This story is especially meaningful to me for a couple reasons. First off, in terms of taste and value, I definitely prefer Rockstar over all the other energy drinks on the market. Secondly, the company founder, Russ Weiner, actually grew up right around the corner from me in the same small town in Northern California. We even went to a few of the same schools, although never at the same time because he is about a decade older. But the most important reason I love this story is that Russ happens to be a fellow baby-faced red head. And I can only imagine the pain he had to endure growing up as a red head with the last name Weiner. My heart goes out bro. On the bright side, if Russ was ever teased for his hair or last name, he's definitely having the last laugh now. Why is that? Because as of today, Russell Weiner is officially a billionaire.
Russell Goldencloud Weiner was born in 1970 and grew up in the San Francisco Bay Area. He attended Redwood High School in Marin County, then San Diego State University. His father is nationally syndicated conservative radio host named Michael Savage. Prior to founding Rockstar, Weiner ran for California State Assembly. He lost, but during the campaign he met a man named Maurice Kanbar. Maurice just happened to be the founder and owner of Skyy Vodka. When his campaign failed, Russ called up Maurice and landed a business development position at Skyy Vodka.
While working late nights at Skyy, Russ often found himself pounding back a Red Bull to help keep him awake. But there was one thing about Red Bull that always annoyed him: The size of the can. Red Bull's can contained 8 fluid ounces of liquid. For comparison, a can of coke has 12 ounces of liquid. That gave Russ an idea.
So after a little more than a year working at Skyy, Russell quit his job to launch Rockstar Energy Drink. He mortgaged his condo in Sausilito, California to raise his $50,000 startup costs. His major innovation was simple: Rockstar cans would have exactly twice the liquid as a Red Bull. After testing more than 700 variations of the future drink, the final formula was chosen and Rockstar's 16 ounce cans hit the shelves in 2001. When they launched, Rockstar was marketed as "Twice the size of Red Bull for the same price!". Their timing was perfect. As it turned out, Russell wasn't the only person who was annoyed by Red Bull's small cans.
Within a few years, Rockstar was selling $50 million worth of its drinks per year. By 2008, the company had snatched away 15% of the energy drink market. Today, Rockstar is the third most consumed energy drink in the United States with annual sales north of $800 million. Rockstar is number three behind Monster and Red Bull.
Along the way, Russell never took a dime of Venture Capital or any other form of financing. Today he still owns 85% of the company. The other 15%? That's owned by his mother Janet, who also serves as company CFO.
Today, Bloomberg/Business Week released a report that pegged Rockstar's enterprise value at $1.8 billion dollars. At that valuation, Russell's 85% stake is worth $1.53 billion dollars. His mother Janet's 15% stake is worth $270 million. Not a bad family business!
And it turns out, Russell may just have the golden touch when it comes to all areas of business. In 2010, Russ bought a mansion on Miami's ultra-exclusive Palm Island for $6.75 million. He bought the house from a bank after it foreclosed on hip hop producer Scott Storch. After living in the house for a little under two years, Russ flipped the house to rapper Birdman for $14.75 million! More than doubling his original investment. In 2013, Russ flipped a 6 bedroom ocean front house in Hermosa Beach, California for $13.9 million. But that's not the impressive part. Russ bought the Hermosa house ONE MONTH earlier for $10 million. That's a $3.9 million profit in 30 days. Wow.
So there you have it. Congrats to my fellow Marin County red head Russ Weiner on officially becoming a billionaire. I'm sure there are a few middle school bullies out there who are kicking themselves today. I hope to have that same feeling some day, assuming there is room for two Marin County billionaires in the world!