What An Overhyped Silicon Valley Juice Company Tells Us About The U.S. Economy

Tyler Durden's picture

Authored by Mike Krieger via Liberty Blitzkrieg blog,

The primary driver behind my decision to walk away from a lucrative Wall Street career was my coming to terms with the fact that our financial system is largely a rent-seeking scheme designed to enrich parasitical, unethical behavior at the expense of the nation as a whole. As soon as I recognized this, I could no longer feel proud of my work and certainly couldn’t justify my large paycheck for being a compliant, highly productive cog in this machine.

In the nearly decade since, I’ve come to understand that the financial system, while absolutely core to the propagation of the declining U.S. empire, is just the tip of the iceberg when it comes to our problems. Not only is the financial system broken; the American political system is broken, healthcare is broken, policing is broken, intelligence agencies are broken, rules for engagement in warfare are broken. Pretty much everything is captured and broken, systematically designed to benefit the few at the expense of the many.

In contrast, one of the few things that seemed to be working, at least relatively well, was the technology sector. Silicon Valley is the poster child for this industry, and while the “innovative” nature of products coming out that celebrated tech hub have been declining for years, it still seemed vibrant and dynamic compared to the rest of the U.S. economy. I’m increasingly starting to wonder whether much of that was just an elaborate illusion.

Most of you probably haven’t heard of the company Juicero, but you should be paying attention to it.

What follows are choice excerpts from a recent Bloomberg article, Silicon Valley’s $400 Juicer May Be Feeling the Squeeze:

One of the most lavishly funded gadget startups in Silicon Valley last year was Juicero Inc. It makes a juice machine. The product was an unlikely pick for top technology investors, but they were drawn to the idea of an internet-connected device that transforms single-serving packets of chopped fruits and vegetables into a refreshing and healthy beverage.

 

Doug Evans, the company’s founder, would compare himself with Steve Jobs in his pursuit of juicing perfection. He declared that his juice press wields four tons of force—“enough to lift two Teslas,” he said. Google’s venture capital arm and other backers poured about $120 million into the startup. Juicero sells the machine for $400, plus the cost of individual juice packs delivered weekly. Tech blogs have dubbed it a “Keurig for juice.”

 

But after the product hit the market, some investors were surprised to discover a much cheaper alternative: You can squeeze the Juicero bags with your bare hands. Two backers said the final device was bulkier than what was originally pitched and that they were puzzled to find that customers could achieve similar results without it. Bloomberg performed its own press test, pitting a Juicero machine against a reporter’s grip. The experiment found that squeezing the bag yields nearly the same amount of juice just as quickly—and in some cases, faster—than using the device.

 

Juicero declined to comment. A person close to the company said Juicero is aware the packs can be squeezed by hand but that most people would prefer to use the machine because the process is more consistent and less messy. The device also reads a QR code printed on the back of each produce pack and checks the source against an online database to ensure the contents haven’t expired or been recalled, the person said. The expiration date is also printed on the pack.

 

Evans, 50, follows a diet of mostly raw, vegan foods. Technology was a new thing for him, but he picked it up quickly. He said he spent about three years building a dozen prototypes before devising Juicero’s patent-pending press. In an interview with technology website Recode, he likened his work to the invention of a mainstream personal computer by Apple’s Jobs. “There are 400 custom parts in here,” Evans told Recode. “There’s a scanner; there’s a microprocessor; there’s a wireless chip, wireless antenna.”

 

Kleiner Perkins Caufield & Byers joined Alphabet Inc. and others in funding Juicero. Evans’s subscription model had hit on a sweet spot for venture capitalists, said Brian Frank, who invests in food-tech companies through his FTW Ventures fund. The successes of Nespresso and Dollar Shave Club have made VCs eager to chase such deals, he said. “Investors are very intrigued by businesses that combine the one-time sale of hardware that ends up leading to repeat purchases of consumable packages,” said Frank, who doesn’t own Juicero shares.

 

But after the product’s introduction last year, at least two Juicero investors were taken aback after finding the packs could be squeezed by hand. They also said the machine was much bigger than what Evans had proposed. One of the investors said they were frustrated with how the company didn’t deliver on the original pitch and that their venture firm wouldn’t have met with Evans if he were hawking bags of juice that didn’t require high-priced hardware. Juicero didn’t broadly disclose to investors or employees that packs can be hand squeezed, said four people with knowledge of the matter.

 

Built on the promise of technology, Juicero was among the top-funded U.S. hardware startups in 2016. But in October, Evans was replaced as chief executive officer by Jeff Dunn, a former president at Coca-Cola Co. A few months later, Juicero dropped the price of the machine to $400 from $700. “It’s very difficult to differentiate yourself in the food and beverage sector,” said Kurt Jetta, who runs retail and consumer data firm Tabs Analytics. “Entrepreneurs may be tempted to have a technology angle when it’s not really there.”

 

Evans is now chairman of the startup’s board. The company sells produce packs for $5 to $8 but limits sales to owners of Juicero hardware. The products were only available in three states until Tuesday, when the company expanded to 17. Packs can’t be shipped long distances because the contents are perishable.

 

In Bloomberg’s squeeze tests, hands did the job quicker, but the device was slightly more thorough. Reporters were able to wring 7.5 ounces of juice in a minute and a half. The machine yielded 8 ounces in about two minutes.

Now watch the video...

There’s so much wrong here, it’s gonna take a little time to unravel it all. Let’s start with the company’s founder, Doug Evans, who apparently liked to compare himself to Steve Jobs. Here’s a free tip for everybody. Whenever a company’s founder compares him or herself to Steve Jobs, run the other way. There’s a high probability the product is an overhyped fraud. I recall another disgraced, overhyped CEO who was frequently compared to Steve Jobs; Elizabeth Holmes, the founder of blood testing company Theranos. In a 2014 Fortune profile on her, Jobs was mentioned on several occasions.

During my four days at Theranos, Holmes dressed identically every day: black jacket; black mock turtleneck; black slacks with a wide, pale pinstripe; and black low-heel shoes. Steve Jobs, because of his vision and perfectionism about “great products”–words Holmes punches out with precisely Jobs’ brio–is obviously a hero to her. As an apparent memento mori, she hangs in her office a framed screenshot of his Apple Internet bio, printed out on Aug. 24, 2011, the day he stepped down as CEO because of pancreatic cancer.

 

That clinched it for him. “When I finally connected with what Elizabeth fundamentally is,” he says, “I realized that I could have just as well been looking into the eyes of a Steve Jobs or a Bill Gates.”

 

Although I believe Balwani when he says that Holmes’s “overall goal and direction” for the company “has been linear,” I don’t believe that Walgreens wellness centers represent the ultimate target of that vector. There are pieces of the puzzle we haven’t seen yet. In some cases she may be waiting for regulatory approval, while in others she may just be waiting, like Steve Jobs, to finish perfecting her next “great product” before unveiling it with a flourish.

We all know how that turned out. But I digress, let’s get back to Juicero. According to Bloomberg, the company’s founder went around claiming that the “juice press wields four tons of force—“enough to lift two Teslas,” but then a few paragraphs later we learn that “a person close to the company said Juicero is aware the packs can be squeezed by hand but that most people would prefer to use the machine because the process is more consistent and less messy.”

You’ve got to be kidding me. So the company knew the machine squeezes juice from its packets as effectively as two human hands, but in order to sell this monstrosity for $400 a pop (originally $700), they had to market it as some technological breakthrough. Is that what’s happening here?

Finally, and perhaps most concerning, look at a couple of the entities that helped fund Juciero to the tune of $120 million: Kleiner Perkins Caufield & Byers and Alphabet Inc. (the parent company of Google). These are large, sophisticated players and they bought into this thing. From what I can tell, they were mesmerized by the fact the machine looked like and iPhone, connects to the internet, and was headquartered in San Francisco. Either that, or they knew the whole thing was a marketing scheme designed to trick morons into spending an enormous sum of money for the right to buy expensive juice packets that could probably be emptied just fine using a $20 machine.

Neither of the above conclusions is comforting. Either high-profile VCs were tricked by this ridiculous product, or they willingly went along with a what appears to be a sleazy scheme. Unfortunately, the bottom-line here seems to be that Silicon Valley is rapidly running out of ideas. That, or perhaps something far more perverse and systemic might be going on.

Tomorrow’s post will attempt to address the above question, but for now it’s safe to say that this Juicero episode bodes very poorly for the one area of the U.S. that had heretofore been one of the last remaining hubs of innovation.

If this is the state of Silicon Valley, the American economy is in even worse shape than I thought.

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major major major major's picture

They got um by the juice bags

techpriest's picture

I really hope my 401k manager is loading up on these. /s

Skateboarder's picture

Dude, the entire new tech shit is all based on doo-hickeys and trinkets and whatnot, usually Bluetooth-connected, focused on one aspect of 'disrupting' something, or whatever. It's about the collection of these little gadgets. More and more and more... just adding clutter to your life.

Wasn't your mixer good enough to bring home some fresh fruits and veggies and juice the shit out of em? Noo... it's gotta come from "pre-masticated" shit in a $7 DRMd bag that some motors squeeze instead. Some people just like being fvcked.

GoldRulesPaperDrools's picture

Gun stocks are down, load up on them ... when the unraveling begins (along with the depopulation) there will be PLENTY of upside. ;)

Rich Stoehner's picture

Decided to leave a Wall Street career after making a killing, then suddenly developing empathy for those you stole from?... fucking faggot, go write about how sorry your are some more.

knukles's picture

A juicer with enough power to lift 2 Teslas off the showroom floor!
Everybody's gotta have one.  And Tesla's gonna have a juicer bar in every new car!
#juicematters

RAT005's picture

My typical morning is cutting a lemon in half and individually fitting the round lemon into the round glass and squeezing the juice out.  After both halves, add about 4X Tonic Water for a delicious breakfast treat. I would miss the hand workout and the chickens like the seeds.

Pairadimes's picture

Real innovation has been essentially outlawed in the United States. Throw in a heaping helping of widespread institutional corruption, and you are left with internet-connected $400 paperweights and rich grifters.

BullyBearish's picture

the kicker is that the pulp is better for you than the juice...the juice has too much sugar..."the juice in the orange is there so you'll eat the pulp"... 

Handful of Dust's picture

The juice, such as carrot or beet juice, is only half as effective without ingesting at least a little bit of the pulp at the same time. Evidently, what ever's in the juice needs some attachment to the fibers (pulp) to be 100% effective.

Oh regional Indian's picture

Moment I saw this story, I smelt a Joosin Joo.

Sure enough, the first linked in profile of an employee is a jewish theology student.

So there you have it. 

Joosing Joos will squeeze you coming and going.

Squeeze those juicy bags baby! 

Two tons.....!!!

Silly Con valley is nothing but a joo infested circle jerk. I should know, having inhabited it for 8 years.

If you suck dick hard enough, SUCKcess is all but guranteed......

I'm sure his real name is Dough (Shlomo) Evans(Berg/Burg)....

Stuck on Zero's picture

I would add "Nest" to the list of totally over-hyped companies.  Nothing but crappy IoT devices.

StychoKiller's picture

Nonsense, I "innovate" a lot of things:

http://www.frontiernet.net/~jimbot/rPiProjects.htm (< $200 for most of these)

http://www.frontiernet.net/~jimbot/allsparkproject.htm (< $1000, including the wood)

Now, getting some suckers to pay big $$, that takes some "innovation!"

curly's picture

Hey.  what happened to $10,000 espresso "machines".

True Blue's picture

It doubles as a jack -you see? Sort of like the semi-trailer in front of you can double as a Tesla tow-truck after 'auto-pilot' thinks its 'the sky' and flys your ass into it like a bug on the windshield. Probably how they get you out of the wreckage too -"Put back the 'Jaws of Life' Fred; this one's all ready in the juicer."

400 custom made parts? What an absolute idiot. And no f'ing way -Arduino and off the shelf parts in a decently slick looking plastic housing is either what it is or what it should have been. For that price per unit and that level of stupid, I'll build one with cooling coils and make it come out like a slurpee. 400 parts is a Rube Goldberg machine that leaves out all the fun bits.

When is Rod Serling finally going to show up start his end credits monologue already?

Amaroosta's picture

But he's the Steve Jobs of redemption arcs...

Save_America1st's picture

in the vid, to me, the bag looks like it's already filled with juice.  I'd like to see them cut one of those same bags open that she squeezed nearly pure juice from.  No way she squeezed the bag and the green juice just came out looking like that...no pieces of fruit at all or anything else and all blended up perfectly, huh?  I call bullshit on that.

A 700 dollar plastic scammer/juicer to basically push juice out of a plastic bag.  

Gravity can do that for free, bitchez ;-)

techpriest's picture

I saw that too. Something tells me this startup would have never flown without certain people wanting to pull a scam.

E.F. Mutton's picture

I can turn beer and wine into urine.  Investor line forms to the left.

madmax1965's picture

Thanks for the laugh, Mutt!

chubbar's picture

I love the child like footstomping "we will only sell you the juice bags if you bought the machines" line. These asshats know they are one big "fail" with this machine. What other company doesn't want to sell you one of their products given the opportunity?

Some dude will just buy the machine and order several pallets of juice bags for resale at $11 bag, it's the american way. This is fucking great!

ljag's picture

Battlefields are littered with weapons during war. Ammo not so much

SoDamnMad's picture

Would I be considered naughty if I spread the fact that you can get cancer from the plastic the fruit comes in?  I didn't say it did just like the machine they shipped wasn't what they displayed to the investors. I noticed the machine started at $700. Holy Shit Batman.  Some food processors will start selling the fruit/ and or veggies in the stores for half that price,no machine required.  Strengthen those hands while you are at it.

Miffed Microbiologist's picture

Something tells me Elizabeth Holmes is collecting a few million as a consultant.

Miffed

knukles's picture

Rachel Doezal's their spokesperson.  Along with another similar role where she'll be singing "Let's all ride the bullet train to Stockton" with dancing minorities and millennials extolling the virtue of safe choo choo train cars through creative dance and regulations.

Bunga Bunga's picture

Yes, but with internet enabled kitchen crap the NSA/DHS can collect more "meta data".

kommissar's picture

i'm finally beginning to think my nutribullet is a bargain.

divingengineer's picture

I'm gonna have a juice douche.

SILVERGEDDON's picture

Bags of processed crap - what is in the bag ? Could be any nasty left over crap GMO dogshit pesticide coated vomit, and probably is.

Soon as it was processed, it started to oxidize. A week out, you mights well drink piss out of your boot - both will have the same value nutritionally speaking. 

Freshly juiced fruit and veggies is fucking amazing nutrition.

I bought a Champion juicer 37 years ago for $259.99 brand new, made in the USA. Same company, same juicer today, $289.00.

Why bother though - every ass hat that buys one finds out it takes time to buy fruit and veggies, wash and juice them, and clean up afterwards, so they show up on Craigsliist a few weeks/ months later, near new, for around a hundred bucks.

Fucking idiots would rather die from lack of nutrition to spend more time on fake social media.

You can still buy parts for my 37 year old version - because the design hasn't changed much.

Make it and drink it fresh from the fruit, or go drink piss from a boot.  

Bigly's picture

Similar...an acme.

But it was made here and they will never break...ever. they are tanks!!!   .chinese crap will break.

If you want a blender go with the vitamix. US made and they stand behind the product. 

scoutshonor's picture

If you need some piss for your boot there is a beer and wine drinker upthread that can help with that;-/

armageddon addahere's picture

I have 5 expensive juicers all bought in thrift stores for $10 $15 $20. They work just as well for me as they did for the people who paid up to $500 for them.

post turtle saver's picture

I present to you the "Pets.com" equivalent for juice machines...

some of you may recall my post where I talked about how much of our economy is captured by very bad incentive structures... this is a perfect symptom of that...

doomchild's picture

silicon valley can squeeze the juice out of my asshole. 

MaffeProg's picture

Absolutly, Silicon valley isn't the high tech place anymore. All these companies(Like google/facebook) will probaly slowly die. Why? Switzerland is the new land where the new technology will developed. Blockchain is the solution for everything inclusive faster product transactions and a shitload more. Or google and facebook need to decentralize their product.

doomchild's picture

Shenzhen: The Silicon Valley of Hardware (Full Documentary) | Future Cities | WIRED - https://www.youtube.com/watch?v=SGJ5cZnoodY

Maybe the CA silicon valley used to be like this once upon a time? I don't know. Right now it is just full of shit, sewage, that is what I am experiencing. This place has turned into the deep state's gestapo head quarters with the sole purpose of broadcasting propaganda and controlling information in the form of google, facebook, twitter, palantir and all the other data shit mining companies. 

doomchild's picture

Oh, and I did not mention the "brilliant" rent-seeking investment property buyers who are gobbling up every little piece of shit property coming on the market and giving it out for rent. We shall use "other people" to pay for our mortgage. That is the mantra of these rent-seeking uber assholes here. I am seeing meager 2b/2b aparments go for 650 thousand dollars here. 

I have pretty much boycotted every little piece of shit here. I don't use facebook, apple, netflix, uber. The facebook account, I deleted all my info and kept my page open to prevent identity theft. I need to figure out a way to stop google from collecting my info though. 

I have tried blockchain, it is very cumbersome in it's present form. Where it will lead to I do not really know. I still am planning to purse it as a hobby though. 

booboo's picture

Oh sure, you try to squeeze a goddamn juice bag with no hands! That is easy for you to do but for people like me that were born without ha.....wait...nevermind..I have hands, I was just in my snowflake perpetual grievance mode

aloha_snakbar's picture

“enough to lift two Teslas,”

If they make one that will CRUSH two Tesla's... Ill take it...

Guderian's picture

How many billions would 'investors' throw at 'inventors' for this, nowadays:

WirelessMagicJuiceExtractor

aloha_snakbar's picture

LOL... an overpriced. internet connected juicer? Exactly HOW STUPID is the juice consuming public?

techpriest's picture

Don't you want to collect stats on how much juice you used?

any_mouse's picture

And correlate and crossreference and confabulate your juicing with your connected fitness machines and your fitness monitor and your connected toilet?

The government needs all of your information, tax donkey # 249,345,769,083.

Dane Bramage's picture

It's not actually a juicer.  It's a juice bag squeezer.  Our Omega J8006 juicer has been running once/day for nearly a decade. ~> https://www.amazon.com/Omega-J8006-Nutrition-Center-Juicer/dp/B001L7OIVI

aVileRat's picture

The new rule for Palo Alto is there needs to be a "Steve Jobs" discount for every company that tries to reference Apple, Uber or Kurig in their business model.

Also, LOL at Alphabet for dropping 120m on a juice company. For anyone who has had the displeasure of interfacing with Google Ventures or M&A, this is just too rich (that's a meta joke for the home gamers). Great post TD.

 

 

alexcojones's picture

The Amazing Theranos Tesla Juicer!

Filled with healthy Silicons!

Bunga Bunga's picture

Don't worry, this is completely normal in Silicon Valley, maybe just the result of micro overdosing.

alexcojones's picture

If it was really so great, why hasn't Elizabeth Holmes or Mark Zuchkerberg endorsed it?

BoingBoing's picture

I think Zuckerfuck's sister is on the board of that VC firm

besnook's picture

if faggoty millenniels are strong enough to squeeze the packet to get juice then sell the packet as an exercise aid and good nutrition and make the packet in a way that a person can eat the fruit without juicing it. either way, a connection to snap chat that automatically turns on when the bag is opened should allow you to sell it for 50 bucks a packet for a coupla months before you would have to lower the price to 10 bucks. it's value added after all.