O Pioneer: He Aims to Pull Money Out of the Air
Monday, September 8, 2008
NEW YORK -- A little more than a month ago, Duane Reade pharmacies here started selling light blue aerosol cans containing "99 percent breathing oxygen." The product comes with a mask, a set of instructions -- basically point at your nose and inhale -- as well as some chirpy promises: "Refresh! Revive! Rejuvenate!"
No doubt a certain percentage of jaded New York shoppers have looked at this seemingly empty, eight-ounce tube of pressurized air and thought, "Why would I spend $16 for something I'm getting for free right now?" Or: "This is some kind of joke, right?"
Kevin DelGaudio, the creator of Instant Oxygen, would like to field those questions. A 45-year-old entrepreneur and former hardware store manager, DelGaudio is sitting on a bar stool at the Tribeca Grill, waving his hands a lot and speaking in a thick Brooklyn accent as he evangelizes about the benefits of canned oxygen.
"It's a very misunderstood gas," he says without a trace of humor.
If the third-most-abundant element in the universe ever had a Johnny Appleseed, here he is, although there are some notable differences between DelGaudio and the famous 19th-century planter. Appleseed was long and reedy and extolled a nutritious fruit. DelGaudio is small and plump and would like you to pay 16 bucks for what you can get gratis by breathing. Appleseed walked barefoot around the Midwest; DelGaudio commutes to New Jersey in a Volvo. Appleseed emphasized charity and altruism, while DelGaudio would like to make a killing.
Which he confidently predicts he will make -- although that hardly seems like a sure thing, at least with this particular item. DelGaudio belongs to that singular class of American schemer-dreamers who either retire rich or wind up with the word "cockamamie" in their obituaries.
"About 80 percent of Americans are oxygen-deficient," DelGaudio says, citing the first of several statistics that he claims to have found on the Internet. "Now, how can that be if there is enough oxygen in the air?"
DelGaudio came up with Instant Oxygen in Las Vegas in 2004, after he spent 30 minutes at an oxygen bar stationed near a trade show he was attending. At the time, he worked for a company that imports light bulbs, but he was looking for a new venture. Not long after huffing away at that oxygen bar, he knew he'd found something special.
"I literally bounced out of bed, which I don't usually do," he recalls. "I felt great, and the only thing different is that I'd been breathing pure oxygen the day before."
DelGaudio spent days rummaging around the Internet and found a couple of smallish companies selling oxygen cans online, but their products didn't impress him -- one cost $50 per can; the other you breathe in through your mouth, which he found uncomfortable -- and neither was in stores. Whenever someone argued that the canned-oxygen market was tiny because oxygen in cans is a lousy idea, DelGaudio had two words: bottled water.
"The analogies are amazing," he says. "When that started, people said, 'You think someone is going to spend $2 for water when they can get 10 and a half gallons for a penny out of the tap?' " He opened a fabrication plant in Spotswood, N.J., where oxygen he buys in bulk from a company in Delaware -- yes, it's Delaware oxygen, not New Jersey oxygen -- is packed into cans. All told, it took a year and a half and "just over $1 million," he says, to get this business started. He has three investors and a number of employees, though he won't say how many for competitive reasons. He won't discuss sales figures, either, nor would a spokeswoman for Duane Reade, the first and so far only chain to carry the product. (A distributor is trying to cut deals with more stores.) Aside from claiming that sales have "exceeded expectations," DelGaudio won't elaborate.
"Have you seen the product?" he asks, pulling a can out of his shoulder bag. He removes the cap, twists the top 90 degrees and puts his nose into the face mask. Then he presses down on the top. Pffft goes the can.