5-Hour Energy's Manoj Bhargava tells entrepreneurs event that the best education doesn't come from an education
The founder of the popular 5-Hour Energy drink told a group of metro Detroit entrepreneurs to be thoughtful, study their competitors and pay attention to human nature.
In his keynote address, Manoj Bhargava, CEO of Farmington Hills-based Living Essentials LLC, talked of defeating competitors, finding weaknesses in the marketplace and skipping college.
"Education really has little to do with schooling," Bhargava said at Crain's annual Salute to Entrepreneurs event today at the Detroit Golf Club. "The problem with kids who come out of those fancy institutions is they think they know stuff."
Education comes with experience, he said, citing as an example the difference between an experienced army sergeant and one who never has been to war.
Working with the sergeant who has dodged bullets before is the safe bet, Bhargava said.
A large part of success comes with understanding human nature, something that can't be taught in a classroom. It can be learned partly through social interaction and life experience.
Bhargava's understanding of human nature has helped him navigate his customers as well as his competitors.
"You think you read a book and know stuff?" he said. "No, not really."
To get to the top and keep thriving, Bhargava said, knocking out competitors is a part of the game. And some of his knockout tactics come from Sun Tzu's The Art of War.
Everyone has different weapons, he said.
For example, Bhargava's company faced a competitor that had a lawyer as CEO.
"He thinks that all war should be in the court, so he sued us," Bhargava said. "So I put an ad on TV that really slammed his product, showed all the weaknesses of his product."
He added that it was part of a Sun Tzu strategy.
"If your enemy gets mad, irritate him."
Bhargava's business philosophy is simplicity. He is not a person who likes to spend time in meetings unless they make the company money.
He also suggested truthfulness as a core principle.
"I'm not advocating honesty, but if you don't tell the truth, you have much higher risk than if you were just straightforward."
Bhargava advocates a work environment that shies from micromanagement.
"'Just get the work done. I don't care what else you do … just get the work done.'"
When 5-Hour Energy entered the market, only 200 bottles sold across 1,200 stores.
"At the time, it tasted like cough syrup," Bhargava said.
The product soon exploded to 10,000 bottles a week, and Bhargava knew he and his team had a worthy product.
Part of the challenge at that time, he said, was keeping the energy shot in the checkout line.
"It's not hard getting it there," Bhargava said. "It's really hard keeping it there."
Once a product is in the checkout line, he said, it faces constant challenges from other companies trying to win the spot.
Now, he said, 5-Hour Energy does about $1.3 billion a year in retail sales.
In the end, walking the walk and following through on one's own word is half the battle, Bhargava said. But an element of chance always will be involved.
"The game is this," he said: "You have to do everything right, and you have to be lucky."