How Juul founders’ dream to disrupt Big Tobacco left teens hooked on vaping

In 2018, Caleb Mintz sensed something wasn’t right about a presentation given at his school, the renowned Dwight School on the Upper West Side. 

Someone had been brought in to supposedly teach Mintz, then a ninth-grader, and his classmates about the dangers of tobacco and vaping. But the speaker had been sent by Juul Labs, the company behind the discreet vaping device that Mintz and nearly all of his friends had tried. 

The man gave a pretty standard spiel except, Caleb noticed, he kept mentioning how safe Juul was. 

After the presentation, Caleb and a friend asked the speaker how they might help a pal addicted to nicotine. The man — who wrongly assumed the friend was addicted to cigarettes (he actually had a vaping problem) — took out his Juul to show the boys how it worked. 

“I really felt like there was an ulterior motive,” Caleb told author Jamie Ducharme, who reports on the company in her new book “Big Vape: The Incendiary Rise of Juul.” 

Indeed there was. In 2018, Juul gave at least three private and public schools $10,000 or more to participate in their Education and Youth Prevention Program, whose stated purpose was “to educate youth on the dangers of nicotine addiction.” (Dwight said it received no money for participation.) 

But the curriculum never mentioned the role of marketing and social media in getting people hooked, the author reveals. In fact, Ducharme writes that experts thought “Juul seemed to be attempting to imply that other forms of e-cigarettes were risky to use but that the Juul was not,” she writes. 

Juul Labs has encouraged teen vaping, according to a new book, which reveals the company even sent a representative to Manhattan's Dwight School (right) to extoll the safety of its e-cigarettes.
Juul Labs has encouraged teen vaping, according to a new book, which reveals the company even sent a representative to Manhattan’s Dwight School (right) to extoll the safety of its e-cigarettes.
Shutterstock; Alamy

In her book, Ducharme shows how Juul was started with the intention of creating a healthier alternative to Big Tobacco, but ended up becoming part of it. And while the vaping device’s inventors were repeatedly cautioned about how their creation might appeal to teens, they ignored such warnings, resulting in an epic Silicon Valley downfall. 

“They let history repeat itself, walking the path laid by Big Tobacco as they pushed out flashy advertisements, sent their representatives into schools, and, finally, accepted billions of dollars from the largest cigarette maker in the country,” Ducharme writes. 

Juul started from an idealistic place. Co-founders James Monsees and Adam Bowen were friends and classmates in the prestigious graduate program in product design at Stanford University in the aughts, and they were both smokers. On a cigarette break in 2004, the two men realized they didn’t want to be beholden to tobacco sticks anymore. 

So they set about feverishly developing a portable product that would deliver nicotine in a safer way than cigarettes, helping those who were addicted to cigs and hoping to be a boon to public health. 

“If they couldn’t find a way to quit smoking, they would invent one themselves,” writes Ducharme. 

But some of their professors worried that they were moving too quickly, former classmate Colter Leys recalled. 

“From an academic point of view, I think it was like, ‘Wow, that’s cool, but let’s try to investigate some of the different options that this could be,’ ” Leys said. “And I think James and Adam were kind of like, ‘Let’s drive ahead.’ ” 

The duo did agree to do more research. An archive of internal tobacco industry documents had just been made public at a nearby university, and they dove into it. 

Both smokers, Monsees and Bowen first met at Stanford University, where they designed an e-cigarette for a thesis presentation.
Both smokers, Monsees and Bowen first met at Stanford University, where they designed an e-cigarette for a thesis presentation.
Alamy (2)

But while the files offered a cautionary tale, they were also a “gold mine” for “two graduate students trying to turn a bright idea into a blockbuster product,” Ducharme writes. “Without ever holding a focus group, they could analyze market research about consumer preferences and tastes. They could sift through internal memos to learn how tobacco companies had sold their products to just about any and every demographic — including, as they admitted, teenagers.” 

In 2005, the two men presented their thesis project, a portable vape pen they called the Ploom that would heat little pods of flavored tobacco to create nicotine-laced clouds that could be inhaled. Their design took inspiration both from Nespresso coffee pods and the hookahs popular with college kids at the time. 

“It turns out actually that burning tobacco is the real problem,” Monsees said in his presentation. “Nicotine is addictive, clearly, but it’s not the nicotine that’s really hurting you; it’s mostly the combustion [burning of tobacco leaves and additives] that’s a problem.” 

Upon graduation, Monsees and Bowen launched a startup in San Francisco, collecting money from various venture capitalists to turn their design into a reality. They released their first product, the Ploom ModelOne, in 2010, but it was plagued with problems. It relied on butane fuel and users had to carry around a little can of the stuff to refill it as needed; it also was known to shock customers. 

It cracked the code of delivering ‘smoke’ without fire, and it did so in a way that people found irresistible.

author Jamie Ducharme on the success of Juul

Still it showed promise and, in 2011, Japan Tobacco Inc. — the fourth-largest tobacco company in the world — invested $10 million in Ploom. 

Fueled by that cash influx, Ploom released a different vaporizer, the Pax, in 2012. It didn’t use butane but instead required users to fill a small compartment with loose-leaf tobacco, that was then heated and vaporized by an internal battery. It was sleek and chic, drawing comparisons to Apple products, but it came with a steep $250 price tag. Both the ModelOne and the Pax were released into a marketplace of uncool e-cigarettes and next-to-no oversight from the FDA, which wasn’t able to regulate tobacco products of any sort until 2009 — and didn’t start regulating e-cigarettes until 2016. 

“All anyone needed to get into the vaping business was an idea and a credit card,” Ducharme writes. “[At the time], there wasn’t even a federal law on the books that made it illegal to sell e-cigarettes to minors, although many were implemented at the state level.” 

The Pax was a success, but Monsees and Bowen knew they needed to create a more modestly priced product to achieve broad sales. And they needed a gadget that would deliver a stronger hit of nicotine. Adam would vape “all day long and still find himself with nicotine cravings,” Ducharme writes. 

Most e-cigs at the time relied upon freebase nicotine, which can be harsh to inhale, so the founders started looking into using a nicotine salt — a mix of nicotine and acid pioneered in the 1970s. Thanks to that formulation, the Juul was born, packing a strong buzz in an elegant package. Thin and just under 4 inches in length, it resembled a USB drive. It activated automatically when a user inhaled, and featured a light that turned green when charged, red when the battery was low, and flashed rainbow when waved about. 

Juul's "Vaporized" ad campaign appealed to young adults and teens.
Juul’s “Vaporized” ad campaign appealed to young adults and teens.

“Beautifully constructed, eminently usable, and scientifically sophisticated, the Juul was perhaps the first e-cigarette that actually stood a chance of dethroning combustible cigarettes,” Ducharme writes. “It cracked the code of delivering ‘smoke’ without fire, and it did so in a way that people found irresistible.” 

A big, fashionable party at a huge industrial loft space in Chelsea kicked things off. There were buzzy DJs, food from a former “Top Chef” contestant, free-flowing alcohol, and lots of Juuls scattered about for the taking. A sexy marketing campaign called “Vaporized” furthered Juul’s appeal — targeting “New York trendsetters” and “cool kids” to counter the douchey reputation vaping had at the time. The ads ran in youth-oriented outlets like Vice magazine and YoungHollywood.com, a celebrity-focused Web site, as well as on Times Square billboards and in convenience stores and retail spaces. The campaign “bore more than a passing resemblance to old advertisements for cigarette brands like Kool, Lucky Strike, and Parliament,” Ducharme writes. 

The company also sent out products to hundreds of influencers and celebs, including Leonardo DiCaprio and Bella Hadid, who was only 19 at the time. 

“Juul’s ads may not have been made with kids in mind — indeed the company has strongly and repeatedly said they were not — but they certainly appealed to people who held a lot of sway with teenagers,” Ducharme writes. 

Then-supply chain head Paul Moraes actually recalls voicing concerns about the advertising. 

“It didn’t take someone with a Ph.D. to say, ‘Hey guys, follow the logical conclusions of where this is going to go,’ ” he told Ducharme. 

The company gave out Juul e-cigarettes to teen influencers like  Leonardo DiCaprio (left) and Bella Hadid (right).
The company gave out Juul e-cigarettes to teen influencers like Leonardo DiCaprio (left) and Bella Hadid (right).
Splash News; Getty Images

Moraes also remembers Monsees passionately stressing around that time that Juul was for adult smokers, but both he and Bowen saw the Vaporized campaign before it went up and didn’t stop it. 

The gadget wasn’t an immediate hit, but it eventually became one, as word of mouth increased, e-cigs in general became more popular, and a greater number of convenience stores carried the Juul. In 2017, Juul Labs sold 16.2 million vaporizers, and one out of every three vapes sold in the country was a Juul. By 2018, Juul Labs reportedly accounted for roughly 70 percent of the e-cigarette market in the US. In mid-2018, Juul was valued at $15 billion, and it had sailed past the $10 billion “decacorn” benchmark faster than Twitter, Facebook and Snapchat. 

And it was hardly just middle-aged smokers looking to quit cigs buying them. In a study from late 2018, the journal Tobacco Control found that nearly 10 percent of teenagers between the ages of 15 and 17 had tried a Juul. That same year, roughly 50 percent of Juul’s Twitter followers were under age 18. There was a system in place on the Juul Web site that didn’t allow anyone under 21 to buy the products, but in a sloppy technical glitch, those who failed the age verification were still targeted with marketing e-mails. And teens who wanted to get their hands on them could easily do so via third-party sellers, eBay, or just lax clerks at the many convenience stores selling them. 

In December of 2018, Altria, the parent company of Philip Morris, paid $12.8 billion for a 35 percent share in Juul. That valued Juul Labs at $38 billion, making it worth more than Airbnb, Lyft and SpaceX at the time. Monsees and Bowen became what they had sought to disrupt — members of Big Tobacco. 

Co-founder James Monsees testified before Congress about Juul's role in the youth vaping epidemic.
Co-founder James Monsees testified before Congress about Juul’s role in the youth vaping epidemic.
AP

Many working for the company felt sickened by what Juul had become, but they also profited handsomely. Employees, now numbering over 1,000, reportedly received bonuses averaging around $1.3 million each from the Altria deal. 

“It was the Silicon Valley dream come to life, for no more so than James, Adam, and their executive team,” Ducharme writes. 

But in 2019, the dream came to an abrupt end when previously healthy teens started to become gravely ill with pneumonia-like symptoms. A 16-year-old varsity swimmer from Michigan could only be saved by having one of the first-ever double-lung transplants. By the end of August 2019, the CDC had counted nearly 200 cases of EVALI: E-cigarette or vaping-associated lung injury. 

In August 2019, Bowen and Monsees were called to testify before Congress about Juul’s role in the epidemic of youth vaping. 

“We never wanted any non-nicotine user, and certainly nobody underage, to ever use Juul products,” Monsees said. “Yet the data clearly shows a significant number of underage Americans are doing so. This is a serious problem. Our company has no higher priority than fighting it.” 

Federal data released in 2019 found 27.5 percent of high schoolers and 10.5 percent of middle schoolers had used an e-cigarette in the past month. Juul was the mostly commonly cited brand by those surveyed. 

Big Vape

It was eventually discovered that THC vapes, not Juul, were the issue causing the EVALI, but many conflated Juul with vaping in general. Profits fell from $745 million in the second quarter of 2019 to $157 million in the fourth quarter of the same year amid the scandal and increased regulation. 

Today, Monsees no longer works for the company, while Bowen does some part-time consulting. But their invention has left both men rich. And while vaping amongst teens is on the decline, it remains prevalent. The research around the dangers of vaping tobacco is inconclusive, with most experts believing it’s safer than smoking cigarettes but still dangerous. 

After the Juul speaker came to Caleb Mintz’s school, his furious mother, Meredith Berkman, launched an advocacy organization called Parents Against Vaping E-cigarettes. In a 2020 NPR interview, she reflected on Juul’s popularity. 

“It’s no longer the teen favorite,” she said. “Juul is almost old school.” 

When kids do want a puff nowadays, they’re increasingly reaching for disposable, single-use e-cigarette like the Puff Bar, which packs a similar punch as Juul for less money. 

If Juul’s rollout had been handled differently, some believe it could have actually been a good thing for society and public health, especially as studies have shown that e-cigarettes can be effective at helping some people quit smoking. 

As one former high-ranking Juul employee told Ducharme: “It was a colossal missed opportunity, starting from the board to the management team to the early science into what’s now going to be a lesser product line for Altria. 

“If you could have asked for a worse outcome, aside from bankruptcy, I’d love to hear it. That’s a tragedy.”

source: nypost.com