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Manoj Bhargava

Take a half-hour and listen to this talk from Manoj Bhargava. Manoj is founder of 5-Hour Energy, a philanthropist, and full of wisdom. The story behind the product is fascinating and Manoj’s common sense will smack your right across the face.

Thanks to Ryan Singer (@rjs) for sharing a link to the talk months ago. Watch and listen here.

Two ways to get technology 1:05

There are only two ways to get technology. To invent it. Or to find it.

Inventing has the same chance as a lottery ticket.

So we formed a company that looked for technology worldwide. I liked chemistry because I thought it was a really simple thing.

You mix a bunch of cheap stuff together and sell it for more. That’s basically chemistry.

So we had submissions from thousands of PhDs across the world. And large companies started hiring us saying, “Can you find technology for us?”

We found out, of course, the large companies, all they have is committee meetings. They would actually never get anything done. So we dropped those contracts.

I found this technology at a trade show. We went there and somebody introduced us to this company. And we had a meeting with them, and at 2 o’clock in the afternoon, I said, “I have 8 hours of meetings and I’m not making it. I’m not able to get through it.”

I went back to them and said, “Didn’t you have some energy something. Can I try that?”

They gave me this thing and I said, “Woah, this I can sell.”

Why it’s a small bottle 2:57

It took me about 30 days. What I did was instead of making a large drink, I did a small one.

The reason is a few things.

One, I thought why is someone tired and thirsty at the same time. That doesn’t make any sense. So why not make it small?

And the other thing was from the retail level. Do I have a big bottle and compete against Coke and Pepsi for the cooler space? That sounded really dumb. So I said, “Ok, let’s not do that.”

If I make it small and I’m in the front and I’m by the counter, I’m competing against keychains and batteries. I can handle that.

So we made it small. The first one was 1 ounce, unfortunately, you couldn’t read it. So we made it 2 ounces.

Don’t do dumb stuff 4:25

I had no experience in consumer products. All we were armed with was common sense and hey, we can do this.

This is not a big deal.

We started with the trunk slammers. The guys who throw stuff in the back of their car and go to store to store peddling stuff. We started there.

Then we got into drug stores. Then we got into Walmart.

Now, we have 4 different items at every Walmart at checkout, which is the most difficult space in the world to get.

We became one of the largest consumer products in the world. We are the largest dietary supplement product in the world.

Really, all of it was common sense stuff. I tell people, we weren’t that smart.

The only thing we did was we just didn’t do dumb stuff.

And that really, pretty much, differentiated us from all corporations.

Even to this day, people say, “How many people do you have?

In our offices, everything all together, we have 65 people. Not including our plant, which has 250, run as a separate company.

They say, “Wow, you must be really efficient?”

I say, “No, we’re not efficient at all to tell you the truth. We just don’t do useless stuff.”

All I did was cut out everything that didn’t make money or didn’t improve the product or didn’t make the customer happy. It’s got to go.

And doing that, you get rid of hundreds and hundreds of potential things. We don’t do strategic initiatives. I can’t even spell that stuff.

Jargon 6:39

We stayed out of jargon, partly because I’m not familiar with all the MBA stuff. There is so much jargon and I can’t spell most of it.

And I think the people who use it also don’t understand it. But they have to use it.

How many times have you gotten a resume and every second line there is strategic?

We just did it differently. We said just use common sense and just go. And do it now.

To give you an example, most of the meetings last about a minute or two. Because most of the time it’s like a decision of saying, “I’m on the roof, should I take the stairs or the fast way down?”

It’s really not a decision. And yet they’ll schedule a half-hour or hour meeting with 18 people.

Should we jump off the roof or take the stairs?

Most of the time, at least the people we have, would rather take the stairs.

We did really simple stuff. And our whole job is to make the business really simple.

It usually flies in the face of all experts. Experts do not like simple.

On giving away 90% of his money? 8:31

I have two choices. I can wreck my son’s life or I can give it away.

So, do really stupid stuff or do not do stupid stuff?

We decided let’s go this way and not do dumb stuff. Today, we are the largest charity in India that nobody knows.

The other guys are nice, but they tend to do more announcements that work. We don’t have anything big or fancy to gauge how well we’re doing.

The only thing we look for is how many people that are underprivileged, did we significantly affect.

That’s it.

Because you really don’t know, sitting behind a fancy desk in an air conditioned office, what they need out there.

One guy, one of these big shot billionaires sitting behind these desks, said, “How should we do this, so it’s sustainable?”

I got a little annoyed. I said, “It’s not about you. It’s about them.”

If you have a business, it’s about a customer. The same way you go out to a field and find out what do they need, and then do that.

How we work in our company 17:21

We don’t have MBA speak. If someone comes to me with an a project or something that needs to be done, the first question I’ll ask is, “Is this useful? How is it useful?”

And if it’s not useful, it better be entertaining.

And if it’s not useful or entertaining, there is only one other basket left. That’s useless.

To us, business is really not rocket science. It’s just do useful stuff. And avoid useless.

What’s an expert? 18:38

An expert is someone who knows everything that was. He’s really good at what was.

And if you ask him about what will be, he’ll say, “No, no that cannot be done. Because I’m an expert of what was.”

Why would I need you?

Because if I want to do what was, I don’t have a business.

Prime Directive 19:35

We have what’s called the prime directive. If any of you watch Star Trek, there is a prime directive.

The prime directive in our company is no aggravation. Nobody gets to give us aggravation. Whether it’s customers, vendors, employees.

If you aggravate, you got to go. It’s that simple.

And it’s really business. Usually it’s the one percent, some customer that has one percent of your business and he’s driving you nuts. And he’s taking up 80 percent of your head.

How is that business? Aggravation is the largest cost in business.

To me, it’s really simple, we live here at the work. If an employee is such that they’re going to cause havoc or aggravate, they need to go.

One time, one of our senior guys yelled at a receptionist. I called him in and said, “Look. You can’t yell at her. You can fire her. If it’s that bad, they need to go. But we live here, don’t mess up this place.”

I’ve found that aggravation, if you avoid it, not only do you have fun, it’s a great place to work and nobody quits.

We can’t get people to quit.

Risk takers 21:21

Somebody asked me should we have risk takers?

Entrepreneurs. Risk takers.

I said no, no, no. Entrepreneurs are not risk takers. If someone in my company wants to take risks, I say, “Go work somewhere else.”

Our job as entrepreneurs is to minimize risks. To manage risk. To give the risk to somebody else. Not take it.

If you want to take risks, go to Vegas.

What entrepreneurs really need 23:24

All jargon does is bury common sense. All entrepreneurs need is two things.

All they need is two things. Common sense. And a sense of urgency.

They asked who should we learn this stuff from?

My answer was your mom.

Because she has probably done more management than your MBA professor.

Because she’s got a budget. All these kids running around. Hard to manage. All of these things have to be done seven days a week. Now that’s work.

That’s hard work. That’s learning on the job.

MBAs 25:05

I think MBA is totally useless. I’m not saying they don’t teach anything of value. I think they teach this much that is useful. They teach this much that is useless. And they teach this much that is harmful.

Overall, average is on the useless side.

Because you come out of school and you actually think you know something. Really? And that’s dangerous.

Because you really don’t.

I never hire people out of fancy schools for that reason. My first question usually to an MBA is, “How are you going to get over it?”

It’s a simple thing. If you’re going to learn plumbing, go learn from a plumber that has actually seen a pipe. That has fixed a leak.

Not just written about pipes, lectured on pipes, and researched pipes.

I’m not for theoretical plumbers.

Me either, Manoj.

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