Steve Haley and the trouble with a good idea

Steve Haley gave his new beverage a glass bottle. It was a considered choice: glass looked premium, and a different package might help a young brand stand apart. Then came an awkward discovery. Some of the places where he wanted people to buy Celsius would not accept glass. A bottle could make a persuasive introduction and still fail to get through the door.

By 2007, Celsius was adding slender aluminum cans. Four-packs followed. The business that Haley had entered after a career in software was teaching him an old operational lesson in a particularly tangible form. A product has to survive contact with the people who stock it, carry it and buy it. The container gets a vote. So does the shopping bag.

That small packaging story is a useful way into Haley’s career. He helped start Celsius in 2004 and led it through its early public-company years. His ambition was to create a category of his own. His daily work involved the less glamorous business of making that ambition fit on a shelf. The gap between those two things supplied plenty of employment.

Retirement, with delivery trucks

Haley came to beverages through the machinery behind commerce. At Pivotpoint, he worked in enterprise software for manufacturers and distributors, becoming CEO. He led the Boston-based business from 1997 to 1999; its venture backers included Goldman Sachs and TA Associates. He then served as chief operating officer and chief business strategist at MAPICS between 1999 and 2001, in a software organization with more than 500 employees.

He had a marketing degree from the University of Florida. His professional world involved helping companies organize their operations, rather than persuading a passing shopper to choose a particular bottle. Yet the two worlds were connected by the same physical business: manufacturers making things, distributors moving them, customers deciding whether to buy them again.

After selling Pivot Point, Haley described deciding to retire and entering beverages as an investor. Between 2001 and March 2004, he and his wife, Janice, invested in beverage manufacturing and distribution companies. He got close enough to the trade to see trucks, routes, warehouses and buying decisions. Retirement had acquired a suspicious number of moving parts.

A husband-and-wife business, with a longer backstory

In April 2004, Haley co-founded Elite FX, the operating business behind Celsius. He was its CEO from the beginning. Janice was part of the entrepreneurial partnership, bringing a career that overlapped with his: marketing at Pivotpoint, then corporate communications at MAPICS. She joined Elite FX as vice president of marketing in June 2006 and later led strategic accounts and business development at Celsius.

Their partnership matters because the usual founder shorthand can flatten the work into a single name. These were two people with experience of the same software companies and several years of beverage investing. They were moving into a new product business with a shared commercial background, rather than arriving at a supermarket aisle entirely unprepared.

Celsius also had other contributors. Greg Horn, who developed the original formula, identifies Haley and Irina Lorenzi as co-founders in his account of the venture. Haley’s role was to run the business and help bring it to market. Keeping those jobs distinct makes his achievement more interesting: turning an idea into a company requires people with different responsibilities, and somebody has to make their work add up.

The bottle had its own opinion

Haley’s early packaging choices show how closely he connected appearance with market position. Celsius launched in wrapped glass bottles in 2005. By 2007, the company was adding a 12-ounce can, supplied by Rexam, with four-count paperboard cartons from Zumbiel Packaging. Hannaford supermarkets in New England were an early outlet for those canned four-packs.

Glass had helped the drink look distinct. Aluminum allowed it into venues that excluded glass, including beaches and swimming pools. The carton supplied a larger face on a grocery shelf. Haley put it plainly: “The packaging is helping to define and drive the brand.” Each change carried an argument about where Celsius belonged and how a shopper might encounter it.

There was also the wonderfully ordinary problem of buying several bottles at once. Retailers told Haley that customers would take four or five from a cooler and carry them away clanking together in a bag. Four-packs gave that behavior a proper package. A repeat customer had effectively written a product brief, complete with sound effects.

A category is a crowded place to be alone

Haley’s guiding ambition was direct: “The company that owns the category wins.” For a smaller beverage company, creating a category promised a chance to establish a recognizable position before competing solely on the terms of much larger businesses. It also created a demanding job: the shopper had to understand an unfamiliar proposition quickly enough to make a purchase.

By 2010, Haley was willing to revise the positioning. Having spent years trying to keep Celsius distinct from energy drinks, he was ready to use the energy-drink designation. At a Coast Brands summit, he acknowledged the time and money that had gone into finding the right place for Celsius in stores and in consumers’ minds.

The change complicates the tidy story of a founder who sees the answer once and never budges. Haley had made a category argument and then adjusted it. A familiar label could help people recognize a use for the product. The practical question became how to retain the brand’s identity while giving the customer a quicker route to understanding it.

“The company that owns the category wins.”Steve Haley

Times Square is easier to photograph than a balance sheet

On April 7, 2010, Haley presided over Nasdaq’s opening bell in New York. He was Celsius’s president, CEO and chairman. The visit celebrated the company’s listing milestone. Actor and television personality Mario Lopez was its national spokesperson. In a company-posted photograph, Haley stands beside investor Carl DeSantis at the Nasdaq podium, holding up the occasion’s trophy.

The company’s route into public ownership had been less photogenic. In January 2007, Elite FX became part of the public company through a merger. The corporate predecessor, Vector Ventures, had begun as a natural-resource exploration business. By the time Haley appeared in Times Square, he had been running the acquired operating business within Celsius Holdings for more than three years.

The ceremony captured one real accomplishment. The financial reporting captured another reality. In the first quarter of 2010, Celsius reported $2.3 million in revenue and a $5.9 million net loss. Revenue had increased from $971,000 a year earlier. The company was selling more while spending heavily to build the business. A bell rings for a moment; operating expenses are rather more persistent.

Getting onto the shelf was only the first sale

Haley explained that some product shipped in late 2009 had taken longer than expected to reach retailers’ shelves. As a result, the first-quarter refill orders from certain customers were weaker than anticipated. That is a revealing problem for someone who had spent years working with distribution businesses. Shipping product and having it available for purchase belong to different stages of the same journey.

By the second quarter of 2010, reported revenue had risen to $4.1 million, compared with $1.2 million in the corresponding quarter of 2009. The quarterly net loss was $3 million. Case volume also increased sharply. Haley described a program covering television, radio, print, demonstrations, coupons and trade promotions. Getting consumers to purchase the drink was the next task after securing its place on the shelf.

He expected that year’s trade promotions to exceed $4.5 million. Those included coupons, slotting fees and temporary price reductions; their accounting treatment reduced reported revenue. The detail is worth keeping beside the growth numbers. An expanding business can need substantial spending to persuade people to try it, and the resulting figures can tell several stories at once.

Software returned. So did Janice.

Gerry David joined Celsius as CEO in October 2011. Haley’s leadership belongs to the company’s founding chapter, before the subsequent turnaround and expansion under other executives. That boundary makes the chronology clearer: starting a brand, getting it into public markets and running its early distribution efforts were significant jobs in their own right.

Haley later returned to business software at Aplicor, where he served as president and CEO. In 2014, Nova Southeastern University listed him among business leaders participating in a mentoring program for its students. His earlier alma mater had also hosted him: a University of Florida finance-program report records a November 2010 appearance on valuing a banker from an entrepreneur’s perspective.

The subjects suit a career spent on both sides of a company’s operating needs. Haley had worked with software, investors, retail customers and public-company reporting. In those student settings, the useful material was experience with decisions that have consequences. He had examples ready: how capital enters a business, what distribution demands, and how a plan can change once someone else has to execute it.

The next idea arrived with the laundry

Steve and Janice later founded Tone-y-Bands, a business built around adjustable wrist weights. Its 2016 launch announcement places the beginning in an everyday setting: Haley was doing dishes and laundry. He tried existing wrist and ankle weights and found them bulky and uncomfortable. The domestic chore had supplied a design problem. The kitchen was conducting its own product review.

The launch also brought a change in scale and setting. After the public-company experience, the Haleys worked through an early-stage ecosystem that included FAU Tech Runway, Amazon Launchpad and Kickstarter. Black-and-white prototypes preceded brighter colors requested by customers. Janice led the business as CEO. The partnership had found another product to develop together.

It is an apt later chapter for Haley. A career involving enterprise software, beverage distribution and Nasdaq ceremonies eventually makes room for the laundry. Across those settings, the recurring work is specific: notice how something is used, find the inconvenience, alter the product or the way it is sold. His Celsius years contain a series of such alterations. The idea started in a bottle. Keeping it moving meant listening when the bottle became a problem.