so can someone clue me in? it smells like there's some weird behind-the-scenes manipulation going on here. something off about this.
Probably there's more to what the machine does, etc., but the story has legs because it's so absurd-sounding and reads like an indictment of how out of touch Silicon Valley actually is with what qualifies as a good idea.
People love a good laugh, and some Schadenfreude helps. Whats not to like?
This is reasoning by analogy rather than from first principles.
Most people reason mostly by analogy and so therefore most investors reason mostly by analogy. Reasoning by analogy is why these kinds of bad "X but for Y" or "like X but Y" ideas get funded. They look like other successful ideas by simple pattern recognition. Add in a team with good credentials (secondary indicators) and a founder who sends solid alpha-primate signals (matters little unless sales are in-person) and what's not to like?
To see why "Keurig for Juice" is a bad idea, we have to look at it from a first principles point of view.
Fruit is perishable, and the taste of juice is highly dependent upon the freshness of the source fruit. As a result a juicing machine is really only going to be competitive with pre-packaged juice if the fruit is fresh. Fresh fruit juicers already exist, but they're not super-profitable since there is no recurring revenue angle. You can buy fresh fruit at any supermarket or farmers' market, and indeed doing so is likely going to give you fresher fruit than getting it from a specialized vendor.
Fruit is also heavy. It's mostly water. That means shipping it around is expensive, especially when you factor in the need to preserve it at a low temperature (dry ice? thermoses?). That means competing with supermarkets and other experts in food shipping (or local farmers, etc.) is going to be very hard and shipping costs will eat your margins.
All that means a Keurig for Juice has to be expensive. That means it has to be a premium product. Premium customers for a juice machine are only going to be interested in it if the juice it produces is very good and very fresh. That in turn amplifies all the problems above in a vicious cycle. In the end you're left with the very top of the premium market, and that market is more likely to buy their premium juice from a restaurant or, at the very top, have their in-home maid/nanny/whatever make them fresh squeezed juice from locally grown fruit.
Coffee is different. Coffee is somewhat perishable but nowhere near as perishable as fruit, and it's far easier to package and preserve. It preserves for a long time at room temperature. It can sit on store shelves. It's also small and light and easy to ship.
Keurig works because it makes sense from first principles. It's easy to package coffee in a cartridge and it's fairly easy to build a machine to brew it. The result is something more convenient than drip coffee and customers like that, and the cost of doing this is not prohibitively high for either supplier or customer.
Fruit fails for the aforementioned reasons. Keurig for fruit makes no sense.
Reason from first principles, not by analogy.
Reason from first principles, not by analogy.
Had it not be for the fact apparently you need the machine for the privilege of buying juice pouches, I would even say some people might see the value of buying the pre-packaged juice and then squeezing it themselves, feeling good for having saved "400 dollars on an expensive machine", while still causing some revenue impact for the company that now has pivoted to selling only the juice pouches, maybe even as a subscription service.
Compared to this company, is so sad to see other projects not taking off because they fail at the funding stage (for one of the many reasons they might not control).
Side note, Olivia Zaleski has made a name for herself with these kinds of stories.
- it's funny
- it plays into popular conception that Silicon Valley is largely out of touch with the real world
Not everything is a conspiracy (and Juicero really does not want this publicity)
2.- Investors were shocked the machine is not needed.
International press coverage in BBC, Bloomberg, Forbes, TechCrunch, etc. seems vastly out of proportion of the importance of this story.
the media response to this has been so rapid and so extreme that it makes me think conspiratorial thoughts, like someone has a vested interest in their demise and pulled some levers to create this media shitstorm.
For every X group of people who don't want this, there will be Y person who will think it's a good idea and they will purchase the product.
Look at the segway, still made the owner millions.
Segway was later sold to a Chinese company which itself was subject of a patent action by Segway. Good manoeuvre.
I still find it surprising they managed to attract 120M funding. Sometimes the thing itself is not noticeable but the circumstances of its existence are. And then it can teach us something about reality. Or the reality of other people.
Apparently some people thought this would become as big as Nescafe. You don't need a machine to pour juice, you need one to brew coffee. So it seems investors let themselves be fooled to think that the juice would be "special".
The $400 machine could then be marketed as the premium, upmarket option - allowing you to freeze the pouches, allowing you to get pouches with fruit and vegetables that are harder to squeeze by hand, etc.
Now, the pouches are probably too expensive anyway, and the $400 for an upsell is also probably too expensive anyway, and Jeff Dunn probably raised too much, too quickly (forcing those kinds of high prices), but... that's a different matter.
"It’s incredible to come to work everyday alongside hardware and software engineers, food scientists, designers, farmer partners, and all our other team members who are committed to building a new way of delivering raw, plant-based nutrition."
It's the SV version of a Capri Sun?
Seems legit enough, but it's still a classic information problem.
would've been refreshing to instead read, "this is an unnecessary gadget for rich juicebros-- get over it."
Yes, but coffee is filled with caffeine, a very addictive drug, and juice is not. Look at herbal cigarettes, how many people smoke those daily? If you want these DRM thingys to work, make them actually addictive.
News at 11.
> "There are industries giving people diabetes. The leader of the free world just invited Kid Rock to the White House. I think we can give Jeff Dunn a pass on selling veggie juice to software engineers."