Word of the Day

Commodity

Even if you don't think you do, you already know plenty about commodities. Want us to prove it? No problem.

What makes oil produced in Saudi Arabia different from oil exported from Nigeria? It's the same thing that makes the corn you ate at last summer¿s barbecue different from the corn used to produce ethanol. Stumped? Well, don't feel bad, it's a trick question. The answer? Absolutely nothing. Corn is corn no matter where it comes from -- just as wheat is wheat and natural gas is -- right! -- natural gas. (Though the quality may differ, the make-up is uniform.)

So, in less elaborate terms, corn and oil (and all other commodities) are homogenous goods that can be processed, resold and more often than not, used as an input to the production of other goods or services. These goods are traded on a commodity exchange, thus setting the price-per-barrel (or other metric unit) used to value them.

Now pay attention, here's a question that indeed does have an answer: What is the difference between a commodity and a stock? While a stock can tank and become worthless, a commodity cannot have its value be wiped to zero. One other difference: Most commodities are traded in futures, meaning traders buy and sell where they think the price of a product will be at a certain point in the future. Stocks trade based on the value of the underlying company at that point in time.

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Tuesday, October 14, 2008

Young Guns: Drink to Your Health With Medicated Water

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Christina Scotti

FOXBusiness

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Young Guns: Determination in a Bottle

FOXBUSINESS.COM PROFILES ENTREPRENEURS AGE 35 AND YOUNGER

Dayton Miller, 30, Josh Simon, 31, and Alex Hughes, 31, co-founders of Function Drinks, say they're putting science in a bottle.

Hughes, a practicing physician, first stumbled on the "technical" ingredients now in Function drinks while at medical school.

"It was amazing to me how often we came across things that can be very valuable to the consumer, yet they're largely unknown," he said.

Hughes, Simon, and Miller are targeting consumers like themselves.

"Being young, active adults in Southern California, we were trying to create products that would change our own lives," said Miller

That's actually how it all started. Their first product -- Urban Detox -- is supposed to help mitigate a hangover, a problem that most young adults tend to have all too often.

The idea that the product is made by physicians "really resonated with people" said Hughes. And by combining what he calls "real science and beverages," this trio hopes to make a splash in the health water market by offering consumers a new edge.

"We set out to change the way people think about beverages, thinking about the functionality first-and then picking a specific flavor."

To learn more about Function Drinks, take a look at the video below.

THE SIX SHOOTER

1. Where were you the moment you decided your business plan?

DM: Our business plan was developed over many nights out in Los Angeles and many long days spent recovering from those nights out. Suffering from the fun we had had the night before, we thought that there had to be a better way. Ultimately, instead of spending so many nights out, we spent nights discussing products, brainstorming marketing concepts, and pulling together the economic model.

2. What was the one thing you didn't know that you had to bluff your way through?

AH: I would definitely say some of the beverage industry lingo. I've been exposed to my fair share of jargon in surgery, but there's nothing like sitting through a meeting talking in generalities out of confusion. DSD, MI, BOL, FOB…. "M.I." doesn't mean heart attack ('myocardial infarction') in this biz…it means 'manufacturing instructions'. Now not knowing that would be like not having heard the word 'oxygen' before."

3. What one life lesson did you learn that helped you build your business?

JS: Whatever doesn't kill you makes you stronger. Over the course of founding Function we have hit so many roadblocks. No matter how large the obstacle, how difficult to overcome, or the level of frustration caused, when I look back on those things I am thankful for making those mistakes. In many ways, I've learned so much more from correcting our failures, then from doing something flawlessly the first time around. And working through those obstacles has made us a stronger, more resilient company

4. Who is your role model or inspiration?

DM: My father. He always put our family first and made sacrifices so that my siblings and I could get the best education and have as many opportunities as possible.

AH: Our customers are a major inspiration.

JS: I'm always impressed with companies of all shapes and sizes that have been able to develop a meaningful brand in their particular area.

5. What do you wish you had more of: time or money?

AH: Definitely time. As a physician, I constantly try to remind myself that that is our greatest limited resource!

6. What is the one word your employees would use to describe you?

DM: Passionate. We pride ourselves on 'living the brand' and the same work/hard play hard attitude that was the part of the genesis of the company. Our brand reflects us as individuals and who we are.

Want to know who's next? Check back every other week for more Young Guns...And if you know a young entrepreneur with an interesting story, e-mail us at youngguns@foxbusiness.com.