Doomed to Fail - Ep 112 - Squeeze your Juice and have it too: Juicero

Episode Date: June 11, 2024

Today we inspect 'the internet of things' and how excited we are to have EVERYTHING online. Does everything need an app??!Farz walks us through the bananas story of the Juicero Press juicer, which guarantees fresh juice at the tap of a button. Founder Doug Evans raised so much money, promised so much convenience, but really created a large machine to do nothing more than you could do with your hands. This juicy saga is a real squeeze on common sense. Did you have one or know anyone who did? We'd love to hear about it! Don't leave us hanging like an unpicked fruit—email us at [e-mail]! Join our Founders Club on Patreon to get ad-free episodes for life! patreon.com/DoomedtoFailPodWe would love to hear from you! Please follow along! Instagram: https://www.instagram.com/doomedtofailpod/  Facebook: https://www.facebook.com/doomedtofailpod  Youtube:  https://www.youtube.com/@doomedtofailpod TikTok: https://www.tiktok.com/@doomed.to.fail.pod Email: [e-mail] 

It's a matter of the people of the state of California versus Hortlandall James Simpson, case number B.A.019. And so, my fellow Americans, ask not what your country can do for you. Ask what you can do for your country. Boom. Taylor, we are recording. Welcome to Doom to Fill. Thank you. I'm welcome in the audience. Hi, hi, four of you. Welcome to Doom to Fail. the twice weekly podcast where we cover doomed to fail topics and we're going to be doing that, I think, today.

Well, mine is definitely doomed to fill. I know what you're about. Who goes first today? I think you do. Okay. So mine is very doomed to fail-y. Okay. I'm ready.

But it has nothing to do with what we typically cover on this show. So changing the format yet again. Okay. man this can be a long win i think taylor i'm trying to try to put it especially given the time crunch i'm going to try and bust through it um so i'm going to start by saying my topic and then tell you what the impetus for all this was so have you ever heard of a company called juicerro yes is that weird machine yes yes cool you know much about it well a little bit i i a little a little bit but tell me more it's wild it's a wild story it's an incredible story it's

very, very doomed to fail. And it made me things like all kinds of different things. So basically the reason I started this topic was one of our old friends, Jeff Dunn, he put me onto a podcast called The Federer Offline. And it's hosted by this Silicon Valley tech journalist, a guy named Ed Zetron. And actually gave done a lot of shit about likeing this podcast and recommending it to me, mostly because all this guy does is shit on tech. Like he shits on tech, he shits on venture capital. He shits on the people who run tech. He, what I told Jeff was like I don't this guy picked the wrong career because he obviously hates this industry and just like some of the topics of the episodes that he does one of them okay so here's four of them we're watching Facebook die how Mark Zuckerberg deliberately made Facebook worse the man that destroyed Google search the autopsy of Apple Vision Pro it's just like constantly just like shitting on their things but he had one called how growth is killing tech innovation Now listen to that, actually I listened to that like a while ago, and I'll go, I'll go into it, but I'll summarize basically the gist of it.

Basically what he was saying, he was interviewing another tech journalist named Robert Evans, and they provided a breakdown of how venture capital works. And for those of you who are not in tech, the TLDR of this is basically you, if you're a trying to, if you're a founder trying to get a company going, you'll either self-fund or aim. angel fund a initial round of your company's existence, then you'd go to a traditional venture capitalist typically in Silicon Valley and raise your series A. Hopefully that's good enough to where you get to a scale where you can raise a series B, a series C, so on and so forth, until you reach what's called like breakout velocity. And that's kind of like the entire point of that. What this episode basically was trying to highlight is that that darling version of like these groups of investors who are trying to like propel growth for the sake of humanity and

the betterment of humanity and all that stuff, it's actually not that clear that they're actually doing that. They're also getting hoodwinked and falling for a lot of scammy stupid stuff. And that's a big part of why a lot of the tech you see like lately hasn't been really all that interesting or innovative. It's because we're just like going to fund the shiny object and get that going and the topic of today was it's kind of like where it's the best example of that i could possibly find but uh one other point to that episode makes is that those venture capitalists really don't give a shit about making money as like they don't give a show about that the company being profitable making money they give a shit about making the company big enough so that it can

IPO so that the public can fund the company and they can extract all our value out of it so Right. They're just serial entrepreneurs. Exactly. This is interesting. I did not know this, but apparently Facebook took $700 million over five years before it ever turned a profit. Wow. That's how much Uber took? A billion dollars. $20 billion.

What? I thought I was being ridiculous saying a billion dollars. Guess when they became profitable? Yesterday? 2021. Pretty close. Oh, my God. Is that nuts? That's nuts. And like they can't,

like we just can't believe we can't find money to help poor people. It's crazy. You know, like in America, we should, no one should be hungry if that's happening. And it was funny because like the same thing was true for, well, it's kind of true for Airbnb. They took a lot less money.

Uber seems like it's an outlier. But Airbnb took $6.4 billion. And they didn't become profitable until 2022. That's 14. years after they were founded. Wow. And way after they actually had IPOed. And so that was kind of the entire point of the podcast was like, like, they're not

actually creating valuable companies because they're providing value to the marketplace. They're just creating value for the investors. And that's basically all it really matters. Yeah. Fair point. So from a purely economic standpoint, the founding of the companies I just named off was basically like a net positive. overall, those three companies employ over 100,000 people, and they're responsible for just shy of

$1.5 trillion of economic activity in the U.S. So on that level, it's a good thing. But on the other side of venture capital and fundraising is that the firms, like I said, they don't really care about the idea or the innovation or really even the users or the financial outcomes for those individual companies. They're just looking to dump as much money as they can to something IPO, have the public market take it over and kind of clear their path for making as much money as possible off the IPO. And so what I put down here is it's basically like a very expensive shell game. And the public is the one funding all the excesses of SeoulCon Valley. And if you think back, Taylor, about like our past, like the shit that we've seen

in our history. And it's just like the flagrant use of money in the stupidest ways possible that like i don't know i don't know jes old to go into about this stuff but you know what i'm talking about right yeah and i think even like i don't know two years ago or whatever when silicon valley bank um crashed and they got bailed out and then there were people that i worked with who were like yay but they're also like i'm a libertarian and i'm like fuck you but you can't be both you can't be like bailouts for me and not for anyone else yeah yeah so wild um it is weird. San Francisco does have this weird, like, leave me alone and also help me. Exactly.

By Scooter, that's so very confusing. Yeah. So I feel like these days, people are becoming, like, pretty, like, it's pretty front and center for people, the, those excesses of Silicon Valley. I like this up. So far, there have been five movies or TV shows about the rise and fall of Theranos, and there is now a movie and a miniseries starring Jared Leto about the rise and fall of weekwork. So we're seeing this stuff, right?

It's fascinating. Yeah, that makes sense. It's totally fascinating. And to be fair, I wanted to like cover an example of this, but I didn't want to cover a company where they just kind of guessed wrong. And in hindsight, you can look back and say, oh, they messed up here, here, and here because that's not really fair. Like, everybody messed up, right?

Yeah. I came with this, like, stupid example. I did a bit of research on it. You remember, you know Vimeo what Vimeo is, right? Yeah. So this is interesting. So, Vimeo and YouTube are essentially competitors, but not really, right? Like, at this point, it could be a show about Vimeo.

But they started out as competitors. What's interesting is that Vimeo was ahead of YouTube by a year. So they got to jump start on things. But the only difference was that Vimeo made creators pay to upload videos like their platform, and they would upcharge them based on quality of the video, storage capacity, things like that. Whereas YouTube's business model was free for creators. They monetize using advertising. that's not like ha ha what an idiot vimeo was it just gets wrong they just like try one thing

and it didn't work out and yeah and to be fair it actually kind of worked out because vimeo's market cap right now is 600 million dollars but there's obviously nothing compared to youtube which is like estimated to be around 200 billion so it wasn't like a huge it wasn't like a failure failure but like in this context I guess it was yeah so I'm going to talk about today is like this one company who is just so obviously patently stupid this is not like a someone, yes, wrong situation. This is just like blinders to the world situation. So the company, like I said, the company I'm covering is called Juice Arrow.

And it's like Juice, the word Juice Arrow. And this company was founded in 2013 by a guy named Doug Evans in San Francisco. His intent behind the company was kind of noble. His early life was plagued by tragedy. So when he was 30 years old, his mother died of cancer. surely thereafter his father died of heart disease his brother had a host of problems he had diabetes atrial fibrillation several strokes to hypertension and because this dog was understandably freaked out that he needs to do whatever he can be as healthy as possible to save off all these elements that are that are in his family so he did the best thing you can do for your heart and he launched a startup which i have no idea how you think that would actually be beneficial for you but he was trying to generally live as healthy as he possibly could during this time. He converted it to veganism and also became obsessed with cold juicing.

And this is like in the early 2000s. He fell into a health movement headfirst and started his first 4A into a business, into business by launching Organic Avenue, which was a cold press juice store in New York City. This was, like I said, in 2002, which actually shows that he was a little bit ahead of his time. Now, there's one of these stores on every block in Los Angeles, for example, like press juicerie, juice press, project juice. I did one of these, what's that one little village part called in L.A.? It's like a very quaint, cute little celebrity villagey kind of a spot. I forgot what it's called.

Anyways, they have this, like, beautiful juice press store there, and I try to do one of those diets for, like three days and it was horrible. I don't know how people do it. But the good thing about this is like he was way ahead of his time. It would take another 10 plus years before all these companies would kind of pop up and follow this cold juice press fad that Doug basically started. So over time, he would have ultimately sell Organic Avenue in 2012 and he decided he wanted to attack the juice market in a different way by launching Juicerro. So he founded a company in 20, But the product didn't actually launch until 2016. And the concept was pretty simple.

It was going for kind of the Apple of concept, of creating an incredibly beautiful, high-quality looking juicer. And it also had a very Apple-like price tag of $700 per unit. So the one thing, the reason it took so long to launch this thing, there's multiple. But one of them was this thing was so. over-engineered. It was so well done. It was so perfectly. It was the best of everything kind of brought together to make this, this juicer. And so that's why it costs so much as well. I'll talk about this later, but the conversion rate from then to now is about $900. So it was a

juicer for over $900. So it totally, totally. But Doug wasn't just trying to create like a beautiful juicer, much like today's AI creates, which is exactly why I talked shit about the AI craze right now. Back then, all anybody paid attention to was IoT, the Internet of Things. Remember this? This is the fat of the 2010s onward. Yeah. Explain it again. So Internet of Things just refers to an Internet connected device. So physical items with an application layer tied to the internet. It's interesting. I looked this up. So the concept, it's been around for a long time. So the very first IOT device was a Coke vending machining Carnegie Mellon University in 1982, which was remotely able to update someone somewhere else on the inventory in the vending machine

and whether they were cold or not. So that was like the starting point of all this. RFIDs are the second iteration of this that are considered IoT devices, but I said RFIDs, yeah, RFIDs. Yeah. Okay, good. thank you so today like obviously we look at iot devices is kind of ubiquitous like apple watches for example or your smart tv or like teslas would be considered iot's at this point

basically most things are connected to the internet which obviously has like it's ups and downs the best possible example might be apple watch which can detect if you've been in a car crash or if you're a senior citizen and you've fallen down so they can automatically call for help the worst of this, which we heard about recently a year ago, was BMW, who started rolling out subscription services during the wintertime to BMW owners for $18 a month to turn on heated seeds in their cars. Wow. Crazy.

It's crazy. Yeah. Yeah. So anyways, IOT back in the 2010s became kind of like a Silicon Valley buzzword. And if you wanted to get funded, you would kind of refer to yourself as an IoT company the same way that you would do that two-day with AI. We have a friend. Taylor, I don't know if he's told you this, but he works in appliances, like ovens and stuff like that. And when Chad GPT was initially released in the Craigsvon, Chad GPT started, I remember having a call with him.

And he mentioned how their entire team is getting together at an offsite, like an emergency kind of offside situation. And they have to figure out how to incorporate AI into like stoves. Yeah. And I was like, what does that mean? He's like, I don't know. We have to have AI. Everyone does for whatever reason. Yeah.

And so it's a nice correlate of what was going on in the 2010s when everybody was like, we have to have IoT. It's got to be IoT. And so, yeah, I looked this up. So apparently in the 2010, so between 2010 and 2015, funding for IoT devices doubled in that time frame. And I went down a weird. rabbit hole here, but I kind of blamed this trend for why the WeWork situation happened,

mostly because funding tech companies who are doing like cool, innovative new things was the point of venture capital in the beginning. And when the IOT trend started, it started migrating from tech to things being what was fundable, ultimately ending up in WeWork, which like, what part of WeWork is tech or innovative? Like, I don't get it. Like, no, because like a physical place and like oh, if things it would look cool. But that's thingly, it was, it was, it was, it's considered

kind of like a slow con valley darling and a slow con valley theory, but it's like, why? Right. Like, they have an app the same way Campbell Soup has an app, but not a tech company. Right. I look this up. So the first

co-working space or the sorry, the biggest co-working space until we worked, uh, downfall was Regis. And that started in 1989. It was literally the exact same concept. Oh, wow. Except we work introduced cold brew.

Exactly. And free beer. Yeah. Yeah. But like, I don't know. It kind of put me on this path. I'm like, wait, so how do we decide that we work with a tech company? Oh, it all started here where we just puts the internet on a book or a piece of gum or something.

Right. And it's like now it's an IOT device. And so anyways, back to Lucero. So it was against kind of that backdrop. that they officially launched the business. So like I said, it was founded in 2013. It didn't launch until 2016. Up to that point, the company went through three fundraising rounds.

The first was a seed round in 2013 at $4.1 million, which is great, by the way. Like, if you can get $4 million, free anything, like, that is awesome. A series A in April of 2014, and it's $16.5 million. And then a series B in March of 2016 at 70 million. This is all pre-launch. So it raised $90 million before it had a physical product. That's crazy amount of money. Yeah.

You're going to say something? No, I'm yawning. Continue. Thank you. It's early this time. I'm going to edit that out. So I did the math on it. So a $90 million valuation, it would put the market.

cap at the time of its launch, it's somewhere between $300,500 million, again, with zero product and zero evidence of product demand for, or market demand for that product. By comparison, I have no idea what this company is. It'll just like Google the round for companies with a similar market cap. There's an online retailer called The Real Real, and that has a market cap of just under $400 million with annual revenues of $551 million. So that's like the universe we're in now, versus what the hell was going on in 2016 when we all kind of figuratively lost our minds. So Jucero launches its $700, beautiful juicing machine. The thing was, the device didn't make juice kind of the traditional way.

My favorite part of researching all this was when I found the original Jucero commercial, which, by the way, all comments have been disabled for, which is a really, really great idea. And it shows this quintessential Los Angeles kind of couple. they're young they're obviously well off they have a nice little kitchy house and they decide that they want to make juice one day and so this commercial follows them around in their journey to try and make juice they have to walk down to the farmer's market they spend hours going from booth to booth get killed from this guy get carrots from that guy get the cucumber from this other guy all the fixings and at that point they realized they didn't bring

their tote bag. And so they end up walking home cradling their produce all the way home as they're dropping parts of them having to stop and pick it up. Once they get there, they have to find all the parts of their juicer, which was at the back of the cabinet. So first they had to take everything else before they get the juicer. Then they realized there was a missing part of the juicer. So they spent another hour searching for that. At this point, the kitchen is a complete mess. And next they have to clean and dice their vegetables. Then they have to. to dice them or wash them again after dicing eventually they find the missing part of the juicer and then make their juice that's not with the commercial lens they're not done yet hours

of time hours of time at this point they now have to clean their kitchen so they basically in this commercial associate the complexity of making the juice with building a nuclear reactor and so they invented this problem that had to be solved which like nobody normal would have that experience trying to make juice. Yeah. Also, you just buy juice. Like, you don't have to. Just buy juice.

Just buy juice. So at that point, the commercial shifts to how they're going to solve this problem that they created, essentially. And it pans over to this beautiful looking device on the couple's kitchen counter. The wife opens the front part of it and reveals this like orange flat interior with little flat hook looking things at the top that you could hang a bag off of. kind of an ivy bag stuff of a thing

exactly like an ivy bag I'm looking at it yeah totally then you close the front door you push the slick looking button and all these gears were into place and they efficiently and effectively squeeze the content from the bag into your glass like I said

I looked I looked up all of Jucero's videos on YouTube because they still have a channel active and all that comments are disabled which is like super super smart that's so funny so they also leverage the fervor around the IOT piece I mentioned earlier and branded themselves as a connected device, which the investors

obviously loved. And it also gave them access to another part of their, a new part of the business model, which was basically how like inkjet printers function. So the IOT concept involved the juice bags themselves that would be squeezed. The juice you could squeeze out of a juicerro bag was sold by Jucero itself. And the IOT idea behind it was that the juice user would read the bag, the QR code on the bag, and only then would it operate and squeeze the contents out of it. And there are even if this was this for quality control. Like if there's a spinach recall, we could immediately disable the ability to squeeze juice

out of that pack or if it's out of date or if it's whatever. Like we can figure something out for that. So that was the entire reason why they said they did that. But realistically, it's just like the inkjet thing. They're trying to make their money off the back end, right? I hate those. Having a printer is the fucking worst experience you can have as a human. Yeah.

Worst, worst. It's terrible. 100%. I don't get what Apple isn't solved this. Why does the Apple just build? Like, if they did it, it would be so much easier. No real. That's weird.

Good question. I'm going to write a letter to Tim Cook. Perfect. So sales numbers aren't public, obviously, because the company never went public. But we can make some assumptions around what was going on. So, for example, for example, Presumably, it wasn't going well eight months after launch because by January of 2017, they reduced the price of the juicer itself from $700 to $400.

No, the packs were separate. Those are between $5 and $7 a piece. So you buy those separate. And you have to have a subscription, right, or something? I don't, so I don't know if they did a subscription model. I think you could just pick the packs themselves. I tried figuring this out by going to their website. obviously it's no longer in existence.

But I went to the Wayback Machine. If you try to go past a home page on the Wayback Machine, it's all at all 404s. So you can't really figure that out. The beginning of the end happened in April of 2017, so about a year after launch, when Bloomberg News published a video entitled, quote, do you need a $400 juicer?

It's only a minute long, and it became a meme really, really quickly. And I watched it. And everybody should watch it too. In the video, two panels are presented, and one is a pair of hands squeezing a juicerro juice pack, and in the other is the juicer squeezing the juice pack. The video finishes with both the juicer and the pair of hands, squeezing the same amount of juice out of the pack and presenting the cup to the camera. So it is presumed at that time the juicerro had sold between two and three thousand units.

The price some customers had paid, like I mentioned before, were $700, while others paid $400. So $700 people were pissed anyways. Then this Bloomberg video comes out and then everybody's pissed. So customer demand for refunds floods in and by June they had to lay off 25% of their staff and they were losing approximately $4 million per month by September of 2017, 18 months after launching and blowing through $120 million in total funding. That's an insane amount of money to blow through. The company shut its doors completely.

So overall, a ton of money blown, ton of jobs were lost. What's interesting is, I think today, okay, don't kill me for this for Stannis Taylor, I think it's not a terrible concept if it had been executed differently. I mean, I feel like the machine is unnecessary. Yeah. So one thing that I thought was like the real value pop here was they actually secured a pretty intense supply chain of farm the table produce and, like, creating the, the contents that go one of those packs.

The biggest problem I thought was the price of the juicer itself, the reason why it exists and what the product value of the juicer itself was, and the expense of the kind of creating it itself, now I think that if you were to create it, maybe you could sink it with a diet app. Maybe you could sync it with an app where it could automatically order fresh shoes based on your diet requirements. Maybe one needs to be more protein rich. One needs to be more vitamin. I think it could be a cool concept. If you just reduce the initial price from like $700, like I don't know, maybe like 50 bucks or $100 or something, but I don't know. It also serves as like a really great case study. This is the other rabbit while I went down of

why you shouldn't just talk to people like yourself. That's very fair, yeah. So based on inflation, like I said before, $700 in 2016 is about $907 in 2024 money. So assuming the average cost of a juice pack from them was about $6, which it is, and presume consumption of five times per week, which is if you're really big into juicing, it's probably light. If you're not, then it's probably average, whatever. That means that your annual spend pre-tax in your first year of juicing comes to $2,140.

The average household income in the U.S. as of today, not back then, as of today, is $74,580. The top 10% of households earn $173,000. So that means that the creators and the investors of this device assume that the average American household would be willing to spend 3% of their gross income on juice and juice-related material. That's probably not true. So according to the U.S. Bureau of Labor and Statistics, Batman Americans would be spending as much on juicing as they do annually on clothing, and they would spend more on juicing than they spend on education.

I just feel like not that much many people like juice. Like, it seems like. Like, juice is fine, but it's not food. And what are you talking? I know, I know. And again, when I did that, so it was like a three-day juice cleanse when I was in a little bit in LA, Hancock Village, I think, I forgot what, damn, I can't remember the name. But, yeah, went to that one juicerie and paid like 300-something bucks for three days of juice.

And yeah, it was like by the end of the first day, I was like, this is stupid. Like, this is so bad. Like, this can't be good for you. Like, your body's not made to live off liquid. like i think living off liquid is what you do right before you die when you can't eat anymore so i actually i should pull this to add too which is interesting so going back to like just talk to other people so the average vc

like the average person sorry the average person that works for vc firm in silicon valley makes about minimum 212 to roughly around like 500 000 a year it is probably close to the 500 000 a year apiece partners on the other hand are in the one to five million dollars a year range and the actual owners of the venture capital firms are in the hundreds of millions and billions of dollars a year range so if you only talk to yourself you're like save 700 bucks for juice easy like what an obviously simple value prop yeah seems totally reasonable like meanwhile meanwhile someone's trying to sell their organs you know to feed their kids and don't want to spend 700 dollars on a juicer and so so so you know, step outside of your comfort zone, talk to people that aren't in your circle, and maybe, you know, it'll be overall a net positive for you. So. That's so funny. But, yeah, that was my piece.

I know someone who got one from Oprah, they like, someone I knew that, like, worked in Hollywood, was at a party, and Oprah was like, oh, my God, I love this new juicer. I gave everyone one at the party. Like, you get a juicer, you get a juicer. And then they, like, had it. And they were like, this stupid. It's, like, really big. give it to someone else and I don't know how long they used it but ridiculous it's really big it's

really big if you watch that commercial and you see again over-engineered as health um totally unnecessary it's also not a juicer it is just a press it is like the thing you use to make tortillas you know the little things that you press down the metal place to make tortillas it's that automated you literally the exact same thing with a three dollar thing you buy from a um mexican restaurant store or something. That's so wild. But yeah, it made me go back. Taylor, it's like our old days. And I was, I was talking to a friend who worked for another company that you probably also know that it was kind of like in our cohort back in the day. And they raised a ton of money. And they were talking about how they had like voice operated like soda machines where you could walk up and like talk

to a machine and would like dispense the exact amount of like, it's crazy. crazy how much money we sold really low yeah and then and then and then you think about like the layoffs and stuff you're like what absolute waste so ridiculous so silly but anyways luckily silicon valley's learned it's lost and it's never going to do that again i know i'm so glad how they're so responsible these days so that's just so nice you know do you not see it too with this AI thing do you not see like how i think there's like obviously really great applications of it but then also the fact that everybody's like oh we're the a i have this where the a it's like it can't be that ubiquitous and still be novel yeah i agree i mean i think it's it's cool in some places

but yeah i don't need it everywhere for sure like my mom was like my mom was here and she was like well now like when i'm in like instagram there's no more google chrome it's just ask i And I'm like, it's the same thing, but it's just like pretending to be different, you know? It's so stupid. Yeah. Yeah. It's so stupid. I hate it.

But whatever, it's going to keep coming around. So, yeah, that's my story. I hope you liked it. Cool. It's wild. It's so dumb. It's so silly. I started researching murder stuff.

I was like, I literally just can't read another semen stained panty story. Like, it's just not. No, it's wild. So anyways, yeah. Yeah, that's our story. If you work for tech and have seen some of these accesses, like, we would love, I love talking to other people and hearing, like, what their companies have done before in the past. It is fascinating. So right. It really is wild. Cool. Anything to report, Taylor? No, no. Thank you, everyone for listening. If any, we're almost, I have four more re-release us to do. So that's exciting. We're almost closing that loop. And thanks everyone for listening. Let us know if you have any ideas. please, please, please tell your friends and give us a review on Apple Podcasts.

That would be really, really helpful. Please. And we're at doom to fail at gmail.com. Wait, we are, sorry, we're, tell what you say it? Doomedefelpod at gmail.com. Thank you. At the pod at the end. Awesome.

Sorry for the rush this morning, everyone, but we're going to cut this off and join with Taylor here in a few days. Cool. Thank you. Yep. Thank you.