For Struggling Startups, Retirees Are Coming to the Rescue
Chris Kanik just could not order a damn margarita. It was a Tuesday in 2011, and the restaurant where he was sitting was called Taco Tuesday -- which meant the place was bustling and waitresses were nowhere. As Kanik sat at his table staring at his water glass, he had a fateful, if not kind of insane, idea: Why hasn’t someone come up with a packet you can carry in your pocket and dump into water to create an instant margarita, or, for that matter, anything else? Just add water and -- kazam! Beer, wine, whatever you want. It would be like an alcoholic Crystal Light. Kanik had a background in chemistry, so he took out a pen and started scribbling some notes.
Flash-forward a day later and a bottle of Everclear at hand, and Kanik was in his kitchen researching his idea. He learned that, in fact, he wasn’t the first thirsty guy to explore this. Others had attempted it but had always been sobered up by state regulations. Kanik was only 27 at the time, working as a struggling comedian and with absolutely zero inventions to his name, but he was undeterred. Maybe, he figured, he could succeed where all these other people failed. So he started making some calls -- and would eventually be led down a path of increasingly older generations of partners. First he’d find an inventor a few decades his senior, and then, ultimately, they’d both find a retiree who could hold a true key to their mutual success.
But first, the somewhat older guy. His name was Sal Celeste, and because he doesn’t publicly advertise his age, let’s just say this: For 20 years -- that is, nearly as long as Kanik had been alive -- Celeste had been hunkered down researching microencapsulation and patenting his inventions. What does that mean? It means he patented a way to print beverage ingredients inside a cup. Take one of his cups, add water, and the ingredients would come loose and mix like a magic trick -- instantly turning water into, say, lemonade, mouthwash, detergents, sterilizing compounds, even drugs. The applications are endless -- a thermos that automatically filters stream water, a patient getting her exact dose of pills imprinted in a stack of special Rx cups, and more.
Celeste calls his company The Additive Advantage. And when Kanik learned of it, he phoned Celeste with an offer: Let him license this cup-printing technology to create instant beverages.
But Celeste said no. He had yet to partner with anyone since founding The Additive Advantage six years earlier, and he certainly wasn’t about to do it with a comic from Jersey. “You’re an idiot,” Kanik yelled into the phone. “Thanks for wasting my time.”
Kanik hung up and wandered into a pizza joint. He’d just ordered his third Coors Light when his phone rang. It was someone from Celeste’s team. Could Kanik jump back on the call?
“You’ve got a lot of balls,” Celeste said. “Let’s talk. I like you, kid.”
They decided on energy drinks. As it happened, Kanik’s timing was good. Celeste was in the process of expanding The Additive Advantage’s team, with an eye toward finally getting the technology to market. And together, they could benefit from a burgeoning relationship Celeste was developing with another guy: a once senior VP of global innovation at Procter & Gamble who had retired after 29 years -- but instead of spending his days hitting golf balls, he was busy advising and consulting through a company called YourEncore.
What’s YourEncore? Kanik wondered. It’s a sort of rent-a-retiree for entrepreneurs in need of deep expertise. And it’s where new founders like Celeste are increasingly going when they meet a hurdle they don’t know how to jump.
Let’s say you’re an entrepreneur creating something that requires FDA approval, or strict quality control, or any technical know-how you don’t have and can’t afford to hire someone full-time to solve. What to do? A growing cadre of companies with senior-citizen-themed names -- YourEncore, Empowered Age, Patina Solutions, Work at Home Vintage Experts -- are presenting a solution: Pick someone from their network of accomplished older experts, many of them retirees, who left their full-time jobs and are now available as consultants.
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These companies are offering a particular kind of value. Founders can get deep expertise from masters who have vast experience without having to bring them on staff. And there’s a lot of this to be had, because boomers are ambitious workhorses who blow way past retirement age. People 65 and older currently make up the fastest growing segment of the labor force, according to the Bureau of Labor Statistics -- which is to say, they’re growing older but still working.
YourEncore, in fact, began as a solution to two giant companies’ problem. It was founded in 2003 by Procter & Gamble and Eli Lilly as a way to bank their own retirees to tap back into as needed. At the time, these companies were losing employees with technical know-how who were not being replaced. “Back in the sixties, we were landing on the moon, and it was cool to be a scientist or a technical person,” says YourEncore CEO Brad Lawson, who was its first employee. “But the number of people going into those fields had waned.”
Over time, though, YourEncore evolved into something independent. It now has a network of more than 10,000 highly qualified experts from a wide range of industries and deploys them as consultants on projects with 150-plus companies -- more than half of which are small and medium-size startups.
Some of those projects call for a single expert (say, an aseptic-packaging whiz who comes in for a month to train employees) while others require a whole team of retirees (who might go in for months, even years).
The Atlanta-based Vero Biotech is a good case study of how these relationships work. In 2016, the company introduced a novel treatment for cardiopulmonary conditions, for which it estimated a $9 billion market. But it was having trouble getting it through the FDA. In search of a solution, Ray Russo, Vero’s senior VP of commercialization, called up an old colleague from Schering-Plough who had headed up U.S. regulatory affairs there.
The regulatory expert’s name is Joe Lamendola, and, at age 69, he was retired, but he wasn’t just hanging around. “I do like golf,” he says, “but I have too much passion for medicine.” Lamendola had put in 20 years at Schering-Plough and Bristol-Myers Squibb; he’d sat in on hundreds of meetings with the FDA. And now he was with YourEncore.
Lamendola got to work. He selected a team of 11 experts from YourEncore’s Who’s Who of pharma, including two who’d been at the FDA and a manager with 27 years of experience running projects at FICO and Hewlett Packard. Then this supergroup of retirees came in and assessed what Vero still needed to do to get its new drug application up to snuff (which was a lot), and helped it get there.
Russo, Vero’s senior VP, marveled at the process. “They were in there; their fingernails are dirty,” he says of his new team of experts. By July, two years after the process began, Vero was in front of the FDA with hopes of approval in early 2019. “We felt their services were, frankly, invaluable.”
Vero’s senior leadership has decades of experience at major medical companies, but sometimes YourEncore is called in to help companies whose executives are far greener. This can be especially valuable: Founders under 30 have the highest rate of startup failure -- 53 percent -- according to a recent MIT study that looked at 2.7 million new companies. But that’s not a problem for retirees. “There’s no fear of failure when you have gray hair,” says Shekhar Mitra, 64, a molecular biologist who spent his career innovating brands like Crest White Strips, Aleve, and Olay Regenerist at Procter & Gamble, and now consults through YourEncore.
Recently, Mitra stepped in to help a young startup called The Seaweed Bath Co. Its cofounders, married couple Adam and Allison Grossman, were selling lotions and body washes made with bladderwrack seaweed (which had helped soothe Adam’s irritable skin). But they struggled to really grow the brand. Mitra looked and saw the problem immediately. The couple was thinking too small and needed to position Seaweed Bath Co as a major brand devoted to making people comfortable in their skin. Then Mitra brought in a retired ingredient specialist and a regulatory expert, who helped build the scientific case for why this brand’s products were efficacious. “We went from having an emotional selling story -- Believe me; this stuff works,” says Adam, “to Here’s the proof. That was a big transition that allowed the business to grow from a fun brand in some natural product stores to a national brand in most major retailers that sell natural products.” Today the brand is in Whole Foods and Target, it has 12 employees, and sales have doubled in the past two years.
Mitra loves working on projects like this; it’s exactly the kind of entrepreneurial energy he was looking for when he walked out the doors of corporate America. And around 2013 he was more than excited to shift into a particularly quirky YourEncore project -- The Additive Advantage, that crazy idea of printing beverage ingredients directly onto the inside of a cup, which was looking to license its technology to Kanik, the comedian in New Jersey. “I said, ‘My God, look at all different things I can print,’” Mitra recalls. And he knew just what to do next.
Today, you can actually try The Additive Advantage’s innovation. Kanik used the technology to build a company called Smart Cups, headquartered at the end of an industrial cul de sac in Mission Viejo, Calif., in a 23,000-square-foot facility. Kanik himself sits behind the door of an office that says FACULTY LOUNGE, a holdover from the building’s previous life as a charter school. There, invariably in flip-flops and a backward Yankees cap, he’s often at his desk, surrounded by his heroes -- a plastic figure of the Rock, who told a young Kanik at an autograph session to stay in school, and giant portraits of Biggie Smalls and Rocky Balboa. Kanik wrote “8/10/17” on the Rocky poster; it’s the date he printed his first Smart Cup in this very facility.
Sometimes Kanik has to pinch himself. Thanks to a private partner who has provided funding, Smart Cups are now for sale in stacks of featherlight compostable bioplastic glasses that, when filled with water, fizz into zero-calorie energy drinks in flavors like All Nighter Energy Punch and Magna Cum Latte.
Meanwhile Mitra has been on the other side of the country helping The Additive Advantage go from essentially sitting on an unused patent to becoming a manufacturing and licensing company ready to pounce. He felt it was essential to look beyond energy drinks at the other applications and figure out how to bring them to market, and how much each could be worth, which another YourEncore expert, a seasoned financial strategist and analyst, helped them do. With that kind of information, The Additive Advantage cofounded a new company called iDrug Delivery, which will develop Smart Cups–style over-the-counter and prescription drug and veterinary products, according to Ralph Makar, the new company’s CEO. Kanik sits on the board. It’s only just recently that Kanik himself has realized how valuable YourEncore–style expertise can be. He wants to start working with Mitra and is planning on it; “Shekhar is the real deal,” he says.
There are bumps ahead for everyone, of course -- broken equipment, manufacturing capacity limits, consumers who don’t understand what they’re buying. But Kanik is gunning to scale. Next year he’s planning to roll out electrolyte drinks, a kids’ line, maybe nonalcoholic mixers. “My goal is to turn Smart Cups into a global brand, so when you look at the logo, you think: quality, innovation, disruption -- same as an Apple logo or a Nike swoosh,” Kanik says. “I mean, I’m sure a lot of entrepreneurs say that. But I think we really can do it. Because nobody can do what we’re doing.”
As for his instant margarita?
“Not yet,” he says. “But give me a year and a half, OK?”