WEBVTT - Juul: Blowing Smoke 0:00:03.760 --> 0:00:07.520 I remember my best friend's older sibling like drove up 0:00:07.560 --> 0:00:09.639 in a car. We're like freshman in high school and 0:00:09.640 --> 0:00:11.360 they're like, try it. This is like the new thing. 0:00:11.520 --> 0:00:14.320 Try it and we're like, wow, this is so cool. 0:00:14.880 --> 0:00:16.840 You know you can puff it whenever. Um. And then 0:00:16.840 --> 0:00:20.000 the naked sine so concentrated. You know, everyone has one. 0:00:20.040 --> 0:00:22.759 It's very accessible, and they think you just start doing 0:00:22.800 --> 0:00:26.119 it and I can't stop. I guess that is what 0:00:26.200 --> 0:00:32.200 I would say. They're talking about Jewel, the e cigarette 0:00:32.280 --> 0:00:35.280 that took the nation by storm just a few years 0:00:35.280 --> 0:00:40.519 ago and has become ingrained in youth culture, even spawning 0:00:40.720 --> 0:00:45.360 viral YouTube hits like this, Hey, have you guys seen 0:00:45.400 --> 0:00:49.040 my jewel? I like literally just had in my hand, 0:00:49.920 --> 0:00:51.919 Like you gave it back to me? Right? I thought 0:00:51.960 --> 0:00:53.760 you hit my jewel and then you gave it back 0:00:53.760 --> 0:00:57.040 to me. You didn't take it, did you. You wouldn't 0:00:57.080 --> 0:01:12.959 do that to me. Welcome to Calling Bullshit, the podcast 0:01:13.000 --> 0:01:17.080 about purpose washing, the gap between what companies say they 0:01:17.120 --> 0:01:20.680 stand for and what they actually do, and what they 0:01:20.720 --> 0:01:25.479 would need to change to practice what they preach. I'm 0:01:25.480 --> 0:01:29.160 your host, Time Montague, and I've spent over a decade 0:01:29.280 --> 0:01:33.560 helping companies define what they stand for, their purpose and 0:01:33.680 --> 0:01:37.240 help them to use that purpose to drive transformation throughout 0:01:37.280 --> 0:01:43.240 their business. Unfortunately, at a lot of organizations today, there's 0:01:43.240 --> 0:01:46.959 still a pretty wide gap between word and deed. That 0:01:47.000 --> 0:01:52.480 gap has a name. We call it bullshit. But, and 0:01:52.560 --> 0:01:56.280 this is important on this show, we believe that bullshit 0:01:56.520 --> 0:01:59.800 is a treatable disease. So when the bullshit detector lights 0:01:59.880 --> 0:02:02.320 up up, we're going to explore things that the company 0:02:02.360 --> 0:02:10.160 should do to fix it. In this episode, we're going 0:02:10.200 --> 0:02:14.480 to take a look at Jewel. The company's mission is 0:02:14.560 --> 0:02:18.880 harm reduction. They want people to stop smoking cigarettes and 0:02:19.040 --> 0:02:22.960 start using Jewel, which they claim is a potentially life 0:02:23.000 --> 0:02:26.800 saving alternative. Here's how co founder Adam Bowen put it 0:02:27.000 --> 0:02:30.440 in a promotional video. fIF the years from now, nobody's 0:02:30.480 --> 0:02:32.840 gonna be smoking cigarettes. They're gonna look back and think, 0:02:32.880 --> 0:02:34.840 oh my god, I can't believe people used to do that, 0:02:35.080 --> 0:02:37.080 and now I think it's actually gonna happen much faster, 0:02:37.480 --> 0:02:40.480 in large part because of the progress that we've made. 0:02:42.160 --> 0:02:50.079 It sounds revolutionary, but is it actually true. To tell 0:02:50.240 --> 0:02:53.440 Jewel's story, we have to start with a quick history 0:02:53.480 --> 0:02:56.440 of the industry that Adam and James wanted to disrupt 0:02:57.240 --> 0:03:02.800 big tobacco to Bacco used goes back thousands of years. 0:03:02.840 --> 0:03:05.880 It grows wild in the Americas and has long been 0:03:05.960 --> 0:03:09.359 valued by indigenous peoples as a sacred and medicinal plant. 0:03:10.280 --> 0:03:15.120 In the Taino people of the Caribbean gave Christopher Columbus 0:03:15.200 --> 0:03:20.080 some dried tobacco. Soon, smoking was all the rage with 0:03:20.240 --> 0:03:26.600 Europe's elite, who apparently just loved that sweet buzz. In 0:03:26.639 --> 0:03:32.000 the sixteen hundreds, English colonists set up big tobacco plantations 0:03:32.160 --> 0:03:36.160 in the southeastern United States, which also fueled the demand 0:03:36.280 --> 0:03:40.160 for enslaved labor, and by the late eighteen hundreds, big 0:03:40.200 --> 0:03:45.000 companies like Philip Morris, now Aultria and American Tobacco began 0:03:45.040 --> 0:03:50.120 to dominate the market. Mass production made cigarettes popular, and 0:03:50.200 --> 0:03:54.400 so did ads that portrayed smoking as a pleasurable, glamorous habit. 0:03:55.080 --> 0:03:59.320 Some of them even featured doctors played by actors in 0:03:59.400 --> 0:04:03.480 white lab codes. Time out for many men of medicine 0:04:03.600 --> 0:04:07.240 usually means just long enough to enjoy a cigarette, and 0:04:07.320 --> 0:04:09.960 because they know what a pleasure it is to smoke 0:04:10.000 --> 0:04:14.280 a mild, good tasting cigarette, they're particular about the brand 0:04:14.320 --> 0:04:18.479 they choose. More doctors smoke camels than any other cigarette. 0:04:19.560 --> 0:04:22.560 A lot of doctors did smoke back in the forties 0:04:22.680 --> 0:04:26.679 when this ad was made, but Big Tobacco specifically used 0:04:26.720 --> 0:04:30.799 this kind of messaging to counter growing concerns around health. 0:04:31.560 --> 0:04:36.200 By the mid sixties, though the evidence was clear. Tonight's 0:04:36.240 --> 0:04:39.840 CBS reports begins with this historic announcement by the Surgeon 0:04:39.920 --> 0:04:43.520 General of the United States on January eleven, nineteen sixty four. 0:04:44.400 --> 0:04:47.440 It is a judgment of the committee that cigarette smoking 0:04:47.520 --> 0:04:53.920 contributes substantially to martality from certain specific diseases and to 0:04:54.080 --> 0:04:59.159 the overall death rate. Big Tobacco knew this. They'd also 0:04:59.200 --> 0:05:02.160 discovered that the key ingredient in their product, the thing 0:05:02.200 --> 0:05:06.840 that gave you that sweet buzz, was nicotine, so they 0:05:06.880 --> 0:05:10.599 optimized for tobacco plants and cigarettes that delivered more of 0:05:10.640 --> 0:05:14.520 the drug into the smoker's lungs. And they knew that 0:05:14.600 --> 0:05:18.920 it was addictive. Tobacco executives admitted that at least as 0:05:18.920 --> 0:05:22.840 far back as the early sixties, according to internal company documents, 0:05:23.520 --> 0:05:27.800 but publicly they claimed otherwise, hoping to steer clear of 0:05:27.839 --> 0:05:31.360 the f d A. After all, if your product is 0:05:31.400 --> 0:05:36.320 addictive and it causes cancer, why should regulators allow you 0:05:36.440 --> 0:05:42.960 to sell it at all. Finally, in the hammer Fell, 0:05:44.920 --> 0:05:49.360 this is an historic hearing. For the first time ever, 0:05:49.520 --> 0:05:53.600 the chief executive officers of our nation's tobacco companies are 0:05:53.680 --> 0:05:58.359 testifying together before the United States Congress. The truth is 0:05:58.440 --> 0:06:03.440 that cigarettes are the single most dangerous consumer product ever sold. 0:06:04.360 --> 0:06:07.760 The Master Settlement Agreement that came out of these hearings 0:06:07.920 --> 0:06:12.839 put strict limits on the sale, advertising, packaging, and distribution 0:06:13.080 --> 0:06:17.960 of tobacco products. Some would say Big Tobacco got off easy, 0:06:18.000 --> 0:06:20.640 but for sure the days of easy money in the 0:06:20.680 --> 0:06:27.279 tobacco industry were over. Flash forward to two thousand and 0:06:27.360 --> 0:06:31.680 five when two young smokers, Adam Bowen and James Monsey's 0:06:31.800 --> 0:06:37.080 were grad students in Stanford's prestigious product design program and 0:06:37.440 --> 0:06:41.400 they kind of hatched their idea and became friends over 0:06:41.600 --> 0:06:46.039 cigarette breaks outside of their classroom at Stanford University. That's 0:06:46.120 --> 0:06:49.920 lauraenett Or, an investigative reporter who's covered the Jewel story 0:06:50.000 --> 0:06:55.080 in depth. So when you're at Stanford, you're always looking 0:06:55.160 --> 0:06:57.560 for what are the products in the areas that are 0:06:57.640 --> 0:07:01.160 right for innovation, and the cigarette was right for innovation. 0:07:01.880 --> 0:07:06.560 It's not the nicotine that kills people, it's the combustion. 0:07:07.040 --> 0:07:09.159 So they thought to themselves, if there was a way 0:07:09.240 --> 0:07:12.040 that we can just get people the nicotine that they 0:07:12.080 --> 0:07:16.080 want and that they're addicted to, but in a safer way, 0:07:16.280 --> 0:07:18.840 we should be able to make a huge public health 0:07:18.920 --> 0:07:25.440 contribution by transitioning people away from the deadly dirty cigarette 0:07:25.720 --> 0:07:30.880 to a safer, cleaner nicotine. They could save millions of 0:07:30.960 --> 0:07:35.160 lives and probably make some money doing it. But it 0:07:35.160 --> 0:07:38.440 turned out that solving this problem was a lot harder 0:07:38.480 --> 0:07:42.360 than it looked. James and Adam hammered away at it 0:07:42.400 --> 0:07:49.360 for a decade until when they finally launched their revolutionary product, Jewel. 0:07:50.600 --> 0:07:54.800 Jewel delivered the kick that smokers crave, but it was 0:07:54.880 --> 0:08:00.280 also everything a cigarette wasn't. It was sleek, modern, easy 0:08:00.320 --> 0:08:04.280 to conceal, It produced no smoke, so it could be 0:08:04.360 --> 0:08:08.080 used in secret, even indoors, and its pods came in 0:08:08.080 --> 0:08:12.160 a variety of tasty flavors like mango, mint and krimboulet. 0:08:17.200 --> 0:08:20.960 So Adam and James went off to work marketing Jewel 0:08:21.040 --> 0:08:24.320 to smokers who tend to be older and less affluent. 0:08:24.880 --> 0:08:27.840 They made it abundantly clear that young people and non 0:08:27.880 --> 0:08:32.800 smokers should stay away because nicotine in any form is 0:08:32.880 --> 0:08:41.760 highly addictive, and their goal was getting people to stop smoking. Okay, okay, 0:08:41.840 --> 0:08:45.840 actually that part is completely made up. They didn't do 0:08:46.000 --> 0:08:50.200 any of that. In fact, they did exactly the opposite, 0:08:50.360 --> 0:08:56.079 and the results are almost comically catastrophic. So get out 0:08:56.120 --> 0:08:59.720 your BS detectors, folks, and hang on tight, because this 0:08:59.760 --> 0:09:06.440 one is quite a ride. Jewel says that its mission 0:09:06.679 --> 0:09:10.480 is harm reduction. Is that true or is it just 0:09:10.600 --> 0:09:15.000 a bunch of bullshit? To learn more about where Jewel 0:09:15.040 --> 0:09:18.680 went wrong, I called up Lauren Eder, who you heard earlier. 0:09:19.240 --> 0:09:22.200 She's a reporter at Bloomberg News and the author of 0:09:22.320 --> 0:09:26.680 the Devil's playbook, Big Tobacco, Jewel and the Addiction of 0:09:26.679 --> 0:09:31.040 a New Generation. I guess I want to start up 0:09:31.040 --> 0:09:34.960 by asking what was it that initially captured your attention? 0:09:35.040 --> 0:09:38.920 Why did you write this book? So? I'm always looking 0:09:38.920 --> 0:09:42.640 for interesting stories about companies that are making an impact 0:09:42.760 --> 0:09:46.160 on our lives in one way or another. And as 0:09:46.240 --> 0:09:52.000 the youth vaping epidemic was skyrocketing, where suddenly all these 0:09:52.000 --> 0:09:55.479 teenagers started showing up in the emergency room with shortness 0:09:55.480 --> 0:09:58.480 of breath, would appear to be burns on their lungs, 0:09:58.960 --> 0:10:01.559 and then it looked like it was tied to vaporing 0:10:01.679 --> 0:10:05.439 of some kind. I was fascinated that there was a 0:10:05.640 --> 0:10:10.320 very high flying Silicon Valley start up in the middle 0:10:10.440 --> 0:10:13.760 of a public health crisis. Can you talk about their 0:10:13.800 --> 0:10:16.640 pitch to early investors, like, how did they tell the 0:10:16.760 --> 0:10:20.040 story of what they were trying to do. It was 0:10:20.559 --> 0:10:23.640 both an innovation pitch and a public health pitch. On 0:10:23.679 --> 0:10:28.640 the innovation side, it was, here's this product that one 0:10:28.720 --> 0:10:32.640 billion people use in the world. Thirty four million Americans 0:10:32.640 --> 0:10:38.000 smoke cigarettes. So the cigarette is literally the same, essentially 0:10:38.440 --> 0:10:44.120 as it was a century earlier. It's essentially paper with 0:10:44.280 --> 0:10:47.199 shredded tobacco leaf rolled up inside of the paper. You 0:10:47.280 --> 0:10:50.440 light it on fire, and you inhale the smoke. So 0:10:50.559 --> 0:10:52.439 if there isn't a product that's right for innovation, I 0:10:52.480 --> 0:10:55.480 don't know what. The public health pitch was really interesting. 0:10:56.120 --> 0:11:01.040 They thought to themselves, why are so many people still smoking, 0:11:01.760 --> 0:11:04.480 and why is it still killing them? And how can 0:11:04.520 --> 0:11:08.160 this be happening. There's got to be a better way 0:11:08.320 --> 0:11:11.600 to get people what they really want in a cigarette, 0:11:11.600 --> 0:11:15.000 which is the nicotine. They sold that story and they 0:11:15.040 --> 0:11:18.360 sold it very well. Yeah, and it seems to me 0:11:18.600 --> 0:11:21.280 that the mission that this company had from the very beginning, 0:11:21.320 --> 0:11:25.080 it's fundamentally a good one, essentially harm reduction. Right. How 0:11:25.160 --> 0:11:28.720 serious do you think they really were about that mission. 0:11:29.480 --> 0:11:32.280 I think that they were very serious about that mission. 0:11:32.600 --> 0:11:34.280 I think they truly believe that they could have a 0:11:34.320 --> 0:11:37.040 public health impact. But they also realized that there was 0:11:37.080 --> 0:11:39.960 a huge market to be tapped. We'll get to what 0:11:40.040 --> 0:11:43.080 eventually happened, but I think those balances got a little 0:11:43.080 --> 0:11:47.840 bit out of whack. So what was the key technical 0:11:47.920 --> 0:11:51.679 challenge that they had to solve in order to actually 0:11:51.720 --> 0:11:55.440 achieve this mission to create a safer alternative to smoking. 0:11:55.920 --> 0:11:58.400 One of the first challenges was very rudimentary, how do 0:11:58.440 --> 0:12:01.400 we heat up the tobacco? So the first iteration of 0:12:01.440 --> 0:12:06.360 their product was essentially a little tube that heated up 0:12:06.400 --> 0:12:12.520 tobacco pods. So it was a very poorly designed device. 0:12:12.840 --> 0:12:15.000 It was almost like a lighter. You snap it and 0:12:15.040 --> 0:12:17.559 it would kick on the butane heater that would heat 0:12:17.600 --> 0:12:22.160 the tobacco. It was shocking people. It was literally on 0:12:22.240 --> 0:12:25.640 the lips now and you look for it in a 0:12:25.720 --> 0:12:29.640 relaxing smoke white, you just get a little joelt. They 0:12:29.640 --> 0:12:32.720 were presenting it to a potential investors, And there's a 0:12:32.720 --> 0:12:34.319 couple of scenes in my book where they go to 0:12:34.360 --> 0:12:37.360 pretty high level people presenting this thing and it like 0:12:37.640 --> 0:12:41.160 zaps them on the lips, and it's super embarrassing. For 0:12:41.200 --> 0:12:44.200 Adam and James, who pride themselves on design. They went 0:12:44.240 --> 0:12:46.920 to the d School, This is the pre eminent design 0:12:46.960 --> 0:12:51.360 school in the world. They eventually included a battery, but 0:12:51.720 --> 0:12:57.600 the challenge with just heating tobacco was that it didn't 0:12:57.679 --> 0:13:02.600 satisfy smokers in the way that cigarettes did. So, yeah, 0:13:02.679 --> 0:13:05.040 if you're not getting the nicotine, there's no way you're 0:13:05.040 --> 0:13:07.160 going to get somebody to quit smoking. I mean, it's 0:13:07.200 --> 0:13:10.320 all about the nicotine. It's only about the nicotine. It's 0:13:10.360 --> 0:13:14.679 all about the nicotine. And let's be clear, high doses 0:13:14.720 --> 0:13:19.320 of nicotine are not a health treatment. According to the CDC, 0:13:20.120 --> 0:13:22.760 using nicotine and adolescence can harm the parts of the 0:13:22.800 --> 0:13:28.320 brain that control attention, learning, mood, and impulse control. However, 0:13:28.880 --> 0:13:31.880 e cigarettes did have the potential to create a far 0:13:32.000 --> 0:13:36.040 safer alternative to cigarettes, and the tobacco companies knew this. 0:13:36.760 --> 0:13:40.080 In fact, because they knew their cigarettes were killing people 0:13:40.240 --> 0:13:43.600 and their backs were against the wall. Tobacco companies spent 0:13:43.800 --> 0:13:48.720 decades and billions of dollars on developing safer products, which 0:13:48.720 --> 0:13:53.560 included vaporizing technology. This was a huge moment for Adam 0:13:53.600 --> 0:13:57.320 and James. They realized that there was an archive containing 0:13:57.360 --> 0:14:00.880 millions of documents that the tobacco industry had made public 0:14:01.840 --> 0:14:05.520 as a term of their settlement with the Attorney's General 0:14:06.120 --> 0:14:09.760 and with the Department of Justice, and so they got 0:14:09.760 --> 0:14:13.160 a lot of their ideas for innovation from these tobacco documents. 0:14:13.559 --> 0:14:19.480 They realized that they could use chemistry to create a 0:14:19.600 --> 0:14:26.600 nicotine solution that was as satisfying as a cigarette. Okay, 0:14:26.680 --> 0:14:31.960 so these two young kids from Stanford finally build a 0:14:32.000 --> 0:14:35.720 little machine that looked like a thumb drive that heated 0:14:35.800 --> 0:14:39.040 nicotine salts or heated nicotine in a way that it 0:14:39.080 --> 0:14:43.080 could deliver as much or more of a hit than 0:14:43.120 --> 0:14:46.280 a cigarette. I mean, this is a pretty amazing breakthrough, 0:14:46.360 --> 0:14:50.200 isn't it. It was a huge breakthrough. Adam and James 0:14:50.240 --> 0:14:52.680 now have Jewel all teed up and are ready to 0:14:52.720 --> 0:14:57.040 go save lives by convincing smokers who are primarily older 0:14:57.440 --> 0:15:01.040 to switch from smoking cigarettes to using a jewel. But 0:15:01.120 --> 0:15:05.360 their very first higher was Kurt Sandrager, a marketing guru 0:15:05.480 --> 0:15:09.440 from Red Bull, a company that pretty clearly targets young people. 0:15:10.160 --> 0:15:13.800 I really think that they found Kurt because he was 0:15:13.840 --> 0:15:16.040 kind of in the area and at the time, it 0:15:16.080 --> 0:15:18.840 wasn't easy to attract people to come work for a 0:15:18.880 --> 0:15:22.360 tobacco startup. I think that they just needed somebody who 0:15:22.480 --> 0:15:27.040 understood marketing, which he did, and I think that they 0:15:27.080 --> 0:15:29.240 did have this kind of initial idea of like, how 0:15:29.280 --> 0:15:33.040 can we frame it as a product that will be 0:15:33.120 --> 0:15:35.800 interesting to people and that might have a little bit 0:15:35.840 --> 0:15:39.000 of cool factors, and of course, being a Silicon Valley company, 0:15:39.080 --> 0:15:42.640 that's a key part of the equation. So Kurt Sandragger 0:15:42.760 --> 0:15:46.720 left the company pretty early and the founders on their 0:15:46.720 --> 0:15:50.360 own went out and hired their first outside marketing partner, 0:15:50.840 --> 0:15:54.360 a company called The Cult Collective run by Chris Neeland, 0:15:55.320 --> 0:15:59.040 and it seemed like they really seemed to understand this 0:15:59.240 --> 0:16:01.520 premise that Jewel was on a mission to be a 0:16:01.520 --> 0:16:05.720 harm reduction company. You know, I'm a former ad guy myself, 0:16:05.920 --> 0:16:08.560 and so you know, I was looking at it with 0:16:08.640 --> 0:16:11.240 my ad guy eyes, and the idea for the first 0:16:11.280 --> 0:16:15.440 campaign that they showed to James and Adam seemed like 0:16:15.520 --> 0:16:19.040 at least the right strategy to me. Basically it went 0:16:19.200 --> 0:16:24.400 directly against cigarettes, comparing cigarettes to old anachronistic technologies boom 0:16:24.440 --> 0:16:27.840 boxes and atari joy sticks and a position jewel is 0:16:27.840 --> 0:16:32.080 the modern alternative, and the tagline was the evolution of 0:16:32.120 --> 0:16:36.120 smoking with the double like jewel. But basically it went 0:16:36.160 --> 0:16:40.040 directly at smoking and knocked it as old fashioned. Why 0:16:40.120 --> 0:16:44.640 didn't James and Adam buy that direction? I don't think 0:16:44.680 --> 0:16:47.280 Adam and James looked at what Chris Nelan did and said, 0:16:47.320 --> 0:16:50.240 this is not the direction we want to go. The 0:16:50.280 --> 0:16:53.360 board of the company at the time was really saying 0:16:53.680 --> 0:16:57.680 we should probably bring in our own marketing person. They 0:16:57.720 --> 0:17:01.760 brought in a new team. This new person Richard Mumby, Right, 0:17:02.000 --> 0:17:06.920 Richard Mumby joined as the CMO midstream, and he had 0:17:06.960 --> 0:17:10.719 his own ideas about what direction the marketing should go. 0:17:11.840 --> 0:17:16.360 So it was evident almost immediately when Richard Mumby came 0:17:16.359 --> 0:17:18.240 in and he had an art director. He brought with 0:17:18.320 --> 0:17:22.639 them a guy named Stephen Bailey. They initially just thought 0:17:22.720 --> 0:17:29.159 that Chris's vision was missing the boat. It wasn't elevating 0:17:29.200 --> 0:17:33.760 the product enough. Well, it also wasn't very cool, right. 0:17:34.000 --> 0:17:38.280 The message I keep getting is these guys somebody somewhere, 0:17:38.320 --> 0:17:41.640 whether it was James and Adam or the board, somebody 0:17:41.680 --> 0:17:45.040 wanted this company to be cool. I think Richard Mumby 0:17:45.080 --> 0:17:48.320 was really driving a lot of that. So Stephen Bailey, 0:17:48.400 --> 0:17:52.760 who is mostly from the world of fashion, did campaigns 0:17:52.800 --> 0:17:57.400 for Gap and hype Beast and Benobo's. He comes up 0:17:57.440 --> 0:18:00.720 with a campaign that became known as vapor Rised, which 0:18:00.800 --> 0:18:03.760 is sort of inspired by his buddy Terry Richardson's look 0:18:03.840 --> 0:18:08.640 that kind of gritty sexy models, jeweling, and it's sophisticated 0:18:08.760 --> 0:18:13.680 and cool and just perfectly out of reach of teenagers, 0:18:13.720 --> 0:18:18.600 who of course will want it. And the Vaporized campaign 0:18:18.840 --> 0:18:20.760 when I look at it today, I look at it 0:18:20.800 --> 0:18:23.800 and go these are exactly the same marketing techniques that 0:18:23.920 --> 0:18:29.120 had been used by Big Tobacco for years, this sexy 0:18:29.160 --> 0:18:34.439 lifestyle imagery. Now absolutely certainly Adam and James were aware 0:18:34.480 --> 0:18:38.200 of these marketing kind of strategies and the problems related 0:18:38.280 --> 0:18:42.760 to them. I don't actually believe that Richard Mumby and 0:18:42.840 --> 0:18:46.560 Stephen Bailey sat down, looked at the tobacco archives and said, 0:18:46.600 --> 0:18:51.920 how can we recreate this tobacco industry playbook? I really don't. 0:18:52.000 --> 0:18:54.880 I don't know how knowledgeable. Richard and Stephen were really 0:18:54.880 --> 0:18:57.000 of the tobacco stuff. I mean, it was all happening 0:18:57.119 --> 0:19:01.159 very fast. They like did the photo shoot and the campaign, 0:19:01.800 --> 0:19:04.760 the mock up in a very short period of time. 0:19:05.440 --> 0:19:10.200 So I really believe that the Vaporized campaign was the 0:19:10.240 --> 0:19:13.920 best work product that Stephen and Richard could come up with. 0:19:14.640 --> 0:19:18.639 It wasn't necessarily a nefarious way to get young people hooked. 0:19:19.040 --> 0:19:21.800 It was a way to make their product cool. I agree, 0:19:21.840 --> 0:19:24.040 And I just think the whole notion of trying to 0:19:24.080 --> 0:19:26.480 make the product cool is where they fell down. It 0:19:26.600 --> 0:19:31.000 was their undoing that was their original sin was the 0:19:31.080 --> 0:19:35.880 marketing campaign and not reading this highly addictive drug with 0:19:36.040 --> 0:19:41.360 enough care, which they should have done right. So they 0:19:41.400 --> 0:19:43.680 do a big launch party at Jack Studio, is a 0:19:43.720 --> 0:19:47.960 super cool place in New York. Four young people models 0:19:48.000 --> 0:19:53.560 and photographers and young fashionistas and punky looking skateboarders, and 0:19:53.920 --> 0:19:56.320 they hire a bunch of young influencers to push the 0:19:56.359 --> 0:20:02.679 event and jewel on social media and spoiler alert, it works. 0:20:03.720 --> 0:20:07.120 Their brand got out there in a very important way 0:20:07.440 --> 0:20:11.640 where I think people definitely started seeing it as almost 0:20:11.680 --> 0:20:14.640 this what is this thing? Nothing on their advertising set 0:20:14.640 --> 0:20:18.040 it was addictive, nothing on their advertising said that it 0:20:18.080 --> 0:20:22.520 contained nicotine. It was just this cool, flashy device that 0:20:22.920 --> 0:20:26.480 you could have as a fashion accessory. So eventually teens 0:20:26.720 --> 0:20:31.320 started becoming interested. Gas stations start running out of it, 0:20:31.800 --> 0:20:35.800 people start posting on Twitter desperately, when are you going 0:20:35.840 --> 0:20:40.080 to restock Jewel? Right, So they can't make them fast 0:20:40.200 --> 0:20:45.199 enough and they're having scaling problems and then Q Scary music. 0:20:45.560 --> 0:20:49.160 Parents start to wake up to this growing issue with 0:20:49.240 --> 0:20:52.760 their kids and they start to freak out. What were 0:20:52.760 --> 0:20:56.400 the first signs of that, Like the first sign of oh, Houston, 0:20:56.440 --> 0:20:59.920 we may have a problem pretty early on I mean principle, 0:21:00.000 --> 0:21:02.520 as we're finding Jewel and not even knowing what it was, 0:21:02.640 --> 0:21:06.080 and parents were finding it and backpacks and in bedrooms 0:21:06.080 --> 0:21:07.800 and stuff like that, and so there's this kind of 0:21:07.840 --> 0:21:13.520 like percolating kind of controversy, and the Tobacco Control Group 0:21:13.920 --> 0:21:17.840 they really started sounding alarm bells. They started calling on 0:21:17.920 --> 0:21:21.080 Congress to regulate this industry because a key part of 0:21:21.080 --> 0:21:23.960 this story is that at the time that Jewel launched, 0:21:24.000 --> 0:21:28.240 there was no regulation on the sale of electronic cigarettes. 0:21:28.800 --> 0:21:34.560 Regulation or lack thereof, is a key point in fifty 0:21:34.600 --> 0:21:38.720 two State and territory Attorneys General signed the Master Settlement 0:21:38.760 --> 0:21:43.120 Agreement with the four largest tobacco companies to settle dozens 0:21:43.200 --> 0:21:47.480 of state lawsuits and to reduce smoking, especially in youth. 0:21:48.560 --> 0:21:52.720 From there on out, tobacco companies have legal marketing obligations. 0:21:53.440 --> 0:21:58.000 No more obscuring health risks, no more billboards sponsoring team 0:21:58.040 --> 0:22:01.960 sporting events, cartoons of any kind, and on and on. 0:22:02.520 --> 0:22:06.240 The Master Settlement Agreement turned out to be incredibly effective 0:22:06.400 --> 0:22:11.000 in reducing teenage smoking, but when e cigarettes and vaping 0:22:11.160 --> 0:22:14.920 came onto the market, they were not covered under that agreement, 0:22:15.200 --> 0:22:19.119 so they were allowed to advertise wherever they wanted, including 0:22:19.240 --> 0:22:24.919 homework sites for middle schoolers and even on Nickelodeon. Yeah yeah, 0:22:24.960 --> 0:22:28.280 so they did advertise on these places. They explain it 0:22:28.280 --> 0:22:30.959 by saying that they used a third party marketer and 0:22:31.119 --> 0:22:33.439 they didn't have control over that, but they did. And 0:22:33.480 --> 0:22:38.320 they actually sent dual representatives into schools to teach about 0:22:38.440 --> 0:22:41.840 addiction and how you shouldn't use nicotine. It was this crazy, 0:22:41.880 --> 0:22:45.360 weird reverse psychology that the tobacco industry had used for years. 0:22:45.880 --> 0:22:47.880 Don't smoke, it's not cool. But then it turns out 0:22:47.880 --> 0:22:50.440 that their marketing was actually attractive to youth. You know, Yeah, 0:22:50.480 --> 0:22:52.600 and at the same time those people went into schools 0:22:52.600 --> 0:22:55.880 and said, well, you shouldn't use it, but it's perfectly safe. Right. 0:22:55.920 --> 0:22:59.320 It was really bad look and it was not good. Meanwhile, 0:22:59.560 --> 0:23:04.000 all the tobacco giant formerly known as Philip Morris had 0:23:04.040 --> 0:23:07.120 been trying to buy a steak in Jewel, and as 0:23:07.119 --> 0:23:11.280 the company came increasingly under fire, that offer started to 0:23:11.320 --> 0:23:16.000 look a lot more attractive. Altria makes Marlborough cigarettes the 0:23:16.080 --> 0:23:20.040 number one selling cigarette in America, and inside Jewel they 0:23:20.119 --> 0:23:24.960 saw it as a way to from the inside take 0:23:25.000 --> 0:23:28.920 their harm reduction plan and use Altrea to really give 0:23:28.960 --> 0:23:33.199 them a huge sales advantage and access to customers. So 0:23:33.280 --> 0:23:37.119 the deal was done in December two thou eighteen, and 0:23:37.640 --> 0:23:40.680 it was like the worst timing ever. There's new regulations 0:23:40.680 --> 0:23:43.399 on the industry, the cigarette industry. At least the pod 0:23:43.400 --> 0:23:46.040 makers had to take off all of their flavored products. 0:23:46.440 --> 0:23:49.160 I mean, Jewel kind of did this voluntarily and anticipation 0:23:49.520 --> 0:23:51.720 of the FDA going in this direction. The FDA is 0:23:51.760 --> 0:23:54.159 now decided whether or not Jewel will continue to be sold, 0:23:54.480 --> 0:23:56.640 whether or not will be legal for Jewel to continue 0:23:56.640 --> 0:23:59.760 selling its product. When do we hear about that? Towards 0:23:59.760 --> 0:24:02.639 the end of the year. So this is really literally 0:24:02.720 --> 0:24:05.639 Julius hanging by threat, and the FDA is holding the threat. 0:24:06.080 --> 0:24:08.560 They either will get the go ahead to continue selling 0:24:08.560 --> 0:24:11.760 their product or they won't. This story made me a 0:24:11.800 --> 0:24:14.160 little sad, I have to say, because it seemed like 0:24:14.680 --> 0:24:17.080 this is a company that was born with a great 0:24:17.160 --> 0:24:19.800 quest to take down big tobacco and save the world 0:24:19.800 --> 0:24:22.479 from cigarettes. They had the breakthrough product to do it. 0:24:23.080 --> 0:24:25.720 They just spiked the ball on like the five yard 0:24:25.760 --> 0:24:28.920 line and marketed it to the wrong people, to teenagers. 0:24:29.200 --> 0:24:33.760 Is that too kind or to mean? Like? Is that fair? Well? 0:24:33.800 --> 0:24:35.960 I feel the same way. I mean, I don't think 0:24:35.960 --> 0:24:38.240 that Adam and James set out to addict five million 0:24:38.280 --> 0:24:42.639 teenagers on nicotine, right, unintentional? Right, But you really do. 0:24:42.800 --> 0:24:46.840 As businesses, and particularly in Silicon Valley, I believe you 0:24:46.840 --> 0:24:53.879 have a responsibility for how your product is marketed and sold. So, Lauren, 0:24:54.320 --> 0:24:57.040 I have a question that I asked all of our guests, 0:24:57.520 --> 0:25:00.399 so I will ask it if you are will just 0:25:00.480 --> 0:25:03.920 a bunch of bullshitters? I don't know. Is there like 0:25:03.960 --> 0:25:06.800 a scale or something? Well, yes, yes, that's where I 0:25:06.880 --> 0:25:08.760 was going. We have a thing called the bullshit scale. 0:25:08.800 --> 0:25:12.040 So on a scale of zero to one, zero being 0:25:12.119 --> 0:25:16.080 zero bullshit the company means everything that it says and 0:25:16.880 --> 0:25:22.320 being just complete bs. Where would you rate Jewel? Well, 0:25:22.400 --> 0:25:25.239 I think that you can't discount their past and like 0:25:25.280 --> 0:25:27.520 a set at their original sin. So I think that 0:25:27.640 --> 0:25:31.320 gives them a lot of points on the bullshit meter. Honestly, Um, 0:25:31.359 --> 0:25:34.480 so that puts them to fifty. I think that they're trying. 0:25:35.240 --> 0:25:39.360 I think that they do have a valid harm reduction mission, 0:25:40.119 --> 0:25:44.119 but again, the youth threat just lingers out there. So 0:25:44.280 --> 0:25:46.920 I would say that between zero and a hundred, I 0:25:46.920 --> 0:25:50.160 would put them at about a sixty. Yeah, that's fair 0:25:50.200 --> 0:25:52.879 and by the way, that can move. What is the 0:25:53.000 --> 0:25:56.320 one thing that you think Jewel should have done or 0:25:56.440 --> 0:26:02.440 still should do to solve their problem? Well, I think 0:26:02.480 --> 0:26:06.280 that they should have treated their product more carefully. They 0:26:06.320 --> 0:26:09.840 should have treated it less as a fashion accessory and 0:26:09.960 --> 0:26:13.560 more as a pharmaceutical grade product that is designed to 0:26:13.600 --> 0:26:16.240 help people quit smoking. They should have been more boring. 0:26:16.680 --> 0:26:20.520 But listen, we all acknowledge and know and realize that 0:26:20.760 --> 0:26:25.200 in no world in Silicon Valley would a boring company 0:26:25.359 --> 0:26:29.920 achieve a thirty eight billion dollar valuation. There's some fundamental 0:26:29.960 --> 0:26:33.959 flaws in the way that Silicon Valley is structure, and 0:26:34.119 --> 0:26:37.080 I think that that's also a big part of the problem. 0:26:37.200 --> 0:26:41.040 Very interesting. I completely agree with that. All right, thank 0:26:41.040 --> 0:26:44.120 you very much for joining us today, Lauren. That was amazing. 0:26:44.280 --> 0:26:48.399 Thanks for having me. Fun to talk to you. So 0:26:49.560 --> 0:26:54.000