MOST PEOPLE WHO aspire to win in business fail because they do not ask the right questions. “It is the biggest problem I see,” said Manoj Bhargava, the $4 billion entrepreneur and founder of Living Essentials, which makes 5-Hour Energy, a two-ounce caffeine-fueled elixir its fans rely on to power them through a demanding day.
Bhargava, 65, is focused on asking the right questions, spotting real problems and coming up with true solutions. In a rare personal appearance, Bhargava on March 29 addressed an audience of several thousand at AAHOA’s 2018 convention and trade show at the Gaylord National Resort & Conference Center in National Harbor, Maryland.
In the beginning of his free-wheeling speech, Bhargava promised to give listeners at least one original thought they could take with them. He spent the next 45 minutes filling a pool with his thoughts, inviting listeners to take what they will from a speech frequently punctuated by applause.
The self-made business success said he realized he was addressing entrepreneurs, so any advice on that topic would be wasted. Bhargava believes ideas, words and time should not be squandered. Neither should wealth. “If you have wealth, it is your duty to help those who have less,” he said.
Bhargava invests most of his company’s profits toward projects that improve the lives of the poor in India – a hand-held battery pack that provides electricity; a process in which farmers can make their own fertilizer free of chemicals; and an appliance that makes brackish and grey water potable. The latter item is set to start mass production in the U.S. in about two months as homes and businesses need clean-water solutions, he said.
Identifying what consumers are willing to buy and finding meaningful ways to contribute to those in need comes from exploring and asking the right questions, he said. “Instead of asking ‘How do I dig a hole?’ the real question is ‘Why do I need a hole?’”
Bhargava shared some bits about creating 5-Hour Energy, noting if one is tired enough to need an energy drink, downing a 16-ounce can of liquid is a daunting proposition. So, he put small doses in small bottles.
Next, he identified his customers – people in need of a quick shot of go-go juice, of course, but also the retailers who would sell it. “If the bottle is small, it is easy to display,” he said. Launched to market in 2004, the red and yellow 5-Hour Energy bottles are displayed at checkout counters in such places as convenience stores, gas stations and grocery stores – next to key chains and lighters, not 16-0unce competitors in beverage coolers.
The product is ubiquitous and has come to signify America’s hard-charging, hard-playing culture evident in various pursuits, from professional sports to corporate offices. IRI, a market-research firm, says last year, 5-Hour Energy sold more than 271 million bottles, generating $1 billion in revenue.
“The myth about entrepreneurs is that we are risk takers,” Bhargava said. “It’s pretty silly. If you want to take risks, go to Las Vegas. Entrepreneurs manage risk; we minimize risk.”
One of the wealthiest people in America, Bhargava is a native of Lucknow, Utter Pradesh, India, who came to the U.S. as a teenager with his family. He attended high school in Philadelphia and studied at Princeton University for one year before dropping out. His company, Living Essentials, is based in Michigan, where Bhargava lives with his wife and son.
He seems not particularly fond of higher education. During his talk, he holds his hands a shoulder length apart. “What they teach you in MBA school, about this much is useful.” He spreads his arms farther apart. “About this much is useless and harmful. When people come out of MBA school they actually think they know something, and that makes them really dangerous.”
Bhargava told the hoteliers: “A lot of you here today don’t have MBAs, and my contention is that’s why you are successful.”
Bhargava said he hires people who get things done. It is the rank-and-file who are close to the problems and who understand the best solutions are usually the simplest – like putting 5-Hour Energy in small bottles next to cash registers.
Business, Bhargava said, is driven by two emotions – greed and fear. “The only opinion who matters is your customer or your vendor or the person sitting across from you. What they perceive is the only reality you have to deal with. We do everything along that basis. Someone who is dissatisfied is not coming back.
“I make stuff that people seem to want to buy, and I sell it at more than it cost me to make it. Buy low, sell high. It’s that simple.”
The first purpose of business is not to make money; it’s to survive, he said. “Once you learn to survive, you will make money.
“You guys [hoteliers] seek the fundamentals in how to make money and have a business that’s sustainable. If you forget the principals that have guided you here, you will lose your business. Make sure you know from where your money is coming, and make sure you know where it’s going.”
The only possible use of one’s wealth is to help others who have less, he said. At first, Living Essentials gave cash to charities, but Bhargava fast realized the method was like “shoveling sand into a moving river” and it produced no real change.
He traveled through villages in India, talking to townspeople. “I realized what a poor person needs. You need to make a living. It’s that simple.”
Bhargava founded Innovations Ventures LLC, a research and development company that seeks solutions to some of the world’s most pressing problems and urgent needs. “We came up with three fundamentals that affect the bottom third of the world, the basis for everything else.” So far, the company has spent about $100 million in producing products that address the basics – food, water and electricity.
The poor in the world are farmers, Bhargava said. Big agriculture and its chemicals have destroyed farmers by making them dependent on their products and taking most of their profits. Hence, Shivansh Fertilizer, a product derived from a composting method that transforms such naturally occurring elements as animal dung and dried vegetation into organic fertilizer. The process uses half the amount of water that industrial fertilizer requires. “In India, 70 percent of the water is used by agriculture,” Bhargava said. “Fix farming, and you fix water.” About 40,000 to 50,000 small farms in India use the fertilizer-making method, and Bhargava sees it growing to one million farms in the next 10 to 15 years.
The other fundamental is education, the means to earning a living. “The basis of education is electricity.” Innovations Ventures has created a hand-held unit called the HANS PowerPack. It can be charged via a recumbent bicycle or a Solar Briefcase, both made by Innovations Ventures. It can provide enough electricity to power a classroom and connect students to the internet. Bhargava visited an elementary school in India that had only a blackboard and chalk. No textbooks. Three months later, he revisited the school which was now powering laptops with the HANS PowerPack. “Imagine, from a blackboard and chalk to the internet. It was stunning.”
The final fundamental need Innovations Ventures is tackling is the lack of clean water. About 70 percent of people who are sick in the world are sick because of water, Bhargava said. “One of our guys had idea: Why don’t we fix brackish water? It’s everywhere, all over the world and no one considers it water. So, we came up with a device that can produce 5,000 gallons a day of drinkable, agriculture-level water.” It’s called the RainMaker.
The positive side effect of the invention? Others besides the poor have realized they need it. “These days, any water that is coming to your house, you have no idea if it’s clean or not,” Bhargava said. The RainMaker cleans both brackish and grey water. He foresees the day when the water-cleaning appliance – a smaller version of the one used in villages – is as common in homes as the refrigerator. “I was basically looking at solving the water problem in India, and suddenly it’s become a worldwide a multi-million-dollar project.”
From a quick-shot energy drink to saving the world. Bhargava has enough experiential fodder to talk all day. But the entrepreneur said he does not make speeches to inspire others. “Inspiration doesn’t do anything. It’s determination. People in the U.S. love the word ‘passion,’ but passion is nonsense. When you get hit in the face, passion disappears. Determination is it. When you fall on your face, you get up again and again and again.”