Juul, the sleekly designed e-cigarette, should be living any brand's fantasy. It's the best-selling vape on the market, reeling in $454 million in retail sales over the last year, according to Nielsen data. But it has a massive problem: Its product is too popular with the wrong age group.

The Juul, made by Juul Labs--a spin-off from Silicon Valley cannabis vaporizer company Pax Labs--was originally created to help adults switch from smoking traditional cigarettes to the healthier alternative of vaping nicotine. But, as the New Yorker recently uncoveredthe Juul has recently become an explosive trend among high school and middle school kids.

The article captures the brand's conundrum: vaping technology promised to be a new a way to reduce the number of adult smokers. But Juul--with its sexy design and flavors like mint, mango, crème brulee, and "cool cucumber"--has become all the rage of teenagers who were never smoking in the first place.

"Young people have taken a technology that was supposed to help grownups stop smoking and invented a new kind of bad habit, one that they have molded in their own image," the New Yorker's Jia Tolentino writes. "The potential public-health benefit of the e-cigarette is being eclipsed by the unsettling prospect of a generation of children who may really love to vape."

In 2015, the vaporizer technology company co-founded by two Stanford design graduates released the Juul. The small device resembles a USB stick and comes with disposable cartridges filled with a patented nicotine salt formula that mimics the throat hit and buzz of a cigarette. It was the first vaporizer on the market that satisfied smokers, along with a halo of cool that far surpassed wearing a NicoDerm patch.

But by 2018, after a surge of reports about underage use, the FDA set up stings at smoke shops and bodegas across the country to crack down on stores selling Juuls to minors. Then, in early May, Senator Chuck Schumer (D-NY) wrote a letter to the FDA demanding they ban "kid-friendly" flavored vape juice, specifically demonizing Juul as a new age tobacco company.

So what should a company do when its product becomes a cult hit--but with the wrong demographic?

Bradley Tusk, the political strategist known for helping startups navigating in regulatory gray spaces, says Juul has found itself in a particularly fraught bind. "We're comfortable working with our clients, but I don't think anyone [in Tusk Ventures] would be comfortable working on this," says Tusk, who isn't one to back down from a fight. His firm has worked with everyone from Uber, to marijuana delivery app Eaze and fantasy sports company FanDuel. He even recently took on the controversial e-scooter company Bird, which is battling regulators in multiple states.

But Tusk does offer some free advice to Juul: The company needs to decide whether it wants to be the bad guy or the good guy in this debate. If it's the bad guy, accept that the company won't be around forever, and simply make as much money as it possibly can while fighting off regulations for as long as it can. But if it has aspirations to be around for decades, then it needs to own up to the misstep, and actively change its marketing strategy and product so it doesn't fall into hands of teens.

For now, it appears Juul is trying to do the latter. In April, the FDA demanded that Juul Labs hand over internal documents regarding how the company markets the product, research on toxicology, and reports from focus groups to find out if the company is intentionally marketing to kids. Juul Labs CEO Kevin Burns wrote an open letter saying that despite their intentions, he fully understands that the the product has become popular among teens. "Let me be clear: we do not want teens or any other non-smokers to ever use our product," Burns wrote, announcing a $30 million initiative to combat underage use. He also stated that the company will support government efforts to raise the legal age to buy tobacco and vape products to 21.

Tusk says the company may have to dig even deeper. "If you were serious about not attracting teens, you wouldn't make products that seem inherently appealing to children," he says, noting that its cool, innovative design is also its Achilles heel. "There is not an epidemic of kids chewing Nicorette gum because it doesn't look particularly appetizing," he says.
 
But Tusk says the biggest hurdle Juul faces is that it's inherited the baggage of traditional cigarette companies. It may pitch itself as a healthier alternative to cigarettes, but it will forever be linked to Big Tobacco, an entrenched narrative impossible to change. "Ironically," says Tusk, "it would be far better politically if they just focused on marijuana." 

Published on: May 11, 2018