Juicero
From Invertopedia, the encyclopedia of how things fail
Juicero was an internet-connected juice press that squeezed single-serve packs of produce[7][2]. It raised about $120 million[3][4] and launched at $699[5]. In April 2017, Bloomberg showed the packs could be squeezed by hand into nearly as much juice[3]. On September 1, 2017, Juicero stopped selling the press and its packs and went looking for a buyer[2][6].
Contents
The bet
Fresh cold-pressed juice at home could work like coffee pods. Buy the press once, then keep buying packs of produce, sold only to people who owned the machine[3]. Doug Evans said the press applied four tons of force, "enough to lift two Teslas."[3] CEO Jeff Dunn told Fortune, "I could see a Juicero in a McDonald's in five years."[5]
The packs were the business. They cost $5 to $8 each[3] and lasted about eight days, and the press stayed online so the company could, in Dunn's words, disable packs remotely in something like a spinach recall[7].
What happened
| 2013 | Doug Evans founds Juicero in San Francisco.[1][2] |
|---|---|
| Spring 2016 | The Juicero Press launches at $699.[5] |
| Oct 2016 | Jeff Dunn, a former president of Coca-Cola North America, replaces Evans as CEO. Evans stays on as chairman.[4] |
| Jan 2017 | The price is cut to $399, 12 to 18 months ahead of plan.[5] |
| Apr 19, 2017 | Bloomberg reports that a hand squeeze got 7.5 ounces of juice in a minute and a half. The machine got 8 ounces in about two minutes.[3][7] |
| Apr 20, 2017 | Dunn defends the connected press in a Medium post, and Juicero offers refunds to customers who want their money back.[7] |
| Apr 24, 2017 | A teardown by Ben Einstein of Bolt finds eight large machined parts, built to press a whole pack at once with thousands of pounds of force.[8] |
| Jul 2017 | Juicero announces a cost-cutting shift and lays off about a quarter of its staff.[6] |
| Sep 1, 2017 | Juicero suspends sales of the press and packs, offers refunds on the press for 90 days and starts looking for a buyer.[2][6] |
The kill shot
The packs were the product, and you didn't need the machine to open them.
Juicero spent its money on a press strong enough to crush a whole pack at once. Bolt's teardown found that this force requirement drove the over-engineering, and that pressing a smaller area, the way a hand does, could have cut the cost a lot[8]. Once Bloomberg showed that hands nearly matched the machine[3], the press had no job left. Even a backer, Doug Chertok, told Bloomberg: "There is no doubt the packs can be squeezed without the machine."[3]
Cost finished it. Dunn wrote that the prices were "not a realistic way for us to fulfill our mission at the scale to which we aspire," and the company said it was too small to bring costs down on its own[6].
Red flags ignored
- The substitute was free. Two hands. Nobody had checked whether the machine beat them by enough to matter.
- Hardware before customers. Juicero spent over two years and nearly $120 million before its first shipment.[8]
- An early price cut. The press went from $699 to $399 12 to 18 months ahead of schedule[5]. A cut that early usually means sales are slow.
- Lock-in sold as a feature. The press checked in online and the company could disable packs remotely[7]. Owners had bought a machine that decided whether they could have their juice.
The cost
About $120 million raised[3][4], more than $118 million of it from investors including Google Ventures, Kleiner Perkins and the Campbell Soup Company[2]. Juicero said it sold over a million packs[2]. About a quarter of the staff were laid off in July 2017, and the rest got 60 days' notice when it shut[6].
The inversion
Before you build the machine, try the job without it. If the cheapest substitute, here two hands, gets nearly the same result, you don't have a product.
What survived
Refunds. Owners could send the press back for 90 days after sales stopped[2][6]. Juicero said it wanted a buyer with an established national fresh-food supply chain[2], and a planned second machine at about $200[6] went with it. The name lives on as the standard example of hardware that had no reason to exist.
References
- ^ “Juicero”. Wikipedia. Founding in San Francisco in 2013 and the 2016 launch.
- ^ “RIP Juicero, the $400 venture-backed juice machine”. TechCrunch, September 1, 2017. Sales suspended, 90-day refunds, the buyer search, more than $118 million from Google Ventures, Kleiner Perkins and others, over a million packs sold.
- ^ “Silicon Valley's $400 juicer may be feeling the squeeze”. Bloomberg, syndicated by The Jakarta Post, April 22, 2017. The hand-squeeze test, the $400 price (down from $700), $5 to $8 packs sold only to owners, about $120 million raised, Doug Evans's and Doug Chertok's quotes.
- ^ “Juicero loses another member of its founding team”. TechCrunch, January 24, 2017. Jeff Dunn replacing Doug Evans as CEO in October 2016; about $120 million raised.
- ^ “Juicero cuts connected juicer price from $699 to $399”. Fortune, January 17, 2017. The $699 launch price in spring 2016, the cut to $399 12 to 18 months ahead of plan, Dunn's McDonald's quote.
- ^ “Juicero: the maker of the infamous $400 juicer is shutting down”. Fortune, September 1, 2017. The shutdown, the buyer search, the July 2017 layoffs, 60 days' notice, 90-day refunds, the planned $200 machine, Dunn's quote on prices.
- ^ “Juicero CEO begs you: do NOT squeeze our juice bags”. Gizmodo, April 20, 2017. The Bloomberg report date, Dunn's Medium post, the refund offer, the connected press and remote pack disabling, the eight-day pack life.
- ^ “Here's why Juicero's press is so expensive”. The Bolt Blog (Ben Einstein), April 24, 2017. The teardown: eight large machined parts, the force requirement, over two years and nearly $120 million before first shipment.