Using about $300,000 of their own savings, Drs. Salvatore Joseph Tirrito and Lou Lancero created XOOD, a sports drink supplement targeted at endurance athletes like themselves. The product was first mixed in a home kitchen in 2007. The company became “live” in September 2008 with a product and marketing launch.
Tirrito and Lancero have used that seed money for product development, labeling, and initial marketing, but could use even more capital. Tight credit markets don’t help, but Tirrito and Lancero prefer to avoid debt.
  
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The main way they use cash is to pay for expenses as they occur.
For instance, they invest in marketing. XOOD helps sponsor athletes like professional cyclist Kathryn Bertine of Tucson, as well as local endurance races including the Holualoa Tucson Marathon, El Tour de Tucson and the three-day Trifest that ended Sunday (March 8). Also, the product is promoted through a website — www.xoodhealth.com — which was developed as part of a marketing plan by Tucson’s LP&G marketing, advertising and public relations.
Tirrito does believe the tight credit market means XOOD has a faster track to venture capital, as it will be apparent immediately whether sales succeed or fail. But that venture capital hasn’t materialized. So the doctors continue to grow the business step by step, paying cash for each step taken.
The company plans to move beyond Tucson into Phoenix, then the greater Southwest, and ultimately nationwide, as it creates a niche among endurance athletes.
Though not divulging gross sales figures, each partner indicates that the company is moving forward, despite the poor economy.
“There is no good time to start a business,” says Charlie O’Dowd, senior vice president of Southern Arizona for the Arizona Small Business Association. “There is no perfect time. It’s like having a kid.”
Regardless of the state of the economy, businesses need cash. Traditionally, start-ups are financed with the three F’s: “family, fools, and friends,” O’Dowd said.
Also, people tend to put start-up costs on credit cards, O’Dowd said.
But, “well-collateralized loans, ones that can be supported by commercial real estate, have a better chance [of being made to start-up businesses] as long as the loan-to-value ratio isn’t too high,” he said.
Instead of relying upon the three F’s, credit cards, or start-up loans from banks, Lancero and Tirrito have relied upon their own money to reach a truly “hot” market. That is, Tucson is a destination for endurance athletes who need hydration and nutrition to help them compete in the dry and hot desert climate. And Lancero and Tirrito had the knowledge to meet that need.
“You better have something in your water bottles if you expect to go anywhere,” said Bertine, who is an American but cycles for the Caribbean islands country of St. Kitts and Nevis and hopes to compete in the 2012 Summer Olympics in London. Bertine is part of the XOOD Racing Team coached by Scott Blanchard, an elite cyclist who runs Pyramid Coaching International in Tucson
Bertine thinks the product has value because it was “created by doctors who are participants in the very field they are creating it for.”
The company provides plenty of product for Bertine to use, but is not to the point where it is providing money for her cycling pursuits. But Bertine believes that day will come as the company grows.
Tirrito and Lancero – who compete in cycling and triathlon competitions – believe a specialized, heart-healthy drink needed to be developed for athletes like themselves. So, relying upon the science that helped them build successful cardiology practices in southern Arizona, the partners created a sports drink that they say balances carbohydrates with protein, electrolytes, and vitamins. For endurance athletes, having a product with all of those elements is vital for energy and muscle function.
XOOD was not designed to compete with mass market products like Gatorade or Powerade. Rather, the product is designed to meet the needs of dedicated endurance athletes, even though the owners hope that others also find benefit in the product.
Tirrito believes artificial colors, flavors, and sweetners do not give the results he would like to see for athletes. But he sees a challenge in convincing consumers that energy does not have to come from sugar.
Like owners of many start-up companies, the XOOD partners have other jobs. In this case, they are partners with over two-dozen other doctors at Pima Heart Associates. So they work many hours a week, on top of their own training regimens.
And, besides spending about 20 hours a week on XOOD, Tirrito also finds time to write for Triathlete Magazine and run weight management clinics. He promotes these activities – as well as XOOD – on a website: www.drheartwise.com.
Lancero thinks the experience of running a profitable medical practice translates well into manufacturing and marketing a profitable product.
“We’re start-ups, and we know what it takes to be successful,” he said.
In fact, Lancero believes there are three principles for that success: doing your homework, creating exposure, and being “100 times better than the next guy.”
XOOD
Natural, healthy endurance drink
www.xoodhealth.com/
Heartwise Fitness & Nutrition Inc.
4729 E. Sunrise Drive #387
1-888-317-9663 (XOOD)
XOOD can be purchased
online or from these retailers:
• FairWheel Bikes
1110 E. Sixth St.
(520) 884-9018
• The Running Shop
3055 N. Campbell Ave.
(520) 325-5097
• Miles Ahead Cyclery
7000 E. Tanque Verde Road #7
(520) 751-0555
• TriSports
4495 S. Coach Drive
(520) 884-8743
• Oro Valley Bicycle
12985 N. Oracle Road
(520) 825-2751
2850 W. Ina Road
(520) 544-5999
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