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Social dimension is what the world needs

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Adam Bowen Founder and Chief Technology Officer JUUL LABS Inc.

Adam Bowen
Founder and Chief Technology Officer
JUUL LABS Inc.

 

 

By Bernie Cahiles-Magkilat

 

Cigarette smoking is addictive and brings out deadly diseases. Most smokers are desperately wanting to quit, but failed. Thus, there have been various efforts to reduce the health risks associated with smoking.

American firm JUUL Labs Inc., a tech startup in Silicon Valley, is one company that is making headway in its technology that purportedly offers smokers a better option.

Product designer and scientist ADAM BOWEN unveiled a breakthrough device that shuns combustion and actual tobacco filler. The device is aptly called JUUL. It forays in the country on hopes it can attract Filipino smokers to shift into a less risky kind of smoking. More than profit, JUUL was born out of a vision to help cigarette smoking less offensive to health.

The company

JUUL Labs Inc. was co-founded by Adam Bowen and James Monsees.

According to Adam, JUUL was actually his thesis at Stanford Design School in the middle 2000s where he was taking up his master’s degree. Both were smokers and had tried quitting several times, but cannot. They were increasingly dissatisfied with the health and social impacts of cigarettes but were unable to find true alternatives.

So, together, they designed and developed a smokeless nicotine device that would serve as better alternative to the traditional combustion cigarette smoking. JUUL Labs was founded to provide the world’s one billion adult smokers an effective alternative to smoking combustible cigarettes.

Instead of burning tobacco, the new JUUL system employs a controlled vaporization of JUUL Labs’ proprietary e-liquid nicotine formulation to produce an inhaled vapor. Smoking is the leading cause of preventable death in the world. JUUL Labs’ products are designed to help smokers switch.

Adam stressed that JUUL is intended only for existing, adult smokers. It is not for anyone who doesn’t smoke, or doesn’t already use nicotine. Globally, the company implemented a strict action plan to combat underage use by minimizing appeal through a strict marketing and advertising code of conduct and prominent nicotine labelling.

Created with smokers in mind, JUUL is a simple, functional and portable device with unique technology. Through a closed vaping system with pods and a patented temperature control design, it provides users with a consistent and satisfying experience. Without buttons or switches, JUUL provides a clean experience, free from ash and odor. JUUL’s design, functionality and experience provides a viable alternative for Filipino adult smokers looking to quit.

“JUUL Labs has a fundamental global mission to improve the lives of the world’s one billion adult smokers, and we are showing unprecedented signs of success in achieving our mission in the markets in which we operate. We created JUUL with the adult smoker in mind, to give them a product that is a simple, clean and satisfying alternative to cigarette smoking,” says Adam adding that JUUL Labs is compliant with all relevant laws and regulations.

Technology

The JUUL technology is unique. It is based on a closed vaporization system, with temperature control designed to deliver nicotine in a satisfying way expected by smokers but without the tar, carbon monoxide and other chemicals that are present in combustible tobacco.

The pods contain a proprietary salt-based nicotine e-liquid formula, which is mixed under strict quality-controlled processes. The liquid is composed of propylene glycol, glycerol, nicotine, benzoic acid, natural oils, extracts and flavorings. When heated, this liquid creates a vapor, mimicking the look, feel, and sensation of smoking.

The JUUL device is designed to be easy to use – pods click into place, come pre-filled and are disposed of after use. There are no buttons or gauges on the device. It’s sleek exterior hides a very sophisticated internal circuitry. A user just inhales like a cigarette and charges the battery via a proprietary USB charger.

Aside from being simpler and easier to use than most vaping products currently on the market, here are a number of features specific to the JUUL device that differentiates it from competitors.

The JUUL device’s look and feel helps smokers disassociate from smoking enough to break the habit and flavors provide a different taste experience. JUUL’s proprietary e-liquid formula which is based on nicotine salts mimics the instantaneous nicotine uptake of cigarette, thereby creating a satisfying alternative to combustible cigarettes.

“The product design is deliberate. We never designed anything round for a couple of reasons. If we offer to behave like a cigarette a promise you cannot deliver so cigarette have so much history of cigarettes being stigmatize by society and even by smoker themselves. So, we want to severe ties from visual icon but aside from that we believe in the integrity and design to total no fire electronics liquid so have its own form so that is more consistent with our vision,” says Adam.

“Previously, a smokers’ mentality is quit smoking or die. There was no third option for them to continue their ritual but in a much less harmful passion.
That was the genesis the very beginning,” says Adam, who explained that the name JUUL is a combination of the terms jewel, a gem; and joule, a scientific unit of energy, resulting in an invented spelling.

After a decade of research and product development, the JUUL product was launched in the summer of 2015.

The student’s thesis took off. Investments already run into millions overtime, but it attracted angel investors who believe in their cause and have confidence in its founders.

“It was a leap of faith,” he adds as there was no assurance that the product would be successful. “What is important is the vision and our progress,” says Adam.

Market

“The market is growing really very well for four years and now we are having a very large impact in terms of number of smokers that switched to JUUL,” says Adam saying sales have reached to a few million units in the US alone.

In contrast, sales of cigarettes in the US market had been declining by 2 percent annually, but a year ago the reduction was a hefty 11-12 percent. which they correlated to the increase in sales of JUUL. The company even sees a 50 percent decline in cigarette consumption in the US in the next 5 to 10 years.

Adam himself was the first convert to JUUL. “Traditional cigarettes disgust me and now makes me immediately noxious because the body realizes just how toxic and unappealing it is,” adds Adam, who used to smoke one pack of cigarettes a day.

“We’ve conducted testing since the beginning of the product development,” he adds noting that third party studies and other government food and health authorities also indicate that the product showed high reduction of toxins or at least 95 percent safer than smoking the traditional tobacco.

Now, the Philippines is the 15TH country for JUUL. Aside from US, JUUL is now present in Canada, UK, France, Spain, Germany, Switzerland, Ukraine, Italy, Russia, Austria, Ireland, Israel, and South Korea.

In the Philippines, the American firm has partnered with Gokongwei-owned Better For You (BFY) Corporation to support in the distribution of JUUL to Filipino adult smokers. The partnership ensures that 16 million Filipino adult smokers have access to products that will give them the opportunity to switch away from combustible cigarettes. The partnership is also strategic as the Gokongwei-conglomerate operates a mall chain and convenience stores nationwide.

Adam explained that they decided to launch in the Philippines ahead of the other Asian countries because of some favorable factors. First, Philippines has a large portion of smokers and the high level of consumers to adopt a new technology and third is having a strong local partner in BFY.

The Philippines is home to over 16 million adult smokers, which makes up 23 percent of the adult population. Roughly 10 Filipinos die every hour due to smoking-related causes, and almost 19 percent of all deaths in the country are caused by smoking-related diseases like lung cancer, hypertension, and cardiovascular diseases. Of the 16 million smokers in the country, 75 percent said they want to quit smoking but only 4 percent have been successful.

The Philippines continues to have one of the highest rates of smoking in Asia, creating concerns that continued tobacco dependence as a key development issue that impacts well-being, productivity, and overall quality of life.

Another factor is the company sees a regulatory environment. Adam noted that in the sin tax bill in Congress, alternative tobacco smoking technology may fall under a different category from the traditional cigarette.

“The regulatory environment gives us confidence because last year the Lower House passed a bill to regulate the category and last week the Senate also acted on the sin tax bill which put this kind of cigarette smoking in a different category,” says Adam.

At present, the non-combustion cigarette is taxed with the same amount as the paper-packed basis. “As a company we are very supportive of paying tax. We pay import duties, VAT, direct tax for profit and excise tax and we believe it is important to contribute to economies we operate in,” he adds.

To make their product accessible, pricing is one thing they consider in this price sensitive market. The JUUL device is available in slate and silver and sold as a Device Kit (one JUUL Device and one USB Charging Dock) at SRP of P1,600. JUUL pods will be available in a two-pod Refill Kit for SRP of P350. One pod is equivalent to 200 puffs or equivalent to one pack of cigarette.

They will come in two nicotine strengths (3% and 5%) and are available in four flavors (Virginia Tobacco, Mango, Mint, and Crème) to meet the distinct needs of adult smokers and help them make the switch. Users can also buy an extra USB Charging Dock for suggested retail price of P500.

To achieve its vision of providing a lesser risky option for smokers, Adam said they have to be conveniently available where the traditional cigarette is conveniently available.

There have been other companies offering options for smokers, but Adam said they are the first major company to enter the Philippine market at this scale.

“Our intent is to make it available to all Filipinos,” he adds.

During the initial years, Adam concentrated on the technical aspect of the device to make the product right. Marketing the product is an additional challenge making it very complicated. But they persevered because they believe in the product as a very effective tool to help smokers with their health. The no-combustion technology also seeks to address the misconception that nicotine is one of the principal causes of illnesses associated from smoking, when most of the harm are caused by the smoke as a result of the combustion.

“Our first goal was to make the product available and distributed wherever possible. We want to educate consumers about the product as an alternative,” he adds.

JUUL is also gaining headway through a strong word of mouth of the existing users, who are telling other smokers of this option.

Joys

“For me the greatest joy is hearing stories of those who have successfully switched from the traditional smoking to JUUL because it is extremely frustrating for someone to want to quit smoking but cannot. So, when these smokers discover JUUL, it is the greatest joy as a founder to see the switch,” he adds.

As a product designer, Adam has also developed other products and gadgets for other small startups, but nothing close to JUUL in terms of reach and success.

“I want to create new products not just for profit but you must have some purpose added, a social dimension. That makes it more interesting to me,” says Adam, who also had stints with Apple.

Adam noted that because of JUUL they have attracted a lot of similar-minded investors and provided over 2,300 jobs to himself and others. But to him that is secondary to the social impact the product brings. The profit is also reinvested for expansion and for R & D because there is more room for improvement.

Adam was thinking of offering Bluetooth capability to the device so the user can connect directly to his smart phone and track his consumption and become mindful.

“By pairing the device with the smart phone, it becomes a very powerful technology,” he adds.

Lessons

A scientist, a product designer, an engineer rolled into one, Adam always puts innovation as key to technological advancement. It not easy though, but he stressed that JUUL disrupts a very large industry with many stakeholders not just smokers, but doctors, public health, research, tax accounting, among others.

“Going into it, we just realize we are making a product but did not see the scale of development,” he adds.

They are also looking at other sites for the production of their device to support its global footprint. In the meantime, all products and ingredients are sourced from the US.

“There is opportunity for the Philippines to develop its capabilities to serve global needs for pharma grade nicotine,” he adds when informed of the tobacco production in some regions in the country.

Although he is the founder of JUUL, Adam has relinquished the role of a CEO so he can focus on R & D and product development. He is particularly interested in early stage research where breakthroughs could lead to generational product evolution. He works with very bright, motivated team of engineers and scientists who are given lots of latitude.

“I started as CEO and then COO and now CTO because I realized there are some things I am good at and I am fortunate I have very talented senior executives who are better than me in moving the company forward,” he adds.

Among the tech entrepreneurs, Adam looks up to Elon Musk calling him a child hero even to his own son as he sets out to do the impossible. “I had some passion for electric transformation and access to space,” says Adam, who comes from a very curious discipline and backgrounds in chemistry and electronics.

Adam holds an MFA, Product Design from Stanford University and a B.A. in Physics and Studio Art from Kenyon College.

Some people may think Elon as crazy, but Adam said, ”It takes a little bit of craziness, but it is admirable when someone kind of shoots for the moon.”
JUUL is taking smokers to a crazy spin as they welcome a better alternative than the traditional combustion smoking.

The situation is a dire strait. There are one billion people worldwide who smoke cigarettes. Tobacco kills one out of every two smokers, or more than 7 million people a year. On average, a person makes 30 plus attempts before successfully quitting. Asia Pacific is home to 50 percent of smokers and tobacco users in the world.

A breakthrough technology with social dimension is what the world needs.

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