The news is now official: Juicero, the high-flying, VC-backed Silicon Valley producer of overly expensive juicers and proprietary juice packs is crushed and done. No more "innovative" cold-pressed ways of getting your liquid carrot or kale.
Food lovers, orchards, and lovers of business well-conceived and undertaken should rejoice. Not to be cruel. Failure is always painful, but important. You can learn a lot from it. Sadly, Silicon Valley's mistakes have been glossed over too often, the result being backward thinking.
The Juicero announcement, which came today, told people, among other things, that they could get a refund for their juicer within the next 90 days. There was a note toward the end for any company willing to take on employees who faced the big squeeze. It further said the company was looking to be acquired. Obviously the "greater fool theory" of investing didn't die with the dot com era of the late 1990s and early 2000s.
There is a strain of insanity that runs through much of the high tech world that new is necessarily better, especially when introduced by someone young. That everything needs to be on the Internet. That the only good customer is a young customer, in keeping with the outlook of the developers. And that money is no object for people.
Lordy, where to start. New can be great. Innovation, by definition, is the new connection of existing ideas. FedEx thought that people might want to send items overnight. Many scoffed and wrongly. Google wasn't the first web search engine, but it came up with a new approach. Apple's iPhone was a relatively late entry to the mobile device category in 2007 and look what happened.
Among the high tech set there is too often a type of naïve assumption that experience and old ideas are always passé. Every new thought or scheme is supposed to be worth testing, which is fine in its way. But common sense and business reality should never go out of style.
Add the third ingredient of assumption that a young demographic is the only one worth considering for a business. (Hate to tell you folks, but Metamucil has been around for a long time.) And then toss in the fourth that price should be no issue.
In this case, people in the Valley, many of them making enough money to sustain entire neighborhoods, if not towns, thought that an originally $699 device (cut to $399 in January 2017) paired with juice pack subscriptions that could run $140 to $200 a month at the original prices according to the 2016 CNET review, made sense. Apparently there was produce in the packs and you could get pressed juice without ever cleaning up the mess, other than tossing the empty pack and adding to the world's landfill problems.
Maybe it all makes sense if you have a grip on your early-issued shares of Facebook and can pay someone to park your Ferrari. But packs that ran from $7 to $10 each that would yield one glass of juice each? You could waltz over to a fancy juice bar, stock up, and still have plenty of money left over. And that's without adding in the price of the juicer. Which, embarrassingly enough, turned out to be unnecessary, as Bloomberg showed in a video earlier this year.
This concept landed Juicero $118.5 million in funding. That's a lot of money down the drain, literally, and it doesn't count all the purchases by people.
One of the best personal characteristics for someone in business is empathy, in the sense of being able to put yourself into the shoes of another. Make sure you don't assume that the shoes aren't always from Jimmy Choo.