1 00:00:06,464 --> 00:00:08,133 [typing] 2 00:00:25,650 --> 00:00:27,652 [indistinct chatter] 3 00:00:33,783 --> 00:00:36,703 [anonymous male employee] I'm not sure this story can be told on the record, 4 00:00:36,786 --> 00:00:38,580 but I'm gonna tell you anyway. 5 00:00:40,123 --> 00:00:43,626 [David Pierce] This idea that you could come to Silicon Valley and not only 6 00:00:43,710 --> 00:00:47,047 invent something that is yours, but also make the world a better place, 7 00:00:47,130 --> 00:00:48,381 that's the dream. 8 00:00:50,884 --> 00:00:54,220 The time was right for new things to happen. 9 00:00:54,304 --> 00:00:56,556 [man] Everybody was there for a purpose. 10 00:00:56,639 --> 00:00:58,725 Build something that would change the world. 11 00:01:00,268 --> 00:01:03,188 Tech was gonna fix all of our problems, all at once. 12 00:01:04,064 --> 00:01:07,525 [Dr. Robert Jackler] There is one leading preventable cause of death in America, 13 00:01:07,609 --> 00:01:09,360 and that is tobacco use. 14 00:01:10,070 --> 00:01:13,865 Innovation could address all the problems associated with smoking. 15 00:01:13,948 --> 00:01:17,494 Our goal, our mission is to eliminate combustible cigarettes. 16 00:01:18,495 --> 00:01:20,663 [Pierce] They had this relentless focus. 17 00:01:20,747 --> 00:01:23,208 Too many people smoke, we want to help them smoke less, 18 00:01:23,291 --> 00:01:26,086 and we want to give them a cooler, better, safer way to do it. 19 00:01:26,711 --> 00:01:30,006 People are talking about it. They're like, "This is going to be big." 20 00:01:30,924 --> 00:01:35,929 One puff and never ever again smoked another cigarette my whole entire life. 21 00:01:36,012 --> 00:01:36,888 Never again. 22 00:01:38,848 --> 00:01:41,726 [Allen Gladstone] I'm optimistic that this new innovation 23 00:01:41,810 --> 00:01:43,853 will completely replace cigarettes. 24 00:01:44,354 --> 00:01:46,731 [Pierce] They had taken every lesson from the tech industry 25 00:01:46,815 --> 00:01:50,235 and applied it to tobacco, and people just threw money at them. 26 00:01:51,736 --> 00:01:55,865 We were the fastest-growing company in world history. 27 00:01:55,949 --> 00:01:59,077 [Pierce] They saw this as just another tech product. 28 00:01:59,160 --> 00:02:01,496 It's not a tech product. It's a nicotine product. 29 00:02:01,579 --> 00:02:03,331 [man] Fuck it, ship it. 30 00:02:03,414 --> 00:02:06,543 [Pierce] Their goal was not to make people quit smoking. 31 00:02:06,626 --> 00:02:08,962 Their goal was to make people start JUULing. 32 00:02:09,045 --> 00:02:13,341 [Ash Casselman] I don't think anyone could have anticipated how many children 33 00:02:13,424 --> 00:02:15,260 would want this product. 34 00:02:15,343 --> 00:02:16,344 [woman] In the beginning, 35 00:02:16,427 --> 00:02:19,931 you felt like you were part of a secret club no one knew about yet. 36 00:02:20,890 --> 00:02:25,937 It is not unreasonable to be skeptical about our intent. 37 00:02:27,814 --> 00:02:30,233 Children's Hospital in Wisconsin is sounding an alarm 38 00:02:30,316 --> 00:02:32,694 about serious health problems linked to vaping. 39 00:02:32,777 --> 00:02:36,156 I remember waking up in an ICU bed, you know, 40 00:02:36,239 --> 00:02:38,575 with my family by my side. 41 00:02:39,325 --> 00:02:40,994 [man] It was like a wave, it swept over. 42 00:02:41,077 --> 00:02:43,872 Everyone was like, "I don't know if I want to vape anymore." 43 00:02:44,581 --> 00:02:48,459 [Gladstone] We would get hate mail. "Kid killer, I hope you die!" 44 00:02:49,294 --> 00:02:52,881 [Pierce] As JUUL became the story, James became the face. 45 00:02:52,964 --> 00:02:55,133 He was the face. He wanted to be the face. 46 00:02:55,216 --> 00:02:57,010 You, sir, are an example to me 47 00:02:57,093 --> 00:02:59,095 of the worst of the Bay Area. 48 00:02:59,679 --> 00:03:03,892 He felt villainized, and I think it was too much for him to bear. 49 00:03:04,684 --> 00:03:06,936 [woman]There's so much vitriol on both sides. 50 00:03:07,020 --> 00:03:10,481 The debate is unlike anything I've seen in public health. 51 00:03:10,565 --> 00:03:13,109 We can't completely favor teens 52 00:03:13,193 --> 00:03:16,905 and completely ignore 35 million adults. 53 00:03:16,988 --> 00:03:21,868 How many kids are you willing to addict to help one adult quit? 54 00:03:21,951 --> 00:03:24,579 The parents of this country are fed up. 55 00:03:24,662 --> 00:03:27,957 Parents got upset because they forgot they had to parent their kids, 56 00:03:28,041 --> 00:03:29,709 and JUUL isn't responsible for that. 57 00:03:29,792 --> 00:03:32,629 E-cigarettes are not helping people quit smoking. 58 00:03:32,712 --> 00:03:34,797 It helped me get off of cigarettes. 59 00:03:34,881 --> 00:03:36,883 Sounds like a smoking-cessation device to me. 60 00:03:36,966 --> 00:03:40,470 They had a choice, and they went to maximize the profits. 61 00:03:40,553 --> 00:03:44,390 We're all in this to make money. We come to San Francisco to make money. 62 00:03:44,474 --> 00:03:46,517 This is America, right? 63 00:03:48,144 --> 00:03:51,314 [Ralph Eschenbach] As all of us have probably experienced in our lives, 64 00:03:51,397 --> 00:03:52,732 if you watch a major event, 65 00:03:52,815 --> 00:03:55,360 different people come away with different perspectives. 66 00:03:55,443 --> 00:03:57,862 They all say, "What I saw was the truth," 67 00:03:57,946 --> 00:04:01,032 but they end up with different versions of the truth. 68 00:04:01,115 --> 00:04:04,619 [Casselman] The story of JUUL, I don't think it's black and white. 69 00:04:05,411 --> 00:04:07,705 The reality is it's gray. 70 00:04:18,675 --> 00:04:20,885 [tense music playing] 71 00:04:20,969 --> 00:04:25,890 [Pierce] In the early 2000s, there was this sense tech could do no wrong. 72 00:04:25,974 --> 00:04:28,893 We place a really big premium on moving quickly. 73 00:04:28,977 --> 00:04:31,980 [Pierce] "Move fast and break things," that's the tech ethos. 74 00:04:32,063 --> 00:04:37,318 You should never be afraid of making small mistakes in service of huge success. 75 00:04:39,904 --> 00:04:44,909 Stanford and the tech industry have had this symbiotic relationship for decades. 76 00:04:44,993 --> 00:04:48,037 You had investors all over Silicon Valley who were starting to say, 77 00:04:48,121 --> 00:04:51,124 "Who's working on interesting student projects that I can invest in 78 00:04:51,207 --> 00:04:54,335 that turn into hundred-billion-dollar businesses down the road?" 79 00:04:54,419 --> 00:04:58,214 You had all these undergraduates wanting to create a start-up, an app. 80 00:04:58,298 --> 00:05:01,259 There were billionaire professors on campus. 81 00:05:01,843 --> 00:05:05,847 There's this euphoria around the Silicon Valley sort of ethos. 82 00:05:05,930 --> 00:05:07,807 "We innovate, we disrupt." 83 00:05:08,641 --> 00:05:12,103 Stanford has a great reputation in attracting talents. 84 00:05:12,186 --> 00:05:15,732 Sometimes it's hard to tell whether it attracts them or makes them. 85 00:05:15,815 --> 00:05:19,402 But in either case, a lot of the top people are coming out of Stanford. 86 00:05:21,612 --> 00:05:24,699 [Gabriel Post] James Monsees and Adam Bowen were classmates 87 00:05:24,782 --> 00:05:27,577 in the Stanford product design program. 88 00:05:28,161 --> 00:05:30,330 [typing] 89 00:05:37,962 --> 00:05:40,506 [Jamie Ducharme] James and Adam were both gifted product designers, 90 00:05:40,590 --> 00:05:43,009 and they both studied this concept of design thinking 91 00:05:43,092 --> 00:05:46,220 or basically infusing design into every aspect of a product 92 00:05:46,304 --> 00:05:47,597 and its development. 93 00:05:47,680 --> 00:05:50,600 [Ian Fernandez] You're trying to have empathy and understand your customers, 94 00:05:50,683 --> 00:05:52,268 and any problem you see, 95 00:05:52,352 --> 00:05:55,480 we can try and make a product to solve that problem. 96 00:05:56,064 --> 00:05:58,816 [Adam Bowen] I was always drawing things, designing things as a kid. 97 00:05:58,900 --> 00:06:01,861 Airplanes, cars… you name it, really. 98 00:06:01,944 --> 00:06:05,281 I don't realize that there was this career called "Product Design." 99 00:06:05,365 --> 00:06:07,784 I was just naturally sketching these things. 100 00:06:08,284 --> 00:06:11,120 My parents always told me I didn't like playing with toys, 101 00:06:11,204 --> 00:06:13,331 I liked playing with vacuum cleaner parts. 102 00:06:13,414 --> 00:06:16,834 When I was 15, my parents wouldn't give me a car, 103 00:06:16,918 --> 00:06:18,461 so I built a car. 104 00:06:18,961 --> 00:06:21,756 James and I met while we were in this program at Stanford. 105 00:06:21,839 --> 00:06:25,718 We worked on a lot of projects that had some social or environmental impact. 106 00:06:26,761 --> 00:06:30,932 [Post] Both Adam and James had world-class minds. 107 00:06:31,015 --> 00:06:36,062 Adam was an incredible engineer and was highly competitive as well. 108 00:06:36,145 --> 00:06:40,733 And James was very gifted in multiple disciplines. 109 00:06:40,817 --> 00:06:43,694 [anonymous Stanford classmate] James was such a good artist, 110 00:06:43,778 --> 00:06:46,697 and he's also a brilliant scientist and engineer. 111 00:06:47,323 --> 00:06:48,991 He can do all of that. 112 00:06:50,701 --> 00:06:54,330 We had this amazing place on campus called The Product Design Loft, 113 00:06:54,414 --> 00:06:56,666 and we got to hide out behind there, 114 00:06:56,749 --> 00:06:58,543 and we would smoke cigarettes. 115 00:06:58,626 --> 00:07:04,882 Smoking was always a contentious issue in my family. 116 00:07:04,966 --> 00:07:08,553 My mom's father, he smoked a lot. 117 00:07:08,636 --> 00:07:11,097 He smoked many packs of cigarettes a day 118 00:07:11,180 --> 00:07:14,142 and, um, died at a sadly early age. 119 00:07:15,184 --> 00:07:16,394 I hated cigarettes. 120 00:07:16,477 --> 00:07:19,689 Every time I picked one up, I felt conflicted about it. 121 00:07:21,607 --> 00:07:24,318 [anonymous Stanford classmate] Smokers were always a bit the misfits. 122 00:07:24,402 --> 00:07:29,407 And, you know, it wasn't very cool to be smoking cigarettes 123 00:07:29,490 --> 00:07:31,367 in the year 2005. 124 00:07:33,536 --> 00:07:36,747 Adam and I would look at each other, and we would ask each other 125 00:07:36,831 --> 00:07:40,960 why we were being quite so stupid hiding out behind this loft. 126 00:07:41,043 --> 00:07:43,921 And, um, we looked inwards at ourselves, 127 00:07:44,005 --> 00:07:48,843 and what we realized was that it isn't smoking that we love, 128 00:07:48,926 --> 00:07:51,554 it is the things that smoking does for you. 129 00:07:52,346 --> 00:07:55,933 It is the sharing that you have, the sharing moments, 130 00:07:56,476 --> 00:07:58,978 or taking a break from your day. 131 00:07:59,729 --> 00:08:01,731 Those are the things that really matter. 132 00:08:02,315 --> 00:08:04,734 [Post] James and Adam were out on a smoke break 133 00:08:04,817 --> 00:08:08,362 looking down at the burning cigarettes in their hands, 134 00:08:08,446 --> 00:08:11,782 and thought, "We must do something better." 135 00:08:11,866 --> 00:08:15,161 James was like, "Can we take all the bad stuff out, 136 00:08:15,244 --> 00:08:17,246 and still get the stuff we like?" 137 00:08:17,330 --> 00:08:20,291 And that's kind of where James and Adam kicked off. 138 00:08:20,791 --> 00:08:23,961 As soon as they started talking to each other, they found common ground 139 00:08:24,045 --> 00:08:27,215 and seemed to be filling in knowledge gaps for each other. 140 00:08:27,882 --> 00:08:32,553 And James was like, "Why hasn't someone come up with vaporization solutions yet?" 141 00:08:32,637 --> 00:08:36,724 And Adam just started going off on essentially a brainstorm. 142 00:08:37,975 --> 00:08:39,977 Smoking impacts a lot of lives, 143 00:08:40,061 --> 00:08:42,271 and it occurred to us that 144 00:08:42,355 --> 00:08:45,107 it's a space where there's been little or no innovation. 145 00:08:45,816 --> 00:08:49,153 There's 38 million Americans that still smoke. 146 00:08:49,237 --> 00:08:52,907 There are a billion people who still smoke globally. 147 00:08:52,990 --> 00:08:56,494 We saw this as a huge public health opportunity. 148 00:08:57,703 --> 00:09:01,290 I was excited about the promise for what could come from it 149 00:09:01,374 --> 00:09:03,167 as the idea matured. 150 00:09:04,043 --> 00:09:06,754 [Fernandez] Most people were happy with it. 151 00:09:07,255 --> 00:09:11,050 But this might have been more from the faculty side, if I remember right, 152 00:09:11,133 --> 00:09:13,052 they were kind of raising eyebrows. 153 00:09:13,636 --> 00:09:17,098 "So this is a drug-delivery device?" 154 00:09:17,181 --> 00:09:18,266 Um… 155 00:09:18,349 --> 00:09:22,895 And not like, "I need drugs to keep my heart rate pressure down." 156 00:09:22,979 --> 00:09:25,356 This is like… This is like nicotine. 157 00:09:26,190 --> 00:09:28,234 [Ducharme] Some of their professors had concerns 158 00:09:28,317 --> 00:09:29,902 that they should slow down a little, 159 00:09:29,986 --> 00:09:32,989 do more research, make sure they were building things responsibly 160 00:09:33,072 --> 00:09:35,783 because nicotine is incredibly addictive. 161 00:09:36,576 --> 00:09:38,244 In James and Adam's research, 162 00:09:38,327 --> 00:09:41,914 they found this massive archive of tobacco industry documents 163 00:09:41,998 --> 00:09:45,167 stored at the University of California, San Francisco. 164 00:09:46,419 --> 00:09:49,171 [Monsees] At the time, what we really wanted to learn about was 165 00:09:49,255 --> 00:09:53,551 what are the best technologies and techniques for eliminating smoking? 166 00:09:54,093 --> 00:09:57,972 It turns out tobacco companies have worked on this quite a bit. 167 00:09:58,472 --> 00:10:00,600 [Dr. Proctor] Cigarette makers knew they had a problem. 168 00:10:00,683 --> 00:10:04,270 They were never happy about the fact their products were killing people. 169 00:10:04,353 --> 00:10:06,689 How can we make a new kind of cigarette 170 00:10:06,772 --> 00:10:09,525 that keeps the addiction but loses the cancer? 171 00:10:10,776 --> 00:10:16,657 And that becomes a kind of hidden goal of Big Tobacco in super-secret projects. 172 00:10:16,741 --> 00:10:19,577 And they've already started in the late 1950s. 173 00:10:19,660 --> 00:10:22,455 [Steven Parrish] To make a product that would be less harmful, 174 00:10:22,538 --> 00:10:24,248 that was the Holy Grail. 175 00:10:24,332 --> 00:10:27,043 Is there a way we can reduce the temperature 176 00:10:27,126 --> 00:10:33,007 to generate smoke without setting the tobacco on fire? 177 00:10:33,090 --> 00:10:37,178 You would basically warm up tobacco and then get tobacco vapor, 178 00:10:37,261 --> 00:10:38,721 which would include nicotine. 179 00:10:38,804 --> 00:10:40,848 And it would be a truly safer cigarette 180 00:10:40,931 --> 00:10:45,144 because most of the harm from a cigarette is in the combustion products. 181 00:10:45,227 --> 00:10:49,649 But if they introduce a safer cigarette, what are they supposed to call it? 182 00:10:50,358 --> 00:10:54,779 They didn't want to admit that their regular cigarettes were causing cancer. 183 00:10:55,279 --> 00:10:57,657 Trapped in their own webs of deception. 184 00:10:58,824 --> 00:11:01,827 [Gregory Conley] Every major tobacco company lied, 185 00:11:01,911 --> 00:11:05,498 saying that there is no way to deliver nicotine 186 00:11:05,581 --> 00:11:06,957 in a way safer than a cigarette. 187 00:11:08,501 --> 00:11:11,253 [Ducharme] James' theory was that someone on the outside, 188 00:11:11,337 --> 00:11:12,672 someone like him and Adam, 189 00:11:12,755 --> 00:11:16,467 would be necessary to come in and make that innovation happen. 190 00:11:17,176 --> 00:11:20,971 They really started focusing more on the vaporization of tobacco. 191 00:11:22,264 --> 00:11:25,476 At the time, vaporizers were a thing, 192 00:11:25,559 --> 00:11:28,312 but it was this massive system. 193 00:11:28,396 --> 00:11:30,981 Not at all portable, not practical. 194 00:11:31,065 --> 00:11:34,026 James was interested in, how do you make that smaller? 195 00:11:34,610 --> 00:11:37,446 It seemed like an awesome project to pursue. 196 00:11:37,530 --> 00:11:39,990 James and Adam built the original prototype, 197 00:11:40,074 --> 00:11:44,161 and they were determined to make this prototype meaningful. 198 00:11:44,995 --> 00:11:47,957 [Monsees] Is it even possible to make a safe cigarette? 199 00:11:48,040 --> 00:11:50,960 It turns out that burning tobacco is the real problem. 200 00:11:51,043 --> 00:11:52,962 Nicotine is addictive, clearly, 201 00:11:53,045 --> 00:11:56,090 but it's not the nicotine that's really hurting you. 202 00:11:56,173 --> 00:12:01,095 [Bowen] Our goal was to basically create a whole new experience for people 203 00:12:01,178 --> 00:12:05,057 that retains the positive aspects of smoking, like the ritual, 204 00:12:05,141 --> 00:12:08,811 but makes it as healthy and socially acceptable as possible. 205 00:12:08,894 --> 00:12:11,564 [Fernandez] People were raving about it. 206 00:12:11,647 --> 00:12:14,567 And James, you know, he was on to something 207 00:12:14,650 --> 00:12:16,193 and really hitting it big. 208 00:12:17,403 --> 00:12:20,114 But still, in the genesis of it, 209 00:12:20,197 --> 00:12:22,408 there was this serious health concern 210 00:12:22,491 --> 00:12:25,202 about preventing people from getting cancer. 211 00:12:27,788 --> 00:12:29,540 [commencement host] It gives me great pleasure 212 00:12:29,623 --> 00:12:32,251 to introduce this year's commencement speaker, 213 00:12:32,334 --> 00:12:33,586 Steve Jobs. 214 00:12:33,669 --> 00:12:35,045 [cheering] 215 00:12:35,129 --> 00:12:38,132 [Post] I remember all sitting together as a class, 216 00:12:38,841 --> 00:12:43,345 and many of us as designers obviously very inspired by Steve Jobs. 217 00:12:43,429 --> 00:12:46,182 He was almost like a rock star, you know. [laughs] 218 00:12:46,974 --> 00:12:49,143 [Steve Jobs] Stay hungry, stay foolish. 219 00:12:49,935 --> 00:12:52,396 And I've always wished that for myself. 220 00:12:52,480 --> 00:12:55,816 Each of us were hungry to make an impact and a change in the world. 221 00:12:55,900 --> 00:12:58,110 As you graduate to begin anew, 222 00:12:58,194 --> 00:12:59,487 I wish that for you. 223 00:13:00,154 --> 00:13:02,239 Stay hungry, stay foolish. 224 00:13:02,740 --> 00:13:04,658 [Fernandez] I think those two go hand-in-hand. 225 00:13:04,742 --> 00:13:08,537 I mean, being foolish is kind of not afraid to take chances. 226 00:13:08,621 --> 00:13:11,248 Try it, do it. Don't hesitate. 227 00:13:11,332 --> 00:13:13,834 -Thank you all very much. -[applause] 228 00:13:13,918 --> 00:13:16,045 This was one of the biggest problems 229 00:13:16,128 --> 00:13:18,881 this program ever tackled and tried to solve. 230 00:13:18,964 --> 00:13:22,343 And everybody knows James and Adam have an awesome idea. 231 00:13:22,426 --> 00:13:25,262 It's incredible, and their prototype is amazing. 232 00:13:25,346 --> 00:13:26,680 Everyone knows. 233 00:13:26,764 --> 00:13:27,848 Now what? 234 00:13:33,771 --> 00:13:35,272 [Ducharme] After they left Stanford, 235 00:13:35,356 --> 00:13:38,192 they decided this was an idea they were going to run with 236 00:13:38,275 --> 00:13:40,027 and make into a real company. 237 00:13:40,110 --> 00:13:43,906 But James and Adam were coming at this problem as underdogs, 238 00:13:43,989 --> 00:13:45,908 and they were not successful. 239 00:13:45,991 --> 00:13:48,536 A lot of companies told them they were not interested. 240 00:13:48,619 --> 00:13:53,040 A lot of VCs have rules against investing in vices. They won't do it. 241 00:13:54,083 --> 00:13:57,545 [Ducharme] Because of those vice clauses, and what are seen as vice industries, 242 00:13:57,628 --> 00:14:00,256 like marijuana, alcohol, tobacco, 243 00:14:00,339 --> 00:14:03,425 around 50 firms told them that they were not interested at all. 244 00:14:04,093 --> 00:14:07,638 So James and Adam realized that if they pursued individual investors, 245 00:14:07,721 --> 00:14:08,889 they might have more luck 246 00:14:08,973 --> 00:14:12,893 because they weren't necessarily bound to the same vice clauses that firms had. 247 00:14:14,103 --> 00:14:17,189 [Eschenbach] Angel investing is investing in start-up companies, 248 00:14:17,273 --> 00:14:19,275 and angel investors invest their own money. 249 00:14:19,358 --> 00:14:21,902 And what angel investors are looking to find 250 00:14:21,986 --> 00:14:24,905 is a company that will change the world in some level. 251 00:14:24,989 --> 00:14:26,824 Doesn't happen often, I will say that. 252 00:14:27,783 --> 00:14:31,871 James and Adam came to my office to, uh, make a pitch for their idea, 253 00:14:31,954 --> 00:14:33,789 which they called "Ploom." 254 00:14:33,873 --> 00:14:36,959 They came across as very bright, very passionate, 255 00:14:37,042 --> 00:14:39,712 and they had a very sophisticated design. 256 00:14:39,795 --> 00:14:43,924 There was no proof at that point in time that heating and not burning the tobacco 257 00:14:44,008 --> 00:14:45,885 was going to be healthier, 258 00:14:45,968 --> 00:14:47,803 but if you weren't burning, 259 00:14:47,887 --> 00:14:51,557 the general attitude and feeling was that this would be safer. 260 00:14:52,057 --> 00:14:55,686 It had such potential for saving lives. 261 00:14:57,605 --> 00:15:02,151 My mother smoked all of her life and eventually died of lung cancer. 262 00:15:02,693 --> 00:15:05,988 So I thought about my mom and thought this would have been a godsend 263 00:15:06,071 --> 00:15:08,073 if she could have been able to use this instead 264 00:15:08,908 --> 00:15:10,910 and add years to her life. 265 00:15:12,202 --> 00:15:13,203 So… 266 00:15:14,914 --> 00:15:16,665 So I decided to invest. 267 00:15:18,959 --> 00:15:22,004 Riaz Valani was the investor in that first round with us. 268 00:15:22,087 --> 00:15:25,382 He was sort of a no-nonsense, very strong individual. 269 00:15:25,466 --> 00:15:29,136 We knew that we needed some way to substantiate the health benefits, 270 00:15:29,219 --> 00:15:31,347 and it needed to come from someone professional. 271 00:15:32,973 --> 00:15:35,851 They called me and said, "We have this great new idea 272 00:15:35,935 --> 00:15:39,229 that we think is going to revolutionize tobacco and save lives, 273 00:15:39,313 --> 00:15:40,856 and we'd like to meet with you." 274 00:15:41,774 --> 00:15:46,278 The idea was that they would heat the tobacco instead of setting it on fire. 275 00:15:46,362 --> 00:15:49,531 And I said to them, "That's an interesting idea." 276 00:15:49,615 --> 00:15:51,408 "If you avoid the combustion, 277 00:15:51,492 --> 00:15:54,954 you're going to have a less toxic mix probably." 278 00:15:55,829 --> 00:15:57,498 "But we need some evidence." 279 00:15:57,581 --> 00:16:01,543 "We need to know what effect are these things actually having." 280 00:16:02,711 --> 00:16:05,506 This whole idea of "move fast and break things," 281 00:16:05,589 --> 00:16:08,467 in terms of public health, is stupid. 282 00:16:08,550 --> 00:16:12,096 We want to move progress forward as fast as we can, 283 00:16:12,179 --> 00:16:15,224 but when you're dealing with things that impact people's health, 284 00:16:15,307 --> 00:16:16,976 you need to be careful. 285 00:16:19,103 --> 00:16:21,939 Ploom was starting to look more like a real company. 286 00:16:22,773 --> 00:16:25,734 The investors were more than just funding sources, 287 00:16:25,818 --> 00:16:29,113 so they would guide them on how to keep their business scaling up. 288 00:16:29,738 --> 00:16:32,700 The rule I use is that if you're not spending as much on marketing 289 00:16:32,783 --> 00:16:35,202 as engineering, your engineering is being wasted. 290 00:16:35,285 --> 00:16:36,704 That's when Kurt was brought in. 291 00:16:37,496 --> 00:16:42,167 [Sonderegger] My experience with marketing began when I started working at Red Bull. 292 00:16:43,377 --> 00:16:47,506 They have a very unique philosophy on how they come to market. 293 00:16:48,340 --> 00:16:52,177 Instead of blasting everybody with advertising and hoping it worked, 294 00:16:52,261 --> 00:16:53,470 they did the opposite. 295 00:16:53,554 --> 00:16:58,392 It was about allowing people to discover your product in a cool way. 296 00:16:59,685 --> 00:17:03,105 One day I saw that there was a message from Adam, 297 00:17:03,188 --> 00:17:06,358 and it said something to the effect that he and his partner 298 00:17:06,442 --> 00:17:08,485 were finishing school at Stanford, 299 00:17:08,569 --> 00:17:11,280 which, of course, gave it some credibility. 300 00:17:12,614 --> 00:17:14,033 When I walked in, 301 00:17:14,116 --> 00:17:16,994 sometimes you empty your pockets when you sit down at the table. 302 00:17:17,077 --> 00:17:21,123 I did that and didn't realize I had a pack of cigarettes. 303 00:17:21,206 --> 00:17:24,710 Immediately, I saw James and Adam look at the box and look at each other 304 00:17:24,793 --> 00:17:26,587 with an interesting look on their face. 305 00:17:26,670 --> 00:17:31,341 I think in their mind they were like, "If this guy's a smoker, he'll get it." 306 00:17:32,176 --> 00:17:34,511 Cigarettes are kind of the monkey on my back. 307 00:17:34,595 --> 00:17:38,223 I really enjoy the relaxation of having a cigarette, 308 00:17:38,307 --> 00:17:40,225 but statistics are pretty clear. 309 00:17:40,309 --> 00:17:43,562 If you smoke, you will very likely die from smoking. 310 00:17:44,605 --> 00:17:48,942 I remember they said to me what I've heard them say hundreds of times. 311 00:17:49,026 --> 00:17:52,279 "Smoking isn't just nicotine delivery. It's the ritual." 312 00:17:52,362 --> 00:17:55,240 "How can we preserve the ritual and eliminate the harm?" 313 00:17:55,324 --> 00:17:59,453 That resonated with me right away because here I am, a conflicted smoker, 314 00:17:59,536 --> 00:18:03,499 who likes the ritual, but can't stand everything else about smoking. 315 00:18:03,582 --> 00:18:07,002 If they can do that for me, that could be a great company, 316 00:18:07,086 --> 00:18:09,088 and also probably a pretty big business. 317 00:18:10,798 --> 00:18:12,216 The meeting went well. 318 00:18:12,299 --> 00:18:13,509 I got the job, 319 00:18:13,592 --> 00:18:16,804 but I did say that I felt pretty strongly 320 00:18:16,887 --> 00:18:20,432 that I didn't want to work for a company that would sell to Big Tobacco. 321 00:18:21,892 --> 00:18:25,145 I thought they were the enemy. Killing people for years, 322 00:18:25,229 --> 00:18:27,689 lying about the nature of their own product, 323 00:18:27,773 --> 00:18:32,111 which they knew very well was one of the most addictive products ever. 324 00:18:33,362 --> 00:18:36,824 I didn't want to be associated with any of those companies. 325 00:18:38,283 --> 00:18:40,786 When James and Adam started working on Ploom, 326 00:18:40,869 --> 00:18:44,081 around 37 million people in the US smoked. 327 00:18:45,791 --> 00:18:48,418 [Dr. Proctor] So many people write off smokers 328 00:18:48,502 --> 00:18:52,214 as people who have just made bad choices. 329 00:18:53,173 --> 00:18:56,927 The truth is that the overwhelming majority of people who smoke 330 00:18:57,010 --> 00:19:00,305 began their tobacco use as teenagers. 331 00:19:00,389 --> 00:19:02,432 [Dr. Proctor] Cigarette makers recognize that 332 00:19:02,516 --> 00:19:05,644 if they can addict a teenager to nicotine, 333 00:19:05,727 --> 00:19:08,689 there's a good chance they may have them for a lifetime. 334 00:19:08,772 --> 00:19:12,109 [Casselman] I was 19. 335 00:19:12,192 --> 00:19:14,820 I was like, "I can't smoke weed. I'll smoke cigarettes." 336 00:19:14,903 --> 00:19:18,157 It was like some sort of 19-year-old non-logic. 337 00:19:19,032 --> 00:19:22,369 [Gladstone] Thanksgiving dinner, my brother convinced me. 338 00:19:22,452 --> 00:19:26,623 He's like, "Just have one. After a big Thanksgiving dinner, it's the best." 339 00:19:26,707 --> 00:19:30,252 And that was that. That was that. 340 00:19:30,836 --> 00:19:34,256 [Chris Charles] The thing I distinctly remember is my dad making sure my mom, 341 00:19:34,339 --> 00:19:35,757 she had cigarettes. 342 00:19:35,841 --> 00:19:37,509 That was his husbandly duty. 343 00:19:38,218 --> 00:19:41,305 I remember asking her, "Can you please quit smoking?" 344 00:19:41,388 --> 00:19:43,932 So that's ironic how I wound up smoking. 345 00:19:45,934 --> 00:19:48,437 Nicotine keeps me focused. 346 00:19:48,520 --> 00:19:51,565 When I'm really stimulated, it can bring me down. 347 00:19:52,524 --> 00:19:54,610 When I'm tired, it can bring me up. 348 00:19:54,693 --> 00:19:57,029 It's a really unique thing in that way. 349 00:19:58,447 --> 00:19:59,656 [Charles] I enjoyed smoking. 350 00:20:00,991 --> 00:20:05,329 Just the physical activity of blowing smoke and watching it dissipate. 351 00:20:06,997 --> 00:20:08,790 It did have a relaxing effect. 352 00:20:09,541 --> 00:20:12,711 I wanted to quit smoking and tried so long to quit, 353 00:20:12,794 --> 00:20:14,296 and felt so badly about it. 354 00:20:17,716 --> 00:20:20,427 My dad had been a smoker my whole life. 355 00:20:21,595 --> 00:20:23,639 I told him I was smoking. He was disappointed, 356 00:20:23,722 --> 00:20:25,349 then I think we shared a cigarette. 357 00:20:26,975 --> 00:20:28,435 He got cancer. 358 00:20:29,394 --> 00:20:34,775 And I remember all through the experience of him being sick, 359 00:20:34,858 --> 00:20:38,862 feeling such deep shame about continuing to smoke. 360 00:20:39,363 --> 00:20:42,950 But it was a huge part of how I coped with stress. 361 00:20:44,618 --> 00:20:46,912 In the end, when he passed away, 362 00:20:46,995 --> 00:20:51,250 every single time I smoked a cigarette, I felt like I was doing him a dishonor. 363 00:20:52,668 --> 00:20:55,629 [Dr. Healton] The overwhelming majority of people who smoke want to quit 364 00:20:55,712 --> 00:20:57,965 and have tried multiple times to quit. 365 00:20:58,048 --> 00:21:00,008 But for people who have never smoked, 366 00:21:00,092 --> 00:21:03,136 the concept that it's not easy just doesn't connect. 367 00:21:04,179 --> 00:21:07,349 [Dr. Proctor] Nicotine can be as addictive as heroin and cocaine, 368 00:21:07,432 --> 00:21:10,060 in such a way that you cannot feel normal 369 00:21:10,143 --> 00:21:12,688 unless you have the next dose. 370 00:21:13,438 --> 00:21:15,899 [Gladstone] I tried the patch, that was the worst. 371 00:21:15,983 --> 00:21:18,360 I was having nightmares. It didn't work. 372 00:21:18,443 --> 00:21:23,240 I tried Nicorette Gum, tried cold turkey, tried a book, tried a hypnotist one time. 373 00:21:23,949 --> 00:21:27,327 Nothing worked, no matter what I tried. 374 00:21:28,161 --> 00:21:29,913 [Charles] I really wanted to quit, 375 00:21:29,997 --> 00:21:33,875 but those replacements did not work for me. 376 00:21:33,959 --> 00:21:35,711 They just weren't the same 377 00:21:35,794 --> 00:21:38,213 because I couldn't do this, and I couldn't do this. 378 00:21:39,214 --> 00:21:41,008 [Conley] If you could not quit smoking 379 00:21:41,091 --> 00:21:44,886 with the gum, patch, lozenge, or cold turkey, 380 00:21:44,970 --> 00:21:47,222 you were doomed to continue to smoke. 381 00:21:50,976 --> 00:21:54,354 For myself and millions of smokers around the world, 382 00:21:54,438 --> 00:21:56,398 that is a death sentence. 383 00:22:01,778 --> 00:22:03,405 [Sonderegger] When we started Ploom, 384 00:22:03,488 --> 00:22:06,575 we were doing something to possibly change the world. 385 00:22:06,658 --> 00:22:08,368 It was "Fuck Big Tobacco." 386 00:22:08,452 --> 00:22:11,330 If I walked in with a shirt that said "Fuck Big Tobacco," 387 00:22:11,413 --> 00:22:15,125 people would have been happy I wore it. All, including Adam and James. 388 00:22:15,792 --> 00:22:19,296 I had some ideas on where I wanted to start with the project, 389 00:22:19,379 --> 00:22:23,008 specifically probably on the branding and things like that, 390 00:22:23,091 --> 00:22:25,886 but they didn't have a working prototype yet. 391 00:22:26,887 --> 00:22:31,266 They thought that they would have it ready after about six months. 392 00:22:31,933 --> 00:22:35,937 It was pretty clear that there were more challenges than anticipated 393 00:22:36,021 --> 00:22:37,564 to get that product ready. 394 00:22:38,190 --> 00:22:40,734 We had a multitude of problems. 395 00:22:40,817 --> 00:22:44,029 We had some early devices, and I took a hit, 396 00:22:44,112 --> 00:22:46,406 and all of a sudden, it exploded. 397 00:22:46,490 --> 00:22:50,494 It shot the rod up into the ceiling. 398 00:22:50,577 --> 00:22:53,997 I remember the look on James' face was like, "Holy shit." 399 00:22:54,081 --> 00:22:57,417 It could have gone into my head, basically. 400 00:22:59,252 --> 00:23:02,756 [Eschenbach] Because Riaz was the biggest amount of money in the company, 401 00:23:02,839 --> 00:23:06,134 James and Adam, when he said, "Jump," they said, "How high?" 402 00:23:06,218 --> 00:23:09,805 Riaz became very adamant that this had to get done fast. 403 00:23:09,888 --> 00:23:12,641 "We're running out of money and we need to get more." 404 00:23:12,724 --> 00:23:15,352 "We're not gonna get more if we don't have a working product." 405 00:23:15,852 --> 00:23:17,562 [Ducharme] They were running out of time 406 00:23:17,646 --> 00:23:20,148 because other e-cigarettes started coming on the market. 407 00:23:20,232 --> 00:23:23,151 This guy is here, and he is not smoking next to me. 408 00:23:23,235 --> 00:23:24,736 What exactly is NJOY? 409 00:23:24,820 --> 00:23:26,738 NJOY is an electronic cigarette. 410 00:23:26,822 --> 00:23:30,909 [Sonderegger] NJOY was probably the first company to come on our radar. 411 00:23:30,992 --> 00:23:32,619 They were the anti-Ploom. 412 00:23:33,453 --> 00:23:37,249 As we were using these competitor devices, 413 00:23:37,332 --> 00:23:40,460 which are basically in the shape of prefab cigarettes, 414 00:23:40,544 --> 00:23:42,921 the question was, "Why are they doing this 415 00:23:43,004 --> 00:23:45,924 if they're trying to help people quit cigarettes?" 416 00:23:46,842 --> 00:23:49,469 [Sonderegger] And then eventually, you started seeing 417 00:23:49,553 --> 00:23:51,430 what people started calling vapes. 418 00:23:51,972 --> 00:23:54,641 The products were pretty complicated. 419 00:23:54,724 --> 00:23:57,519 They had to have coils, these batteries, 420 00:23:58,186 --> 00:24:01,440 they had a tank that you could fill with e-liquid of your choice, 421 00:24:01,523 --> 00:24:04,484 flavor of your choice, nic strength of your choice… 422 00:24:05,110 --> 00:24:07,237 The industry was growing rapidly 423 00:24:07,320 --> 00:24:10,282 because there were no regulations for vapor products. 424 00:24:10,365 --> 00:24:12,117 It was a new category. 425 00:24:12,200 --> 00:24:14,744 The FDA couldn't regulate it, 426 00:24:14,828 --> 00:24:17,622 so no one was checking anything about the products, 427 00:24:17,706 --> 00:24:19,916 there were no age restrictions. 428 00:24:20,000 --> 00:24:21,418 It was the Wild West. 429 00:24:22,252 --> 00:24:24,713 But Ploom was a really different device. 430 00:24:25,213 --> 00:24:27,632 Adam and James, they were coming at it from, 431 00:24:27,716 --> 00:24:31,303 how does it fit in your hand? How are you going to hold it? 432 00:24:31,386 --> 00:24:33,430 There was more thinking involved. 433 00:24:36,975 --> 00:24:39,853 [Monsees] What we've tried to do is create a new paradigm. 434 00:24:39,936 --> 00:24:41,938 Something that doesn't look like a cigarette, 435 00:24:42,022 --> 00:24:45,609 doesn't feel or taste like a cigarette. It's different. 436 00:24:45,692 --> 00:24:48,487 [Ducharme] The Model One was James and Adam's first product 437 00:24:48,570 --> 00:24:50,155 to enter the market. 438 00:24:50,238 --> 00:24:53,241 It launched in 2010 and represented the first time 439 00:24:53,325 --> 00:24:57,537 that Adam and James had successfully made their thesis vision a reality. 440 00:24:57,621 --> 00:25:00,248 This is the Ploom Model One, 441 00:25:00,332 --> 00:25:02,542 which you open by removing the mouthpiece 442 00:25:02,626 --> 00:25:06,171 and inserting a specially-designed pod capsule. 443 00:25:06,254 --> 00:25:08,298 Reinsert the mouthpiece, 444 00:25:08,381 --> 00:25:11,051 push the button on the bottom, it clicks to start, 445 00:25:11,134 --> 00:25:13,803 it lights up in about 10 to 20 seconds. 446 00:25:13,887 --> 00:25:17,265 [Sonderegger] As we were getting ready to launch the Model One, 447 00:25:17,349 --> 00:25:19,809 it was certainly an exciting time for us. 448 00:25:19,893 --> 00:25:24,022 I remember we were toying around with an ad campaign, 449 00:25:24,105 --> 00:25:28,151 and one of the campaigns we launched with was "Small, dark, and handsome." 450 00:25:28,235 --> 00:25:29,277 And that was it. 451 00:25:29,361 --> 00:25:32,531 And I dropped that on one of the e-cig message boards, 452 00:25:32,614 --> 00:25:33,782 and it went crazy. 453 00:25:33,865 --> 00:25:35,450 No one had seen anything like it. 454 00:25:35,534 --> 00:25:37,327 We got all these messages, 455 00:25:37,410 --> 00:25:39,829 the number of reservations shot through the roof, 456 00:25:39,913 --> 00:25:43,208 and it felt like, "This is real, this is happening." 457 00:25:43,291 --> 00:25:45,418 "This could be the future of smoking." 458 00:25:46,962 --> 00:25:51,925 Around that time, I started looking for brand ambassadors to promote the product. 459 00:25:52,008 --> 00:25:56,763 I met Kurt, and I was invited over to Ploom headquarters. 460 00:25:56,846 --> 00:25:59,266 And they laid out the product in front of me, 461 00:25:59,349 --> 00:26:01,226 and they're like, "What do you think?" 462 00:26:01,309 --> 00:26:03,812 And I was like, "This is cool." 463 00:26:04,604 --> 00:26:10,318 But it's powered by butane, so you had to have a little canister of gas. 464 00:26:10,402 --> 00:26:13,697 And then a tiny little pod with real tobacco. 465 00:26:13,780 --> 00:26:18,868 Then you put the gas in, put the pod in, screw it on, and off you go. 466 00:26:19,452 --> 00:26:22,914 They wanted it to be like a modern, social, smoking experience, 467 00:26:22,998 --> 00:26:25,417 which I was like, "Yeah, sounds amazing." 468 00:26:26,376 --> 00:26:31,881 My job, as the field marketing manager, was to introduce the world to the product 469 00:26:31,965 --> 00:26:34,217 and get as much information as I could 470 00:26:34,301 --> 00:26:36,678 from the people who use the product to improve it. 471 00:26:38,305 --> 00:26:42,142 [Sonderegger] At that time, we had been doing a lot more testing, 472 00:26:42,225 --> 00:26:45,770 we had been inviting people to the office for social happy hours, 473 00:26:45,854 --> 00:26:48,481 we were taking the product out and about. 474 00:26:48,565 --> 00:26:52,694 In the beginning, we had one or two. Now everyone had a couple of devices. 475 00:26:52,777 --> 00:26:56,197 Pods were being made and stockpiled in the back 476 00:26:56,281 --> 00:26:59,743 for hopefully what would be a tsunami of orders. 477 00:27:00,660 --> 00:27:05,040 When it came time to start doing the initial tastings and marketing, 478 00:27:05,123 --> 00:27:08,335 I was working all day and going out, sometimes until midnight, 479 00:27:08,418 --> 00:27:10,128 back at the office at 8:00. 480 00:27:10,712 --> 00:27:14,257 [Salta] We don't know where it's gonna work yet, so we're gonna try everything. 481 00:27:14,341 --> 00:27:17,344 We're gonna do movie theaters. We're gonna do cafés. 482 00:27:17,427 --> 00:27:20,347 We're gonna do boutiques, parties, clubs. 483 00:27:20,430 --> 00:27:22,849 Clubs were the worst because they were so loud, 484 00:27:22,932 --> 00:27:24,225 and everyone was drunk. 485 00:27:24,309 --> 00:27:26,728 You know, Plooms everywhere. 486 00:27:27,312 --> 00:27:30,982 But we would set up in the back, wait for people to come to us. 487 00:27:31,483 --> 00:27:33,693 We would ask them what they think. 488 00:27:33,777 --> 00:27:35,862 A lot of the comments in the early days were, 489 00:27:35,945 --> 00:27:38,073 "When are you coming out with more flavors?" 490 00:27:38,156 --> 00:27:40,700 There was a mint, there was a chocolate one, 491 00:27:40,784 --> 00:27:44,537 plus blueberry, honey cognac, organic peach… 492 00:27:44,621 --> 00:27:47,624 and people specifically asked us for these flavors. 493 00:27:48,625 --> 00:27:51,544 It wasn't just about nicotine delivery, 494 00:27:51,628 --> 00:27:55,090 it was about the experience, so they were into flavors. 495 00:27:55,173 --> 00:27:59,511 Flavors were important to ultimately get smokers away from smoking, 496 00:27:59,594 --> 00:28:01,012 with various options. 497 00:28:01,596 --> 00:28:05,558 But people who were smokers who Ploomed 498 00:28:05,642 --> 00:28:09,938 would say, "It's fun, but it's not giving me the same hit 499 00:28:10,021 --> 00:28:12,524 as I would with a big pull from a cigarette." 500 00:28:13,650 --> 00:28:18,863 [Sonderegger] The Ploom device itself wasn't very good at delivering nicotine. 501 00:28:18,947 --> 00:28:20,573 It didn't work for me. 502 00:28:20,657 --> 00:28:25,453 I would tape two of them together, sometimes at extreme displeasure of James, 503 00:28:25,537 --> 00:28:30,250 because by taping two together, it means his product isn't working. 504 00:28:32,085 --> 00:28:35,964 For a hardcore Marlboro pack-a-day smoker, 505 00:28:36,047 --> 00:28:40,301 they might try it, "Interesting," but they're gonna go back to smoking. 506 00:28:40,385 --> 00:28:44,973 Kurt, Adam, and James were constantly trying to fiddle with it. 507 00:28:45,056 --> 00:28:47,767 Like, change up the construction of the formula 508 00:28:47,851 --> 00:28:50,854 so that it would be a bit more turbocharged. 509 00:28:51,396 --> 00:28:55,233 [Sonderegger] A lot of times, engineers, they know so much about the product 510 00:28:55,817 --> 00:28:58,611 that they don't understand the pain points. 511 00:28:58,695 --> 00:29:02,115 There were a lot of pain points with the early Ploom device. 512 00:29:03,366 --> 00:29:05,910 The number one was, it's powered by butane, 513 00:29:05,994 --> 00:29:10,081 so nobody's carrying around a giant bottle of butane wherever they go. 514 00:29:10,749 --> 00:29:13,293 Because it was an actual heating element, 515 00:29:13,376 --> 00:29:16,755 there was a danger of singeing your fingers, 516 00:29:16,838 --> 00:29:19,924 sometimes your mouth if you took a big hit from it. 517 00:29:20,008 --> 00:29:22,093 It wasn't that every one of them was hot, 518 00:29:22,177 --> 00:29:26,139 but every 50th one turned out to burn somebody, right? It's too hot. 519 00:29:26,222 --> 00:29:31,186 And with that kind of a yield, 2%, you don't have a product. 520 00:29:32,270 --> 00:29:33,563 [Conley] It was unimpressive. 521 00:29:34,189 --> 00:29:37,066 It was something that maybe you could get a small market for 522 00:29:37,150 --> 00:29:41,196 if you really dedicated yourself, but it wasn't going to change the world. 523 00:29:41,863 --> 00:29:43,948 [Sonderegger] I was going to smoke shops, 524 00:29:44,032 --> 00:29:47,202 and I was getting quite a bit of negative feedback there. 525 00:29:47,285 --> 00:29:51,581 So, eventually, Adam came to do a ride-along with me. 526 00:29:51,664 --> 00:29:55,627 We went to five or six shops, and I remember one time in particular, 527 00:29:55,710 --> 00:29:58,505 when it finally, I think, really hit home for Adam. 528 00:29:59,214 --> 00:30:01,966 Instead of doing the whole setup for the owner, 529 00:30:02,050 --> 00:30:03,718 I just put it on the table. 530 00:30:03,802 --> 00:30:08,014 The first thing he did was try to put the butane in. It spilled out. 531 00:30:08,097 --> 00:30:09,641 -He clicked it to start it… -[zapping] 532 00:30:09,724 --> 00:30:13,561 …and his finger was in the wrong spot on the device, and he got a shock. 533 00:30:13,645 --> 00:30:16,523 Eventually, he got it started, put the pod in, 534 00:30:16,606 --> 00:30:19,192 the top popped off, and the pod burned his lip. 535 00:30:19,275 --> 00:30:23,112 So it was the perfect storm of everything that could have gone wrong, 536 00:30:23,196 --> 00:30:25,490 did go wrong, and Adam got to experience it. 537 00:30:25,573 --> 00:30:29,744 I think when we walked out of that shop, Adam came to the conclusion 538 00:30:29,828 --> 00:30:32,205 that, "Shit, this product isn't working." 539 00:30:32,789 --> 00:30:34,749 "We're gonna have to redesign it, 540 00:30:34,833 --> 00:30:38,002 and it's gonna take somewhere between a year and 18 months." 541 00:30:38,086 --> 00:30:42,590 We were frustrated at that point that we hadn't seen the progress we wanted, 542 00:30:43,341 --> 00:30:45,426 and the buck has to stop someplace. 543 00:30:45,927 --> 00:30:49,764 [Ducharme] James took over in the CEO role, and Adam took a step back. 544 00:30:49,848 --> 00:30:53,184 And it was kind of a crisis point for this new company. 545 00:30:53,268 --> 00:30:57,647 Ploom was starting to get low on funds and struggling to get additional funds. 546 00:30:57,730 --> 00:31:00,483 I thought, "It's probably all over. It's a shame." 547 00:31:05,697 --> 00:31:10,618 At this point, James was on the hunt for any investor who could help Ploom succeed. 548 00:31:10,702 --> 00:31:14,664 [Eschenbach] Japan Tobacco International approached us to invest in Ploom. 549 00:31:14,747 --> 00:31:15,832 $10 million. 550 00:31:17,000 --> 00:31:20,628 JTI was this huge Japanese conglomerate making cigarettes. 551 00:31:21,546 --> 00:31:23,131 [Sonderegger] We were conflicted. 552 00:31:23,214 --> 00:31:29,095 Again, Big Tobacco killing people for almost 100 years and lying about it, 553 00:31:29,178 --> 00:31:31,890 and they come in with a significant investment. 554 00:31:32,515 --> 00:31:34,559 It was difficult. 555 00:31:35,268 --> 00:31:38,730 But without that investment, I'm not sure we would have made it. 556 00:31:39,647 --> 00:31:42,525 Our mission was really important. 557 00:31:43,026 --> 00:31:45,486 We can't scrap it and go to the next thing. 558 00:31:46,112 --> 00:31:49,282 The goal of the company was to save a billion lives. 559 00:31:49,365 --> 00:31:52,785 James and Adam told me that of all the Big Tobacco companies, 560 00:31:52,869 --> 00:31:55,079 JTI was the most progressive, 561 00:31:55,163 --> 00:31:58,082 and they seemed to be the most open-minded. 562 00:31:58,166 --> 00:32:02,378 It was a way to get more distribution of a product that was gonna save lives. 563 00:32:02,462 --> 00:32:05,089 [Sonderegger] My spine was softened, so to speak. 564 00:32:05,965 --> 00:32:11,763 If by partnering with Big Tobacco, it helps you achieve your core mission, 565 00:32:12,347 --> 00:32:14,349 maybe it's not the worst thing. 566 00:32:16,100 --> 00:32:18,353 [Salta] Japan Tobacco enabled them to expand, 567 00:32:18,436 --> 00:32:20,939 so now you have the funds to create your own playground. 568 00:32:21,022 --> 00:32:22,440 What does that look like? 569 00:32:26,027 --> 00:32:27,862 [Ducharme] After the Ploom device flopped, 570 00:32:27,946 --> 00:32:30,865 Adam and James knew they needed to make something better. 571 00:32:30,949 --> 00:32:33,493 And the $10 million that they got from JTI 572 00:32:33,576 --> 00:32:37,205 gave them the ability to take a step back and go back to the drawing board. 573 00:32:38,498 --> 00:32:41,459 [Sonderegger] So with that money, they pivoted. 574 00:32:41,542 --> 00:32:46,172 They didn't come out with a new and improved version of the Ploom, 575 00:32:46,255 --> 00:32:48,257 they came out with something called PAX. 576 00:32:51,970 --> 00:32:56,766 The PAX was an induction vaporizer for "loose-leaf" tobacco. 577 00:32:58,184 --> 00:32:59,310 [Monsees] So this is PAX. 578 00:33:00,603 --> 00:33:02,063 A pinch of pipe tobacco. 579 00:33:02,563 --> 00:33:07,777 You can really unlock the sort of excellence of tobacco. 580 00:33:07,860 --> 00:33:08,861 Pretty awesome. 581 00:33:13,700 --> 00:33:16,911 [Ducharme] PAX was supposed to vaporize loose-leaf tobacco, 582 00:33:16,995 --> 00:33:21,666 but it became popular with marijuana users instead of tobacco users. 583 00:33:22,208 --> 00:33:26,379 At that point, cannabis was becoming more and more acceptable. 584 00:33:26,462 --> 00:33:28,965 Even though it wasn't fully legal in a lot of places, 585 00:33:29,048 --> 00:33:30,800 it looked like a good opportunity. 586 00:33:30,883 --> 00:33:33,302 [Erica Halverson] A friend, he handed me this vaporizer 587 00:33:33,386 --> 00:33:35,680 that had this little X thing on the front of it. 588 00:33:35,763 --> 00:33:37,140 Told me it was called a PAX. 589 00:33:37,223 --> 00:33:41,185 It changed my world. 590 00:33:41,811 --> 00:33:44,856 I made a decision right then I was gonna work for this company. 591 00:33:44,939 --> 00:33:46,649 The way that you smoke marijuana 592 00:33:46,733 --> 00:33:49,444 is mostly complicated, mostly bad, mostly inefficient. 593 00:33:49,527 --> 00:33:52,238 PAX showed up and said, "We'll make it easier." 594 00:33:53,031 --> 00:33:56,325 Suddenly, you didn't have to have a Ziploc bag with your weed in it. 595 00:33:56,409 --> 00:33:59,537 Suddenly you didn't have to have a match or a lighter. 596 00:33:59,620 --> 00:34:01,914 You can just vape a little bit, and you're done. 597 00:34:02,582 --> 00:34:03,916 This is fantastic. 598 00:34:04,000 --> 00:34:06,919 [Sonderegger] It was a beautiful product. It worked really well. 599 00:34:07,003 --> 00:34:09,630 It was something you want to share with your friends. 600 00:34:09,714 --> 00:34:11,049 It even had a game function, 601 00:34:11,132 --> 00:34:14,260 so you could shake it up, and it would go around… 602 00:34:14,343 --> 00:34:17,513 Like Spin the Bottle, whoever it lands on would have to take a hit. 603 00:34:17,597 --> 00:34:22,435 There was a lot of care in even choosing who we had representing our product. 604 00:34:22,518 --> 00:34:26,189 We collaborate with people like The Weeknd or Broad City, 605 00:34:26,272 --> 00:34:30,610 one of the coolest, most relatable stoner shows on TV at that time. 606 00:34:30,693 --> 00:34:33,738 It was really fun, it was well-thought-out, 607 00:34:33,821 --> 00:34:35,823 and it blew up really fast. 608 00:34:36,407 --> 00:34:39,660 The PAX was very big. I remember it was all over the city. 609 00:34:39,744 --> 00:34:41,871 You saw people using it everywhere. 610 00:34:42,455 --> 00:34:44,874 Every concert you went to, you saw the little light. 611 00:34:45,625 --> 00:34:48,169 I have a friend who was a distributor for PAX, 612 00:34:48,252 --> 00:34:50,963 and he was selling as many as he could get. 613 00:34:51,047 --> 00:34:53,299 [Eschenbach] It started outselling Ploom, substantially, 614 00:34:53,382 --> 00:34:56,552 so Ploom dropped to the wayside and PAX took over. 615 00:35:02,475 --> 00:35:04,727 [Sonderegger] The PAX was a phenomenal success. 616 00:35:04,811 --> 00:35:08,022 Some people could have just said, "Okay, we did great." 617 00:35:08,606 --> 00:35:11,150 "Let's kick back, enjoy the success for a while." 618 00:35:11,234 --> 00:35:13,820 But there's a certain ceiling in the cannabis space. 619 00:35:14,403 --> 00:35:17,698 So, the venture capitalists that would back this 620 00:35:17,782 --> 00:35:19,784 were like, "Congratulations, guys." 621 00:35:19,867 --> 00:35:23,871 "You have a successful product, but that's not what we signed up for." 622 00:35:24,372 --> 00:35:27,041 "We signed up for the big project." 623 00:35:27,125 --> 00:35:29,043 "The project to solve the smoking problem." 624 00:35:29,127 --> 00:35:31,337 "The $90-billion-a-year project." 625 00:35:32,296 --> 00:35:34,257 At the same time, Adam and James, 626 00:35:34,340 --> 00:35:38,511 they still wanted to do a revolutionary product 627 00:35:38,594 --> 00:35:41,264 that delivered revolutionary results. 628 00:35:41,347 --> 00:35:45,226 In this case, saving millions, if not, possibly, a billion lives. 629 00:35:46,227 --> 00:35:47,770 [Eschenbach] They still had that dream 630 00:35:47,854 --> 00:35:50,648 and passion to solve a critical health problem, 631 00:35:50,731 --> 00:35:52,358 and PAX wouldn't be targeting that. 632 00:35:52,441 --> 00:35:55,653 So I think that led to the evolution of the JUUL. 633 00:35:56,154 --> 00:35:59,115 [Pierce] In this "move fast and break things" world of tech, 634 00:35:59,198 --> 00:36:01,993 you should constantly be cannibalizing your own ideas 635 00:36:02,076 --> 00:36:05,371 and rethinking the way that things work, all the time. 636 00:36:05,454 --> 00:36:09,292 Look at something that seems good, and say, "I bet this could be better." 637 00:36:09,375 --> 00:36:12,753 We said, "We're going to build something from scratch, 638 00:36:12,837 --> 00:36:14,630 from the ground up." 639 00:36:14,714 --> 00:36:17,258 That's really how we became JUUL. 640 00:36:17,341 --> 00:36:19,218 As they went back to the drawing board, 641 00:36:19,302 --> 00:36:22,847 James was focused on the design side of a new device, 642 00:36:22,930 --> 00:36:25,433 while Adam was more focused on the science. 643 00:36:26,100 --> 00:36:29,812 [Salta] For James, the design of it was always number one. 644 00:36:29,896 --> 00:36:32,481 "Let's make it look like it came from San Francisco." 645 00:36:34,650 --> 00:36:36,652 [Sonderegger] What they needed to do was two things. 646 00:36:36,736 --> 00:36:39,697 They needed to make it simple, easy to use. 647 00:36:39,780 --> 00:36:41,741 That was a problem in the vape industry. 648 00:36:41,824 --> 00:36:45,036 Big devices, complicated, people would try it, 649 00:36:45,119 --> 00:36:47,955 and if it wasn't easy to use, they'd put it down. 650 00:36:48,039 --> 00:36:51,000 And the other side of the coin was satisfying. 651 00:36:51,083 --> 00:36:54,086 It had to be satisfying pretty much from the get-go. 652 00:36:54,170 --> 00:36:56,589 [Ducharme] While James focused on the design side, 653 00:36:56,672 --> 00:37:00,968 Adam was finding a way to deliver enough nicotine to keep smokers satisfied. 654 00:37:01,052 --> 00:37:04,096 There was something missing about the products we had developed, 655 00:37:04,180 --> 00:37:06,390 and the products on the marketplace. 656 00:37:06,474 --> 00:37:08,601 You would vape them, smoke them, 657 00:37:08,684 --> 00:37:11,187 and not get that sensation of smoking a cigarette. 658 00:37:11,270 --> 00:37:14,398 I knew this because I was still smoking cigarettes. 659 00:37:15,149 --> 00:37:18,277 [Dr. Proctor] Earlier generations of so-called electronic cigarettes 660 00:37:18,361 --> 00:37:21,906 used what's called freebase nicotine, which was difficult to inhale. 661 00:37:21,989 --> 00:37:23,658 [Dr. Jackler] It had a bite in your throat. 662 00:37:23,741 --> 00:37:27,745 What it did is it inhibited the ability to raise the nicotine level up, 663 00:37:27,828 --> 00:37:29,038 because it got too bitter. 664 00:37:29,956 --> 00:37:32,208 [Ducharme] Adam was looking for an answer to this question 665 00:37:32,291 --> 00:37:36,420 of how to make the nicotine delivery of his product equal that of a cigarette. 666 00:37:36,504 --> 00:37:40,466 And he found what he was looking for in cigarette industry research. 667 00:37:40,549 --> 00:37:43,302 [Dr. Jackler] What they found is if you conjugate nicotine 668 00:37:43,386 --> 00:37:47,223 with a weak organic acid, so-called salt nicotine, 669 00:37:47,306 --> 00:37:49,433 that it tasted much softer. 670 00:37:49,517 --> 00:37:51,394 It burned the throat less. 671 00:37:51,936 --> 00:37:56,607 [Dr. Proctor] That overcame that harshness of the traditional e-cigarette. 672 00:37:57,275 --> 00:37:59,318 It's a kind of a chemical trickery 673 00:37:59,402 --> 00:38:03,781 that allows the body's normal defense mechanisms to be overcome, 674 00:38:03,864 --> 00:38:07,285 and is very smooth and goes down very easily. 675 00:38:08,286 --> 00:38:10,121 [Ducharme] In the summer of 2013, 676 00:38:10,204 --> 00:38:12,873 Adam brought on a chemist named Chenyue Xing 677 00:38:12,957 --> 00:38:15,209 to help with the nicotine delivery problem. 678 00:38:20,631 --> 00:38:23,634 The question was what would be the right salt formulation. 679 00:38:26,095 --> 00:38:28,848 [Pierce] When they started doing the chemistry for JUUL, 680 00:38:28,931 --> 00:38:31,892 it was a ramp-up. Incremental ramp-up. 681 00:38:31,976 --> 00:38:34,770 [Ducharme] Adam and Chenyue went outside of some of the protocols 682 00:38:34,854 --> 00:38:36,814 in a typical research lab. 683 00:38:36,897 --> 00:38:41,319 They would just recruit their co-workers to test whatever they were working on. 684 00:38:41,861 --> 00:38:44,405 [Chenyue Xing] It was called "buzz testing", 685 00:38:44,488 --> 00:38:47,825 it's a commonly-used term by smokers 686 00:38:47,908 --> 00:38:52,747 to describe the nicotine head hit that they feel. 687 00:38:54,165 --> 00:38:58,085 [anonymous Ploom engineer] The test was simple. Ten puffs in two minutes. 688 00:38:58,878 --> 00:39:02,548 Around the fourth or fifth puff, I would have to start tallying 689 00:39:02,631 --> 00:39:06,052 because I'd hit a buzz so hard I'd be like, "Where am I?" 690 00:39:06,552 --> 00:39:09,764 Then I'd come back and be like, "I'm done with number six." 691 00:39:10,931 --> 00:39:14,977 The potency, I had never really felt anything like that before 692 00:39:15,061 --> 00:39:17,688 since high school, when I tried my first cigarette. 693 00:39:18,272 --> 00:39:20,232 Like a punch in the face, "Whoa." 694 00:39:20,316 --> 00:39:23,110 It really opened our minds to what was possible. 695 00:39:23,986 --> 00:39:26,864 As soon as we tried nicotine salts, we were like, "Boom." 696 00:39:26,947 --> 00:39:29,158 "All right, we're done. This is it." 697 00:39:29,241 --> 00:39:33,746 Now it was something that could actually satisfy a smoker. 698 00:39:35,498 --> 00:39:39,543 Adam discovered the secret sauce to making it effective. 699 00:39:42,296 --> 00:39:43,255 Everyone knew. 700 00:39:44,173 --> 00:39:45,800 This is it. We crushed it. 701 00:39:47,802 --> 00:39:50,888 [Andre Rougeau] At the 2014 holiday party, 702 00:39:50,971 --> 00:39:53,891 it wasn't more than 25 of us in this room. 703 00:39:53,974 --> 00:39:57,311 They got in front of us, pulled out the JUUL and showed us. 704 00:39:58,729 --> 00:40:02,983 [Sonderegger] Sleek little design, no moving parts, no on/off button. 705 00:40:03,067 --> 00:40:05,903 [Pierce] The shape of the pod sort of told you how to insert it. 706 00:40:05,986 --> 00:40:08,656 That simplicity, I was like, "Everyone's gonna love this." 707 00:40:09,240 --> 00:40:12,827 [Salta] Everybody was comparing it to an Apple product. 708 00:40:12,910 --> 00:40:15,871 "God. It's like an iPod, except it's for a vape." 709 00:40:16,539 --> 00:40:19,417 [Rougeau] There were smokers who hit it and their eyes lit up. 710 00:40:19,500 --> 00:40:21,877 Like, "We found it. This is great." 711 00:40:21,961 --> 00:40:23,796 [Sonderegger] I knew that it was significant 712 00:40:23,879 --> 00:40:25,923 when I took the first couple of puffs 713 00:40:26,006 --> 00:40:29,343 because the nicotine delivery was far better than anything I'd tried. 714 00:40:29,427 --> 00:40:34,265 To be honest, I not only got a head rush, I almost vomited. It was that strong. 715 00:40:35,516 --> 00:40:38,519 [Salta] I did have a pull off of it, and I was like, "Damn." 716 00:40:38,602 --> 00:40:42,148 The plume that came out of it was so satisfying, 717 00:40:42,231 --> 00:40:46,402 and exactly what I think anybody who wants to vape wanted to feel. 718 00:40:47,611 --> 00:40:48,946 [man] It was a home run. 719 00:40:50,489 --> 00:40:52,992 [Dr. Proctor] It didn't look like an object that might be abused. 720 00:40:53,075 --> 00:40:54,869 It looked like a thumb drive. 721 00:40:54,952 --> 00:40:58,038 And so, that was part of the genius of the designers, 722 00:40:58,122 --> 00:41:00,124 make something that not only delivered 723 00:41:00,207 --> 00:41:04,795 a perfect level of nicotine to the brain, but could be used almost anywhere. 724 00:41:04,879 --> 00:41:10,009 And in that sense, it's the culmination of this century-long effort 725 00:41:10,092 --> 00:41:12,803 to produce a perfect engine of addiction. 726 00:41:12,887 --> 00:41:15,848 [Pierce] I think JUUL should have asked the question, 727 00:41:15,931 --> 00:41:19,602 "If we make the greatest e-cig in the world, is that a good idea?" 728 00:41:21,103 --> 00:41:23,522 "Is that a thing we should bring into the world?" 729 00:41:23,606 --> 00:41:26,609 But once they decided to, a lot of what happened after that 730 00:41:26,692 --> 00:41:28,486 feels inevitable to me. 731 00:41:28,569 --> 00:41:31,697 [reporter] E-cigarette use has skyrocketed among America's youth. 732 00:41:31,780 --> 00:41:33,616 An epidemic among adolescents. 733 00:41:33,699 --> 00:41:36,327 [man] No one should use vaping products, period. 734 00:41:36,410 --> 00:41:38,787 You're nothing but a marketer of a poison. 735 00:41:38,871 --> 00:41:42,750 [chanting] JUUL's getting richer while people are getting sicker! 736 00:41:46,128 --> 00:41:48,130 [closing theme music playing]