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How Juul made vaping viral to become worth a dirty $38 billion – TechCrunch

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A Juul is not a cigarette. It’s much easier than that. Through devilishly slick product design I’ll discuss here, the startup has massively lowered the barrier to getting hooked on nicotine. Juul has dismantled every deterrent to taking a puff.

The result is both a new $38 billion valuation thanks to a $12.8 billion investment from Marlboro Cigarettes-maker Altria this week, and an explosion in popularity of vaping amongst teenagers and the rest of the population. Game recognize game, and Altria’s game is nicotine addiction. It knows it’s been one-upped by Juul’s tactics, so it’s hedged its own success by handing the startup over a tenth of the public corporation’s market cap in cash.

Juul argues it can help people switch from obviously dangerous smoking to supposedly healthier vaping. But in reality, the tiny aluminum device helps people switch from nothing to vaping…which can lead some to start smoking the real thing. A study found it causes more people to pick up cigarettes than put them down.

Photographer: Gabby Jones/Bloomberg via Getty Images

How fast has Juul swept the nation? Nielsen says it controls 75 percent of the U.S. e-cigarette market up from 27 percent in September last year. In the year since then, the CDC says the percentage of high school students who’ve used an e-cigarette in the last 30 days has grown 75 percent. That’s 3 million teens or roughly 20 percent of all high school kids. CNBC reports that Juul 2018 revenue could be around $1.5 billion.

The health consequences aside, Juul makes it radically simple to pick up a lifelong vice. Parents, regulators, and potential vapers need to understand why Juul works so well if they’ll have any hope of suppressing its temptations.

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It’s tough to try a cigarette for the first time. The heat and smoke burn your throat. The taste is harsh and overwhelming. The smell coats your fingers and clothes, marking you as smoker. There’s pressure to smoke a whole one lest you waste the tobacco. Even if you want to try a friend’s, they have to ignite one first. And unlike bigger box mod vaporizers where you customize the temperature and e-juice, Juul doesn’t make you look like some dorky hardcore vapelord.

Juul is much more gentle on your throat. The taste is more mild and can be masked with flavors. The vapor doesn’t stain you with a smell as quickly. You can try just a single puff from a friend’s at a bar or during a smoking break with no pressure to inhale more. The elegant, discrete form factor doesn’t brand you as a serious vape users. It’s casual. Yet the public gesture and clouds people exhale are still eye catching enough to trigger the questions, “What’s that? Can I try?” There’s a whole other article to be written about how Juul memes and Instagram Stories that glamorized the nicotine dispensers contributed to the device’s spread.

And perhaps most insidiously, vaping seems healthier. A lifetime of anti-smoking ads and warning labels drilled the dangers into our heads. But how much harm could a little vapor do?

A friend who had never smoked tells me they burn through a full Juul pod per day now. Someone got him to try a single puff at a nightclub. Soon he was asking for drag off of strangers’ Juuls. Then he bought one and never looked back. He’d been around cigarettes at parties his whole life but never got into them. Juul made it too effortless to resist.

Concealable

Lighting up a cigarette is a garish activity prohibited in many places. Not so with discretely sipping from a Juul.

Cigarettes often aren’t allowed to be smoked inside. Hiding it is no easy feat and can get you kicked out. You need to have a lighter and play with fire to get one started. They can get crushed or damp in your pocket. The burning tip makes them unruly in tight quarters, and the bud or falling ash can damage clothing and make a mess. You smoke a cigarette because you really want to smoke a cigarette.

Public establishments are still figuring out how to handle Juuls and other vaporizers. Many places that ban smoking don’t explicitly do the same for vaping. The less stinky vapor and more discrete motion makes it easy to hide. Beyond airplanes, you could probably play dumb and say you didn’t know the rules if you did get caught. The metal stick is hard to break. You won’t singe anyone. There’s no mess, need for an ashtray, or holes in your jackets or couches.

As long as your battery is charged, there’s no need for extra equipment and you won’t draw attention like with a lighter. Battery life is a major concern for heavy Juulers that smokers don’t have worry about, but I know people who now carry a giant portable charger just to keep their Juul alive. But there’s also a network effect that’s developing. Similar to iPhone cords, Juuls are becoming common enough that you can often conveniently borrow a battery stick or charger from another user. 

And again, the modular ability to take as few or as many puffs as you want lets you absent-mindedly Juul at any moment. At your desk, on the dance floor, as you drive, or even in bed. A friend’s nieces and nephews say that they see fellow teens Juul in class by concealing it in the cuff of their sleeve. No kid would be so brazen as to try smoke in cigarette in the middle of a math lesson.

Distributable

Gillette pioneered the brilliant razor and blade business model. Buy the sometimes-discounted razor, and you’re compelled to keep buying the expensive proprietary blades. Dollar Shave Club leveled up the strategy by offering a subscription that delivers the consumable blades to your door. Juul combines both with a product that’s physically addictive.

When you finish a pack of cigarettes, you could be done smoking. There’s nothing left. But with Juul you’ve still got the $35 battery pack when you finish vaping a pod. There’s a sunk cost fallacy goading you to keep buying the pods to get the most out of your investment and stay locked into the Juul ecosystem.

(Photo by Scott Olson/Getty Images)

One of Juul’s sole virality disadvantages compared to cigarettes is that they’re not as ubiquitously available. Some stores that sells cigs just don’t carry them yet. But more and more shops are picking them up, which will continue with Altria’s help. And Juul offers an “auto-ship” delivery option that knocks $2 off the $16 pack of four pods so you don’t even have to think about buying more. Catch the urge to quit? Well you’ve got pods on the way so you might as well use them. Whether due to regulation or a lack of innovation, I couldn’t find subscription delivery options for traditional cigarettes.

And for minors that want to buy Juuls or Juul pods illegally, their tiny size makes them easy to smuggle and resell. A recent South Park episode featured warring syndicates of fourth-graders selling Juul pods to even younger kids.

Dishonorable

Juul co-founder James Monsees told the San Jose Mercury News that “The first phase is proving the value and creating a product that makes cigarettes obsolete.” But notice he didn’t say Juul wants to make nicotine obsolete or reduce the number of people addicted to it.

Juul co-founder James Monsees

If Juul actually cared about fighting addiction, it’d offer a regimen for weaning yourself off of nicotine. Yet it doesn’t sell low-dose or no-dose pods that could help people quit entirely. In the US it only sells 5% and 3% nicotine versions. It does make 1.7% pods for foreign markets like Israel where that’s the maximum legal strengths, though refuses to sell them in the States. Along with taking over $12 billion from one of the largest cigarette companies, that makes the mission statement ring hollow.

Juul is the death stick business as usual, but strengthened by the product design and virality typically reserved for Apple and Facebook.

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Google TV Android app is mysteriously blocking Netflix

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As with its messaging services and, more recently, music streaming, Google’s video entertainment strategy isn’t exactly the most consistent. It has flip-flopped on that as well, and its latest attempt is just as confusing. Google TV, which refers to an app as well as an unrelated Android TV skin, tries to consolidate not just Google’s own videos and movies but content from other sources as well. Those sources, however, have strangely lost one important member as users report Netflix’s practical disappearance from the app.

Google TV, the Android app, not the Chromecast UI, is meant to be a hub for all things video on your phone. It is pretty much a search engine for VODs and allows you to link to streaming services so that you won’t have to search each one separately. It’s convenience, however, relies on the number of data sources it can search through.

Unfortunately, Netflix might no longer be one of those sources. Users first started reporting that Netflix shows wouldn’t show up in results or that they couldn’t be added to their watchlist. Now, 9to5Google also revealed that Netflix was no longer in the list of services you could sign into in the Google TV app. When asked to comment, Google’s response is almost telling:

“With Google TV, our goal is to bring the best of our search and discovery features across your subscriptions to your favorite devices. We work with each content partner to enable these entertainment experiences, and the level of integration will vary by partner.”

It’s pretty much a roundabout way of saying that there has been some miscommunication or disagreement between Google and a content partner, in this case, Netflix. Whether it’s temporary or permanent, we can only wait and see. Either way, it’s a surprising development just a month or so after Google TV’s debut.

To be clear, Netflix is still available on the new Chromecast so it’s not like Google is completely blocking the service. This discrepancy with the Android app, however, pretty much defeats the purpose of Google TV being a gateway to video streaming and VOD services. It also doesn’t do Google any favors when it comes to ridding itself of that image of inconsistency and unreliability when it comes to its social and media platforms.

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Fujifilm GFX100 can now produce 400MP images with a firmware update

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Given the onslaught of smartphones, camera makers have had to step up to offer features that would be difficult to pull off with a mobile device. Most have started turning DSLRs and ILCs into webcams, for example, to ride on the wave of video conferencing platforms today. Fujifilm has yet another such feature that would probably be impossible with smartphones today, allowing the 102MP GFX100 mirrorless camera to generate pictures with 400MP resolutions.

It almost sounds like the opposite of pixel binning, where smartphones use adjacent pixels to produce an image that has a smaller resolution but a higher level of detail. The principle behind Fujifilm’s “Pixel Shift Multi-Shot” however, isn’t exactly new and can be found in cameras and smartphones under different names. In a nutshell, it takes multiple shots at slightly shifted positions which are then combined into a single 400MP image.

When the user presses the shutter button, the GFX100 records 16 frames in rapid succession, using the in-body image stabilization or IBIS to shift the sensor slightly at each frame. It doesn’t end in the camera, however, and requires a separate Pixel Shift Combiner software for PCs and Macs to combine those 16 frames into a single RAW file in DNG format. A different piece of software like Capture One can then turn that into a 400MP TIFF or JPEG.

The resulting image naturally contains more detail than an equivalent 100MP photo. Fujifilm claims that these 400MP images are able to reproduce more faithfully the details and colors of their subjects. Of course, that also means that file sizes are exponentially larger, too, with a single JPEG taking up hundreds of megabytes.

That might be a deal-breaker for hobbyists and even some pros but Fujifilm might not have those users in mind anyway. It is positioning this feature for digitally archiving artworks, architectures, and other cultural assets where storage is a small price to pay for being able to faithfully preserve such artifacts. Pixel Shift Multi-Shot is available in the latest firmware update to the Fujifilm GFX100 but the Pixel Shift Combiner and Capture One programs have to be downloaded separately.

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TikTok given another seven days to sell its US operations

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Almost like some of the smooth dance moves you can see on the social network, TikTok has again narrowly dodged what could be the fatal deadline that would end it, at least in the US. As the new November 27 deadline approaches, owner ByteDance was given another week to convince the US government not to ban it outright. That remains a quest of Herculean proportions as the Chinese company’s multiple proposals have been repeatedly rejected already.

TikTok was supposed to go dark in the US on November 12, the initial deadline set by US President Donald Trump for the company to come up with a proposal to sell its US operations to a US owner. Whether it was because of the elections or not, that date approached with no further word from the government, leading TikTok to wonder if they were miraculously forgotten. It wasn’t but it at least got a 15-day reprieve.

Those fifteen days will be over on Friday and yet no resolution has been reached. It seems, however, that the Trump administration is willing to draw the uncertainty out as long as it can and filed for another seven days for ByteDance to find a buyer. The problem is that it seems that the US government is still not satisfied with the terms.

For quite a few months already, TikTok’s owner has been in talks with Walmart, Oracle, and other US investors to create an entity that will handle the US side of TikTok’s operations, including the critical data of American users. ByteDance revealed it already made four other proposals before November 10 and an insider tip claims it submitted yet another one. The extension is supposedly meant to give the US Treasury Department time to review that proposal.

This, of course, leaves TikTok’s fate still hanging in the balance, especially given the current uncertainty in the US political scene. The Trump administration itself, however, is also running out of time before it hands over the reins to a new government. Previous attempts to indirectly curtail TikTok’s operations were already shot down in federal courts, leaving this divestment strategy as its last recourse.

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