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 doomedtofailpod@gmail.com!
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 doomedtofailpod@gmail.com!
Hi Friends! Our transcripts aren't perfect, but I wanted to make sure you had something - if you'd like an edited transcript, I'd be happy to prioritize one for you - please email doomedtofailpod@gmail.com - Thanks! - Taylor
[Music] in a matter of the people of State of California versus orthal James Simpson case number ba09 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 fail thank you I I'm
welcoming the audience hi hi four of you um welcome to dooma Phil
we are the twice weekly podcast um where we cover Doom theel topics and um we're
going to be doing that I think today good well mine is definitely Doom
toil I don't know what yours about who goes first today I think you do okay so mine is very doomed to
failly okay I'm ready but it has nothing to do with what we typically cover on
the show so great changing the format yet again um okay this man this G to be
a long win I think Taylor tryy especially given the time crunch I'm G to try and Buzz through it um so I'm GNA
start by saying my topic and then tell you what the infinus for all this was so have you ever heard of a company called
juaro yes is it that weird machine yes yes cool do you know much about it well
a little bit I I a little bit but tell me more it's wild it's a wild story it's
it's an incredible story it's very very Doom to fail Le and it made me think like all kinds of different things so basically the reason I started this
topic is one of our old friends Jeff Dunn he put me on to a podcast called better offline and it's hosted by the
this um silcon Valley tech journalist guy named ed Zone and actually gave done
a lot of [ __ ] about like liking this podcast and recommending it to me mostly because all this guy does is just [ __ ]
on Tech like he shits on Tech he shits on Venture Capital he shits on the people who run Tech he it what I told
Jeff was like I don't this guy picked the wrong career because he obviously hates this industry and right 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 like it's just like constantly just like [ __ ] on it things but he had one called how growth
is killing Tech Innovation and now listen to that actually listed that like a while ago
and I'll go I'll go into it um but I Al 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 Angel fund a initial
round of your company's existence then you go to a traditional venture capitalist typically in silcon 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 it what this episode basically was
trying to highlight is that that darling version of like the these groups of 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 actually doing
that they're 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 is kind of like where is the best example of that I could possibly find but uh one other point
that that episode makes is that those retro capitals really don't give a [ __ ] about making money as like they don't
give a [ __ ] about that the company being profitable making money they give a [ __ ] about making the company big enough so
that it can IPO so that the public can fund the company and they can extract
all their 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 guess 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 I can't believe we can't find money to help poor people it's crazy it's 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 kind of
true for ABNB they took a lot less money Uber seems like it's an outlier but Airbnb took $6.4 billion do and they
didn't become profitable until 2022 that's 14 years after they were founded wow and way after they actually
had 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 um 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 one .5 trillion of economic activity in the
US so on that level it's a good thing but on the other side of venture capital
and fundraising is that the firms like 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 Solon Valley um and it made
me think back Taylor about like our past like like the [ __ ] that we've seen
in our 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'm not jel 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 it 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 [ __ ] you but you can't be both you can't be like ba bailouts for me and not for anyone else
yeah yeah so wild yeah um it is weird
San Francisco does have this weird like leave me alone and also help me exactly
that's so very confusing yeah so I feel like these days people
are becoming like pretty front like it's pretty front and center for people the those excesses of Silicon Valley I look
this up so far there have been five movies or TV shows about the rise and fall of Theos and there is now a movie
and a miniseries starring Jed Leto about the rise and fall of we work so w yeah
we're seeing this stuff right it's fascinating yeah that makes sense it's it's totally fascinating and to be fair
I want to like cover an example of this but I didn't want to cover a company where like they just kind of guessed
wrong in in hindsight you can look back and say oh they messed up here here and here because that's not really fair like everybody messes up right yeah I came
with this like stupid example I did a bit of research on it you remember you you know Vimeo What Vimeo is right yeah
so this is this is interesting so VI and YouTube are essentially competitors like but not really right like at this point
it giv a show out Vimeo but they started out as competitors what's interesting is that Vimeo was ahead of YouTube by a
year so they got a jump start on things but the only difference was that video made creators
pay to upload videos to 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 monetized using advertising that's not like a haha what an idiot Vimeo was it just gets wrong
they just like tried one thing and it didn't work out and yeah and to be fair it actually kind of worked out because VI's market cap right now is $600
million but that's obviously nothing compared to U2 which is like estimated to be around 200 billion so it wasn't
like a huge it was like a failure failure but like in this context I guess it was yeah so what I'm going to talk
about today is like this one company who's just so obviously patly stupid like this is not like a someone yes
wrong situation this is just like blinders to the world situation oh my
God so so the company like I said the company I'm covering is called juera
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 um his early life was played by tragedy so when he was 30 years old his
mother died of cancer shortly thereafter his father died of heart disease his brother had a host of problems he had
diabetes hual fibrillation several strokes and hypertension and because this Doug was
understandably freaked out that he needs to do whatever he can to be as healthy as possible to save off all these
ailments that are that are in his um 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 um he fell into a health movement
head first and started his first 4A into a business into business by launching Organic Avenue which was a cold pressed
juice store in New York City um 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 Juicery juice press project juice I did one of these uh what's that
one little village part called in um in La 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 tried to do a I tried
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 it to it would take another 10 plus years before all these companies would kind of pop up
and follow this cold juice press f that Doug basically started so over time he
would have ultimately sell um Organic Avenue in 2012 and he decided he wanted
to attack the juice Market in a different way by launching juicero so he founded a company in 2013 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 perfect like it was the best of everything kind of brought together to make this this juicer and so
that's why it cost so much as well I'll talk about this later but the conversion rate from then to now is about $900 so
was a juice for over $900 ridiculous totally totally um but Doug
wasn't just trying to create like a beautiful juicer much like today's AI craze which is exactly why I talk [ __ ]
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 inter I looked this up so the concept it's actually been around for a long time so the very first iot
device was a coch vending machine in car carnegi melon University in 1982 which
was remotely able to update someone somewhere else on the um inventory in
the vending machine and whether they were cold or not so that was like the starting point of all this the rfids are
the second iteration of this that are considered iot devices but um I said
RFID said I yeah rfids yeah okay good um 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 iots at this point um basically most things are connected to the internet which obviously has like
its 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 winter time to BMW
owners for $18 a month to turn on heated seats 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 today with AI we have a friend Taylor I don't know
if he's told you this but he works in um in um appliances like ovens and stuff
like that and when Chad gbt was initially released and the crazy chbt
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 like everyone does for whatever
reason yeah and so so it's a nice correlat of what was going on in the 2010s when everybody was like we have to
have iot it's got to be iot um and so yeah I looked this up so apparently in
the 2010 so between 2010 and 2015 uh 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
weor situation happened mostly because funding tech companies who were 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 cuz a physical
place and like all things that just look cool but that's thing it was it was it was it's considered kind of like a
Silicon Valley darling a Silicon Valley Phil it's like why right like they have an app the same way Campbell Soup has an
app they're not a teag company like right I look this up so the first co-working space or the sorry the
biggest co-working space until we Works uh downfall was regious and that started
in 1989 it was it's literally the exact same concept oh wow except um except we work introduced cold brew
and yeah yeah but like I don't know that it kind of put me on this path of like
wait so how do we decide that we work with a tech company oh it all started here where would he just puts the
internet on a book or a piece of gum or something it's like now it's an iot
device and so anyways back to Jero 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 that is awesome um
a series a in April of 2014 at 16.5 million
and then a series B in March of 20 2016 at 70 million this is all pre-launch so
it raised $9 million before it had a physical product that's crazy amount
money CRA yeah you want to say something no I'm yawning continue thank you it's early
it's early this time I'm gonna edit that out um so I did I did a math on this so
a $90 million um valuation it would put the the market cap at the time of its launch it's somewhere between $300 and
$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 just like Googled around
for companies with a similar market cap there's a online retailer called the real re 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 so Jero launches a $700 beautiful juicing machine the thing was it the
device didn't make juice kind of the traditional way my favorite part of researching all this was when I found the original juicero 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 farmers market they spend hours going from Booth
to Booth get Kill from this guy get carriots from that guy get the Cucumbers from this other guy all the fixings so
and at that point they realized they didn't bring their tote bag and so they end up walking home cradling the their
produce all the way home as they're dropping Parts been having to stop and pick it up once they get there they have
to find all the parts their juicer which was at the back of a 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 dice them or wash them again after dicing eventually they find
the missing part of juicer and they 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 a 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 also you just buy juice like you don't have bu juice
just buy juice so so at that point the commercial shifts to how they're going
to solve this problem that they created essentially and it pans over 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 could you could hang a bag off of kind an ivy bag type of thing exactly like an ivy bag
I'm looking at it totally 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 back into your glass like I said I I
look I looked up all of juo's videos on YouTube because they still have a channel active and all their comments
are disabled which is like super super smart that's so funny so they also
leveraged 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 ink jet printers function so the iot concept
involved the juice bags themselves that would be squeezed uh the juice you could squeeze out of a juicero bag was sold by
juicero itself and the iot idea behind it was that the juicer would read the
bag the QR code on the bag and only then would it operate in squeeze the contents
out of it and their argument for 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 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 inkjet thing they're trying to make their money off the back end right I hate those having a printer
is the [ __ ] worst experience you can have as a human yeah worst worst it's Terri 100% I don't get why Apple hasn't
solved this why doesn't Apple just build like if they did it it would be so much easier for real that's weird question I
wna write Tim Cook perfect um so sales numbers W aren't public obviously
because the company never went public um but uh we can make some assumptions around what was going on so uh
presumably it wasn't going well eight months after launch because by January of 2017 they reduced the price of the
juice it sell from $700 to $400 no the packs are separate those are between $5
and $7 a piece so you buy those se you have to like have a like 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 P packs
themselves um I tried figuring this out by going to their website obviously it's not no longer in existence but I went to
the Wayback machine and if you go try to go past the homepage on the Wayback machine it doesn't it's all all 404s so
can't really figure that out um 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 every should watch it too in the video two panels are presented and one is a pair of hands squeezing a
juicero 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
that Jero had sold between two and 3,000 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 ton of money blown
ton of jobs were lost um what's interesting is I think today okay don't
kill me for this for sist 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 they actually secured
a pretty intense supply chain of Farm to
Table produce and like creating this the the contest that go into those packs
it the biggest problem I thought was the price of the juicer itself the reason why it exists and what
the mark the product value of the juicer itself was and the the expense kind of
creating it itself now I think that if you were to create it maybe you could
sync it with a diet app maybe you could sync it with an app where it could automatically order fresh shoe spacing
or 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 bucks or
something but I don't know um it also
serves as like a really great case study this is the other Rabbit Hole I went down of why you shouldn't just talk to
people like yourself so that's very fair yeah so
based on inflation like I said before $700 in 2016 is about $97 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 US as of today not back then as of today is 74,500 $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 so that's probably not true so according to the US Bureau of Labor and
statistics bman Americans would be spending as much on juicing as they do
annually on clothing and they would spend more on juicing they spend on education I just feel like not that much
many people like juice like it seems like like juice fine
but it's not food and what are you talking I know I know like and again
when I did that so it was like a three-day juice cleanse when I was in living in La Hancock Village I think I
damn I can't remember the name um but yeah went to that went to that one Juicery 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 this is so bad like this can't be good for you like your body's not made to live
off liquid like like I think living off liquid is what you do right before you die yeah when you can't eat
anymore so I actually actually pulled this D 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 a 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
piece Partners on the other hand are in the1 to5 million a year range and the
actual owners of the Venture Capital firms are the hundreds of millions and billions of dollars a year range so if you only talk to yourself you're like d
700 bucks for juice easy like what obviously value prop yeah it 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 on a juicer and 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 it'll be overall a net positive for
you so that's so funny but yeah peace I
know someone who got one from Oprah they like someone I knew that like worked in
Hollywood was at a party in Oprah was like oh my God I love this new juicer and gave everyone one the party like you
get a juicer you get a juicer and then they like had it and then they were like this is stupid it's like really big and they gave 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 his health um totally unnecessary it's also not a
juicer it is just a press it is like the thing you use to make tortilla is you know those little things that you press
down the metal placement it's that automated you L do the exact same thing
with a$3 thing you buy from a um Mexican restaurant store or something that's so
wild but yeah it it made me go back tailor to like our the old days and I
was I was talking to a friend who worked for another company that you'd 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
would like dispense the exact amount of like it's crazy crazy how much money we
blow 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 uh luckily silon he's learned its lesson 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 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 AI of this we're the AI 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 when I'm in like Instagram there's no more Google Chrome it's just ask Ai 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 um but
whatever it's going to keep coming around so so yeah that's my story 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
Sean stained panty story like it's just not no that's
wild um so anyways yeah that's our story if you work for Tech and have seen some
of these excesses like we would love I I love talking to other people and hearing like what their companies have done
before in the past it is it is fascinating so it really is wild um cool
anything to report Taylor uh no no thank you everyone for listening um if any
we're I I have four more re-releases to do so that's exciting we're almost
closing that Loop um and thanks everyone for listening let us know if you have any ideas and please please please tell your friends and give us a review on
Apple podcast that would be really really helpful please and we are at Doom
toil gmail.com do we are sorry we're tell you say it Doom toil pod gmail.com thank you
thank you POD at the end um awesome sorry for The Rush this this morning
everyone but we're going to cut this off and join with Taylor here in a few days cool thank you yep
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