Over the summer and fall of 2015, Juul marketers traveled up and down the East and West Coasts, handing out tens of thousands of free samples at parties hosted in a pop-up Juul Vapor Lounge. Some of the lounges were built inside a twenty-by-eight-foot steel shipping container finished in gleaming white paint, decorated with the brand’s fluorescent-colored geometric patterns, and topped off with pink lounge furniture and a bar with brightly lit jewel boxes displaying the nicotine gadgets. After guests were handed a free Juul kit, they were invited to step in front of the Bosco animated “GIF booth” to have their pictures snapped and turned into silly moving videos designed to go viral on social media with an assortment of hashtags—#juulmoment. #juullife. #juulpod. #juulvapor.
As the sampling tour descended on yachts, raves, art shows, movie screenings, and wine tastings, Juul easily distributed hundreds of thousands of Juul pods. Company documents showed that the so-called Container Tour was expected to “get JUUL into the hands of over 12,500 influencers subsequently introducing JUUL to over 1.5M people.” Additionally, the marketing crew was encouraged to sign up people with their email addresses to help them spread brand awareness and to make them more likely to enlist in Juul’s “auto-ship” program that delivered the product straight to the person’s doorstep without their lifting a finger.
Juul was following a well-worn formula that had come to define new tech start-ups. Rather than plow a bunch of money into a traditional, expensive Madison Avenue ad campaign on television and radio, it had become more effective to deploy the boundless reach of social media with the help of influencers. So-called user-generated content, which relied on real people posting about the product on Twitter or Instagram, had become the go-to tactic for start-ups to give a brand an air of authenticity and generate an x-factor that money couldn’t buy. It had been done masterfully by insurgent brands. Juul’s chief marketing officer, Richard Mumby, had previously worked at Bonobos, an upstart men’s apparel brand that ran contests like the #Pantsformation challenge that had customers upload photos of themselves on Instagram for a chance to win a trip to New York City. Warby Parker, the trendy eyewear start-up, used #warbyparkerhometryon as a way to get people to share photos of themselves sporting the brand’s eyewear.
The combination of old-school marketing practices, with Juul on billboards and in glossy ads, and twenty-first-century marketing tricks was a potent combination. It’s not that Bowen and Monsees were clueless of the tobacco industry’s advertising past—they had spent enough time in the tobacco archives to know the ire generated by the companies’ youth-oriented marketing practices. Several years earlier they’d even visited a Stanford professor named Robert Jackler who’d built an archive of old tobacco ads and was an expert in tobacco advertising. But the mindset of executives at Pax Labs, the company that launched Juul, was trained almost solely on one thing and one thing only: getting customers.
Pax board member Alexander Asseily, the cofounder of Jawbone, was warning that the tactic could backfire. “The world is transparent and increasingly intolerant of bullshit. It’s not about faking it—it’s about doing it correctly . . . which could mean not doing a lot of things we thought we would do like putting young people in our poster ads or drafting in the wake of big players in the market.”
After guests were handed a free Juul kit, they were invited to step in front of the Bosco animated “GIF booth” to have their pictures snapped and turned into silly moving videos designed to go viral on social media.
But the Juul campaign seemed to be working. Not only was there a growing buzz about the brand, unmatched by any of its competitors, but the company was attracting another kind of attention that was very much wanted. Juul “could be a multi-billion [dollar] opportunity,” read a presentation from the investment bank Stifel, in an August 2015 presentation to Pax Labs. The bank was pitching the company on strategic alternatives, which included a potential sale to a major tobacco company to “maximize Juul Growth Trajectory.” The tobacco industry, the presentation noted, had “aggressively but unprofitably entered the vape category” and launched “products that are not compelling.” As a result the industry’s shortcomings in the e-cigarette industry presented a “prime opportunity” for Juul to own the market. Just weeks out of the gate with Juul, despite the board’s handwringing and the simmering controversy, Bowen and Monsees’s nicotine start-up was already in play.
By the beginning of 2016, Juul was starting to make a ripple. New distributors were calling, saying they’d heard about Juul and were interested in carrying it. Stores that already had Juul in their rotation called, saying they were sold out and wanted more. To employees, the surge of interest seemed almost suspicious, but Juul was simply beginning to reach an inflection point. As the product got into more and bigger retail stores, it reached growing numbers of people, who in turn spread the word in vape shops and at parties and on social media, until the product started to snowball.
Engineers furiously worked to finish designing a new pod and device that steered clear of the Philip Morris trademark. They settled on a hexagonal shape, which sat in the little cutout between the device and the pod. The fix wasn’t big, but it also wasn’t simple, since it required the design to be ironed out and the production lines to be retooled. By early 2016, production in China resumed. The pod-filling line in North Carolina was eventually brought back online, and by the spring it had doubled its production capacity and was running around the clock. A second pod-filling contract manufacturer was eventually brought on to help meet the demand.
Throughout 2016, Juul’s supply chain became completely overwhelmed. Just as soon as the company sent out a shipment, retailers were sold out again. Soon, the warehouse that just weeks earlier had been brimming with Juul boxes was nearly empty. Employees were getting screamed at by retailers complaining the company wasn’t restocking fast enough, and slapping them with late fees for not filling orders on time.
Customers were complaining that they couldn’t find Juul anywhere. When they found stock, they’d buy it in bulk, scooping as much as they could off the shelf as fast as they could. Retailers couldn’t keep Juul in stock for more than a day. The scarcity led people to track the product like a precious commodity, posting on social media when they found a store that had it. “PSA: speedway on bird and 81st will restock juul pods at 5 pm,” read one posting on Twitter, drawing the reply “damn why so late.”
The despondent mood inside Pax had dramatically changed. By now so many demands from customers and retailers were flowing in that employees would work over the weekend, ordering pizza as they stayed late. Bowen and Monsees often pitched in, personally answering customer tickets and responding to inquiries. Board members dropped in frequently, sometimes staying late into the night with a team that was running on adrenaline. There was a sudden electricity about the place.
“Everyone was so astonished that they wanted to be a part of it,” one former employee recalled. Just months earlier Juul was on life support, but now there was a gathering sense that they were witnessing the birth of something big. “This was a once-in-a-lifetime company.”
Of the many reasons for Juul’s sudden popularity, one was indisputable: Juul was leaving its unique mark. It had crossed the blood-brain barrier of America and was starting to pump through a nation. Well before the product launched, back to the days when Bowen was in New Zealand giving his own blood, the company had been in pursuit of the perfect nicotine high. And it was becoming clearer by the day that they appeared to have found it. That combined with the compact, handy design of the hardware made the thing incredibly enticing, and hooking.
When Erica Halverson—a cheerful but blunt Pax marketing manager with a fast-talking charm—first started working for Juul in 2016, she was tasked with putting together a marketing plan for vape shops nationwide. While convenience stores were an important sales channel for Juul, the largely independently owned and operated vape shops were critical as well. But the vapers were a much different animal than somebody rolling up to a Circle K to pump gas. Vape shops were dominated by a steampunk culture filled with pierced guys with beards who’d typically kicked a lifelong habit of smoking through ripping monster nicotine hits on squonk mods. The hard-core enthusiasts hand-mixed liquid nicotine concoctions from glass bottles like mad scientists and tinkered with copper wires to tweak resistance. They expired streams of vapor from their nose like angry bulls. As one former Juul executive described them: “These are just a bunch of good ol’ stoners that went along for the ride.”
When Halverson first started showing up to the haze-filled vape dens, toting dainty little Juul in its precious little box, she got some side eye. Compared to the big box mods, a Juul seemed like a toy. And while the other devices would give off billowing vape clouds, Juul’s plume was ephemeral and discreet. But when she’d set up her little booth in the shop and allow sampling, it didn’t take long for the tough guys to discover Juul could knock them on their ass.
When she’d set up her little booth in the shop and allow sampling, it didn’t take long for the tough guys to discover Juul could knock them on their ass.
Its 5 percent nicotine concentration was by far the strongest e-cigarette on the market. It would always amaze people when Halverson told them that a single tiny Juul pod delivered an amount of nicotine equivalent to an entire pack of Marlboro Reds. Even with Juul’s proprietary benzoic acid–nicotine salt formulation that made its hits smoother compared to others, its potency delivered a powerful zing. Before long even the most hard-core vapers were Juuling.
“That was part of the marketing message—we were trying to show that Juul was cigarette-like without being a cigarette,” said Halverson.
Introducing Juul to the world was much more calculated than sauntering into a vape shop or a gas station. The company collected all kinds of data on adult smokers that would help inform the company’s marketing strategy. It brought in beta testers to the corporate offices for in-house focus groups. They’d sit around a table and Juul while the marketing people observed them. How often did they puff? How long did it take somebody to take a puff? They hired data scientists to ingest information from as many sources as possible, including from beta Juul devices given to testers to log their usage patterns. They purchased third-party data on existing smokers and worked to segment it out based on geography and demographics. Where did smokers hang out in Chicago, for example. And how were they different from smokers in Los Angeles? They hacked vaping like a Silicon Valley company would.
Still, consumer research conducted by the company showed that even some heavy smokers found Juul to be too strong. Unlike a cigarette, the Juul had no beginning or end, so people could ingest large amounts of nicotine without even realizing it. “They were floored by the delivery and didn’t really know how to control it,” said the researcher hired to do the consumer tests. Some of the comments from the study subjects were that Juul was “overwhelming when I first inhaled” or “too much for me” or “it caught me off guard.” There were internal conversations over whether the product’s nicotine content was too strong and could be interpreted as “feeding an addiction faster,” according to notes from a 2017 internal science meeting at Juul. “Given the current climate with addictions to OxyContin, how the data is presented needs to be considered carefully.”
Halverson was tasked with teaching shop owners and patrons how it was completely normal when first using Juul for even smokers or experienced vapers to hack up a lung. She’d reassure them that it was only because of Juul’s uniquely satisfying (read, high nicotine) formulation. Before long, any lung aggravation would subside, and they’d be coming back for more.
Sure enough, when she’d come back to the shop, say, two weeks later, she learned that the people who’d been coughing and taking hesitant hits were now Juuling with no coughing at all. “People were taking deeper and longer puffs the longer they had the device,” Halverson said. “We found that people were—I don’t want to say they were getting addicted, because it was more that the device itself was just so easy to pick up and use, but people would get so used to being able to use this thing anywhere and everywhere.”
It didn’t take long for anywhere and everywhere to mean exactly that. ●
From the book The Devil's Playbook, copyright © 2021 by Lauren Etter. Published by Crown, an imprint of Random House, a division of Penguin Random House LLC. All rights reserved.
Lauren Etter is an award-winning investigative reporter at Bloomberg News, where she writes in-depth corporate features and investigative stories for Bloomberg Businessweek. Previously, she was a staff reporter at the Wall Street Journal and has written for Vanity Fair and the New Yorker. She holds master’s degrees in journalism and law from Northwestern University. Etter lives in Los Angeles with her husband and three children.