Dr. Entrepreneur
People in Los Angeles like to punctuate their careers with a slash mark — as in actor/model/massage therapist. But it’s not every day you run into an orthopedist/entrepreneur.
But then Dr. Alex Hughes is not your average Tinseltown resident. This orthopedic surgeon at UCLA Medical Center is also the cofounder of Function Drinks, an L.A.-based beverage company. Hughes says his medical experience, along with his background in chemistry and engineering, has allowed his company to develop a line of drinks that not only taste good, but also help consumers recover faster from hangovers, increase their brain power, and look younger.
The fruity concoctions, which have been on the market for less than a year, are resonating with consumers and restaurants. Function Drinks is expanding nationally this year and expects to ring up sales of nearly $10 million. Its products can now be found in organic grocery chains like Whole Foods and Wild Oats as well as in Longs Drugs and AM/PM convenience stores.
Function Drinks produces five beverages with ingredients that doctors — like Hughes himself — use every day in the hospital. Take N-acetyl cysteine, or NAC. It’s a powerful antioxidant that’s used to help protect the liver. NAC also maximizes the liver’s ability to clear acetaldehyde from the body, which allows you to quickly recover from hangovers. Function Drinks' Urban Detox beverage contains NAC while its Youth Trip drink features supplements that protect the skin from UV damage and minimize wrinkles. And Shock Sports is infused with all-natural antiinflammatories to help sore muscles and joints.
It’s not easy for an unheralded company to break into the highly competitive, $3.4 billion energy-drink market — especially if it’s introducing ingredients that have never before been in beverages.
“It’s one thing to create a new drink in a small lab setting, but it’s quite another to do it on a large scale in a bottling plant, which is not the most technically advanced place,” says Hughes.
When Hughes and his business partner, Dayton Miller, first formed the company in 2004, industry veterans thought they were insane. They said it was impossible to put supplements like NAC into a beverage, and then to expect the drink to remain stable (i.e. not explode) as it went into mass production.
In fact, early last year, Function Drinks was preparing to introduce its beverages in three test markets, when, the day before production was to start, Hughes and his team discovered a huge problem: the bottles kept exploding.
This is when the crisis management skills that Hughes learned as a surgeon really paid off. “Surgery teaches you how to triage by prioritizing your problems and dealing with them quickly and efficiently without blaming others,” he says. “This is something that most startups can’t do.” Instead of getting angry and desperate, Hughes and his team systemically looked at every conceivable cause of the problem and quickly resolved the issue in record time (switch to a better production facility and do away with glass bottles).
Hughes believes that any doctor with the right amount of motivation and creativity can succeed as an entrepreneur, but they have to overcome one big obstacle. “Doctors are highly motivated people, but they are bad at listening to others’ points of view or asking other people for advice and support." Hughes himself relies on a business partner who has an MBA and makes many of the financial decisions.
“The biggest lesson I learned is when you start a new business that is innovative and coming at something from a new angle, most people who are already involved in that industry will tell you that you are crazy. I learned that you have to trust your gut instincts and surround yourself with people who share your vision and are interested in achieving the same goal,” says Hughes.
Another lesson he learned: Some people are suited for the hectic, 24/7 startup lifestyle and some people aren’t. He says it's important to constantly step back and analyze which team members are in it for the long haul. “Some people like to talk a big game but then they aren’t around when it’s time to get down to work. It’s important to have people around you that you can count on,” he says.
Given his full schedule as a surgeon, it’s fair to wonder how much time and energy Hughes has left for the drink business. “I’m working all the time, but I’m a Type A, 24-hour-a-day person anyway,” he admits. “There’s actually a great synergy between my two jobs. They each satisfy a different part of my brain and keep me balanced. When I leave the hospital, I look forward to what awaits me on the beverage front, and vice versa.” In other words, the slash mark is here to stay.
Tom Stein has contributed to leading business and general interest publications including Wired Magazine, Business 2.0, Venture Capital Journal, and Tennis Magazine.
