Big Vape: The Rise and Fall of Juul (2023) s01e02 Episode Script
First Impressions
1
[cerebral music playing]
[anonymous JUUL engineer]
The buzz was fantastic. Flavor was cool.
[Eschenbach] I was literally floored.
And it kind of made me feel like a virgin.
[flick]
My immediate reaction was really like,
"This feels exactly like a cigarette."
[man exhaling]
But I quickly realized,
"This isn't the same. This is better."
[Casselman] I remember trying it
for a couple of days,
and I realized that I had just
quit smoking.
It was this huge moment for me.
[Gladstone] Ever since one puff,
and never again
smoked another cigarette my entire life.
Never again.
[Pierce] With the JUUL,
they had made something remarkable.
Their one job now is to get it everywhere.
This is a bold product to put out
up against these companies
that have existed since forever.
[Lorenz] If you know you have a product
that is going to change an industry,
that's exciting.
[Pierce] The JUUL came onto my radar
in about 2015.
People had been hearing about
what this new JUUL thing might be,
and it started to percolate into my brain
that there's something
bigger and interesting happening here.
The reason I was interested in them
is because
there was this big question
going on at the time:
How do we use technology to improve
every piece of everybody's lives?
You have people
like the Uber founders, who say,
"I was just trying to get around,
and getting a cab was annoying."
Or people didn't know where their
friends were, so they invented Twitter.
JUUL felt like a particularly
high-stakes version of that.
The idea that we can use technology
to improve the lives of a billion people
was really appealing.
The first thing you would notice
walking into their offices
was that everybody was vaping.
Everybody.
[indistinct chatter]
[Pierce] James was a total tech guy.
I mostly mean that in a good way.
He was super confident, super smart,
thoughtful about the kind of thing
they were trying to do.
He wanted something
that felt cool and discreet
and wasn't trying
to build a better cigarette.
He wanted to actually
change the experience of smoking.
And the clear sense they had was,
"We have reinvented smoking."
The headline of my article was,
"This Might Just Be
the First Great E-Cig."
If you take this thing
people enjoy the experience of
but don't want to die from,
and replicate the experience
without the bad parts,
that tracked as the right way
to think about this.
They had made something remarkable.
Appearing in a publication like Wired
was huge for them
because it lent the company legitimacy
as it launched JUUL.
[anonymous engineer] The mission was,
make something that had enough nicotine.
you wouldn't feel a need
to go back to your combustion cigarette.
We were trying to get smokers
away from smoking with various options.
So JUUL offered flavors
for the same reason
Tesla offers multiple colors.
Not everyone's going to like the same.
[Casselman] When we started,
we had four flavors.
[Rougeau] You cover all bases
with fruit, brûlée, mint,
and then tobacco for all
your Marlboro Red smokers.
Their flavors had incredibly stupid names.
Like "fruit" was spelled F-R-U-U-T.
And "crème brûlée" was B-R-U-U-L-E.
[chuckling]
And "mint" was spelled M-I-I-N-T.
They were just trying so hard
that it felt dumb, honestly.
But flavors were a key part
of the whole thing.
They wanted to make this not only
satiating from a nicotine perspective,
but also enjoyable and pleasant to smoke,
and smells better
than your average cigarette.
[Casselman] Your typical vaper
doesn't want to smell like a cigarette,
doesn't want to inhale
the carcinogens from a cigarette,
or just wants some different flavors.
I thought the names were stupid,
but the idea was pretty smart.
James and Adam created a product
that seemed like it would work well
and be attractive to users.
But there were still issues.
[supply chain engineer]
Pods were a problem.
We did not have a 100% yield,
anywhere near that.
You set out to make a hundred,
we maybe ended up
with eight that were good.
[cerebral music playing]
[Pierce] A lot of people got a squirt
of nicotine into their mouth
when they would inhale.
[Ducharme] One employee said he got
crème brûlée liquid in his mouth so often
that he now can't eat crème brûlée
because it was so disgusting.
[supply chain engineer]
To get a battery in there, tubes in there,
to get the pods small enough to work,
was a technical challenge.
People would say, "We need a bigger unit."
James refused to budge on the unit size.
He really liked the way that unit looked.
[anonymous engineer] That's what
a visionary does. He's an artist.
But, you know, we were rushed.
About a month before
the original launch date,
we didn't have a way to fill pods yet.
[Ducharme] James told them,
"You have to figure the problems out."
"You have no other choice."
Ever heard the adage,
"When in doubt, ship it"?
[man laughing]
[man laughing]
There was pressure
to get this product out there.
PAX, a loose-leaf tobacco
and cannabis vaporizer,
was the engine
from a financial perspective.
But we started to see
some PAX revenue wane.
[Ducharme] At the same time,
Japan Tobacco International,
who was a major investor,
was growing uncomfortable
with how much the PAX devices
were becoming associated with marijuana.
[Eschenbach] JTI said, "We can't be part
of a company involved with cannabis,
so we're going to part ways."
So in the end,
we paid them the $10 million back.
In some ways, splitting with JTI
was actually a good thing.
Many employees felt uncomfortable
that a tobacco company
was a major investor.
JUUL wanted to be a tech company
and didn't want to be dragged down
by the stink, so to speak,
of the tobacco industry.
At that point in time,
getting a reliable, solid product
that we could start ramping
manufacturing on was the biggest focus.
[Ducharme] Investors had been
pouring money into the company for years,
and they were antsy
for some of that money back.
So James and Adam knew that they needed
JUUL to sell, and to sell really well.
It's hard for a company to have a mission
it believes in and cares deeply about
and a board who wants tons of growth.
"I gave you millions of dollars,
and you owe me billions of dollars."
"If we make the world a better place
in the meantime, fantastic."
[Eschenbach] If a company doesn't make
profit, it's not gonna last long.
Public health first,
but you can't have public health
if nobody buys the product.
[Jonathan Mildenhall] Silicon Valley
is known for these big, iconic companies,
but what we don't remember
is the graveyard of start-ups
that is also Silicon Valley.
And so when a company
is going to market for the first time,
it's really important to get it right.
You only have one chance
to make a first impression.
So I, uh I love smoking.
And uh, I know I'm not alone in this.
It's been
[Ducharme] James is extremely confident
and believed in himself very deeply,
but it started to become apparent
that he was not the kind of founder
who could become his own brand
and sell the company to the world.
We're not an activist company.
We're not prescriptive in our products.
If you don't like what we're making
better than cigarettes,
then have a cigarette.
That's fine. We're not against that
[Ducharme] It was incredibly jarring
to hear somebody say something like,
"If you don't like our product,
go smoke a cigarette,"
because the whole idea of the company
had been built on the fact
that cigarettes are bad for you.
[Casselman] He might say, in like,
the context of talking to a journalist,
exactly what he believes,
as opposed to whatever is the most
beneficial thing to say for the company.
[JUUL employee] I don't think
that he had a very good handle
on what it was that we were going to do
by way of marketing.
It's really important that you get
the strategy and the execution right.
The stakes are incredibly high.
[Ducharme] As JUUL's
launch date got closer,
James needed someone
he could rely on to sell it.
He had someone at the company
who'd already proven himself
to be a talented marketer.
Richard Mumby first joined the company
as a marketing consultant,
and he was the polar opposite
of your typical Silicon Valley bro.
He had a degree from Dartmouth,
he'd worked at fashion start-ups
in New York City,
and he was basically
a social media influencer.
Every time I met Richard Mumby, it felt
like he knew exactly what he was doing.
Like he was prepared for every
interaction that he had during the day.
He kind of exudes confidence,
and it's intoxicating.
[Ducharme] James entirely trusted him
to run everything to do with marketing,
so that's what Mumby did.
Richard Mumby is a dumbass fuck
who I never want to meet again,
and I believe he had a big hand
in ruining JUUL.
[Steven Baillie] I had worked with Richard
on different marketing initiatives,
so he reached out and told me
about an exciting opportunity he had
in San Francisco, and asked me
if it'd be something I'd be interested in.
I have a career specializing in
luxury advertising, lifestyle advertising.
["Them Changes" by Thundercat playing]
I'm not trying to flex,
this is not about my vanity,
but if you're a start-up
and you want to be relevant,
you need a douse of sexy,
I'd be the guy they would call.
When I'm sitting here
Knowing this ain't real ♪
[Ducharme] Baillie had a colorful
reputation in the fashion world.
He was sort of seen as a party boy,
always surrounded with models
and DJs and influencers.
But he was definitely seen as somebody
who could make a product
look cool and sell it.
When you look under the hood
of advertising, what is it really about?
Desirability is imperative
if you're launching something, right?
[music fades]
[inhales]
And the whole vaping thing
was really goofy.
[slurping]
Gnarly fucking plumes.
[laughs]
[Lorenz] If you told somebody about
e-cigarettes in the first half of 2010s,
they wouldn't have any idea
of what you were talking about
or would think that sounds lame and nerdy.
[Pierce] Everybody had either these things
that looked like cigarettes
but were worse, like a fake cigarette,
or these huge monster rigs
that would make
these crazy, giant clouds of smoke.
[Ducharme] James and Adam
wanted JUUL to be seen
as a luxurious, sophisticated product that
people would not be embarrassed to use,
unlike some vaping products
that had been seen as dorky and uncool.
I mean, there's a barren wasteland
of awful, tacky stuff.
Even the mainstream brands
that were putting out devices
were so corny. It was just, like, "Wow."
It felt as though
we were playing in amateur leagues.
It really struck me that the devices
looked like Stanley Kubrick's monolith
in Space Odyssey, 2001.
The godlike presence
of that device in those films,
and the mystery behind it,
was a huge inspiration for me.
I also had Apple on the mind,
the way that Apple markets their products.
They're beautiful,
sumptuous objects to be worshiped.
But how do you dial up that appeal?
What does that look like?
And it comes from a lot of strategy,
some research, and some instincts.
It's like,
how do you get it on people's radar?
Launch campaigns
are arguably the most critical factor
in an early-stage start-up's existence.
It's through that launch campaign
that you're actually accelerating,
or otherwise,
the potential growth of the company.
And if you get a launch campaign wrong,
then you don't really get a second chance.
[Baillie] San Fran was
this e-comm start-up hub.
Everyone was setting up camp,
but from a style perspective
I don't know if I should say this, but
We've got a bunch of Zuckerberg-type dudes
coming from Stanford,
and they were out of touch
with being relevant and cool.
And so if we're using people in these ads,
what do they look like?
Who are they? Where are they?
[hip-hop music playing]
[Baillie] When I started
working with Richard, I said,
"Look, Vice Magazine, Williamsburg,
this is where it's all going down."
He immediately agreed.
[indistinct shouting]
During this period, a huge inspiration
to me was Terry Richardson.
He had his finger on the pulse
of what was happening culturally.
It's the President, the next day
it's Beyoncé, and then it's Rihanna.
Richard gravitated to that approach.
The overarching theme
that we developed was "Come As You Are,"
the Nirvana song, right?
The idea is come as you are.
You're not gonna be styled,
you don't need to do your hair
and makeup. Like, be yourself.
We had a bunch of this stuff
where the JUUL was worked into
what you would call a lifestyle scenario.
A lot of folks in advertising
think lifestyle is a cheap trick.
Get someone who's good-looking, handsome,
give him anything, it's gonna work.
But I think it definitely works.
[indistinct chatter]
Richard presented the work
to the founders,
and I don't recall specific feedback.
There were just certain devices
that they gravitated towards.
They liked the color.
They liked that that design motif
came back to the device.
Everybody signed off on the creative,
and we were ready to start
into production on these shoots.
[Mildenhall] You've got Adam and James,
who had this problem,
they had this technology,
they were going to solve the problem.
But then in walks Richard,
and Richard clearly
not interested in the mission,
but sees a massive opportunity
to drive growth.
[inhales, exhales deeply]
I think everyone was mindful
of that mission statement.
I think once we went down
the approved path,
it just became something
completely different.
[shutter clicking]
[Baillie] There was no talk
of mission statements on the photo shoot.
And sometimes when you're bringing
a brand's mission statements to life,
it doesn't work consumer-facing.
So the direction we decided to take was
more focused on the cool factor, right?
[Mildenhall] Their initial idea
was conceived with a particular use-case,
somebody who's already smoking,
and Richard took it into
a completely different demographic
based on a lifestyle proposition
of urban cool.
[Mimi Sweeney] I was 17 at the time,
when my friend messaged me
about just a random party.
So let me hit this real quick.
Mmm.
Also, anything I say about fake IDs
is like, not an issue, right?
- [woman] No.
- Okay, just want to make sure.
It's an open bar.
Who doesn't love free alcohol? Obviously.
So we were like,
"Let's just go check it out."
But we had no idea
what we were walking into.
You were greeted by someone
with a Polaroid camera.
The pink and the blue really set the vibe.
They definitely had the right ambiance.
["Mouthful of Diamonds"
by Phantogram playing]
You're getting high on your own supply ♪
[Sweeney] They had great DJs playing,
and on all the projections,
they had "JUUL" on the walls.
And they all had hashtags on them,
which gave us the cues
for what to put into our posts.
So I remember I used the #JUUL,
# VAPORIZED, #JUULvapor.
We were told to post it
anywhere we wanted.
So, Twitter, Instagram.
You know, we were dancing, having fun.
There was a lot of coughing
going around the room that night.
[shutter clicks]
[Sweeney] My first hit of the JUUL
[bubbling]
[exhaling]
was different from others
because I didn't cough the first time.
So that's what kind of turned me on to it.
Me and my best friend
used to smoke Newports.
I realized it was stronger.
It had a different effect.
And I do remember thinking, like, "Oh."
"Is this what a cigarette
is supposed to be like?"
Or if maybe I'd been
smoking cigarettes wrong or something.
One thing I liked about it
was the sleekness
did remind me
of the sleekness of an iPhone.
The first flavor I tried
was the fruit flavor,
but flavor of choice was mint.
I remember a lot of my friends
saying that they didn't like it,
but I took two devices home.
[Baillie] They wanted a small takeover
at Times Square.
I walked down there with a couple cameras.
I was just like, "Wow."
[introspective music playing]
The way the whole thing was orchestrated,
the way the animation sequences
went around the corner, was incredible.
What a platform
to see your work displayed in.
It was really exciting.
After the launch party,
the strategy was to get JUUL
in front of as many people as possible.
JUUL needed to be successful
to satisfy the board and investors
and people at the company.
But the challenge was
that they didn't yet have the budget
to put together a huge,
elaborate launch campaign.
[Baillie] Part of their strategy
was to get boots on the ground
and have pop-ups in key cities
to get the device out there in the world.
[JUUL employee] Our mind state
was getting them in places
where we knew people of influence
were around or were going to.
We had little sampling tips,
and we would treat it
like a hookah lounge.
[Halverson] Sampling became
a very intrical part
of all the campaigns that we did.
And I'd see
these big, burly guys doubling over.
[making coughing sounds]
Wiping the tears.
"Wow. Can I have another?"
[Mildenhall] The Vaporized campaign
was exquisite
at getting the coolest kids
to promote the JUUL product
on their own social media.
[Lorenz] You started to see booths
pop up at parties
where you'd take a moment away,
hop into the booth,
create content to share on social media.
JUUL was trying to associate itself
with young, internet-savvy, cool kids
to ride that boom in influencer marketing.
JUUL did a good job of tapping into
people known as "It girls" and "It boys."
People like Lucas Abbat and Tavi Gevinson.
They were associating themselves
with tastemakers.
But at the same time, people at JUUL
were sending out free products
to a long list
of influencers and celebrities
like Leonardo DiCaprio and Bella Hadid.
Every start-up was using this tactic.
Selling a way of life is the most
effective way of selling a product.
If you run a company and want it to grow,
that was the way to grow it.
[Pierce] JUUL throws a party,
invites people
with a lot of followers on Instagram,
gives them JUULs, and gives them
cool things to take pictures in front of.
It just looks like
all the cool people you know are JUULing.
[Ducharme] The launch campaign
was targeted towards millennials,
which struck some people
as a strange decision
because smoking wasn't
terribly popular with millennials.
I never saw a single proposal by Marketing
ever be pushed back on.
[mouse click]
There was never any,
"No, let's not do this."
I'm not a born marketer either.
So if they said, "This is
what's necessary to get this going,
and here's what we'll promise
in terms of results,"
um, the board went with it.
The investors are investing
in the launch campaign,
and they're expecting to see signals
that this business
has huge potential growth ahead of it.
[Ducharme] Among the board,
one person in particular was concerned,
an investor named Alexander Asseily.
[Mildenhall] Alex Asseily
was the only voice of dissent
as the campaign went to market.
He felt that it was way off strategy,
and he understood that,
if this strategy was to succeed,
the organization might never
be able to walk back from it.
[JUUL supply chain engineer]
We did the Vaporized campaign.
You know, models dancing,
holding a JUUL in their hand.
It seemed like this was going to be
the coolest thing in the world.
Probably a bad idea.
I feel it was effective in terms
of what we were trying to achieve.
But the initial response to the campaign
we immediately got negative feedback.
E-cigarette makers are allowed
to advertise to anyone on TV,
which has led to ads like this one
for JUUL Vapor.
[dance music playing]
[audience cheering]
Mm-mm.
Yeah! Something about inhaling
poison steam makes me want to dance
in a way that doesn't require
much lung strength.
[audience laughing]
[Conley] Ultimately, the problem
with JUUL's early marketing
was that while they had sat down
and read thousands of pages
of tobacco industry documents
about nicotine salts,
they apparently hadn't read the thousands
of pages about tobacco industry marketing.
If you were starting a start-up
putting out a nicotine product,
why reinvent the wheel?
JUUL, in its advertising,
faithfully followed the playbook
of Big Tobacco companies
and their cigarette brands.
The Vaporized campaign.
It has direct roots
from the way the tobacco industry
marketed to youth.
Take a bunch of 20-somethings,
and you have them dance around.
Many of the thematics
look like Newport ads.
Social groups of teenagers,
ones and twos, doing fun things,
playing, dancing around.
[Dr. Proctor] The themes
that are put forward with Vaporized,
of individuality, adventure, and glamour,
those were older themes
that had been developed by Big Tobacco.
Look at the hair.
Look at the faces.
Look at the poses.
Employing glamour,
sophistication and youth,
and cool.
[Dr. Jackler] They gave away tens
and tens of thousands of free JUULs.
That's an old trick
of drug dealers everywhere, right?
The first one is always free.
[Dr. Jackler] They took the very worst
elements of tobacco marketing.
Cigarette makers could no longer
advertise on television. JUUL could.
Cigarette makers could no longer
have a billboard on Times Square.
JUUL could.
[mouse click]
[Ducharme] Shortly after
the Vaporized campaign came out,
AdAge ran a story about the campaign.
Within that article,
somebody was quoted as saying
that the advertisements looked
very similar to old Big Tobacco ads.
This was a bombshell within the company.
Mumby's team leapt into hyperdrive
and started redoing aspects
of the Vaporized campaign,
even though it had just come out.
[suspenseful music playing]
We all knew from day one,
children smoking JUULs was a disaster.
There was no doubt about that.
James actually came out of his office
one day and said,
"Guys, this is a smoking product.
We gotta start thinking that way."
And I remember
that was quite a shift for him,
because there was always
this Silicon Valley mentality of,
"Get as big as you can
as fast as you can."
"Figure out the rest later."
They got caught, in a sense,
and you end up with an apology tour,
or a retreat.
When we launched JUUL,
we had a campaign that was uh,
arguably too kind of
lifestyle-oriented, too flashy.
It lasted less than six months.
Adam Bowen said,
"It was too lifestyle-oriented."
That's a "tepid" way of saying
it was, in fact, very youth-oriented.
[Mildenhall] There's a saying
in Silicon Valley,
"Move fast and break things."
This Vaporized campaign
was conceived, pre-produced,
and executed in less than a month.
That's really, really quick.
[Dr. Jackler] It was wildly irresponsible
for the creative leadership
to have no knowledge
of what was responsible marketing
of a tobacco product.
I want to be clear,
Steven Baillie was hired help
to execute a playbook
that he was known for.
Young, smiley, happy,
sexually provocative people
having a great time.
It's really not Steven's responsibility
to set the strategic direction
for the brand.
Baillie and Mumby took the marching orders
from the senior leadership of JUUL,
and they created the goal
of getting the cool kids.
[clearing throat]
So, uh, one of the things
I wanted to talk about
was that Stackler professor from Stanford.
- [woman] It's Jackler.
- Jackler, Stackler.
It was kind of shocking
that he was a professor.
I'm not here to take shots at him,
but this idea
that we went through the hallowed hall
of bad tobacco advertising,
and extracted elements,
as if we even had the time for that,
you know, it was comical in a sense,
because of the time it actually took
to do this whole thing.
It wouldn't have been physically possible
to do what he was suggesting.
If I could take credit for creating
this thing that was a cultural phenomenon,
maybe, I mean
I'd be the most wanted
creative professional on the planet,
but it didn't work out like that.
It was, you know
My name was getting
thrown around the press,
and uh, it got really scary, you know?
I'm coming out of it. I just feel weird
being like, "Wah, wah, wah."
I'm a grown man.
If I have to drive Uber, fuck it.
What am I going to do?
[Rougeau] I remember what
the first day was like.
They had just sent the samples
to my house. I was super excited.
I had a list of stores
I was going to visit.
I was like, "I'm going to
hit the ground running. It'll be awesome."
I get to the first vape shop.
They're like, "We don't want it."
I'm like, "Let me see if I can
change it up and go to a smoke shop."
"No, we don't want it."
And it was like that.
No one wanted it.
[chuckles] No one wanted it at all.
[Ducharme] JUUL was starting to spread
on social media.
People were posting about it
after the sampling tour,
but in real life,
things were not looking as good.
Salespeople were struggling to convince
retailers to stock JUUL products.
[Rougeau] I don't think they got
what we were selling.
They just saw pretty people
holding what looked like a USB stick.
Are we selling the models,
or are we selling the JUUL?
This guy, he calls us and he's like,
"Hey, is this uh, JUUL?" I'm like, "Yeah."
He's like, "Are you the person
who sent me those JUUL pods?"
"Yep, what'd you think?"
"First off, I got a bunch
of juice in my mouth."
"I'm not thrilled about that."
[Ducharme] Even after JUUL launched,
people were still reporting
this juice-in-mouth problem.
One employee tested
this huge batch of JUUL pods,
and almost one in five leaked.
I think the expectations
on how successful JUUL was gonna be
were rapidly shrinking.
In fact, at one point,
we stopped production for two weeks
because we had ordered too much.
They expected JUUL to be big,
but then when the JUUL came out,
James was in a panic because he thought
the product was going to fail terribly.
[indistinct conversation]
[Ducharme] To get the JUUL device
to a point where it could be sold widely
was a huge undertaking.
We were doing things manually,
and they were extremely expensive
to hand-assemble and hand-fill.
We were selling potentially at a loss.
I was trying to get
some automated equipment,
and me and James got into an argument
that spilled into the parking lot
over $500.
[tense music playing]
[Ducharme] James wanted to call the shots,
even if it wasn't his area of expertise.
He wanted to be the one in charge.
[reporter talking indistinctly]
Big changes are coming
to the e-cigarette market.
The FDA released new rules today.
The agency
[Ducharme] On top of
all of these problems,
the FDA was finalizing its rules
for regulating e-cigarettes.
[Mitch Zeller] The Food
and Drug Administration regulates
most of the foods, all the drugs,
and, since 2009, tobacco products.
When I became center director,
e-cigarettes were not
under FDA regulation.
It took the better part of seven years
to finally begin to regulate e-cigarettes.
[reporter] The industry
has never been regulated
or taxed by the federal government,
but today, a new set of rules came out.
That includes banning sales
to anyone under 18,
requiring package warning labels,
and making all products
subject to government approval.
[Zeller] Instead of it being the Wild West
and the companies being able to do
anything that they wanted,
if they wanted to bring
a new product to market,
if they wanted
to make a claim for their products,
they had to come to FDA first.
[Ducharme] E-cigarette makers
could keep selling any vaping product
already on the market,
but they couldn't introduce new ones.
So for JUUL to be told
basically to freeze in place
and say, "We'll grandfather in this thing,
because you did it before
we were paying attention,
but now we're paying attention,
and if you try to do anything else,
you're going to get
the full scrutiny and wrath of the FDA,"
I think it just left them
feeling sort of static.
[supply chain engineer] It was right
in the middle of the morning.
There was tension in the air
because we knew
that there had been some rumblings
about some of the numbers
were really bad in terms of JUUL.
Anyway, we're hanging around,
but, normally, the board
was insulated from the company.
This is the first time this guy Pritzker
had ever spoken directly.
Says, "We're having an immediate
all-hands meeting."
He was very blunt, not happy at all
with the way things were going.
"I see a lot of stupid decisions
being made."
And he marched James up to the front,
the guy from the board got up there says,
"Effective immediately, James is out."
Right like that,
in front of the whole company.
He was sitting on a table.
He was looking down.
He wasn't looking up, uh
His feet were swinging in the air.
And, uh, bam.
I was so angry at that board
because he had built that company.
He didn't deserve to be treated like that.
And all of a sudden, the board stepped in
and took a very active role.
[Pierce] James being demoted
didn't really surprise me,
but it did surprise me
that the board would come in and say,
"We don't have a CEO."
"We're just going to run this company
for the foreseeable future."
Board members suddenly
de facto running the company
is basically unheard of.
James and Adam had lost control
of their company by then,
because they gave away too much of it.
[Ducharme] That's when JUUL started
to become a company driven by profit
and this desire to become a corporation
rather than a scrappy little start-up.
[anonymous JUUL engineer]
Because of the waning revenue
and the lack of performance from JUUL,
there was discussion
about killing JUUL altogether.
It was a lot of fear that,
"What have we done?"
"Have we just wasted all this energy
and time and resources in creating this?"
But sometimes you get a lucky hit.
So
after the party,
I think that my relationship
with cigarettes changed.
I carried the JUUL with me more often.
When my friends saw me vaping that summer,
they were like, "What is that?"
[camera shutter clicking]
[chiming]
[man] Mimi, go!
[Sweeney] I started college
in August 2016.
Because I carried it
around with me so often,
I did have a big influence on JUUL
in our college campus.
I remember my roommates
would make fun of me for it,
but they eventually got one.
You felt like you were
almost a part of a secret club
that no one knew about yet.
But I'd say around my sophomore year
of college, everyone had one,
or at least everyone knew about it,
and they'd be like, "Can I hit your JUUL?"
[Rougeau] June or July 2016,
we just blew up.
[supply chain engineer]
JUUL orders just took off out of nowhere.
We are just flying through product.
When sales started rolling in,
all of a sudden I'm realizing,
"Wait a minute,
this is really going somewhere."
[Rougeau] The only thing I can guess is,
somewhere in New York,
somebody asked the question,
"What is that?"
And then we just got hot.
[upbeat music playing]
I think it was word of mouth.
[Casselman] I ended up telling
a lot of my friends about JUUL.
Thirty-something people who were smokers
all switched over to the JUUL.
[Eschenbach] A friend saying,
"I tried this and it really is great,"
that's the best marketing
and advertising you can get.
You can't beat that.
But that kind of word of mouth takes time.
[Lorenz] A marketing campaign
that you do in 2015,
you might not see
those sales numbers until 2016.
But a year to mass adoption
is actually extremely quick.
JUUL took a product
that was previously considered cringy,
and made it into this cool,
aspirational, awesome thing
that everyone had to have.
This party accessory almost.
[sucking in]
I would say the draw from this
is as close to a cigarette as you'll get
from something electronic.
Being influenced is easy, especially
if you tell someone "this is cool,"
and they see it and say,
"You're right, it is."
Then they start using it
and it spreads like wildfire from there.
[upbeat music continues]
[Pierce] For me, it was when I walked
around the streets of Silicon Valley,
and San Francisco,
and it felt like two out of every
three people you passed were JUULing.
And then, pretty quickly,
it started to be truly everywhere.
[Rougeau] Everyone saw Dave Chappelle's
stand-up, and he was using it.
They didn't reach out to him.
They didn't pay him.
He was just using it all on his own.
You want to hit my vape pen?
Sorry, nigga.
I'm trying not to get herpes. My bad.
[Pierce] There were
a bunch of celebrities
posting about it on Instagram
in a way that felt genuine,
which is the dream
for a company like that.
That if you can just get into
the right handful of places, you're good.
[Rougeau] We were thrilled
when we saw that people
that were influencers were loving JUUL.
[Pierce] It's amazing how little of that
it takes from the right set of people
to make a campaign like that take off.
Because as soon as
a handful of celebrities do it,
that means you've now exposed
your product and your idea to everybody.
The Vaporized campaign,
I think it's brilliant marketing.
It's textbook marketing.
You know, you seed the conversation,
and you seed the influencers,
and you sit back,
and you watch the masses take notice.
But JUUL's first impression
will forever be known
as a brand that tried to recruit
the next generation of nicotine addicts.
[Pierce] JUUL ran ads that looked
exactly like what you would do
if you're Apple
and you're making a vaporizer.
They had people who looked cool,
doing cool stuff, with JUULs.
It wasn't a deep, serious dive
into how they improved
the experience of ingesting nicotine.
It was lifestyle ads.
What your life could look like
if only you had this in your life.
They did not go into this
with regard for the side effects
of that sort of marketing.
They saw this
as just another tech product.
And it's not another tech product.
It's a nicotine product.
Had JUUL decided to hire somebody
from the tobacco industry,
that person likely would have immediately
sent up red flags and said, "No."
[Steven Parrish] With 20/20 hindsight,
what I would say to them
is take the marketing plan
that you learned how to do
when you were in business school,
and throw it away.
Because you don't make widgets,
you make a product
that has nicotine in it.
James and Adam
didn't totally understand that.
[Pierce] I've been conflicted
about my role in all of this, over time.
I wrote an article a lot of people read
saying this was
the iPhone of e-cigarettes,
which is not a small thing to say.
I think I was right, in retrospect,
but did I help that be right? Probably.
And I think, as a tech reporter,
it would have been easy enough
for me to leave it alone
and say, "This is not fundamentally
a tech product."
"This is somebody trying to make tech
out of something else."
And a thing I didn't realize at the time,
that I wish I had,
was their goal was not
to make people quit smoking.
Their goal
was to make people start JUULing.
And I never asked the question,
and I wish I had,
"What if this works?
What if everyone does start JUULing?"
"Then what?"
["Where's my JUUL??"
by Full Tac and Lil Mariko playing]
[Casselman] I don't think anyone could
have anticipated how many children
would want this product.
Where's my JUUL? ♪
Where's my JUUL? ♪
[Lorenz] First impressions
are everything on internet,
so when you put the JUUL campaign
into the world,
it's like releasing a genie.
There's no going back.
Where's my JUUL? ♪
Where's my JUUL? ♪
So not cool! ♪
Where's my JUUL? ♪
[closing theme music playing]
[cerebral music playing]
[anonymous JUUL engineer]
The buzz was fantastic. Flavor was cool.
[Eschenbach] I was literally floored.
And it kind of made me feel like a virgin.
[flick]
My immediate reaction was really like,
"This feels exactly like a cigarette."
[man exhaling]
But I quickly realized,
"This isn't the same. This is better."
[Casselman] I remember trying it
for a couple of days,
and I realized that I had just
quit smoking.
It was this huge moment for me.
[Gladstone] Ever since one puff,
and never again
smoked another cigarette my entire life.
Never again.
[Pierce] With the JUUL,
they had made something remarkable.
Their one job now is to get it everywhere.
This is a bold product to put out
up against these companies
that have existed since forever.
[Lorenz] If you know you have a product
that is going to change an industry,
that's exciting.
[Pierce] The JUUL came onto my radar
in about 2015.
People had been hearing about
what this new JUUL thing might be,
and it started to percolate into my brain
that there's something
bigger and interesting happening here.
The reason I was interested in them
is because
there was this big question
going on at the time:
How do we use technology to improve
every piece of everybody's lives?
You have people
like the Uber founders, who say,
"I was just trying to get around,
and getting a cab was annoying."
Or people didn't know where their
friends were, so they invented Twitter.
JUUL felt like a particularly
high-stakes version of that.
The idea that we can use technology
to improve the lives of a billion people
was really appealing.
The first thing you would notice
walking into their offices
was that everybody was vaping.
Everybody.
[indistinct chatter]
[Pierce] James was a total tech guy.
I mostly mean that in a good way.
He was super confident, super smart,
thoughtful about the kind of thing
they were trying to do.
He wanted something
that felt cool and discreet
and wasn't trying
to build a better cigarette.
He wanted to actually
change the experience of smoking.
And the clear sense they had was,
"We have reinvented smoking."
The headline of my article was,
"This Might Just Be
the First Great E-Cig."
If you take this thing
people enjoy the experience of
but don't want to die from,
and replicate the experience
without the bad parts,
that tracked as the right way
to think about this.
They had made something remarkable.
Appearing in a publication like Wired
was huge for them
because it lent the company legitimacy
as it launched JUUL.
[anonymous engineer] The mission was,
make something that had enough nicotine.
you wouldn't feel a need
to go back to your combustion cigarette.
We were trying to get smokers
away from smoking with various options.
So JUUL offered flavors
for the same reason
Tesla offers multiple colors.
Not everyone's going to like the same.
[Casselman] When we started,
we had four flavors.
[Rougeau] You cover all bases
with fruit, brûlée, mint,
and then tobacco for all
your Marlboro Red smokers.
Their flavors had incredibly stupid names.
Like "fruit" was spelled F-R-U-U-T.
And "crème brûlée" was B-R-U-U-L-E.
[chuckling]
And "mint" was spelled M-I-I-N-T.
They were just trying so hard
that it felt dumb, honestly.
But flavors were a key part
of the whole thing.
They wanted to make this not only
satiating from a nicotine perspective,
but also enjoyable and pleasant to smoke,
and smells better
than your average cigarette.
[Casselman] Your typical vaper
doesn't want to smell like a cigarette,
doesn't want to inhale
the carcinogens from a cigarette,
or just wants some different flavors.
I thought the names were stupid,
but the idea was pretty smart.
James and Adam created a product
that seemed like it would work well
and be attractive to users.
But there were still issues.
[supply chain engineer]
Pods were a problem.
We did not have a 100% yield,
anywhere near that.
You set out to make a hundred,
we maybe ended up
with eight that were good.
[cerebral music playing]
[Pierce] A lot of people got a squirt
of nicotine into their mouth
when they would inhale.
[Ducharme] One employee said he got
crème brûlée liquid in his mouth so often
that he now can't eat crème brûlée
because it was so disgusting.
[supply chain engineer]
To get a battery in there, tubes in there,
to get the pods small enough to work,
was a technical challenge.
People would say, "We need a bigger unit."
James refused to budge on the unit size.
He really liked the way that unit looked.
[anonymous engineer] That's what
a visionary does. He's an artist.
But, you know, we were rushed.
About a month before
the original launch date,
we didn't have a way to fill pods yet.
[Ducharme] James told them,
"You have to figure the problems out."
"You have no other choice."
Ever heard the adage,
"When in doubt, ship it"?
[man laughing]
[man laughing]
There was pressure
to get this product out there.
PAX, a loose-leaf tobacco
and cannabis vaporizer,
was the engine
from a financial perspective.
But we started to see
some PAX revenue wane.
[Ducharme] At the same time,
Japan Tobacco International,
who was a major investor,
was growing uncomfortable
with how much the PAX devices
were becoming associated with marijuana.
[Eschenbach] JTI said, "We can't be part
of a company involved with cannabis,
so we're going to part ways."
So in the end,
we paid them the $10 million back.
In some ways, splitting with JTI
was actually a good thing.
Many employees felt uncomfortable
that a tobacco company
was a major investor.
JUUL wanted to be a tech company
and didn't want to be dragged down
by the stink, so to speak,
of the tobacco industry.
At that point in time,
getting a reliable, solid product
that we could start ramping
manufacturing on was the biggest focus.
[Ducharme] Investors had been
pouring money into the company for years,
and they were antsy
for some of that money back.
So James and Adam knew that they needed
JUUL to sell, and to sell really well.
It's hard for a company to have a mission
it believes in and cares deeply about
and a board who wants tons of growth.
"I gave you millions of dollars,
and you owe me billions of dollars."
"If we make the world a better place
in the meantime, fantastic."
[Eschenbach] If a company doesn't make
profit, it's not gonna last long.
Public health first,
but you can't have public health
if nobody buys the product.
[Jonathan Mildenhall] Silicon Valley
is known for these big, iconic companies,
but what we don't remember
is the graveyard of start-ups
that is also Silicon Valley.
And so when a company
is going to market for the first time,
it's really important to get it right.
You only have one chance
to make a first impression.
So I, uh I love smoking.
And uh, I know I'm not alone in this.
It's been
[Ducharme] James is extremely confident
and believed in himself very deeply,
but it started to become apparent
that he was not the kind of founder
who could become his own brand
and sell the company to the world.
We're not an activist company.
We're not prescriptive in our products.
If you don't like what we're making
better than cigarettes,
then have a cigarette.
That's fine. We're not against that
[Ducharme] It was incredibly jarring
to hear somebody say something like,
"If you don't like our product,
go smoke a cigarette,"
because the whole idea of the company
had been built on the fact
that cigarettes are bad for you.
[Casselman] He might say, in like,
the context of talking to a journalist,
exactly what he believes,
as opposed to whatever is the most
beneficial thing to say for the company.
[JUUL employee] I don't think
that he had a very good handle
on what it was that we were going to do
by way of marketing.
It's really important that you get
the strategy and the execution right.
The stakes are incredibly high.
[Ducharme] As JUUL's
launch date got closer,
James needed someone
he could rely on to sell it.
He had someone at the company
who'd already proven himself
to be a talented marketer.
Richard Mumby first joined the company
as a marketing consultant,
and he was the polar opposite
of your typical Silicon Valley bro.
He had a degree from Dartmouth,
he'd worked at fashion start-ups
in New York City,
and he was basically
a social media influencer.
Every time I met Richard Mumby, it felt
like he knew exactly what he was doing.
Like he was prepared for every
interaction that he had during the day.
He kind of exudes confidence,
and it's intoxicating.
[Ducharme] James entirely trusted him
to run everything to do with marketing,
so that's what Mumby did.
Richard Mumby is a dumbass fuck
who I never want to meet again,
and I believe he had a big hand
in ruining JUUL.
[Steven Baillie] I had worked with Richard
on different marketing initiatives,
so he reached out and told me
about an exciting opportunity he had
in San Francisco, and asked me
if it'd be something I'd be interested in.
I have a career specializing in
luxury advertising, lifestyle advertising.
["Them Changes" by Thundercat playing]
I'm not trying to flex,
this is not about my vanity,
but if you're a start-up
and you want to be relevant,
you need a douse of sexy,
I'd be the guy they would call.
When I'm sitting here
Knowing this ain't real ♪
[Ducharme] Baillie had a colorful
reputation in the fashion world.
He was sort of seen as a party boy,
always surrounded with models
and DJs and influencers.
But he was definitely seen as somebody
who could make a product
look cool and sell it.
When you look under the hood
of advertising, what is it really about?
Desirability is imperative
if you're launching something, right?
[music fades]
[inhales]
And the whole vaping thing
was really goofy.
[slurping]
Gnarly fucking plumes.
[laughs]
[Lorenz] If you told somebody about
e-cigarettes in the first half of 2010s,
they wouldn't have any idea
of what you were talking about
or would think that sounds lame and nerdy.
[Pierce] Everybody had either these things
that looked like cigarettes
but were worse, like a fake cigarette,
or these huge monster rigs
that would make
these crazy, giant clouds of smoke.
[Ducharme] James and Adam
wanted JUUL to be seen
as a luxurious, sophisticated product that
people would not be embarrassed to use,
unlike some vaping products
that had been seen as dorky and uncool.
I mean, there's a barren wasteland
of awful, tacky stuff.
Even the mainstream brands
that were putting out devices
were so corny. It was just, like, "Wow."
It felt as though
we were playing in amateur leagues.
It really struck me that the devices
looked like Stanley Kubrick's monolith
in Space Odyssey, 2001.
The godlike presence
of that device in those films,
and the mystery behind it,
was a huge inspiration for me.
I also had Apple on the mind,
the way that Apple markets their products.
They're beautiful,
sumptuous objects to be worshiped.
But how do you dial up that appeal?
What does that look like?
And it comes from a lot of strategy,
some research, and some instincts.
It's like,
how do you get it on people's radar?
Launch campaigns
are arguably the most critical factor
in an early-stage start-up's existence.
It's through that launch campaign
that you're actually accelerating,
or otherwise,
the potential growth of the company.
And if you get a launch campaign wrong,
then you don't really get a second chance.
[Baillie] San Fran was
this e-comm start-up hub.
Everyone was setting up camp,
but from a style perspective
I don't know if I should say this, but
We've got a bunch of Zuckerberg-type dudes
coming from Stanford,
and they were out of touch
with being relevant and cool.
And so if we're using people in these ads,
what do they look like?
Who are they? Where are they?
[hip-hop music playing]
[Baillie] When I started
working with Richard, I said,
"Look, Vice Magazine, Williamsburg,
this is where it's all going down."
He immediately agreed.
[indistinct shouting]
During this period, a huge inspiration
to me was Terry Richardson.
He had his finger on the pulse
of what was happening culturally.
It's the President, the next day
it's Beyoncé, and then it's Rihanna.
Richard gravitated to that approach.
The overarching theme
that we developed was "Come As You Are,"
the Nirvana song, right?
The idea is come as you are.
You're not gonna be styled,
you don't need to do your hair
and makeup. Like, be yourself.
We had a bunch of this stuff
where the JUUL was worked into
what you would call a lifestyle scenario.
A lot of folks in advertising
think lifestyle is a cheap trick.
Get someone who's good-looking, handsome,
give him anything, it's gonna work.
But I think it definitely works.
[indistinct chatter]
Richard presented the work
to the founders,
and I don't recall specific feedback.
There were just certain devices
that they gravitated towards.
They liked the color.
They liked that that design motif
came back to the device.
Everybody signed off on the creative,
and we were ready to start
into production on these shoots.
[Mildenhall] You've got Adam and James,
who had this problem,
they had this technology,
they were going to solve the problem.
But then in walks Richard,
and Richard clearly
not interested in the mission,
but sees a massive opportunity
to drive growth.
[inhales, exhales deeply]
I think everyone was mindful
of that mission statement.
I think once we went down
the approved path,
it just became something
completely different.
[shutter clicking]
[Baillie] There was no talk
of mission statements on the photo shoot.
And sometimes when you're bringing
a brand's mission statements to life,
it doesn't work consumer-facing.
So the direction we decided to take was
more focused on the cool factor, right?
[Mildenhall] Their initial idea
was conceived with a particular use-case,
somebody who's already smoking,
and Richard took it into
a completely different demographic
based on a lifestyle proposition
of urban cool.
[Mimi Sweeney] I was 17 at the time,
when my friend messaged me
about just a random party.
So let me hit this real quick.
Mmm.
Also, anything I say about fake IDs
is like, not an issue, right?
- [woman] No.
- Okay, just want to make sure.
It's an open bar.
Who doesn't love free alcohol? Obviously.
So we were like,
"Let's just go check it out."
But we had no idea
what we were walking into.
You were greeted by someone
with a Polaroid camera.
The pink and the blue really set the vibe.
They definitely had the right ambiance.
["Mouthful of Diamonds"
by Phantogram playing]
You're getting high on your own supply ♪
[Sweeney] They had great DJs playing,
and on all the projections,
they had "JUUL" on the walls.
And they all had hashtags on them,
which gave us the cues
for what to put into our posts.
So I remember I used the #JUUL,
# VAPORIZED, #JUULvapor.
We were told to post it
anywhere we wanted.
So, Twitter, Instagram.
You know, we were dancing, having fun.
There was a lot of coughing
going around the room that night.
[shutter clicks]
[Sweeney] My first hit of the JUUL
[bubbling]
[exhaling]
was different from others
because I didn't cough the first time.
So that's what kind of turned me on to it.
Me and my best friend
used to smoke Newports.
I realized it was stronger.
It had a different effect.
And I do remember thinking, like, "Oh."
"Is this what a cigarette
is supposed to be like?"
Or if maybe I'd been
smoking cigarettes wrong or something.
One thing I liked about it
was the sleekness
did remind me
of the sleekness of an iPhone.
The first flavor I tried
was the fruit flavor,
but flavor of choice was mint.
I remember a lot of my friends
saying that they didn't like it,
but I took two devices home.
[Baillie] They wanted a small takeover
at Times Square.
I walked down there with a couple cameras.
I was just like, "Wow."
[introspective music playing]
The way the whole thing was orchestrated,
the way the animation sequences
went around the corner, was incredible.
What a platform
to see your work displayed in.
It was really exciting.
After the launch party,
the strategy was to get JUUL
in front of as many people as possible.
JUUL needed to be successful
to satisfy the board and investors
and people at the company.
But the challenge was
that they didn't yet have the budget
to put together a huge,
elaborate launch campaign.
[Baillie] Part of their strategy
was to get boots on the ground
and have pop-ups in key cities
to get the device out there in the world.
[JUUL employee] Our mind state
was getting them in places
where we knew people of influence
were around or were going to.
We had little sampling tips,
and we would treat it
like a hookah lounge.
[Halverson] Sampling became
a very intrical part
of all the campaigns that we did.
And I'd see
these big, burly guys doubling over.
[making coughing sounds]
Wiping the tears.
"Wow. Can I have another?"
[Mildenhall] The Vaporized campaign
was exquisite
at getting the coolest kids
to promote the JUUL product
on their own social media.
[Lorenz] You started to see booths
pop up at parties
where you'd take a moment away,
hop into the booth,
create content to share on social media.
JUUL was trying to associate itself
with young, internet-savvy, cool kids
to ride that boom in influencer marketing.
JUUL did a good job of tapping into
people known as "It girls" and "It boys."
People like Lucas Abbat and Tavi Gevinson.
They were associating themselves
with tastemakers.
But at the same time, people at JUUL
were sending out free products
to a long list
of influencers and celebrities
like Leonardo DiCaprio and Bella Hadid.
Every start-up was using this tactic.
Selling a way of life is the most
effective way of selling a product.
If you run a company and want it to grow,
that was the way to grow it.
[Pierce] JUUL throws a party,
invites people
with a lot of followers on Instagram,
gives them JUULs, and gives them
cool things to take pictures in front of.
It just looks like
all the cool people you know are JUULing.
[Ducharme] The launch campaign
was targeted towards millennials,
which struck some people
as a strange decision
because smoking wasn't
terribly popular with millennials.
I never saw a single proposal by Marketing
ever be pushed back on.
[mouse click]
There was never any,
"No, let's not do this."
I'm not a born marketer either.
So if they said, "This is
what's necessary to get this going,
and here's what we'll promise
in terms of results,"
um, the board went with it.
The investors are investing
in the launch campaign,
and they're expecting to see signals
that this business
has huge potential growth ahead of it.
[Ducharme] Among the board,
one person in particular was concerned,
an investor named Alexander Asseily.
[Mildenhall] Alex Asseily
was the only voice of dissent
as the campaign went to market.
He felt that it was way off strategy,
and he understood that,
if this strategy was to succeed,
the organization might never
be able to walk back from it.
[JUUL supply chain engineer]
We did the Vaporized campaign.
You know, models dancing,
holding a JUUL in their hand.
It seemed like this was going to be
the coolest thing in the world.
Probably a bad idea.
I feel it was effective in terms
of what we were trying to achieve.
But the initial response to the campaign
we immediately got negative feedback.
E-cigarette makers are allowed
to advertise to anyone on TV,
which has led to ads like this one
for JUUL Vapor.
[dance music playing]
[audience cheering]
Mm-mm.
Yeah! Something about inhaling
poison steam makes me want to dance
in a way that doesn't require
much lung strength.
[audience laughing]
[Conley] Ultimately, the problem
with JUUL's early marketing
was that while they had sat down
and read thousands of pages
of tobacco industry documents
about nicotine salts,
they apparently hadn't read the thousands
of pages about tobacco industry marketing.
If you were starting a start-up
putting out a nicotine product,
why reinvent the wheel?
JUUL, in its advertising,
faithfully followed the playbook
of Big Tobacco companies
and their cigarette brands.
The Vaporized campaign.
It has direct roots
from the way the tobacco industry
marketed to youth.
Take a bunch of 20-somethings,
and you have them dance around.
Many of the thematics
look like Newport ads.
Social groups of teenagers,
ones and twos, doing fun things,
playing, dancing around.
[Dr. Proctor] The themes
that are put forward with Vaporized,
of individuality, adventure, and glamour,
those were older themes
that had been developed by Big Tobacco.
Look at the hair.
Look at the faces.
Look at the poses.
Employing glamour,
sophistication and youth,
and cool.
[Dr. Jackler] They gave away tens
and tens of thousands of free JUULs.
That's an old trick
of drug dealers everywhere, right?
The first one is always free.
[Dr. Jackler] They took the very worst
elements of tobacco marketing.
Cigarette makers could no longer
advertise on television. JUUL could.
Cigarette makers could no longer
have a billboard on Times Square.
JUUL could.
[mouse click]
[Ducharme] Shortly after
the Vaporized campaign came out,
AdAge ran a story about the campaign.
Within that article,
somebody was quoted as saying
that the advertisements looked
very similar to old Big Tobacco ads.
This was a bombshell within the company.
Mumby's team leapt into hyperdrive
and started redoing aspects
of the Vaporized campaign,
even though it had just come out.
[suspenseful music playing]
We all knew from day one,
children smoking JUULs was a disaster.
There was no doubt about that.
James actually came out of his office
one day and said,
"Guys, this is a smoking product.
We gotta start thinking that way."
And I remember
that was quite a shift for him,
because there was always
this Silicon Valley mentality of,
"Get as big as you can
as fast as you can."
"Figure out the rest later."
They got caught, in a sense,
and you end up with an apology tour,
or a retreat.
When we launched JUUL,
we had a campaign that was uh,
arguably too kind of
lifestyle-oriented, too flashy.
It lasted less than six months.
Adam Bowen said,
"It was too lifestyle-oriented."
That's a "tepid" way of saying
it was, in fact, very youth-oriented.
[Mildenhall] There's a saying
in Silicon Valley,
"Move fast and break things."
This Vaporized campaign
was conceived, pre-produced,
and executed in less than a month.
That's really, really quick.
[Dr. Jackler] It was wildly irresponsible
for the creative leadership
to have no knowledge
of what was responsible marketing
of a tobacco product.
I want to be clear,
Steven Baillie was hired help
to execute a playbook
that he was known for.
Young, smiley, happy,
sexually provocative people
having a great time.
It's really not Steven's responsibility
to set the strategic direction
for the brand.
Baillie and Mumby took the marching orders
from the senior leadership of JUUL,
and they created the goal
of getting the cool kids.
[clearing throat]
So, uh, one of the things
I wanted to talk about
was that Stackler professor from Stanford.
- [woman] It's Jackler.
- Jackler, Stackler.
It was kind of shocking
that he was a professor.
I'm not here to take shots at him,
but this idea
that we went through the hallowed hall
of bad tobacco advertising,
and extracted elements,
as if we even had the time for that,
you know, it was comical in a sense,
because of the time it actually took
to do this whole thing.
It wouldn't have been physically possible
to do what he was suggesting.
If I could take credit for creating
this thing that was a cultural phenomenon,
maybe, I mean
I'd be the most wanted
creative professional on the planet,
but it didn't work out like that.
It was, you know
My name was getting
thrown around the press,
and uh, it got really scary, you know?
I'm coming out of it. I just feel weird
being like, "Wah, wah, wah."
I'm a grown man.
If I have to drive Uber, fuck it.
What am I going to do?
[Rougeau] I remember what
the first day was like.
They had just sent the samples
to my house. I was super excited.
I had a list of stores
I was going to visit.
I was like, "I'm going to
hit the ground running. It'll be awesome."
I get to the first vape shop.
They're like, "We don't want it."
I'm like, "Let me see if I can
change it up and go to a smoke shop."
"No, we don't want it."
And it was like that.
No one wanted it.
[chuckles] No one wanted it at all.
[Ducharme] JUUL was starting to spread
on social media.
People were posting about it
after the sampling tour,
but in real life,
things were not looking as good.
Salespeople were struggling to convince
retailers to stock JUUL products.
[Rougeau] I don't think they got
what we were selling.
They just saw pretty people
holding what looked like a USB stick.
Are we selling the models,
or are we selling the JUUL?
This guy, he calls us and he's like,
"Hey, is this uh, JUUL?" I'm like, "Yeah."
He's like, "Are you the person
who sent me those JUUL pods?"
"Yep, what'd you think?"
"First off, I got a bunch
of juice in my mouth."
"I'm not thrilled about that."
[Ducharme] Even after JUUL launched,
people were still reporting
this juice-in-mouth problem.
One employee tested
this huge batch of JUUL pods,
and almost one in five leaked.
I think the expectations
on how successful JUUL was gonna be
were rapidly shrinking.
In fact, at one point,
we stopped production for two weeks
because we had ordered too much.
They expected JUUL to be big,
but then when the JUUL came out,
James was in a panic because he thought
the product was going to fail terribly.
[indistinct conversation]
[Ducharme] To get the JUUL device
to a point where it could be sold widely
was a huge undertaking.
We were doing things manually,
and they were extremely expensive
to hand-assemble and hand-fill.
We were selling potentially at a loss.
I was trying to get
some automated equipment,
and me and James got into an argument
that spilled into the parking lot
over $500.
[tense music playing]
[Ducharme] James wanted to call the shots,
even if it wasn't his area of expertise.
He wanted to be the one in charge.
[reporter talking indistinctly]
Big changes are coming
to the e-cigarette market.
The FDA released new rules today.
The agency
[Ducharme] On top of
all of these problems,
the FDA was finalizing its rules
for regulating e-cigarettes.
[Mitch Zeller] The Food
and Drug Administration regulates
most of the foods, all the drugs,
and, since 2009, tobacco products.
When I became center director,
e-cigarettes were not
under FDA regulation.
It took the better part of seven years
to finally begin to regulate e-cigarettes.
[reporter] The industry
has never been regulated
or taxed by the federal government,
but today, a new set of rules came out.
That includes banning sales
to anyone under 18,
requiring package warning labels,
and making all products
subject to government approval.
[Zeller] Instead of it being the Wild West
and the companies being able to do
anything that they wanted,
if they wanted to bring
a new product to market,
if they wanted
to make a claim for their products,
they had to come to FDA first.
[Ducharme] E-cigarette makers
could keep selling any vaping product
already on the market,
but they couldn't introduce new ones.
So for JUUL to be told
basically to freeze in place
and say, "We'll grandfather in this thing,
because you did it before
we were paying attention,
but now we're paying attention,
and if you try to do anything else,
you're going to get
the full scrutiny and wrath of the FDA,"
I think it just left them
feeling sort of static.
[supply chain engineer] It was right
in the middle of the morning.
There was tension in the air
because we knew
that there had been some rumblings
about some of the numbers
were really bad in terms of JUUL.
Anyway, we're hanging around,
but, normally, the board
was insulated from the company.
This is the first time this guy Pritzker
had ever spoken directly.
Says, "We're having an immediate
all-hands meeting."
He was very blunt, not happy at all
with the way things were going.
"I see a lot of stupid decisions
being made."
And he marched James up to the front,
the guy from the board got up there says,
"Effective immediately, James is out."
Right like that,
in front of the whole company.
He was sitting on a table.
He was looking down.
He wasn't looking up, uh
His feet were swinging in the air.
And, uh, bam.
I was so angry at that board
because he had built that company.
He didn't deserve to be treated like that.
And all of a sudden, the board stepped in
and took a very active role.
[Pierce] James being demoted
didn't really surprise me,
but it did surprise me
that the board would come in and say,
"We don't have a CEO."
"We're just going to run this company
for the foreseeable future."
Board members suddenly
de facto running the company
is basically unheard of.
James and Adam had lost control
of their company by then,
because they gave away too much of it.
[Ducharme] That's when JUUL started
to become a company driven by profit
and this desire to become a corporation
rather than a scrappy little start-up.
[anonymous JUUL engineer]
Because of the waning revenue
and the lack of performance from JUUL,
there was discussion
about killing JUUL altogether.
It was a lot of fear that,
"What have we done?"
"Have we just wasted all this energy
and time and resources in creating this?"
But sometimes you get a lucky hit.
So
after the party,
I think that my relationship
with cigarettes changed.
I carried the JUUL with me more often.
When my friends saw me vaping that summer,
they were like, "What is that?"
[camera shutter clicking]
[chiming]
[man] Mimi, go!
[Sweeney] I started college
in August 2016.
Because I carried it
around with me so often,
I did have a big influence on JUUL
in our college campus.
I remember my roommates
would make fun of me for it,
but they eventually got one.
You felt like you were
almost a part of a secret club
that no one knew about yet.
But I'd say around my sophomore year
of college, everyone had one,
or at least everyone knew about it,
and they'd be like, "Can I hit your JUUL?"
[Rougeau] June or July 2016,
we just blew up.
[supply chain engineer]
JUUL orders just took off out of nowhere.
We are just flying through product.
When sales started rolling in,
all of a sudden I'm realizing,
"Wait a minute,
this is really going somewhere."
[Rougeau] The only thing I can guess is,
somewhere in New York,
somebody asked the question,
"What is that?"
And then we just got hot.
[upbeat music playing]
I think it was word of mouth.
[Casselman] I ended up telling
a lot of my friends about JUUL.
Thirty-something people who were smokers
all switched over to the JUUL.
[Eschenbach] A friend saying,
"I tried this and it really is great,"
that's the best marketing
and advertising you can get.
You can't beat that.
But that kind of word of mouth takes time.
[Lorenz] A marketing campaign
that you do in 2015,
you might not see
those sales numbers until 2016.
But a year to mass adoption
is actually extremely quick.
JUUL took a product
that was previously considered cringy,
and made it into this cool,
aspirational, awesome thing
that everyone had to have.
This party accessory almost.
[sucking in]
I would say the draw from this
is as close to a cigarette as you'll get
from something electronic.
Being influenced is easy, especially
if you tell someone "this is cool,"
and they see it and say,
"You're right, it is."
Then they start using it
and it spreads like wildfire from there.
[upbeat music continues]
[Pierce] For me, it was when I walked
around the streets of Silicon Valley,
and San Francisco,
and it felt like two out of every
three people you passed were JUULing.
And then, pretty quickly,
it started to be truly everywhere.
[Rougeau] Everyone saw Dave Chappelle's
stand-up, and he was using it.
They didn't reach out to him.
They didn't pay him.
He was just using it all on his own.
You want to hit my vape pen?
Sorry, nigga.
I'm trying not to get herpes. My bad.
[Pierce] There were
a bunch of celebrities
posting about it on Instagram
in a way that felt genuine,
which is the dream
for a company like that.
That if you can just get into
the right handful of places, you're good.
[Rougeau] We were thrilled
when we saw that people
that were influencers were loving JUUL.
[Pierce] It's amazing how little of that
it takes from the right set of people
to make a campaign like that take off.
Because as soon as
a handful of celebrities do it,
that means you've now exposed
your product and your idea to everybody.
The Vaporized campaign,
I think it's brilliant marketing.
It's textbook marketing.
You know, you seed the conversation,
and you seed the influencers,
and you sit back,
and you watch the masses take notice.
But JUUL's first impression
will forever be known
as a brand that tried to recruit
the next generation of nicotine addicts.
[Pierce] JUUL ran ads that looked
exactly like what you would do
if you're Apple
and you're making a vaporizer.
They had people who looked cool,
doing cool stuff, with JUULs.
It wasn't a deep, serious dive
into how they improved
the experience of ingesting nicotine.
It was lifestyle ads.
What your life could look like
if only you had this in your life.
They did not go into this
with regard for the side effects
of that sort of marketing.
They saw this
as just another tech product.
And it's not another tech product.
It's a nicotine product.
Had JUUL decided to hire somebody
from the tobacco industry,
that person likely would have immediately
sent up red flags and said, "No."
[Steven Parrish] With 20/20 hindsight,
what I would say to them
is take the marketing plan
that you learned how to do
when you were in business school,
and throw it away.
Because you don't make widgets,
you make a product
that has nicotine in it.
James and Adam
didn't totally understand that.
[Pierce] I've been conflicted
about my role in all of this, over time.
I wrote an article a lot of people read
saying this was
the iPhone of e-cigarettes,
which is not a small thing to say.
I think I was right, in retrospect,
but did I help that be right? Probably.
And I think, as a tech reporter,
it would have been easy enough
for me to leave it alone
and say, "This is not fundamentally
a tech product."
"This is somebody trying to make tech
out of something else."
And a thing I didn't realize at the time,
that I wish I had,
was their goal was not
to make people quit smoking.
Their goal
was to make people start JUULing.
And I never asked the question,
and I wish I had,
"What if this works?
What if everyone does start JUULing?"
"Then what?"
["Where's my JUUL??"
by Full Tac and Lil Mariko playing]
[Casselman] I don't think anyone could
have anticipated how many children
would want this product.
Where's my JUUL? ♪
Where's my JUUL? ♪
[Lorenz] First impressions
are everything on internet,
so when you put the JUUL campaign
into the world,
it's like releasing a genie.
There's no going back.
Where's my JUUL? ♪
Where's my JUUL? ♪
So not cool! ♪
Where's my JUUL? ♪
[closing theme music playing]