is Innovation Ventures. The 5-Hour Energy Drink was ideated in 2003, put out on the shelves in 2004, and is going steady (and upwards) to date, with the mystery man Manoj Bhargava’s managerial and entrepreneurial skill set.
The Magnetic Effect of a 5-Hour Energy Drink
A drink that can help you stay alert and attentive – that’s exactly what the then generation was looking for. And Manoj Bhargava offered the market just that! A great quality product launched with a creative and smart distribution/marketing model for a target audience that needed it the most – that’s the story of 5-Hour Energy Drink for you.
The Modest Beginning That Knew No Ending
Like most of our bootstrapped heroes stories, the tale of how 5-Hour Energy started is also quite unique. Manoj Bhargava was born in India and moved to the United States when he was 14 years old. After dropping out of Princeton in his first year, he lived as a monk for 12 years in India. In 1990, he started his first firm, a plastics company, which was later sold to a private equity firm.
The idea of the 5-Hour Energy Drink emerged in the spring of 2003. Bhargava was attending a natural products trade show in Anaheim, California. What caught his immediate attention was a booth selling a 16-ounce concoction claiming an hours-long productivity boost. He had the drink and thought it was great! He thought he could sell it too – this served as a life-changing experience for the founder.
A quick glance at the drink’s ingredients – and there he was! That eureka moment happened right there for him. It took him merely six months to launch his version of the drink with two ounces of caffeine-infused B vitamins, mixed with acids that would provide “5 hours of energy”. And thus, began his story with no u-turns!
The Story So Far: Wasn’t A Bed Of Roses For Living Essentials
Right after the drink’s initial launch, Manoj Bhargava knew it wasn’t an easy game out there. In the words of Rise Meguiar, Vice President, Sales – Living Essentials, “it was never an easy sell.” The marketing initiatives had to strongly focus on exhibiting the drink as a safe option for buyers and sellers alike.
Starting off as a shelf item for GNC, a then-popular health chain, the drink was finally stocked in 2004. The brand then witnessed a domino effect by way of its inclusion at stores such as Walgreens, Rite Aid, and Sheetz.
How The Tables Turned
Toughness beats the competition. That’s probably the single biggest reality that made Manoj Bhargava the man he is today. It is no news that as an entrepreneur, he likes to play tough, and that’s exactly what he has been ensuring from the very start of the brand.
Several neon lookalikes such as 6-Hour Power, 8-Hour Energy, etc. tried to capture his target market but failed miserably. They were either sued or simply kicked off the market. This was made possible by a robust and alert lawyer team at Living Essentials.
However, the greatest move that has helped the brand become what it is today can be deemed its inclusion in the Wal-Mart checkout aisle. Selling all four of its fresh flavors, the store shelves the drink at all its US stores.
The Popularity That Grew By Leaps And Bounds
Today, a group of people, from truckers to gym enthusiasts, swear by this wonder drink. But what made it catch the public and professional eye was its popularity among the traders in Oliver Stone’s 2010 sequel to Wall Street. In fact, a study by the research firm SymphonyIRI reports that the 5-Hour drink alone enjoys about 90% of the energy drink market share today.
In its short span of less than a decade, the power booster drink went all the way from what we can simply say ‘nowhere’ to a mighty $1 billion in retail sales.
What Can Budding Startups Learn From The Story of 5-Hour Energy and Its Founder, Manoj Bhargava
As strong supporters of the saying – practice is better than preaching, we believe otherwise. We are always craving real-time success stories of trailblazing entrepreneurs who have made a mark in the business world out there.
Here’s a compilation of the top 6 lessons to learn from this extraordinary success story:
Lesson #1: A much repeated yet understated mantra – Always maintain the quality
The 30%+ profit margins achieved in eight years span stand to say a lot about product quality. It has not only made its way through a pack led by Red Bull to Coke and Pepsi, but the company has also withheld its deep foot in the market for years now. This has a lot to prove that the owner’s great focus on quality over others is a sure-shot success.
Lesson #2: Better late than sorry – More so in the business world
It is indeed never too late to start something new. That is because a missed opportunity does not imply a missed goal. You can always start afresh, start small and yet make a fortune. Have a great idea? But think you’ve missed the train? Well, there’s always a next coach to catch. Manoj Bhargava was 51 when he launched the 5-Hour Energy Drink. The somewhat scary entry of the 5-Hour energy drink into the market, led by already-established brands, raised quite some eyebrows. But to everyone’s surprise, the drink became a superhit among the masses.
Lesson #3: Try the path less taken
The secret sauce in the success recipe of the 5-Hour Energy drink is undoubtedly the founder’s will and guts to adopt unique and less trodden paths. Most businesses are bound to shy away (or even be frightful) from engaging with the government at such an early bird stage of their business cycle.
Nevertheless, Bhargava took just the unimaginable turn at the aptest time of his venture and empowered it with flawless execution. He has collaborated with the Uttarakhand government for the distribution of his energy drink and also plans to collaborate with other states of India soon.
Lesson #4: Technology is not a must-have, but logic is.
Simple math about chemicals that stuck Bhargava early on – the 16-ounce shot (the one that served as his eureka moment) being too big, and instead focusing on a 2.5 oz shot only made him what he is today. Logic in ideation is integral, even if there is no intense tech involved. His groundbreaking logic stated that “tiredness does not equal thirst”. Therefore, there was no need for a big shot for people who needed an energy drink.
Lesson #5: Swear by a marketing mantra led by one’s self-belief
Bhargava calls his daily dose of 5 hours, his shot of ‘focus drink’ and not “energy drink”. This has much to portray what the drink holds to offer to its target audience. Innovative and thoughtful marketing is what clicked with the audience for this brand. Bhargava is often applauded for his captivating philosophies about innovation.
Lesson #6: Target the audience with a need that can be best met with your product
The targeted marketing towards truckers was a hit. They needed an instant energy boost, but could not handle the liquid. Hence the need for a 5-Hour Energy Drink. In our view, this is by far the best demand-supply goal ever met!
Learning from the stories of entrepreneurs who have carved a niche for themselves in currently highly competitive and mostly saturated markets is unmatched. How they started with a dime in their pockets and turned their humble beginnings into newfangled success stories is enriching, inspiring, and noteworthy.
Hope you had a great time reading this success story as much as we did writing it! Is there any other brand that you want us to explore as a part of this series? Let us know in the comments section below.
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Want to read more such inspirational stories? Here are a few more we have written:
- The Secret Sauce to Wayfair’s Success
- 5 Lessons Aspiring Startup Founders Can Learn From Wingify
- Tuft & Needle: Bootstrapped From Zero To A Million Dollar Brand
- Nykaa: How India’s First Woman-led Unicorn Transformed The Beauty Industry
- The Dollar Shave Club: An Extraordinary Story of An Ordinary Product Brand