Why is Juul worth $16B? It’s more like a cigarette than you think

https://www.theverge.com/2018/7/3/17529442/juul-vapes-nicotine-electronic-cigarettes-addiction-funding

by nwrk • 8 years ago

39 41 8 years ago

newfocogi• 8 years ago

Does Juul do any advertising? One of the biggest problems I see in the historical tobacco industry was how subversive the advertising was. I wonder if Juul goes down a similar path.

marpstar• 8 years ago

They are HUGE with the Instagram influencers, and therefore the younger audiences.

cannabisceo• 8 years ago

No, they avoid it because they know they're a target.

true_religion• 8 years ago

Juul advertises, as a vaper, I see their ads thanks to ad personalization.

mchahn3• 8 years ago

I'm not sure why it is called vaping. You can see smoke come out. It uses a heater to burn the juice.

jasongill• 8 years ago

It's called vaping because the carrier liquid (propylene glycol) is being vaporized. There isn't supposed to be any smoke - if so, something is wrong.

colanderman2• 8 years ago

I think the GP is confusing smoke with vapor.

blairbeckwith• 8 years ago

That’s... not true. On every level.

gwbas1c• 8 years ago

That's steam, no combustion happens

cjmoran• 8 years ago

It's not steam, it's a vapor composed of propylene glycol and vegetable glycerin (plus optional flavorings and nicotine). It's not "water vapor" as many seem to be spouting.

hymen0ptera2• 8 years ago

It feels like there's a premeditated process, here, in terms of timing.

1. Tobacco Cigarettes emerge as public health scare in the late 1990's.

2. McDonaldsization of Coffee via Starbucks in the late 1990's.

3. Cigarettes taxed and regulated with punishing costs and counter-media-manipulation.

4. Bindings introduced to market coffee with free wi-fi, boosting high-end coffee's incidental exposure to novice internet users at a time when caffeine is very-nearly required to negotiate the ever-expanding terrain of new technologies. (it's just good business, of course)

5. Millions of former nicotine addicts herded away from nicotine to expensive, premium high dose caffeine alternatives, serving as stimulant to wean many down off of nicotine cravings with new habits.

6. 20 years later, with ordinary tobacco cigarettes habits all-but-destroyed, across two generations of former users, and new technologies now well established, coffee habits can wind down. A mild campaign against coffee is introduced. See: acrylamide, poor stock performance, racial sensitivity incidents in liminal zones of large franchise chain restaurants.

7. Emerging technologies, now ready for maturity may be re-introduced with new players. These entities work to re-normalize a newly engineered and tested concept in managed synthetic addiction, with status symbol oriented marketing plays.

Why vaping is anything is beyond me, but I feel like this represents the fundamentals of a broader subversive program to phase out agricultural-plantation-oriented modes of daily-use otc psychoactives that play vital roles in common universal social norms that cut across a wide array of global cultural customs.

scythe2• 8 years ago

If you've ever tried nicotine you'll quickly understand why caffeine could never substitute for it. Sure, they're both stimulants. But nicotine decreases anxiety. Caffeine increases it.

itronitron• 8 years ago

> nicotine decreases anxiety

decreases intensity of the anxiety and duration as well, when measured in years.

hymen0ptera2• 8 years ago

Actually, they both do the same thing, but attack different sides of the mood slope.

Which you'd know, if you ever stopped to consider how to adjust your mood with either.

Caffeine introduces anxiety and irritability on downslope, after about two half-lives, or 12-ish hours (6 hour half life). On the up slope, caffeine provides a long slowly declining period of alertness and performance. The initial buzz comes on strong and tapers off over time.

People seek caffeine to perform. But a slow sinking feeling appears near the end of the day.

Nicotine modifies mood on the other side of the bend, with it's presence evening out irritability with immediate relief. The trail off goes unnoticed until a sudden urge kicks in, to bump one's self back up onto the plateau.

Nicotine is sought to cure or cool an immediate pang, which leaves the impression of easing into relaxation, which degrades silently until suddenly noticed as an urge to re-up.

The perception of nicotine is downtime, even though the dosage process and serum curve is the usual spike and tapered downslope, people learn modify the nicotine downslope differently, by catching the drop-off before cravings become desperate.

Which is why cigarettes are designed as they are, and achieve product success the way they do. Metering doses at an almost hourly rate, with twenty dose packs marketed to afford exactly that behavior.

Coffee, as a liquid, is readily either sipped or chugged as needed, and has different preparation and consumption habits, so its marketing is different.

Caffeine's downslope is handled differently, since the withdrawal effects, are separated by longer distances of up to 48 hours, and because circadian rhythms are more drastically effected. Consuming in the late afternoon results in insomnia, so the better choice is to cure the anxious late day mood disruptions with food and alcohol, and stave off withdrawal (vasodilation migraines, etc) the next morning.

jeffdavis• 8 years ago

Cigarettes have all the right metrics for a startup: great user engagement, network effects, negligible per-user costs, sticky and hard to leave.

The big invention here is a one-liner: s/smoking/vaping/g.

8bitsrule• 8 years ago

Very much like social media, porn, automobiles and sex.

dizzystar3• 8 years ago

Spourious claims about the chemical makeup of vapor? Check.

Misinformed statements about what science found about the dangers of vaping vs cigarettes? Check.

Citations of studies with no peer review, that likely don't say what the article claims? Check.

Wrong information about the mechanics of vaping? Check.

Boogyman chemistry? Check.

No indicative knowledge about how people actually use these devices? Check.

What about the children-isms? Double check.

Look, I get it. As someone who vapes, I truly do my best to treat it like smoking, which is saying I do my darndest to respect those around me.

I don't know what to think of Juul. I was told it has 50 mil nic and my jaw hit the floor. Those that vape knows that's a crazy number, and obviously these are incredibly low powered devices.

People do move from Juul to more advanced setups, and yes, they step all the way down to 12 or 6 mil (nicotine) off the bat and likely go down to 3 mil after a few months.

paulwithap2• 8 years ago

One thing to keep in mind is that you’re inhaling significantly less vapor per hit with a Juul, than a “mod”.

handsomechad• 8 years ago

Why do you go down mil(lileter?) nicotine as you progress? pardon my ignorance i have only vaped a few times.

Why did your jaw hit the floor for JUUL?

pandaman• 8 years ago

Most vaping devices (mods) produce much denser vapor and doing 50 mg/ml nicotine with them would not be pleasant even for an experienced smoker. People who use vaping to quit smoking gradually decrease nicotine concentration to wean themselves off nicotine.

dizzystar3• 8 years ago

Anything above 24 mL is considered dangerous if you are using refillable tanks. Very few people even bother to that high because it is much too strong. The most I could handle was 12mL, but that was on very low-powered devices.

You go down because you go for more power, partly. When I started, you could only get up to maybe 10w. These days, people are going up to 100, but I'm pretty sure they are not using any nicotine for that.

You also just don't need as much over time. Nicotine also over-ride the flavor.

nullymcnull• 8 years ago

That's a good hot take, and I don't really disagree about (some of) the tendencies of this article, but this is still a pretty shady / unethical company by most measures.

I was told it has 50 mil nic and my jaw hit the floor. Those that vape knows that's a crazy number

Since the earliest days of vaping, it's been easy to get liquids at varying nicotine levels, downright common to have them without nicotine at all, and it's been understood practically as a first principle that one can gradually taper down the nicotine levels as an effective means of smoking / overall nic cessation.

Along comes Juul, with patents for more effective nic delivery, a $16B valuation and >$1B capital, trying to reach people who aren't necessarily tuned into this niche at all, coming to market with exactly one nicotine option: ultra freaking high, apparently over double what for a long time was the standard 'highest' option available from most e-liquid vendors (18mg/mL). These guys seriously only plan to start selling "lower-dose pods" at some later point.

I'm not so sure that any significant portion of the market they're angling for (virgins to the product space) is likely to progress to "more advanced setups", not if Juul is their point of entry. In any case, Juul's rising will probably lead to higher median nic levels in the market at large, as competitors whose product would otherwise seem "weak" try to reach Juul's customers.

Makes sense, I guess, that the guys in this space getting funded would be those who are the most amoral - cranking nic levels up while aiming to deliver it with more punch, not even pretending to support tapering off nic entirely, keeping them on the tit for now while probably offering unspecified lower levels in the future. On one hand they talk about their noble mission to get people off the hated cigarettes and their outreach to keep everything above-board and 21+, on the other they make sure social media is carpet bombed with cool young guys + gals vapin Juuls.

Don't get me wrong, I'm not outraged or clamouring for them to be legislated to their doom or anything. I'm truly impressed by how brazen and full of shit these guys are.

dizzystar3• 8 years ago

As I said, I'm conflicted. I've talked to a few shop owners who told me most people move off of them in short order, no different than when people start with Blu or any of the other more "cigalike" brands.

In my interpretation, no company can really stay afloat by sticking to beginners, except for a very small portion. Every "beginner" device these days is good enough for a long-time user. Even those companies have things that are for more advanced users, though the highly advanced stuff is a different world entirely.

The CA regulations opened the door for companies like Juul to thrive. No one took these sorts of companies seriously enough to suggest them to anyone. Now that CA has all these regulations, vape shops just gave up and started carrying them. It's ironic because so much of the regulations purportedly about safety, yet it's only going to take one Juul to leak to see someone dead of nicotine poison, and the company can apparently advertise as they are due to loopholes.

lvoudour• 8 years ago

I don't know why you're getting downvoted, I think your comment is spot on

People do move from Juul to more advanced setups, and yes, they step all the way down to 12 or 6 mil (nicotine) off the bat and likely go down to 3 mil after a few months.

That's certainly true for me, started vaping few months ago at 12 mil, switched to 6 within two weeks, trying 3 now.

50 mil is insane, there is absolutely no way you'll ever get hooked off nicotine and if it's true that they don't offer lower nic alternatives that's just insidious (and no different to what the tobacco industry has done for decades)

Lazare2• 8 years ago

Something to keep in mind is that the tobacco industry has a ton of money, a demonstrated willingness to play dirty if needed, and a deeply vested interest in undermining companies like Juul.

I'm not saying that the The Verge or Rachel Becker have any intention of defending the tobacco industry from disruptive startups, not am I suggesting that vaping in general or Juul in specific aren't be problematic.

What I am saying is that there's an immense amount of money and effort is being deployed to ensure that people will defend the tobacco industry and will attack vaping, and it's always worth being extra cautious. "Where there's smoke, there's fire" is rarely a useful heuristic, but it's extra useless when you know there's a guy with a smoke machine around the corner. :)

paulwithap2• 8 years ago

There has certainly been a lot of anti-vaping money backing ballot measures like the recent one in SF. I’ve been meaning to look into who is actually funding this. The tobacco companies seem to be on board with the trend and many are manufacturing their own devices. What’s bad for Juul would likely be bad for them too.

UnderProtest• 8 years ago

To some extent for Big Tobacco this might be like BP hedging on solar power. Nicotine is still best extracted from the tobacco plant. I doubt they'll fight vaping forever.

What I see is people foolishly fighting the last war. Today's adults have been trained since early life on the evils of smoking and nicotine addiction and vice. We have this narrative of Big Tobacco pushing a product they claimed was safe and which was not. There are all these programmed mental circuits saying "if you don't like smoking, you should be suspicious of vaping."

And so at the beginning of vaping there was a lot of FUD about popcorn lung. Now there's FUD about kids getting hooked on Juul. Everybody's looking for the catch because last time there was a catch.

A future in which 20% of the population is forever hooked on vaping nicotine and no cigarettes are sold is a utopia compared to what we have now. Instead of embracing that future we have the anti-tobacco activists spreading alarm about vaping and all the old smoking laws being expanded to cover an activity that doesn't justify the ostracism.

I've never smoked or vaped and the laws have no effect on me. For a brief period I saw smokers switching when they could vape indoors. That advantage is disappearing.

We're missing a chance to kill cigarettes in the developed world. We should embrace the viral appeal of the vape fad before they become just another nicotine delivery device. We could save millions of lives.

Lazare2• 8 years ago

I agree very strongly. Vaping is a bit of an unknown, but it's difficult to overstate how terrible tobacco is.

Like you, I've never smoked or vaped, but I see vaping as an excellent chance to actually kill off tobacco. If we later learn some flavouring agent is harmful, well, we have an entire regulatory apparatus that let's us solve these things.

We could save millions of lives.

Yep. Or we could virtue signal about how important self restraint and puritan morals are. Might kill a bunch of people, but man, think how great that smug feeling will feel!

bra-ket• 8 years ago

The great thing about Juul is the lack of chemical aftertaste

danpalmer• 8 years ago

It’s interesting how the messaging has shifted over the past ~4 years from vaping being a way to quit nicotine addiction, to vaping being a way to stop smoking cigarettes. I’ve often heard the former from people, but the latter from companies.

With the low nicotine liquids coming out, I bet they are low enough that you can’t smoothly transition from higher nicotine content to lower nicotine content. I’m sure they won’t sell a smooth gradient of nicotine levels that help people quit, instead it will just be marketed as “diet vaping” and will be a huge marketing effort that will pain then in a much more positive light without any real loss of lock-in.

creep• 8 years ago

With the low nicotine liquids coming out, I bet they are low enough that you can’t smoothly transition from higher nicotine content to lower nicotine content.

There's a funny little "vape van" in back of a strip mall where I live. They make their own vape juice (with a permit, of course) in-house right in front of you. They measure the nicotine themselves, so theoretically I could get as much or as little nicotine as I wanted in 240 mLs at $80. They also label the bottles if there are any controversial flavorings.

There are more than a handful of vape shops in my city like this, who can mix their own and who care about what happens with their customers. It's actually like a little community sometimes.

I think as long as the gourmet vape juice business survives, there won't be the problems you talk about. Kids want the Juul convenience, but adults trying to quit smoking usually want to do it the best way-- ie. not with salted nicotine, or disposable juice pods, etc. It's kind of like coffee or chocolate in that way, where it's easy and fun to become sort of a connoisseur and buy all the best and interesting flavors and smoke them in the perfect vape.

akeck• 8 years ago

It’s essentially a drug delivery device. I don’t understand how it’s not regulated by FDA.

Why is Juul worth $16B? It’s more like a cigarette than you think

Related Stories