Flex-Power
Founded: 2001
Location: Berkeley, Calif.
Employees: 7 full-time, 15 part-time
Key decision makers: Bejan Esmaili, 41, co-founder and CEO; Rasheen Smith, 29, co-founder and president
Sales: $2 million
Strategic investors: 25 professional athletes, including Jason Kidd, Manu Ginobili and Stephon Marbury
For a startup with little name recognition and a microscopic marketing budget, topical sports cream maker Flex-Power has some very well-known athletes lined up to publicly sing its praises. The Web site of the Berkeley, Calif., company (www.flexpower.com) features testimonials from NBA stars such as Jason Kidd, Manu Ginobili and Stephon Marbury, along with baseball hall of famer Hank Aaron and an array of NFL players that includes free agent quarterback Jeff Garcia and San Francisco 49ers center Jeremy Newberry.
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Bejan Esmaili, who used his own money to launch Flex-Power,
has found willing customers, investors and endorsers
among professional athletes such as Jason Kidd (below). |
So how does a company with seven full-time employees get a bunch of All-Stars and All-Pros on its roster?
“We haven’t paid any athlete one penny for an endorsement or testimonial,” said 41-year-old founder and CEO Bejan Esmaili, a former Morgan Stanley money manager turned entrepreneur. “All of the athletes made the transition from using the product every day to saying, ‘I’ll help you out with the marketing, and maybe even become an investor.’”
In fact, Esmaili said, about 25 professional athletes have invested $25,000 each in Flex-Power, which competes with other joint and muscle pain relief creams such as BenGay, Flexall and Icy Hot. A former college soccer player at UC Berkeley, Esmaili launched Flex-Power in 2001 after 12 years in the investment business. His clientele had included many professional athletes, including Kidd and former NBA All-Stars Kevin Johnson and Hakeem Olajuwon.
Esmaili said he thought a lot about introducing a new product to what he called a “static” market after enduring five knee surgeries and more than his share of pain, which he treated with the now shelved Vioxx and other anti-inflammatories. He talked to his athlete clients about the idea for a new sports cream before deciding to invest roughly $250,000 of his own money to make Flex-Power a reality.
Esmaili touts his product as not only smelling better than the competition (it comes in a neutral or citrus scent, rather than the wintergreen commonly associated with sports creams), but as including ingredients such as MSM and glucosamine, which have become popular supplements for people treating muscle and joint pain.
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| Kidd. |
“I just believe in it,” said San Antonio Spurs star Ginobili, via e-mail, who became an investor after trying Flex-Power.
Jose Fonseca, the men’s basketball athletic trainer for Duke University, said he has been using Flex-Power for his players almost exclusively after learning about the product from the Philadelphia 76ers, who train in Durham, N.C.
Said Oakland Raiders team physician Dr. Warren Strudwick, “I think a lot of the athletes really like this product. In my opinion, [Flex-Power] has a big market opportunity only because the market has not been addressed in a long time.”
Esmaili said the guidance of the late Brian Maxwell, founder of PowerBar, the product that launched the energy bar market, was invaluable when he was getting started. Maxwell, also a Berkeley graduate, who died suddenly in 2004 at 51, took an interest in Flex-Power because he saw many similarities to his own start-up efforts.
Maxwell implored Esmaili and Flex-Power President Rasheen Smith, yet another Cal grad, to market Flex-Power through grassroots methods, by putting it in the hands of athletes and trainers and showcasing it at events. Early on, Esmaili gave the product to pro athletes and sold it at cost to professional team trainers, seeking — and getting — genuine endorsements at the highest level.
Maxwell also coached Esmaili to avoid going for a mass market retail strategy, where the product would get lost on the shelves next to other creams. Rather, Esmaili has focused on getting the product on the shelves and Web sites of health clubs, gyms, and specific sporting goods stores, supplemented by online sales direct from the Flex-Power Web site ($19.95 for a 2-ounce jar).
The product can be found on the Web site of 24 Hour Fitness, the California-based fitness chain, and will be in the chain’s physical locations this quarter. Another recent deal put Flex-Power on the shelves of 10 Sports Authority stores.
The product has seen significant sales in Mexico and Japan through sporting goods and fitness chains, accounting for more than half the company’s estimated $2 million in revenue. Most recently, Flex-Power struck a deal with Korean conglomerate LG, which will sell the product in sporting goods and fitness center chains in its home country.
Esmaili and Smith are trying to raise $10 million to $15 million to aggressively market the product.
“Hopefully, we can evolve like PowerBar,” said Esmaili of the company founded by his mentor and sold to Nestlé SA in 2000 for a reported $375 million. “First there was no food in sporting goods stores and gyms and now everyone has it.”
Greg Abel is a writer in Baltimore.
