Is Jonathon Perrelli’s LifeFuels About To Become a Company?

(Updated 5:51 PM August 29, 2019) Hallelujah, Jonathon Perrelli! Yes! Yes! Yesssssssss! It’s happy days for LifeFuels investors. According to an article first reported by Andy Medici in the  Washington Business Journal, Jonathon Perrelli’s, LifeFuels will be shipping product at some yet to be identified mythical time in the not so distant near future like perhaps some time on some unspecified day this September…. presumably he means September 2019.  Now keep in mind, this company founded on April fools day, 2014, has been about to ship a product for 4 1/2 years. According to the Journal article,

“This isn’t the first time LifeFuels said it was nearing mass production. The bottle, along with a smartphone app and vitamin- and nutrient-based “fuelpods” were available on preorder back in 2015.”

If everyone took a grain of salt for every pronouncement Jonathon Perrelli makes they would have massive issues with hypertension, thirst, swelling in weird places and all the other symptoms of salt poisoning. Perhaps if they had a water bottle they could dilute the sodium.

Over a year ago, I wrote,

February 14th, 2018, Jonathon Perrelli, self-proclaimed VC, serial entrepreneur, and the person who can pack more bullshit in a 5 foot 2 package than anyone else on earth announced the following in a Facebook post:

“Once we announce our Series A investment, we will not only have the capital to go to market, we will also have a timeline for production.”

Is this September that timeline we’ve been waiting for?

It would be great if LIfeFuels actually does ship this water bottle that took more time to create than it took to build the Pentagon. Nothing could be better for the DCTech ecosystem than to have a consumer product success story. So let’s just give Perrelli something he doesn’t deserve… the benefit of the doubt.

Let’s compare him favorably to Elon Musk who founded Tesla in 2003 and shipped the Tesla Roadsters 5 years later in 2008. The roadster achievement might eclipse the LifeFuels bottle… it’s a car!!! LifeFuels took as much time to develop an H2O container as Musk took to develop a revolutionary automobile that carries two passengers from zero to sixty in under 5 seconds while adhering to multiple government safety standards?

If Musk could create a car with cup holders in five years, Perrelli should be able to create a stupid “smart” bottle in the same time and we should be able to put it in a Tesla cup holder. Unfortunately, the bottle instructions say you can’t leave the bottle in the car. Even a buffoon should be able to create a water bottle in 5 years… so I’m betting that there’s a good chance, that LifeFuels certainly might maybe almost ship a product in the near September-ish time frame if all things work out… maybe.

But let’s put that aside. Let’s say there is a bottle and it ships. That is about 1/4 of the battle of building a real company. People… you know… like humans… like consumers… need to actually buy the product. And they need to buy it in volume. And they need to be willing to pay much more than it cost to produce. Therefore, to be successful there need to be a lot of low IQ stupid humans with cash burning holes in their pockets, who seek a smart water bottle with a higher IQ than they possess.

Definition of a dumb human: A human that requires a battery operated 500 mL water bottle to tell them on thier phone that they drank 500 mL of water.

Difinition of a dumb smart water bottle: A battery operated water bottle that connects to a phone to let it’s dumb human owner know they drank 500 mL of water.

Now I know what you’re thinking, you’re saying to yourself, “Hey Mr. Cranky, there are lots of stupid people in America… hell, just look at the results of the last election.” But really, think about this, voting is free, I bet in that last presidential election if Americans had to pay $179 to vote there would have been twelve votes cast.

To build a good business, you need to meet the following characteristics:

  1. A Great Idea
  2. Great Market
  3. Well Executed Product
  4. Customer Market Fit
  5. Timing
  6. Sales

The Idea – Report Card Grade D –

LifeFuels is a stupid idea. That’s just my opinion and opinions are like assholes, everybody has one including this asshole.

The bloated, unwieldy, water bottle, weighs 2.5 lbs when filled with 500 mL of water, sells for $179 including 3 fuel pods that can add vitamins and kool-aid like a flavoring for 45 drinks. All a marathoner needs is to carry an extra 2.5 lbs in order to drink flavored water. The thing requires a battery, must be charged, has proprietary “flavor pods” which come in flavors and have a mix of “nutrients.”  It can’t accommodate hot water, carbonated water and just like a small child or a dog, don’t leave it in a Tesla on a hot day. Buyers are held captive to purchase these flavor pods at a price of $12 each and each pod is good for 15 servings (.80 each per serving). You can’t get flavor pods from Yoohoo or Kool-aid or Pez or any other company but LifeFuels. You won’t be able to get flavor pods when LifeFuels goes kaput.

LifeFuels is a so-called smart bottle. Let’s compare it to a stupid bottle, like a Camelbak. My dumb Camelmak bottle can carry 48% more water and even with nearly 50% more water it weighs 40% less than Perrelli’s “smart” moronic bottle.

But Glen, you say, the “smart” piece of crap, comes with 3 Favor Pods. I say, go to Amazon and buy a 12 pack of Kool-aid for $6 dollars and a bottle of 70 counts Flinstone vitamins for $12.  If you don’t like Kool-aid buy Propel or any of the other commercially available water additives that are readily available from multiple sources and yet are not compatible with the “smart” bottle. Think about it, if Camelbak ever went out of business, my bottle is still useful and I can still get vitamins, and flavor agents that work with my bottle. When LifeFuels goes under in 12 months… where you going to get your flavor pods?

This smart bottle is battery operated and needs to be recharged… by the way, here’s some shocking news… electricity and water are not good friends. My stupid bottle is 3 years old and still hasn’t needed a recharge. But Glen, the smart bottle connects to my phone and tells me that I drank water… hmmm, well you have me there. Smart bottles must be designed for dumb people because most smart people can figure out how much water they drank when they drank a 25-ounce bottle of water. In fact, a smart person might be able to figure out that they drank 8 more ounces than a dumb person without having to check their phone.

A Great Market – Report Card Grade: D

In analyzing a great market, MarketResearch.com suggest you consider these factors

  1. What is the market size? – According to a Market Research Engine Report, “The Smart Water Bottle Market is expected to exceed more than $ 297.5 Million by 2024 growing at a CAGR of 12% in the given forecast period.” That means that by 2024, this market is still not a billion-dollar market. That means 5 years from now this market would not excite a Venture Capitalist… unless you count Jonathon Perrelli as a Venture Capitalist which is fair because he considers himself one (see link).
  2. How quickly is the market expanding or contracting? – 12% CAGR… is not lighting the world on fire, which is a good thing because you can’t put out a fire with a puny little 500-milliliter bottle full of water.
  3. How many buyers are there? – Seven, but you better hurry because Rodney is on his death bed.
  4. What are the barriers to entry? – It took Perrelli 5 years to figure out how to announce for the second time that he was about to ship a bottle that isn’t shipping as of this writing. That sounds like a huge barrier to entry. Unless you check out the long list of competitors that have already beat LifeFuels to market. Don’t tell me about your moronic Patents that you have to give up if your product is manufactured in China (watch out for tariffs) and Patents. These patents are not difficult to engineer around and are of little value.
  5. What is the bargaining power of suppliers? – Money talks… buying power talks… I’m not seeing any bargaining power on the buy-side.
  6. What is the intensity of the competition? A ton of competitors for a small market. Many of them have already established a beachhead.  Most are less than half the cost. Here’s just a few:
    • HydrateSpark – Cost $45, 3.5 star Amazon rating
    • HYDRA Tech (Combo, Water Bottle, Music Speaker and Speakerphone) – Cost $60, 3.5 star Amazon rating
    • Bellabeat – Cost $76, 1.5 star Amazon rating
    • H2OPal – Cost $100, 3.5 star Amazon rating
    • Dixie cup – Cost $0.05 A water container is a water container (8 0z Dixie Cups are smart cups because they tell you you drank 8 oz of water
    • Neighbors Garden Hose – Free
    • Public Water Fountain – Free
    • Here’s a 2019 review of 7 bottles – who knows how many other competitors beat LifeFuels to market.
  7. Is there a threat of new entrants or substitute products or services? Absolutely

Well Executed Product – Report Card Grade: Incomplete

Hell, in the case of LifeFuels… just a product would be good enough. The Jury is still out but having a good product is only 1/2 the battle, which is 10 times more of the battle than saying for the second time that “we will be shipping a bottle soon”… twice.

What follows is a note to me from Skippy, a reader and an accomplished engineer who has designed multiple high-technology, military-grade, safety devices. These devices are highly successful and used in life-saving critical situations in extreme conditions. Here’s his analysis of the product after reading the manual Skippy gives the product a failing grade.

Engineering note: Hey dumbass, pumps use a lot of power and are very unreliable. Since you are only dispensing a small amount of “fuel” into each drink and you still have to mix said fuel. Why not just squeeze the bottle? You could still use your rocket science to monitor the amount released but your battery would last a lot longer. 

Second engineering note: Hey moron, water is not easily compressed but dispensers are. Drop a dispensing pod in a bottle of water, squeeze water bottle….presto, flavoring is squeezed from pod into water. Guess what Einstein, now you will not have to worry about the seal between your water vessel and your rocket booster. The way you have it designed now, I promise will leak! Don’t even think of using that design in cold weather, that gasket will last about a minute. You could replace your bottle with pods that drop into any bottle and do the same thing mechanically. You could have designed small water bottle caps that dispense liquid into any bottle (how much flavor per day to you need?) In fact I can think of about 50 better ways to do this but I believe you found the most bizarre convoluted method possible, congratulations!

Engineering note #3: Get yourself an engineer, you desperately need one.

Customer Market Fit – Report Card Grade: C-

Does the product fit the market? What kind of people want a bottle that has a limited number of flavor and nutrient added choices from a company with no experience in producing physical or nutritional products. I’m probably not the target market, because I have a brain, and it works, but I would rather be able to choose my vitamins and supplements provider from a best of breed provider than a traveling medicine show carnival barking snake oil salesman. I would rather break or lose a $13 bottle than a $179 bottle.  I’d rather not have to compromise between having to charge my phone or my pace-maker or my water bottle.

Even if the way-too-late-to-market product is well-executed with tremendous customer market fit… the market isn’t big enough to excite me.

Timing – Report Card Grade: F

The product is not only late to market but if Perrelli isn’t bullshiting himself, his investors, and the world,.. which based on Perrelli’s bullshit-to-fact track record is a ginormous, low-confidence, leap-of-faith, Big FFFn IF, and the product ships sometime next month… the timing sucks. The world economy is at the tail-end of a bull market business cycle. The longest upward business cycle in history. If as many economists predict, the world economy is heading towards a recession… that would be catastrophic for discretionary spending on luxury products like $179 water bottles. In recession markets, weak companies, like companies that have been around for 5 years with no product get little investor support.

If the company can’t fund itself via sales and profits, it’s unlikely to get outside capital. It is unlikely to weather the coming storm.

Sales – Report Card Grade: Incomplete

An Incomplete Grade in sales is the equivalent of your dog eating your homework.

Ultimately no bluster and boosterism by Perrelli and no naysaying from cranky old bastards like me matter when a company’s product hits the market. The tale of the tape tells the story. The average discretionary product company today earns 420 thousand per employee. Do you know how many dumb people would have to buy $179 “smart” water bottles to generate the $12 million a 30 person LifeFuels would have to generate to be average?

Let’s say that the average loaded cost per person, for the 30 employees is $70 thousand, counting salaries, rent, equipment, T&A, benefits, taxes. That’s a ridiculously conservative number. LifeFuels’ 30 person company today requires a minimum of $2 million dollars in gross profit from product sales per year to pay its bills. The company would need over $2 million in gross profits just to break even. Let’s assume they have outrageous gross margins of 60 percent. The company would have to sell about $4 million to pay its bills and be an unintentional non-profit. LifeFuels would have to ship 28 thousand bottles.  Alternatively, Perrelli would have to sell 10 thousand bottles and 170 thousand flavor pods.

Good luck with that.

Logistical Nightmare

The FuelPods pose a logistical pain in the ass for the company and its customers. FuelPods are meant to be recycled.

The bottle packaging includes a USPS return label. Customers are asked to collect FuelPods. Once they’ve collected 25 pods, they are to find a package, attach the label, drive and mail the returns back to LifeFuels.

LifeFuels will then, presumably clean them and refill them with more “fuel.”

The handling of envelopes of 25 FuelPods coming into the company at random dates, is a costly logistical nightmare for handling the returns and managing the inventory?

With no control of if and when FuelPods are returned, how does the company manage inventory of new and recycled FuelPod containers?

LifeFuels… sounding stupider and stupider… I guess Perrelli forgot to hire a logistics expert.

 

The Keurig Factor

Now some people will point out that LIfeFuels has the backing of industry giant Kuerig…

Keurig is a company that is struggling to duplicate its past successes. Its main hit product recently slammed against a wall and is experiencing stagnant market growth. That’s why the company is grasping at any stupid straw or smart bottle to try and dig themselves out of a hole.

The financials are unimpressive and Kuerig’s earnings per share isn’t making any shareholders smile.

The stock suffered a precipitous drop last summer and is trading close to the range when it first went public.

There is no question the company is having difficulty. And chasing a “Smart Water Bottle” market projected to be worth 1/3 of a billion-dollar market in 5 years is not going to fix Kuerig’s billion-dollar issue today.

In a  2015 article in the DailyMeal, titled, “Nobody’s Buying Keurig Coffeemakers Anymore: Company Admits They Made a Serious Mistake.” The company looks to be a one-hit-wonder. The article talks about new product failures,

The poorly thought-out feature has affected sales so much that CEO Brian Kelley has admitted that the company made a serious mistake.

“Quite honestly, we were wrong. We underestimated the passion the consumer had for this,” Kelley told analysts on a conference call.

In 2015 the company dumped its huge investment in the Cold Brewer.

Keurig like most companies makes mistakes and they wouldn’t be the first people to make a mistake betting on Perrelli.

If you search the Keurig web site, there is no mention of LifeFuels… not a one. Search the same site for a term like “cold brew” and I get 1,260 results. And there’s no wonder that no one at Kuerig, not in the board room or the washroom is talking about LifeFuels. In five years if LifeFuels captured the entire market… the executive team would still be fired for missing their numbers. Compared to Keurig’s issues LifeFuels is a nit and only a nitwit would put their hopes on it.

Keurig dabbles here and dabbles there and make no mistake, even $20 million investment for a company of this size is a dabble for a company that’s struggling to find anything that can get them out of the doldrums (There are rumors they handed Perrelli as much as $20 million. If that were true, that number would be more than a rumor the way JP runs his mouth all over town.). The only people talking up the LifeFuels Keurig partnership is Jonathon Perrelli. Keurig is not telling their investors about a deal, they haven’t announced it to the press, it can’t be found on the Keurig web site anywhere.

How much do you count on a Keurig that doesn’t seem to notice that LifeFuels exists?

Summary

All DCTech eyes have been on LifeFuels for five years. Would it be great if they succeed? Hell yes! Would I love to be proven wrong? Yes… I’m not rooting against this region developing a great consumer brand. I’m just not drinking the kool-aid out of this LifeFuels “smart” bottle.

The Net… raising money isn’t a success, announcing a product isn’t a success. The only success is building a product that enough people will pay enough money to build a profitable business. It would be great if that happens with LifeFuels… I’d invest in Danny Boice’s next effort before I bet on LifeFuels.

Correction

(August 30, 2019, UPDATE) Marty Ringlein, tweeted about the mistake I made in this article. “I’d like to formally request a retraction from your poorly researched, biased, and inaccurate article … you can leave a dog in a Tesla! 🤪 https://www.teslarati.com/tesla-dog-mode-feature/ …

Learn More About Life Fuels – User Manual

Warning Note: Please be forewarned that if you comment on this article, little boy Perrelli will most likely block you in Social Media and your life will be ruined. He’s blocked most people who follow me on social media. Be forewarned and comment at your own social peril (see article)!