Drink HRW Beginnings: The Road to Commercialization Part III
Drink HRW Beginnings: The Road to Commercialization Part III
In the first week of July 2015, I managed to get a tentative agreement out of Dr. Holland to assist me with my project. For someone with my personality type, the timing was absolutely devastating. I had already spent the previous two weeks hitting “refresh” on my phone, looking for new e-mails from him to further our discussions. Dr. Holland had been working on a project in Washington State and was slow to respond.
Two weeks seemed like an eternity as I was waiting for him to finish reviewing my rebuttal and the literature I provided. I can vividly remember him letting me know the day after Canada Day (July 1) that he was open to the project and would like to meet in person. The caveat being that it had to be in the next week as he was leaving for a 6-day camping trip with his family. I was also leaving for an extended road trip that would turn into an extended business trip lasting the entire month of July. We met early the following week, he agreed to take on the project, and we signed a confidentiality agreement.
For the next month, I could barely focus on the business that was paying my bills, despite being on the road and fully immersed in it 12 hours a day. I couldn’t find a true care for almost anything in my life other than making sure supplies reached Dr. Holland. I had this crushing feeling that everything I desired was being taken from me every waking moment. I knew that someone better, smarter, and more trained than me had to be working on this. I knew I was too late, and the more I obsessed over it the more my anxiety grew. I convinced my best friend to drive supplies to Dr. Holland’s house as they arrived and to go buy certain containers, equipment, and measurement devices. I had to get a jump on this, Dr. Holland had to start before I returned.
I was met with a crushing blow, the pharmaceutical chemical supplier I had applied for an account with rejected my order, on account of not having a commercial address. Two weeks of ordering raw materials was wasted. I scrambled, woke up every morning hours before I needed to get to appointments, and called suppliers on the East Coast while e-mailing those on the west. Dr. Holland had most of what he needed to start, but not everything, including some of the critical items. Finally, I was able to find the last items and everything was delivered. It took almost the entirety of July, which felt like years.
I was still oscillating between believing that this was a new career path or simply a DIY hobby. How could I be so audacious? While resourceful and motivated, I was not a trained professional. I was not a chemist or an engineer, and I certainly was not a medical doctor or researcher. What gave me the nerve to believe that I could commercialize something like this? It was nothing but a pipe dream, a fantasy. Someone else had to be doing something far more profound, more meaningful in this field than me. How could I possibly believe that I was the only one who saw potential here and could figure it out?
On the other hand, the companies currently selling hydrogen water and hydrogen tablets had some of the most unscientific marketing claims I had ever read, some which were dangerous and demonstrably harmful. After buying tablets from several companies to sample (and noting there were only two variations), many had sent “reps” to “recruit me” by e-mail or even by phone in one troubling instance. The claims that were relayed disgusted me to my very core. There was no doubt in my mind I was better suited than these companies to market the science and in fact, I was of the mentality of wanting to crush their businesses out of existence. While the motivation was strong, so was the self-doubt in my knowledge of the subject.
My anxiety and self-doubt faded as I returned to Vancouver and became quite hands on, calling and speaking to Dr. Holland daily, even driving to his house (30 minutes each way) to go over samples and progress, and take some samples home to replicate and test myself. In just a few weeks, we had developed a tablet that absolutely devastated the competition in every regard. It was palatable, almost unnoticeable in the water, and was several times higher in H2 concentration in most preparation and testing protocols.
I continued to send Dr. Holland research articles on hydrogen water as a therapeutic agent daily, and serendipitously I happened to send him an article on Hepatitis B (Hep B). Little did I know, Dr. Holland’s company was working on a cure for Hep B, and this intrigued him. He called me up and asked if I would meet him for lunch. We sat at a popular burger chain and he told me, to paraphrase, that in other studies, he had to simply trust the conclusions of the research. In this study, he could judge for himself that hydrogen water worked (or rather exhibited a beneficial biological outcome) and had many potential applications. He wanted in, not just as a consultant, but as a partner.
While internally I was leaning towards “going for it,” I had not yet admitted this to anyone, even to my then girlfriend, now common law partner. Not even to my best friend who had helped me out with my peculiar requests in delivering goods to Dr. Holland. Dr Holland’s sudden 180 from extreme skepticism to an enthusiasm motivating him to get involved as a partner was the sign I needed. If I didn’t go for it, who was I? If I didn’t seize this opportunity, would I ever have the courage to seize another? I had waffled on a previous invention just a few years before, one that others ended up developing (completely independently), which is now distributed in sports stores worldwide. I couldn’t let that happen again. For the first time in my life, I was financially secure and had the self-belief to know that even if I lost and was knocked down, I would get back up and be ok.
During these weeks, I set up a commercial address and obtained an account to order pharmaceutical chemicals to aid in our research. I also initiated an End Use declaration for the magnesium. About a month passed and I obtained authorization to ship samples of high, pharmaceutical grade purity magnesium. I also set up more advanced techniques to create prototypes and stocked up on ridiculous amounts of testing agents.
I knew almost nothing about launching a health product. I didn’t even know if this was a supplement, a food or a beverage. I read page after page on the FDA and Health Canada’s websites and could not make any sense of what my situation was. I set up calls with both Health Canada and the FDA as hypotheticals, and neither were particularly helpful in the sense that they really didn’t understand what I was talking about. It was as if I was speaking a foreign language, trying to explain how adding the magnesium would make H2 gas that dissolved in water. I was recommended all around to seek a consultant.
I started calling consultants as I started sourcing manufacturing. I didn’t realize the challenge either would be. I cannot count how many manufacturers hung up on me as I was trying to explain what I was doing or how many tried to give me a “piece of advice” and just “buy something people want and put it on Amazon.” Consultants were often no better, with one large Canadian firm charging me thousands of dollars in billable hours just to understand my project, while offering absolutely no direction.
Simultaneously, I had a certain US consultant advising me to use a different magnesium that was already legally sold and just to tell people it made H2. As an aside, a very highly recommended consultant that had already worked on another magnesium-based H2 product told me off the record that it was “impossible” and would “never be approved.” 28 months of gathering every single piece of data and evidence possible, crossing every “t” and dotting every “i” and we received a No Objection from the FDA as New Dietary Ingredient 1104 (https://www.nutraingredients-usa.com/Article/2019/02/20/Hydrogen-supplement-developer-cites-science-seeks-to-distance-himself-from-magic-waters).
Finding a manufacturing partner was a nightmare. After the first dozen had given me incredibly off-putting feedback, even down right insulting me, I decided I needed to get methodical and play the numbers. I gathered a list of literally hundreds of contract facilities across the USA and Canada and called and e-mailed every single one of them. About 15 of them agreed to do a scale up R&D run, and every single one of them pulled out as the date came closer, not wanting to touch the sensitive and reactive materials. I do not blame them, as I now know how critical proper controls are. 99.9% of manufacturers should not touch this material, only those who fully understand how to deal with it and are willing to comply with governmental oversight should. Without it, it is dangerous. I talk about this in the “comparing hydrogen technologies” article, concerning DIY projects and potential issues here. A local company was on board after I visited them in person, speaking to the COO, but needed to wait for some production backlogs to clear.
Most sane people would have given up given the regulatory and manufacturing nightmares. It seemed that success with either was nearly impossible. Fortunately, in this case, I was spurred on by positive reinforcement from all sides. I had started pressing hydrogen tablets for myself by hand to use for my own needs. I felt great. I needed to share these with others, to make sure I wasn’t imagining the benefits. First, I made some for my best friend and room mate who had just injured his rotator cuff and his girlfriend who had done the same competing in martial arts.
Days went by, and while she said she felt better within a few days, he was adamant they were doing nothing. He is incredibly skeptical by nature, and I did not expect him to report anything that wasn’t accurate. Day 5 he came home brimming with excitement. His shoulder felt way better, while clearly still injured, he could move it around and the pain had gone down. He was sold. I sent tablets to one of my first mentors in business, knowing he had ruptured discs in his back and a frozen shoulder. He didn’t know much about what I was doing at first, in fact, he was extremely surprised as he was one of the two others on my side in the Facebook war on the myths of alkaline water I spoke about in part II of this series, but took these hydrogen water tablets as I had asked him to.
Over a week went by and he felt no benefit. I was starting to doubt the H2 tablets again, but day 9 came. His shoulder had loosened up. It had been completely frozen and he woke one day to it feeling much better. We spoke on the phone, and he thought I may be on to something. He quipped that it hadn’t helped his back which was “worse than ever,” but it had done something noticeable. He put me in touch with his brother, a biochemist researcher at Duke University, who remarkably remembered the Baylor/Texas A&M paper on the therapeutic effects of hydrogen published in Science in 1975 (https://www.jstor.org/stable/1740947?seq=1#page_scan_tab_contents). All of a sudden, after over three weeks, his back loosened. He called me, in absolute disbelief. This couldn’t be a coincidence; this was becoming quite profound.
I started giving away tablets to anyone that would take them. As I expanded past those who trusted me the most, people became more resistant. A friend using “bro science” convinced numerous people to take my hand pressed hydrogen tablets. I convinced a few more who were reluctant. The feedback was overwhelming. We had dozens of people asking how and when they could buy them.
Both my best friend and the business mentor previously mentioned hinted at wanting to be involved. As I added up the costs I was expecting, my savings, and my income, I realized things were very tight. I could barely afford to launch if all went well. I had just bought two properties, my first rental home and a home with my common law partner. I had two mortgages and was mentally preparing to phase out of my business, something I was still devoting 240 hours a month to. I cannot discount how much my unique, innate ability to survive on less sleep than others played during this period. This isn’t a trait that is particularly healthy and it is one I am now trying to overcome with proper sleep, but during this period of time, it was the only thing that propelled me through. I estimate my working hours well exceeded 100 every week. I was still managing to work out an hour a day and spend an hour or two with my girlfriend. That said, I was growing very distant with my friends and family.
I was referred to a lawyer specializing in securities law by a business acquaintance. If I was to sell shares, I needed to make sure I was doing it legally. As we began discussing what I was doing, the groundwork I had done and how I was looking to raise capital by selling to friends I was immediately advised to sell one of my homes to fund it myself. I appreciated the advice regarding my self-interest, but was OK with having a smaller piece of something if it meant friends who had supported me and given me the confidence to pursue this from Day 1 would also benefit. I let the lawyer know this, and he went about drafting some terms I needed to consider before selling shares and to make sure they didn’t require a prospectus.
As we spoke more over the next week and I went back to visit him expecting a rather large bill, my lawyer David looked at me and told me that if I gave him my word he was my corporate attorney, there would be no bill right now. This took me off-guard, I gladly accepted, and this was much needed reinforcement on my drive. My manufacturing issues, regulatory issues and quickly depleting finances were leaving me in a permanent state of nausea. This isn’t hyperbolic, I had developed late night anxiety-induced dry heaving that would lead to actual vomiting. While David is now one of five main firms that represent my interests regarding Hydrogen Water (by necessity, and a half dozen more when considering international partner firms), he is my “go to” counsel on matters of business.
I put it out to my closest friends and family that I was willing to sell shares in what I was doing. I sold the shares for an absolute steal, considering only start-up costs and an incredibly generous and undervalued estimate of my time spent. I couldn’t in good faith make profit off my friends investing in an idea I still wasn’t sure I could pull off. My best friend and my mentor jumped immediately, they wanted in. My best friend had, and still does to an extent, a complete disdain for capitalism and business, so this was another huge clue that others were sold on what I was doing. At this time, I had been sending some tablets off to my minority partner, our VP of Operations, Terrell. He was on his family’s property, a sprawling 700 acres of land at the base of the mountains, running operations on a gravel pit and a legal medical marijuana operation. Two businesses owned by his family that had a far more proven track record, far more current profit, and stability.
Terrell called me and asked me “how much are you willing to sell?” I answered maybe 10% more, tops. He told me he was driving down the next day for lunch (4 hours), and when we met, he pushed and asked for 40%. He wanted every share I was willing to give him. While I didn’t agree to 40%, he took a much larger chunk than I originally intended. It was official, I was funded, my financial concerns were over… now I had to actually make the stuff, there was no quitting at this point, no turning back.
By this time, we were in April 2016. I believed I had my manufacturing sorted and had actually ordered the volume of magnesium needed to run production at a facility that had agreed to do it. While everything else was going on, I had run over 1,000 iterative adjustments on the formulation. As I was pressing these tablets by hand, with a small pipe sized piston, pipe, stopper and hammer, my stone table I had moved to rather than the kitchen counter top eventually cracked and crumbled.
Dr. Holland and I had made some novel discoveries on various molecules creating H2 rich gels, foams and viscous liquids containing significantly higher levels of H2 than was capable in water alone. We had used various functional chemicals to scale-up and down the viscosity of water and others for various other principles we developed. Our base tablet had advanced significantly, and we were hitting 6-7 ppm of water in a properly sealed bottle in about an hour. It left no taste and required much less special preparation than the tablets that were gaining popularity in the USA.
The manufacturer I was working with backed out the week they were supposed to run. They backed out while I was away on a trip, completely helpless. I cannot describe the pain and torment this caused. I begged and pleaded with them to reconsider, provided significant evidence on solutions to their suggested problem and they affirmed they would reschedule in three weeks. The end of April came and they again backed out the week they had stated they would run. I felt like I had lost a loved one. I could barely tell anyone, internalizing it. I felt like a failure, a fraud.
I spent a night in self-contempt, waking the following morning determined to find a new manufacturer. I focused 100% on the facilities that were in town, knowing that if they just gave me a face-to-face I could convince them of the potential. With my substantially advanced knowledge of the industry, necessary steps to manufacture and strategies developed to overcome common objections I found two facilities in town willing to run the product. I was taken aback; they were actually competing over my business.
Due to a certain few glimmers of truth I obtained from the one facility, I put my faith in them. It was rewarded, and they have been a critical business partner I am still working with to this day. Without their support, I would not be alive as a business. There were many times in the early days they could have easily turned me away to focus on bigger, easier clients, but they didn’t. Their director told me they couldn’t tell me no as “I believed in what I was doing,” and he knew that I had invested in it in money, blood (literally), sweat, and tears. There were times I knew they had to be losing money with my headaches, and every time I worked out a fair deal with them.
My facility took my job, possession of my materials, and scheduled my run. I went about starting my distribution and decided to reach out to an old contact, Tyler W. LeBaron, to let him know I was commercializing my work. I had corresponded on and off with Tyler during the past year, letting him know some of my observations on gels, foams, and viscous hydrogen-rich aqueous solutions. While he was interested in this research, he was highly skeptical. He also didn’t seem to know or believe I was making a standard tablet.
Tyler was taken aback as the claims were so great. I told we had a successful pilot run and were scheduling full manufacturing in a few weeks. He seemed quite pleased and mentioned that there were likely lots of people that would love to speak to me. What I didn’t know at the time was that MK was tyrannically controlling other business interests while constantly reneging on deals, which may have been a catalyst for what was about to happen next.
I discuss in detail my internal struggle and the conversation I had with Tyler W. LeBaron that changed my perspective and convinced me to pursue private labelling my technology here.
Calls started coming in literally that evening and my perception on the business completely changed. I started sending my samples out, both hand pressed and those from my scale-up run. The feedback was beyond my wildest imaginations. I was told that I was going to be a millionaire by years end, that this was the best product they had ever seen. I was told POs would come in as soon as I sent a production bottle over with these specs. In a rare moment where I lacked proper caution, I decided I needed to get out of my other business instantly, or at least as quickly as possible, rather than in a year. I needed to push all in.
I kept getting calls and follow-up calls in the following weeks before my first manufacturing run completed. I pulled the trigger and spoke to my former partner about an exit plan. He wasn’t pleased, but we figured something out that he was happy with, which gave me some support for the first year. I was on cloud nine, I had done it, I was going to be rich and change the world.
My entire reality came crashing down when I found out just days later that my formulation was failing in production. What worked in simulated scale-up and stress tests failed in a supposedly identical production run, a phenomenon quite rare in manufacturing. We adjusted the formulation and it ran in manufacturing, but the performance was not what I had expected… but I was already all in.
Next week, part IIII, desperation and the development of the open cup tablet.