00:00If you have a smoking cessation device to help these 30 million Americans quit smoking,
00:05what better company could you sort of work with than Juul?
00:09Juul skyrocketed to fame as a sleek, USB-shaped vape that redefined nicotine for a new generation,
00:16then became a lightning rod in the fight over youth vaping.
00:19Originally spun out of the startup Plume in 2015, Juul quickly captured market dominance,
00:24only to face backlash, lawsuits, and regulatory crackdowns.
00:28James Sagan, its largest investor, has remained behind the scenes throughout the brand's rise, fall,
00:33and now its attempt to re-emerge as a regulated alternative to cigarettes.
00:40So walk me through, though, kind of where we started, where you wanted to join in an informal capacity.
00:47Tell me more about kind of how that was pitched to you or framed to you and why the company even persisted through that.
00:53I mean, it seems like if you're not allowed to sell your product in the U.S. and you're a U.S. company,
00:57you might think about closing shop.
01:00Well, they were allowed to sell the product under a stay.
01:04I didn't come in as an equity investor.
01:05I came in to sort of just help, right, effectively, because I had some friends who were involved in the company.
01:10And they just valued my input and became sort of, you know, it was the most sort of shocking narrative construction I've ever seen
01:18because the founders of the company are the most mission-driven people in the world.
01:22Like, imagine being an engineer at Juul in 2021 and still working with the company in spite of, like, you know, pay cuts.
01:28I imagine there was a ton of attrition.
01:29There was a ton of attrition from sort of the tourists, let's say, who came into the business when revenues were escalating.
01:37But the most ironic outcome being the most likely in this case is that the people who stayed at the company
01:41were the smartest, most mission-driven people I've ever encountered.
01:45And so that's what really sort of highlighted to me that there's something wrong in the story,
01:50that, like, this is a really misunderstood company.
01:52And the early investors and the founders, you know, pouring a bunch of capital back in the company to save it
01:57because it was simply too important.
01:58And I think everybody was of the belief that, like, at some point in time, the truth will reveal itself.
02:03You spend $200 billion a year in health care costs attributable to smoking-related illnesses.
02:08And Juul is, like, the only successful cessation product that is regulatorily compliant, right?
02:13And it's independent now.
02:15So, you know, it's no longer, there's no ownership, residual ownership from Altria anymore.
02:20And so it's literally owned by, you know, the founders and early investors.
02:23And I was, like, the first really large outside participant.
02:26And they were essentially then a B2B business.
02:28That's right.
02:28They didn't have stores that they manned.
02:31They sold primarily to bodegas and convenience stores.
02:35Yeah.
02:35Were there other ways that they distributed the product?
02:37It was small, direct-to-consumer online, but that was, like, heavily age-verified and age-gated.
02:42At the same time, the company was, like, okay, well, how do we create solutions and sort of take responsibility, which is what's so cool about Juul, in my perspective.
02:49And what was the vision or the idea, if they weren't targeting kids, to have some of the flavors that people have been very critical of?
02:58To be fair, I guess adults, like, flavored things, too.
03:01But that seemed like that was targeted.
03:03They had an early instinct, because they were just, like, these, you know, colossally smart engineers, that, you know, flavors help transition smokers, you know, with much more efficacy than non-flavored products.
03:14Smokers, basically, you know, they used, they smoked cigarettes in spite of the taste of cigarettes, like, not because of it, right?
03:20And so if you pair a flavor with, you know, nicotine, it turns out that it's much more, you create much more successful smoking cessation, which is borne out by all the data.
03:29How many people were impacted, or how many children, I should say, were impacted by that crisis, where it did seem like so many teens were vaping?
03:36I mean, our estimation is, like, less than 10% of our revenues were attributable to youth vaping, which is still, like, a tragedy, in my view, right?
03:43But there's no way to have known that beforehand.
03:46So when did those conversations begin with the current FDA?
03:51Yeah, I mean, really.
03:52And it seems like it must have moved pretty fast, because the administration's only been in office six months.
03:57Yeah, I mean, it's a huge, huge problem.
04:00I mean, any sort of public health-focused organization, the FDA being, like, the most important of which, this is the lowest-hanging fruit.
04:07Like, you know, I think the mission of this FDA is to sort of end this chronic disease crisis.
04:11And so, like, if you have a smoking cessation device to help, you know, these 30 million Americans quit smoking, what better company could you sort of work with, right, than Juul?
04:22The newest products are basically, you know, trying to solve these three missions.
04:26How do you keep it out of the hands of people who shouldn't be using it, kids?
04:29And how do you make it as appealing and as effective to the smoker, right?
04:32And they came up with, like, this incredible solution that feels like a cigarette, but is far less harmful.
04:38And so they've just continued doing that.
04:42Yeah.
04:50Nice.
04:51Mand Table bank.
04:54ые control.
05:01Music.
05:02Perfect.
05:03Okay.
05:04Perfect.
05:06Perfect.
05:07Care.
05:08Hance.
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