Stimulating Innovation: 5-hour Energy Founder Invests in Global Change

Manoj Bhargava

As the creator of 5-hour Energy, Manoj Bhargava saw an opportunity to power Americans’ workdays via a tiny bottle of highly caffeinated liquid. It was a simple, yet, groundbreaking innovation that has resulted in the sale of billions of 5-hour Energy products and spawned a new category of “shot-based” beverages and liquid supplements.

Eleven years since the launch of 5-hour Energy, sales of the energy shots have made Bhargava a billionaire several times over. He’s already pledged to give the vast majority of that wealth to charitable causes before he dies. Now he’s using some of his money to fuel innovation that addresses global health and sustainability issues.

Bhargava is the founder and chief financier of Stage 2 Innovations, a $100 million investment fund “established to accelerate the large-scale commercialization of innovative, patentable technologies in the global market,” according to its website. Stage 2 provides the funding for a laboratory in Farmington Hills (where 5-hour parent company Living Essentials is also based) that focuses on the development of devices and other inventions focused on clean energy, water purification and advanced medical technology.

One of those inventions is Free Electric, a machine that gives people the power to generate electricity by pedaling a hybrid bicycle. Another is the Rain Maker, which can turn seawater or polluted water into fresh water suitable for drinking and agriculture; a Rain Maker machine the size of small car can make a thousand gallons per hour, according to the laboratory. Stage 2 is also working on a device called Renew, which is described as “an auxiliary heart pumping blood between heartbeats… [to increase] circulation while reducing the heart’s workload.”

Bhargava’s efforts are documented in a film called “Billions in Change,” in which he calls to action others who can make a difference by sharing a philosophy — not money — to address “the basic needs of those who don’t have the basics, thus enabling them to provide for themselves, their families and their communities.”

BevNET recently interviewed Bhargava via email about his investment and involvement in Stage 2 as well as how 5-hour Energy fits into his vision.

BevNET Managing Editor Ray Latif: What sparked your interest to make energy and sustainability projects a focus of your day-to-day workload?

Living Essentials CEO Manoj Bhargava: I looked at what was really needed out in the world and asked, What are the fundamental things that would make everything better? And there are really only a few things: Water, energy, and health. If you focus on those three things, you have the ability to make a huge difference in the lives of billions of people. Take the rural poor of the world. If you give them access to clean water, you increase their wages several times. It’s the same with electricity. Most of the wealth in the world today was created after the Industrial Revolution and exists because of the Industrial Revolution. But a lot of the world has been left out of that. If you don’t have electricity, you haven’t experienced the Industrial Revolution.

RL: How do you choose among the dozens of global and social issues that you want to address via innovation?

MB: We look at needs that are fundamental. Most of the issues we hear about are not fundamental; they’re above the fundamental. In other words, crime is an issue, but it grows from poverty, and poverty comes from not having the fundamentals. Most of the worst things in the world are based on the three fundamentals that we’re addressing.

RL: Have you been able to apply lessons from the launch and development of 5-hour Energy to these new projects? If so, can you elaborate?

MB: It’s hard to point to specifics. You learn every day what’s going on with your company or with the market, and that teaches you what to do and what not to do in the future. Projects need to be executed, but that execution has nothing to do with whether you’re running a for-profit or a non-profit. You’re always looking for the most efficient way to execute—whatever you’re trying to achieve—and to do it in the best possible way. You also need goals that are clearly for the benefit of humanity. If you’re not doing something useful or making something useful, you’re probably running a bad nonprofit or a pointless business.

RL: Will 5-hour Energy — in terms of marketing — play a role in promoting the projects?

MB: No.

RL: How involved are you in the actual planning and engineering of these projects?

MB: I’m fairly involved, but I’m a dropout so I may not understand a lot of stuff. Some of these fellows are way smarter than me and they know their jobs very well. I make sure that what they engineer is so simple that I can understand it, which means so will our customers who are the poor half of the world.