Here Today; Gone Tomorrow
A Lesson From the Demise of Juul
When you are part of a fast-growing business in a fast-growing industry, it’s easy to imagine that growth is normal and that the good things that come from growth are going to keep on keeping on. But as I’ve discovered many times in my career, it ain’t always so.
In fact, it’s common for fast-growing start-ups to hit a point where sales level out. Or start to fall. There are many reasons why that happens. Four of them can be lethal.
From the inside:
* Insufficient capitalization.
* An inability to discover the optimal selling strategy before the clock runs out.
From the outside:
* An economic downturn in the industry.
* An unanticipated act of government over-regulation.
This last one is what happened to Juul, a pioneer in the e-cig industry that got big fast by promoting its e-cigs to minors by producing them in flavors like mango and crème brûlée. By 2018, the company was dominating the market. Altria (Marlboro’s parent company) bought 35% of Juul for $12.8 billion, giving the business a total valuation of $38 billion.
When the media began reporting on how popular Juul’s products were in middle schools, the FDA took action, and in June banned the company from advertising in the US. Altria’s $12.8 billion investment has since crashed by 97%.
Click here.
Uber’s Latest Feature: Is It Good for the Customer Experience?
When dealing with issues in business, you’re always looking for ways to increase productivity by simplifying routines and incentivizing employees to accomplish more in the time they have.
Uber recently introduced a feature that may simplify decisions for its drivers and motivate them. But it may also reduce the quality of the customer experience. I’m talking about the new technology that shows Uber drivers the customer’s destination and what they will earn from the trip before they accept the ride. The company claims this will result in fewer cancelled trips for riders. Yes, it will reduce those annoying, last-minute cancellations. But it will also – almost certainly – mean that if you want an Uber for a short ride, perhaps anything less than 30 minutes, you may have to wait a long time to get one.
Click here.
