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I simply do not understand the mindset of silicon valley investors. I used to think that perhaps they had some edge that helped them to get behind successful co

I simply do not understand the mindset of silicon valley investors. I used to think that perhaps they had some edge that helped them to get behind successful companies, but looking at this -- how much money they raised and from whom -- I think that there are just a bunch of people who have so much money that they can afford to risk throwing it away on something that will not likely succeed. Can someone watch the video in the article and explain what sort of mindset you have to be in and think that this is a good idea? Perhaps the initial vision was different somehow and the final product does not align with what you thought you were putting your money behind? Is it possible that you see the issues, but have so little faith in consumers not to buy crap that it seems like you'll make a reasonable profit? Maybe there's something you see or know that I don't -- perhaps some sort of shake up in the fruit industry was set to make this a hit only to not meet expectations? I am now more deeply concerned than ever about the effect that an exploding tech bubble is going to have on our economy.

palakchokshi 9y ago
This investment seemed to me to be in search of the next Dollar Shave Club.
- johnhenry 9y ago
  The idea of getting people to subscribe to your product looks really good to your investors these days -- once you get people to start the subscription, they are likely to keep giving you money, even when they don't really want the product anymore because there is some effort in canceling it. I am NOT saying anything bad about the DSC, I love the commercials, but you have to wonder about a company who's business model is intertwined with subscribing to a product.
  - palakchokshi 9y ago
    Subscription model businesses are actually pretty good businesses if you can service a genuine recurring need with a genuinely good product at a reasonable price point. I order diapers for my kid on a subscription. As a consumer it works great for me since I didn't have any upfront one time cost like $700. The problem I see with Juicero and its investors is that the machine is not unique, it is redundant, the investors were clearly blinded by the founder's pedigree to overlook the simple clear fact that the machine was not needed and the founder was delusional to think the machine was needed.
_sentient 9y ago
The answer to this is fairly straightforward: VCs don't actually expect (or need) every investment to be successful, they just need it to have the potential to be huge if everything works out. Laypeople always seem shocked when a VC-funded company implodes. We should actually be surprised if we didn't see routine flame-outs, as that would mean VCs aren't taking on appropriate quantities of risk for the asset class. As a final aside: I've lost count of the number of times I've pulled an about-face on businesses I initially thought were stupid -- once I had a chance to talk to the founders and better understand the vision. Many of these seemingly 'dumb' ideas have surprising depth. Some, granted, are in fact dumber than a box of rocks.
- yahna 9y ago
  It's not that a VC company failed, it's that the entire idea looks completely ridiculous from the start.
  - _jtrig 9y ago
    You could say that same about Soylent as it's simply a Pediasure/Ensure marketed towards hipster 20-somethings. People love drawing the conclusion that superior marketing/design equates to better products. Often times, if you can make a consumer happy with the experience, they don't care if they're overpaying for a terrible product. The problem with Juicero is that their user experience laid bare how futile and ridiculous their product was by having consumers manufacture the product themselves. If the Juicero simply made those juices in a bottle (EVEN IF the nutritional value was lost during bottling) I can see them succeeding based purely on their marketing and people suspending disbelief to support their idea they were being healthy while looking cool.
    - Laforet 9y ago
      >The problem with Juicero is that their user experience laid bare how futile and ridiculous their product was by having consumers manufacture the product themselves. Blue Apron and every other meal kit delivery business sits on the other end of the same road, yet they seem to be doing okay and without the same level of ridicule. I wonder whether Juicero could have avoided this outcome had they mailed their customers whole fruits and asked them to peel and fill their own juice bags, that way people will not be able to put two and two together to realise that it is just another beverage maker with DRM. P.S. I remember Juicero being rather well received by the resturant industry as it is fully automated and requires minimal cleanup, so perhaps they marketed to the wrong crowd after all.
deleted 9y ago
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bane 9y ago
I think what makes it frustrating is all the times people with honest good ideas walk out of investor meetings with nothing but empty promises. There doesn't appear to be any specific meritocracy or guidelines in the venture market, not even a chance to make money!
- notalawyer 9y ago
  Huh. It's almost like it's not a meritocracy at all.
- cantstop99 9y ago
  Huh, it's almost like it's not a meritocracy at all!
smartician 9y ago
You see a juice shop sprout at every corner of your yuppie neighborhood, and you read about the success of Keurig, who married the coffee machine with the consumer-level printer, which allows you to control which consumables go into your machine, and you think that this can somehow be translated to said fresh juice craze. So I don't think it's completely crazy. But a back-of-the-envelope calculation should have shown that it's probably not a great idea.
- dzhiurgis 9y ago
  Juice is not addictive as caffeine, perhaps that’s why.
  - briandear 9y ago
    It is probably because I can go to the store right now and buy pretty great Odwalla stuff that tastes good and is healthy. However, pre-brewed coffee from a bottle isn’t at the same level as fresh coffee. The point is that there are reasonable substitutes for a Juicero, but coffee at home is something people already make but most people don’t care about making their own juice — and if they were aficionados, they would have a real juicer. Juicero just didn’t make much sense. It wasn’t solving a problem most people had. Many people make coffee each day and they might even drink juice, but most people drink juice from bottles, so Juicero was solving a problem that didn’t really need solving for the average consumer.
    - hannob 9y ago
      > It is probably because I can go to the store right now and buy pretty great Odwalla stuff that tastes good and is healthy. Contrary to popular belief none of that stuff is healthy. It doesn't matter whether it comes from a juicero or from a bottle, it just all contains far too much sugar.
      - zzleeper 9y ago
        For some reason, people seem to think that eating 40 grams of apple sugar is healthier than eating "sugar cane sugar" or "corn sugar". IMHO, of you take an apple and extract the fiber and water, you shouldn't be calling that fruit any more.
dzhiurgis 9y ago
What I don’t understand is how they flopped after getting so much publicity? Was the price too high? Didn’t manage to turn PR against them? Was it designed to fail? I think the product is awesome in every possible way. The model worked for Nespresso (Kruger or smth in US), printers, dishwashers, Soylent, etc.
- pfarnsworth 9y ago
  I know a couple of people that worked at Juicero. The news article that humiliated Juicero came just as they were about to get another round of funding. All of the investors pulled out, so they basically ran out of cash. This is completely due to the negative publicity generated by that one article that went viral. It couldn't have come at a more inopportune time for them, it's almost as if the reporters wanted to do as much damage as possible to the company.
  - david927 9y ago
    Most companies get hard press. This report went viral and shut down the company because it exposed the product as being ridiculous.
  - wpietri 9y ago
    You talk as if the negative press wasn't justified. And as if journalists were supposed to consider a company's convenience when writing about them. And as if investors were such empty vessels that they are blown hither and thither by each thing they read. If one negative article about your product can kill your company, your problem is not a couple of journalists. It's your product.
- briandear 9y ago
  Soylent? No normal person I have ever met in my life has ever heard of the stuff. Slim Fast — everyone has heard of that, but Soylent? That’s an ultra niche product with little mass market appeal. Is it successful? Sure, but about as successful as a company that produces kits for growing orchids. The whole concept of Soylent is essentually Ensure for Hipsters. Even the name sounds like some kind of cyberpunk cliché.
danielfoster 9y ago
If "knowing your users" applies to startup success, it should also apply to VC startup success. I think most VCs are simply out of touch and thus don't understand what average consumers want, leading to poor investment decisions like this.
- FTA 9y ago
  While I agree, I don't think it's the case every VC desires to appeal to the average consumer. Companies ranging from Gucci to Rolls Royce to Tesla have made a good business for themselves knowing what the above average consumers they want to cater to like. Thus VCs, like any company, should be judged as to how well they know their target audience. At their price point, Juicero clearly wasn't wanting to appeal to the average consumer. But they instead missed the mark in appealing to their target market--the wealthier than average.
rhizome 9y ago
Can someone watch the video in the article and explain what sort of mindset you have to be in and think that this is a good idea? Hate to be glib, but I'm pretty sure it's all about e.g. Redfin and Vanguard, and that there's a sucker born every minute.
wpietri 9y ago
The thing that troubles me is not that people tried a dumb idea. It's that they spend $120m trying a dumb idea. That is 100 seed rounds that never happened. Could we have learned the lessons here for less? I'm gueessing yes; the ridiculously over-engineered [1] juice press is a good sign that efficient use of capital was just not a priority. [1] https://blog.bolt.io/heres-why-juicero-s-press-is-so-expensive-6add74594e50 https://blog.bolt.io/heres-why-juicero-s-press-is-so-expensi...

palakchokshi 9y ago

This investment seemed to me to be in search of the next Dollar Shave Club.

johnhenry 9y ago
The idea of getting people to subscribe to your product looks really good to your investors these days -- once you get people to start the subscription, they are likely to keep giving you money, even when they don't really want the product anymore because there is some effort in canceling it. I am NOT saying anything bad about the DSC, I love the commercials, but you have to wonder about a company who's business model is intertwined with subscribing to a product.
- palakchokshi 9y ago
  Subscription model businesses are actually pretty good businesses if you can service a genuine recurring need with a genuinely good product at a reasonable price point. I order diapers for my kid on a subscription. As a consumer it works great for me since I didn't have any upfront one time cost like $700. The problem I see with Juicero and its investors is that the machine is not unique, it is redundant, the investors were clearly blinded by the founder's pedigree to overlook the simple clear fact that the machine was not needed and the founder was delusional to think the machine was needed.

_sentient 9y ago

The answer to this is fairly straightforward: VCs don't actually expect (or need) every investment to be successful, they just need it to have the potential to be huge if everything works out. Laypeople always seem shocked when a VC-funded company implodes. We should actually be surprised if we didn't see routine flame-outs, as that would mean VCs aren't taking on appropriate quantities of risk for the asset class. As a final aside: I've lost count of the number of times I've pulled an about-face on businesses I initially thought were stupid -- once I had a chance to talk to the founders and better understand the vision. Many of these seemingly 'dumb' ideas have surprising depth. Some, granted, are in fact dumber than a box of rocks.

yahna 9y ago
It's not that a VC company failed, it's that the entire idea looks completely ridiculous from the start.
- _jtrig 9y ago
  You could say that same about Soylent as it's simply a Pediasure/Ensure marketed towards hipster 20-somethings. People love drawing the conclusion that superior marketing/design equates to better products. Often times, if you can make a consumer happy with the experience, they don't care if they're overpaying for a terrible product. The problem with Juicero is that their user experience laid bare how futile and ridiculous their product was by having consumers manufacture the product themselves. If the Juicero simply made those juices in a bottle (EVEN IF the nutritional value was lost during bottling) I can see them succeeding based purely on their marketing and people suspending disbelief to support their idea they were being healthy while looking cool.
  - Laforet 9y ago
    >The problem with Juicero is that their user experience laid bare how futile and ridiculous their product was by having consumers manufacture the product themselves. Blue Apron and every other meal kit delivery business sits on the other end of the same road, yet they seem to be doing okay and without the same level of ridicule. I wonder whether Juicero could have avoided this outcome had they mailed their customers whole fruits and asked them to peel and fill their own juice bags, that way people will not be able to put two and two together to realise that it is just another beverage maker with DRM. P.S. I remember Juicero being rather well received by the resturant industry as it is fully automated and requires minimal cleanup, so perhaps they marketed to the wrong crowd after all.

deleted 9y ago

[deleted]

bane 9y ago

I think what makes it frustrating is all the times people with honest good ideas walk out of investor meetings with nothing but empty promises. There doesn't appear to be any specific meritocracy or guidelines in the venture market, not even a chance to make money!

notalawyer 9y ago
Huh. It's almost like it's not a meritocracy at all.
cantstop99 9y ago
Huh, it's almost like it's not a meritocracy at all!

smartician 9y ago

You see a juice shop sprout at every corner of your yuppie neighborhood, and you read about the success of Keurig, who married the coffee machine with the consumer-level printer, which allows you to control which consumables go into your machine, and you think that this can somehow be translated to said fresh juice craze. So I don't think it's completely crazy. But a back-of-the-envelope calculation should have shown that it's probably not a great idea.

dzhiurgis 9y ago
Juice is not addictive as caffeine, perhaps that’s why.
- briandear 9y ago
  It is probably because I can go to the store right now and buy pretty great Odwalla stuff that tastes good and is healthy. However, pre-brewed coffee from a bottle isn’t at the same level as fresh coffee. The point is that there are reasonable substitutes for a Juicero, but coffee at home is something people already make but most people don’t care about making their own juice — and if they were aficionados, they would have a real juicer. Juicero just didn’t make much sense. It wasn’t solving a problem most people had. Many people make coffee each day and they might even drink juice, but most people drink juice from bottles, so Juicero was solving a problem that didn’t really need solving for the average consumer.
  - hannob 9y ago
    > It is probably because I can go to the store right now and buy pretty great Odwalla stuff that tastes good and is healthy. Contrary to popular belief none of that stuff is healthy. It doesn't matter whether it comes from a juicero or from a bottle, it just all contains far too much sugar.
    - zzleeper 9y ago
      For some reason, people seem to think that eating 40 grams of apple sugar is healthier than eating "sugar cane sugar" or "corn sugar". IMHO, of you take an apple and extract the fiber and water, you shouldn't be calling that fruit any more.

dzhiurgis 9y ago

What I don’t understand is how they flopped after getting so much publicity? Was the price too high? Didn’t manage to turn PR against them? Was it designed to fail? I think the product is awesome in every possible way. The model worked for Nespresso (Kruger or smth in US), printers, dishwashers, Soylent, etc.

pfarnsworth 9y ago
I know a couple of people that worked at Juicero. The news article that humiliated Juicero came just as they were about to get another round of funding. All of the investors pulled out, so they basically ran out of cash. This is completely due to the negative publicity generated by that one article that went viral. It couldn't have come at a more inopportune time for them, it's almost as if the reporters wanted to do as much damage as possible to the company.
- david927 9y ago
  Most companies get hard press. This report went viral and shut down the company because it exposed the product as being ridiculous.
- wpietri 9y ago
  You talk as if the negative press wasn't justified. And as if journalists were supposed to consider a company's convenience when writing about them. And as if investors were such empty vessels that they are blown hither and thither by each thing they read. If one negative article about your product can kill your company, your problem is not a couple of journalists. It's your product.
briandear 9y ago
Soylent? No normal person I have ever met in my life has ever heard of the stuff. Slim Fast — everyone has heard of that, but Soylent? That’s an ultra niche product with little mass market appeal. Is it successful? Sure, but about as successful as a company that produces kits for growing orchids. The whole concept of Soylent is essentually Ensure for Hipsters. Even the name sounds like some kind of cyberpunk cliché.

danielfoster 9y ago

If "knowing your users" applies to startup success, it should also apply to VC startup success. I think most VCs are simply out of touch and thus don't understand what average consumers want, leading to poor investment decisions like this.

FTA 9y ago
While I agree, I don't think it's the case every VC desires to appeal to the average consumer. Companies ranging from Gucci to Rolls Royce to Tesla have made a good business for themselves knowing what the above average consumers they want to cater to like. Thus VCs, like any company, should be judged as to how well they know their target audience. At their price point, Juicero clearly wasn't wanting to appeal to the average consumer. But they instead missed the mark in appealing to their target market--the wealthier than average.

rhizome 9y ago

Can someone watch the video in the article and explain what sort of mindset you have to be in and think that this is a good idea? Hate to be glib, but I'm pretty sure it's all about e.g. Redfin and Vanguard, and that there's a sucker born every minute.

wpietri 9y ago

The thing that troubles me is not that people tried a dumb idea. It's that they spend $120m trying a dumb idea. That is 100 seed rounds that never happened. Could we have learned the lessons here for less? I'm gueessing yes; the ridiculously over-engineered [1] juice press is a good sign that efficient use of capital was just not a priority. [1] https://blog.bolt.io/heres-why-juicero-s-press-is-so-expensive-6add74594e50 https://blog.bolt.io/heres-why-juicero-s-press-is-so-expensi...