By Erin Sherbert
By Erin Sherbert
By Leif Haven
By Erin Sherbert
By Chris Roberts
By Kate Conger
By Brian Rinker
By Rachel Swan
Maurice Kanbar -- multimillionaire, film buff, scooter rider, owner of 32 patents, inventor of (among other things) the D-Fuzz-It sweater comb, the ROLLOcane, Skyy Vodka, 80/20 Cola, a game called Tangoes, and one of the world's first multiplex movie theaters -- calls South San Francisco at least once a day. That's where his personal laboratory is. Tucked in the back of a nondescript industrial park, Rex Products Inc. is a 10,000-square-foot shrine to whatever ideas pop into Kanbar's head, and the main warehouse has a Radio-Shack-meets-Home-Depot feeling of controlled chaos. The place is filled with prototypes, lathes, saws, drills, and drawers packed with valves and wires and moldings and all sorts of things that might, someday, result in a useful and profitable invention.
When Kanbar calls, he usually speaks to Albert Kolvites, a tall, bespectacled man with salt-and-pepper hair. Like Kanbar, he has a boundless enthusiasm about the stuff that makes up the world. The two met 25 years ago in a New Jersey lab where Kolvites worked at the time. Kanbar moved Albert and his wife, Florence, to the Bay Area four years ago to work for him full time. The couple, along with industrial designer Wayne Bish, make up the entire staff of Rex Products, which juggles dozens of projects simultaneously. This week they're retooling a brand of Indian motor scooters that Kanbar wants to sell in the U.S. Next week it'll be something else -- like the more efficient LED stoplight that Kanbar claims uses a tenth of the energy today's stoplights do, or the Wagel, a whole-wheat, nonfat breakfast bread.
On the wall of the laboratory's office is a poster of three men whom Kanbar and Kolvites refer to as the gods: Walter Brattain, William Shockley, and John Bardeen, the Nobel Prize-winning scientists who invented the transistor in 1947. The Bell Labs Three are sanctified because they not only invented something the whole world uses, they investigated, researched, and slaved over prototype after prototype. But Kanbar will tell you that even the most meticulous research can still result in failure. And that passion can be enough to bring a product to market, but not enough to keep it there. That passion created 80/20 Cola, a soft drink that Kanbar launched last year -- and that failed almost immediately. He still likes it, and he still believes in it -- indeed, he keeps a few cases around the offices of Rex Products for when he drops by, as he did on a recent lunch visit with his staffers. But eventually the aspartame will degrade, the 80/20 Cola will become flat and undrinkable, and the cans will be useful only to exemplify how Maurice Kanbar's mind works -- and what goes right and wrong when you choose to be an inventor.
"The real problem is I didn't do my homework," Kanbar explains, holding up a can of 80/20 Cola. "What do you have to know?"
And the staff answers, in unison, as if they've been asked this question before: "Everything."
There's a difference between inventors like Maurice Kanbar and most people. And here it is: When most people go to a fast-food joint, they get a burger, fries, and a Coke. When Kanbar goes, he gets an epiphany.
Kanbar, who gives his age as "50-plus" (though most everyone agrees he's well into the retirement-age side of that number), is on a reduced-sugar diet. So he had to be careful when he made a fateful trip to Burger King two years ago. With a chicken sandwich and an empty cup on his plastic tray, he went to the do-it-yourself soda fountain, considered the options before him, and performed an experiment. Disgusted by the artificial-sweetener taste of diet colas, Kanbar worked out a compromise: He filled the cup with a little bit of regular cola and topped it off with diet cola -- roughly 20 percent regular and 80 percent diet. Problem solved. "I said, "You know, this really tastes like the real thing,'" he recalls. "So I started buying regular cola and diet cola and mixing it."
That, of course, created a needlessly messy situation in Kanbar's Pacific Heights home, which got Kanbar to thinking of perhaps mass-producing cans of his cola mixture. So he invoked one of his guiding philosophies as an inventor: "Would I buy it if it were available?"
In the same way that Joseph Heller wrote Catch-22because he couldn't find a book he wanted to read, many of the things Kanbar invents and invests in are items that he wants himself; it's why he's interested in making a light, versatile work vest to keep his pens and papers and plane tickets in (like his 11-pocket Vee Vest, available soon) but not, say, a better gun. An interest in removing those unsightly "pills" from his sweaters resulted in his first patent, the D-Fuzz-It sweater comb. A hangover spurred him to invent his most successful creation -- Skyy Vodka, which claims to contain fewer headache-inducing impurities. A passion for scooters made him want to license an Indian scooter brand, Bajaj, for sale in the U.S.
Ideas like these, and the success they bring, have helped give Kanbar a Horatio Alger-type reputation. He's the man who broke out of a lower-middle-class Brooklyn childhood to do what everybody said he couldn't: become a wealthy inventor and serial entrepreneur. He's the man who dreamed of becoming a filmmaker but whose father -- a failed businessman -- would have slapped him upside the head if he'd ever followed through. He's the man who studied engineering instead, but whose father wouldn't loan him the thousand dollars he needed to make a prototype of the D-Fuzz-It. He's the man whose mind is so flexible, he understands the nature of what people need in the world -- and what they don't, even if he sometimes fails on the path to that understanding.
"Look at this cup," Kanbar says, picking up a coffee cup in his office at Skyy's corporate headquarters. He leans forward on his sofa and points hard at the glass cup. "Can you make a coffee cup handle that's more comfortable, or more efficient, or something? You may not find it. I go through 50 things that I will spend more than an hour on to find one that's worth pursuing; and out of that, one out of a hundred will become a reality. So I just have a great time with my head, playing around with ideas. It's a way to keep from being bored."
With that philosophy in mind, Drinx LLC was incorporated to manufacture and sell 80/20 Cola on June 29, 1999. The sales pitch was a simple one: Thanks to its formulation -- a mix of aspartame and sugar -- 80/20 would taste like a full-sugared cola, but with fewer calories. Thirty to be exact, compared to the 150 in a 12-ounce can of Coca-Cola or Pepsi. And, for added value, it would give you 100 percent of your recommended daily allowance of vitamin C. After all, people drink diet cola by the oceanful but suffer through the diet taste. Why not a compromise -- a midcalorie cola?
Pepsi and Coca-Cola are too big to take on, you say? Then you'd be the same person who told Kanbar that there's no room for another vodka on the market, the person who told him nobody would buy a sweater comb, the person who told him it would be silly to cut a movie theater into four parts and quadruple your moviegoing options. But Skyy is huge, the D-Fuzz-It is sold all over the world, and Manhattan's Quad Cinema, opened in 1972 and arguably the first multiplex on the East Coast, has been in profit from the start. There are untold millions in all the things people tell Maurice Kanbar are silly. Besides, Kanbar didn't want to annihilate Coke and Pepsi, just move into a bit of the market. After all, RC Cola only has 1 percent of the U.S. soft drink market and it's a profitable business.
When Kanbar founded Skyy, he drove his scooter around San Francisco to sell the drink to liquor stores and bar owners. But as a general rule, he isn't very hands-on with the things he creates. Once success is secured, he usually passes the day-to-day operations of his business to someone else, as he did with his brother Elliott, who runs the Quad Cinema. So the presidency of Drinx LLC was bestowed on a bright, young, and enthusiastic Skyy employee and Kanbar protégé: Russell G. Weiner.
Russ Weiner is truly his father's son. His father is best known to Bay Area radio listeners as the right-wing talk show host Michael Savage; under his real name, Dr. Michael Weiner, he's written 20 books about nutrition and herbal medicine. Similarly, the 30-year-old Russ is a Republican who has made two failed runs for the state Assembly out of Marin County and has spent time at the nutrition department at the Chicago Medical School studying herbs, flavors, and health-food nutrition.
Weiner explains that Kanbar, who tends to donate to Republican causes, was impressed with his 1998 Assembly run. "He hired me to learn the business from that," Weiner says. "He saw what I did with the campaign, which essentially created something from nothing."
"Russ and Maurice have similar attributes," says Jason May, a brand manager who works for Kanbar. "They're both focused, and they both do whatever they believe in."
And neither believes much in doing market research -- the focus groups and studies that tell companies when they should (and shouldn't) invest in new ideas. The real world is the test market for Kanbar; knowing when to stop making a product -- or avoid making it at all -- is summarized in what Kanbar calls the Eleventh Commandment: Thou shalt not bullshit thyself. "I don't do market testing or focus groups," says Kanbar. "If those focus groups worked, the products that focus groups like wouldn't fail. But they fail. In fact, they fail more often than they succeed. I believe in using your own intuitive sense. If I would've taken 80/20 Cola to a focus group, I would've heard, "Yes, I like it, I'll buy it,' and I would've said, "OK, let's do it.' But it's hard to get valid market testing. If I worked for a large corporation and did market testing, they would've said, "It failed!' and I could've said, "Well, the market testing showed that it succeeded!' So I'd be covering my ass. But since I'm doing it on my own, I don't need market testing. I think it's a good product. I think that it's a darn good product."
So in the spring of last year, cases of 80/20 Cola made their way to Houston. But both Weiner and Kanbar ignored a simple detail, one that anybody could have discovered with 15 minutes' worth of research: America has never, ever, wanted a midcalorie cola.
This much we know: Canadians are shifty people.
They are carefree, devil-may-care folks, these Canadians. They will jump, willy-nilly, from a diet cola to a regular one. Give them aspartame, give them high-fructose corn syrup -- hell, give them both at the same time -- it matters not a whit. Saccharin, acesulfame potassium, pure sugar, natural or synthetic, Canadians will take their sweeteners any which way. Zero calories? 15? 50? 150? Such distinctions mean nothing to them. Canadians are cola sluts. Canadians will drink anything.
Canadians are like no other people on Earth. They are the only ones who, the market research shows, want midcalorie colas. In industry parlance, they're "switchers" who will drink both diet and regular colas and won't remain particularly loyal to one or the other. That mentality has created a market in Canada for the 60-calorie Pepsi Max -- introduced with the tag line "The Best of Both Worlds" on Jan. 27, 1994, which Pepsi called "Pepsi Max Day."
But Pepsi Max has never been available in America, and likely never will be. This hard lesson was learned during the cola wars of the '80s and '90s. In the mid-'80s, Coke and Pepsi deliberately went head-to-head against each other with a flurry of advertising. Pepsi introduced its "Pepsi Challenge," the vaunted "blind taste test" in which, lo and behold, people liked Pepsi more than Coke. Coke countered with ads featuring Max Headroom, a sputtering, computer-generated Goebbels who commanded the masses not to say "the P-word."
But the cola wars ran deeper than high-profile prime-time TV ads. Looking for increased market share in a multibillion-dollar soft drink industry, Pepsi investigated new avenues in American soft drinks. There are a lot of them -- lemon-flavored drinks, lemon-lime-flavored drinks, root beers, cherry colas, iced teas, and so on -- but one that Pepsi could never quite let go of was the midcalorie cola. It seems like such an obvious winner -- same taste as a regular cola, fewer calories. But it's never worked.
"Midcalorie products have had a hard time," says Sarah Theodore, who reports on the soft drink market for Beverage Industrymagazine. "I don't think consumers know what to do with a midcalorie cola. People who drink full-calorie colas don't go down to a lower-calorie drink, and people who drink diets don't understand the midcalorie concept."
There's ample proof of this. In the early '80s, Pepsi briefly sold Pepsi Light, a 70-calorie, lemon-flavored drink that struggled to find a market. In 1987 -- the height of the cola wars -- Pepsi began test-marketing Jake's, a 15-calorie cola, in the U.S. Coke killed it almost instantly with an advertising campaign saying that you could enjoy 15 cans of Diet Coke and still consume fewer calories than one can of Jake's. Pepsi's last stand was Pepsi XL, a 70-calorie sugar-and-aspartame blend that was test-marketed in Florida in the spring of 1995. By the summer, it was clear that consumers weren't biting. By the end of the year, Pepsi pulled the plug. Thou shalt not bullshit thyself.
"It didn't seem to be a proposition that resonated with the U.S. consumer," says PepsiCo spokesperson Larry Jabbonsky. "Americans either gravitate toward a diet or a full-calorie cola." So we'll never see a midcalorie in America again? "We never rule anything out," says Jabbonsky. "But I think we're pretty happy with our cola portfolio the way it is."
To put it another way: 80/20 Cola was pretty much doomed from the start.
"You learn more from a failure than a success -- you learn to say, "Don't do this again,'" says Maurice Kanbar with a laugh.
But he adds more soberly: "Let me say this. It doesn't affect my lifestyle to have some failures. It's a very important part of your education. As a matter of fact, to all young inventors I'd say, "Don't be discouraged.' The worst thing you could be is discouraged. Certainly not everything I've done has been a big success, but more of them have been than the failures, so I have been lucky."
Kanbar talks about his failures with remarkable candor. After all, he can afford to. In its first year of production, the D-Fuzz-It sweater comb made $200,000, and Kanbar has parlayed that success into the Quad Cinema; Rex Games, which makes Tangoes and other diversions; and, after moving to San Francisco 15 years ago, Skyy Vodka, which has more than doubled its sales in the past five years and, according to Skyy employees, is poised to become the No. 2 premium-vodka brand in the U.S. this year. It's done so well that in 1997 Kanbar gave $5 million to NYU's highly respected film department, which is now named the Maurice Kanbar Institute of Film and Television.
But mistakes and failure are themes in Kanbar's book, Secrets From an Inventor's Notebook, recently published by Council Oak Books, an imprint he purchased in 1997. In the book, he cites the example of the ROLLOcane -- a three-wheeled cane that makes walking smoother. Kanbar hasn't given up on it entirely -- he and Albert Kolvites are tinkering with different wheel sizes -- but Kanbar learned that sometimes you can't know everything until you put something in the marketplace. With the ROLLOcane, the problem was a matter of perception. Kanbar and Kolvites knew it was sturdy, but an outsider looking at the thing could easily picture it rolling away from its user. It looks unstable, so not enough people want it.
By contrast, making 80/20 Cola -- which isn't mentioned in Inventor's Notebook-- was a relatively simple matter. Despite the legends about the armed vault at Coca-Cola headquarters containing Coke's ultra-ultra-secret formula, getting a cola made is simply a matter of hiring out a "flavor house" to make the proper sweetener mixture with the appropriate taste. "This formula that [Coca-Cola] locks in a safe is meaningless," Kanbar says. "It's nonsense."
But if cracking the code of Coke's taste was easy, competing with Coke and Pepsi in the marketplace proved difficult. In the long run, 80/20 Cola likely would have died due to lack of interest; but the reason it lasted less than six months is the reason most cola brands can't compete with Coke and Pepsi: profit margins.
Houston seemed like the best place to ship the first few thousand cases in the late spring of 2000. Skyy's representatives in Texas were eager to give it a shot; as Weiner explains, "People drink a lot of cola down there." There was no fanfare, no "80/20 Cola Day" -- just a bottler and distributor hired out to handle the cola. There was little advertising, and the only interview Kanbar did was with the trade magazine Beverage Industry; Skyy launched its Skyy Citrus vodka at the same time, and he told the magazine that his favorite drinks were a Skyy Citrus martini and "80/20 Cola served ice cold." And 80/20 would be selling for less than Diet Coke, so consumers could appreciate the value.
"I didn't know what the margins were -- I could've found that out in a minute," Kanbar laments. "I thought Coca-Cola makes a dollar a case! Sell a 24-pack, and they make a dollar! So, fine, I'll make 50 cents! That's a hell of a business! I didn't know it was a dime!"
Actually, as Jason May recalls, the profit margin on sodas is closer to a penny a case. Making 80/20 Cola profitable would mean selling in mass volume. Selling in mass volume would mean a nationwide or large regional rollout -- not just Houston. A large rollout would mean mass advertising. Mass advertising would mean a huge financial outlay -- not to mention competing against Coke and Pepsi for ad space, bottling, distribution, and other mechanics of the soda industry that Coke and Pepsi have a lock on. "I think what happened was that it was put to rest before the investment was too heavy," says May. "It was a big learning experience for everyone, and what everyone realized was that a one-penny-per-case margin is not something you want to work on, unless you have the volume that Coke and Pepsi have, and this particular product wasn't going to get to that level."
"Cola's so cheap that unless you're Coke or Pepsi, and you have your own distribution network, you can't distribute a cola," says Weiner. "It doesn't work."
"Don't go into a business where you don't know the margins!" says Kanbar. "Sometimes," he adds, "you get a little cocky."
By July, Kanbar had pulled the plug and Weiner had left to pursue his own company. Kanbar kept a few cases of 80/20 Cola for himself and donated a few pallets to the San Francisco Food Bank. The rest of the supply was shipped to surplus goods stores and sold at a loss.
Shortly after the 80/20 Cola project was scrapped, Russ Weiner left to create Rockstar, an energy drink that he's begun to sell on the West Coast. While Weiner was the ostensible president of 80/20 Cola, Rockstar was his passion; he'd seen how well nutrient-packed "energy" drinks like Red Bull were selling in clubs and decided to get in by making a drink that tastes just like Red Bull, but sells at the same price in a larger can -- which Weiner argues is a better value for club owners. Weiner had also seen how the big soft drink companies were muscling into energy drink territory. PepsiCo recently purchased Gatorade and South Beach Beverages' SoBe line of teas; Coca-Cola, which failed in its attempt to buy both those companies, is now test-marketing KMX, an energy drink set to compete directly against Red Bull.
\rIt's the same cola war. Only the flavors have changed.
Weiner believes in Rockstar the way he never believed in 80/20 Cola. While 80/20 was flopping, he was trying to convince Maurice Kanbar to get behind Rockstar instead, but Kanbar demurred. "He's very intelligent and has done a lot of amazing things, but energy drinks are just not his thing," says Weiner.
Weiner harbors no resentment toward Kanbar; indeed, he cites Kanbar as a genius, a true mentor, and an inspiration for the way he wants to handle his drink. About six months ago, he pushed Kanbar one last time to get involved in Rockstar, and Kanbar responded with what Weiner now recalls as the best advice he's ever gotten: "If you're really passionate about something, and you really want it to succeed, you need to invest your own money in it."
Kanbar employee Jason May remembers talking to Weiner the day after he wrote a large check to get Rockstar's production moving. "We were talking, and Russ said, "Fuck, Maurice is so right. I know what he means now. I just sent the biggest check I ever wrote in my life, and I can't stop thinking about this thing, no matter what I do.'"
Maurice Kanbar moved on as well. There are a lot of things at Rex Products to move on with, after all. First is the Bajaj scooter line, which he hopes will be available this summer. "Importing the Bajaj scooter, I want to tell you, it's fun," he exclaims. "I can't wait for the EPA to approve the bloody thing so I can buy one and throw away my Yamaha! I love this machine. I love this machine!"
The projects continue: the LED stoplight idea, the Wagel, the board meetings with the San Francisco International Film Festival, which Skyy helps sponsor, and which will screen the film One of the Hollywood Ten,in which Kanbar has a cameo as a Hollywood producer. "All my friends say, "You were great, you were great,' but I don't know," Kanbar says. "I think I did a reasonably good job. I was playing myself."
And he's taking another crack at the beverage market. This month, Skyy Spirits will begin selling Vermeer Dutch Chocolate Cream Liqueur. The drink exists simply because Maurice Kanbar likes chocolate. And it's called Vermeer because Maurice Kanbar enjoys going to the Frick Museum in New York City, where he can see its collection of works by the 17th-century Dutch painter Jan Vermeer. So now when Kanbar goes to a cocktail party, he can continue to tell the same half-truth he always does when people ask him how he makes a living. "I don't say I'm an inventor," says Kanbar. ""Inventor' always leads to lots of questions -- people want to know what you invented. I actually tell them that I'm in the spirits business. That makes it very easy."