To Start Sports Drink Company, Its 26-Year-Old Founder, A Former Pro Hockey Player, Lives In A Gym
AS SEEN IN FORBES
Written By: Amy Feldman, Forbes Staff
Jack McNamara, 26, grew up in Newton, Mass., and started college at Colgate University on a hockey scholarship, hoping to eventually make the NHL. But while he was playing hockey in Denmark, he came up the idea for a healthier-for-you sports drink. After all, he figured, why would athletes who worked out constantly and ate healthily want to guzzle fluorescent-colored drinks filled with caffeine and artificial sugars if they didn’t have to? So when his hockey career ended, McNamara returned to the U.S. and, in 2015, launched TruEnergy, a more natural, non-GMO alternative that includes coconut milk water and green tea. It hasn’t been easy. McNamara, a first-time entrepreneur, went through two accelerators, raised more than $20,000 on Kickstarter for the first production run – and moved into a gym to save money. (This being the age of sharing, he also made a video about living in a gym.) So far, startup Tru, Inc.’s revenues are just $25,000. But McNamara has raised $85,000 from three investors who believe he can make the business work. He’s also gotten distribution in two dozen running stores owned by Finish Line's JackRabbit division (formerly Running Specialty Group) and a handful of gas stations in Massachussetts that are part of giant Global Partners’ portfolio of 800 gas stations, as well as on Amazon. In a sign that McNamara may be right about the market, but also that it may become more competitive, Honest Tea, now part of Coca-Cola, debuted its own line of organic sports drink in June. In an interview that has been edited and condensed, McNamara spoke about what he’s been doing to get his nascent business off the ground.
Amy Feldman: How did you come up with the idea?
Jack McNamara: I had a scholarship in college to play hockey, and then was playing pro hockey in Europe. I literally just grabbed my hockey clothes and headed to Denmark and made a team. When I was over there, I noticed players drinking energy drinks. Guys were drinking SoBe and Red Bull. They’re doing insane fitness regimens and eating well, and then drinking caffeine. I decided to create something better. My career came to an end. My parents are saying, ‘Jack, you’ve got to get a job, get married.’ I got a software job, and said, ‘Screw this,’ and applied to probably 100 different accelerators everywhere in this country and in Europe. I just wanted a chance to take this idea to full-time.
Feldman: Tell me more about the idea.
McNamara: I started looking at ingredients. A lot of the competitors have insane amounts of caffeine, and a lot of them have artificial sweeteners. It just didn’t make sense to me. I started talking with high school athletes, pro athletes and dieticians and hammering out a formula. We decided to throw electrolytes in there, and make the bottle transparent, because we’re not a pink fluorescent color, we’re more natural. It appeals to Millennials. We found a company in Chicago that can make it at a reasonable price. Our bottles are made in China, our labels in India, and our ingredients come from seven different companies.
Feldman: What’s in it?
McNamara: It’s like a combination of an energy shot and a sports gel. [Energy gels like GU Energy and PowerGel, which are gooey and easy-to-digest, provide nutrition during endurance sports.] We trademarked the phrase ‘sports shot.’ Runners hate the consistency of the gels. They don’t like the Gatorades because they’re flourescent and have too much sugar. They don’t like the caffeine. We have electrolytes and coconut water and 10 vitamins. We use natural sweeteners. We’re vegan and non-GMO.
Feldman: How did you decide to quit playing hockey and start a business?
McNamara: I always wanted to play in the NHL, and from five years old until 24 years old, I believed I would make it. That’s why I went to Europe. I believed I would be able to come back and play. I told myself that at 25 I would make a decision. I got a contract with a German league. Until that point, I had always played in top leagues. This was third league in Germany. I didn’t think I was going to make the NHL from there. I just decided it’s time to hang them up, and do something else. I haven’t regretted it for a day. I think if I played too long, I would’ve ended up hating it.
Feldman: How did you convince an accelerator to back you?
McNamara: No accelerator would take it until Startup52, a New York-based accelerator, which said, “you need to bring in a cofounder,” and a bunch of different things. When I did it and sent an email in, he [founder Chike Ukaegbu] said, “I wasn’t going to accept you, but you’re the only one who ever has done exactly as I said.” A week later, a high school friend of mine and I moved to New York. I was on a couch and he was a mattress on the floor in Harlem. Then another accelerator, FoodX, saw us, and we went into a meeting with them kind of cocky and they accepted us 24 hours later. We did that from September to December last year. We were trying to cut costs as much as possible, so we took an AirBnB in Bushwick, Brooklyn, but realized we were wasting so much time on the train, we just ended up sleeping in the office. After that I moved back to Boston, and the guy who helped me get the company off the ground needed a full time job. I lived at home a month. A guy who I had worked for has a gym with a little apartment, which is a 10 by 10 room, and he said, ‘Come live here.’
Feldman: So you’re living in the gym?
McNamara: The video depicts what my life is like. In the center of the gym, there’s this little room and behind the gym there’s office space. I shower with everyone else at the gym. It is a unique situation. Most people are like, ‘Jack, you are nuts.’
Feldman: How long have you been living there?
McNamara: I moved into this gym in June, and I don’t have any plans on leaving. I tell people that even if I was worth a whole lot money I might still live in this gym. I wake up at 5:20, and start working out at 5:30. It’s kind of an insane joke that I can’t skip the workouts because I don’t have the excuse of the commute. It’s literally 10 feet.
Feldman: What got you to make a video about living in the gym?
McNamara: It was actually Dollar Shave Club. No one knew who Dollar Shave Club was until they created that video. I said, ‘I could do that too.’ Then one day I was lying down in the gym and grabbed the camera I’d invested in with the selfie stick. I probably did 100 takes that night and stopped shooting at 4:30 a.m. and then got up to work out at 5:30 a.m. I tried to make it as funny and authentic as possible. It launched late-October and has more than 50,000 views.
Feldman: Did you expect that?
McNamara: I hoped it would get some traction. I wondered if I should release it. I didn’t know if I wanted to tell everyone I live in a gym. Then I started getting texts from people, and every time I got a new share or a new like or a new view I felt like I was on top of the world.
Feldman: Have you gotten sales out of it?
McNamara: That was the biggest disappointment. The views didn’t translate to sales. But for us, it’s really important to get brand recognition.
Feldman: Do you have other video plans?
McNamara: Mike Condon, who plays for the Ottawa Senators, is my best friend from growing up. He was an awesome player in high school, and battled it out in college. After a trade to the Ottawa Senators, he got one of his first shutouts. We’re filming something with him.
Feldman: How much have you sold so far?
McNamara: We’ve got about $25,000 revenues to date. We did a Kickstarter campaign while we were in FoodX. That presold about 3,000 units. Our first run was 6,500 bottles, in July, and it sold out. We completed the second run of 26,000 units in the middle of October, and sent half of those to a fulfillment center in Europe. The other 13,000 I sent to the gym. The owner of the gym also owns a jujitsu facility across the street where I could put them for free. I walked across the street and emptied out the basement to start putting TruEnergy there. The pallet wouldn’t fit on the dock. I had to carry them down the stairs. It took me like five hours, and there were monsoon rains. It was hilarious. I literally broke down three pallets of 13,000 bottles and carried them down 12 cases at a time.
Feldman: Where is it sold?
McNamara: There’s another back story in this. I’m living in the gym, and it’s one of my first days there. The guy who owns the facility is named Warren Cross. He said, ‘How would you like to be in gas stations?’ He calls his friend, the CEO of Global Partners, Eric Slifka. I’m not in any stores yet, and that is my first call. I feel like I’m going to have a heart attack. We went to the same college, and he knew my parents. We started selling in five of their gas stations in Massachusetts. Then my partner, Robert Avakian, reached out to RSG, the Running Specialty Group, and I sent them some product. They immediately ordered 80 cases of TruEnergy. We got into 25 of their 70 stores right off the bat. I said, ‘When do you need it?’ She said, ‘Two weeks.’ I didn’t have any bottles at the time, so I said, ‘How about six?’ I then talked to the manufacturers. They immediately shipped 80 cases to RSG. It was like scoring a goal in hockey.
Feldman: So what happens next?
McNamara: That’s the toughest question. I live day-to-day. The next step is trying to break into as many accounts as possible. There’s this guy who’s a scout for the Islanders and a supplements broker. We met and talked about hockey half the time, and he said, ‘Let's try to get you into Muscle Foods USA.” If we can get that, hopefully we can get into as many specialty retailers as possible.
Feldman: So how do you pay the bills now?
McNamara: I am constantly battling the zero bank account. I coach tennis to five and six year olds and I babysit on the side.
Feldman: You’ve got a lot of determination to do that.
McNamara: Yeah. I am a manny, that’s what I am. I do odd jobs just to get by and have some lunch money.
Feldman: How long can you keep that going?
McNamara: Every day it is progressing. I’ve already established connections with investors. I do believe we can get the money. Another 12 months before my parents are like, ‘Jack, this is psychotic.’
Feldman: Is it just you at this point?
McNamara: My original partner is on the board. I am the only person full-time.
Feldman: How much do you own?
McNamara: I have a majority. The accelerators have equity. SOS Ventures, Crimson Capital, and an angel who is my uncle have supported it. This guy [Steve Malley] put in $1,000 on Kickstarter, and I went to a Celtics game with him as a reward. It was Celtics-Knicks. We didn’t even watch the game. He’s the co-founder of Crimson Capital. I said, ‘Don’t give me more money than you can afford to lose.’ He said, ‘Okay, I’m in.'
Feldman: How much money have you raised total?
Feldman: Have you tried to get other investors?
McNamara: I had an investment offer, a letter of intent, for $150,000 at a $1.5 million valuation. The terms were pretty rough. I sent it to a few different investors, and they said, ‘I wouldn’t take that if I were you.’ It would have impacted future investment. It was the strangest thing. I was so excited to get the offer, but it was like the weight of the world fell off my shoulders when I said no.
Feldman: Do you think it’s easier or harder to start a company at 26 than at, say, 35?
McNamara: I think it’s 100% easier. If I had a family and kids, I would feel too selfish. Right now my life is consumed by myself. Everything I do is to push this company forward. Twenty years ago, the whole industry was owned by a few companies. Now there are craft beers and sports drinks and kombucha. It’s becoming the wild west, and I love that.
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