A big-bet Juul in Altria’s crown

Big news in the world of big brands: Altria has taken a 35% stake in Juul, the privately-owned California startup that has taken the e-cigarette world by storm with its signature sleek-black vape pen, and a tidy 70% market share in the process.

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The deal, reportedly worth $12.8 Billion, unofficially gives Juul a $38 Billion valuation, more than twice the valuation it received just six months earlier after a $650 million infusion of cash valued the brand at roughly $15 Billion. The new valuation makes Juul more valuable on paper than Ford, Target, SpaceX and Lyft. This in just over three years, when it was introduced by Pax Labs. (Juul spun off as an independent company in July of 2017.)

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In and of itself, this is just moderately-sized investment news by big-brand standards. And naturally, the question has arisen: why would Altria (the owner of Philip Morris, who manufactures and markets the leading cigarette brands in the US,) take a major stake in a company whose goal, according to Founder James Monsees, centers “around the idea of making cigarettes obsolete?”

It’s kind of simple, really. While Philip Morris has been trying to invent its own cigarette alternatives – it owns iQOS, a heat-not-burn concept sold outside of the US and has reportedly invested more than $4.5 Billion in it over the last 10 years – it found a company that has out tech-ed them and outsold them in just three years. Kind of a no-brainer: if you can’t build it, buy it.

From a marketing perspective, this is a pure (and big) horizontal line extension. Philip Morris is not going to stop selling cigarettes anytime soon – not when their Marlboro brand is the category leader in a roughly $100 Billion US tobacco market. But they are girding against their slow and steady demise by diversifying their tobacco portfolio.

Current Juul advertising features testimonials of former smokers talking about how Juul has helped them to quit smoking actual cigarettes.  And their off-the-line marketing campaign, focused almost solely on social media, featured celebrities (like Dave Chappelle and Katy Perry,) as proud Juul-ers.

This investment may just be a pre-IPO valuation manipulation. If Altria is looking to capitalize on any opportunities it can find, it may just be pumping up Juul’s value so that it can drive eventual profits right to the bottom line, whether it cannibalizes their cigarette business or not.

And it may not be that nefarious at all.  Altria has a duty to its shareholders to seek out opportunities, and one way to do that is to segment the market and give their target audiences what they (both) want. Cigarettes for some, e-cigs for the rest.  If you’ve got the resources, why not own the leader in both categories?

Concurrently, Juul is undertaking several clinical studies to drive evidence-based claims ahead of their required submission to the FDA in August of 2022. Imagine what their value will be with any kind of favorable decision (and some accompanying language that sniffs of a “safer than cigarettes” authorization,) then?

And remember that Juul is hardly standing still. This is a brand still very much on the rise. They’re currently developing a product (for introduction into global markets outside the US) that will be a “connected device,” essentially keeping users informed of their day-to-day usage. It’s no wonder they’ve been called “the iPhone of e-cigarettes.”

Smoking has gone high-tech, and at least one dinosaur is girding against its extinction with a healthy investment in a vaping future. So let’s start the countdown: a Marlboro Light-flavored Juul pod in 5-4-3-2…

Why, Hightail?

The very popular file sharing service, formerly known as YouSendIt, has now changed their name to Hightail.  No, keep reading…I’m serious.

This is what their homepage takeover message looks like:

hightail_takeover

So the obvious question is…why?  And let me qualify that question with some color.

Why, if you’re a file sharing service, a service that allows YOU to take a large file and SEND IT to someone else (for free on the basic plan, I might add) change your name from YouSendIt to, well, anything else?

Why, if you’ve invested all this time and money for nine years in the back end cloud storage virtualized pool infrastructure, and invested in acquisitions and technological upgrades, and invested in marketing and advertising, would you change your name from YouSendIt to, well, anything else?

Why, even if you’re announcing broadening your offering from file sharing into digital file collaboration services, would you change your name from YouSendIt to, well, anything else?

Why, when there’s nine years of brand equity built up, when you’ve outlasted some pretty high profile would-be competitors, (including the flailing DropBox,) when you’ve gotten 4 out of 5 stars from PC Magazine, when you’re finally turning a profit on the premium services, when you’ve become the generic term for Internet file sharing services (literally, people verb-ize file sharing as “I’ll YouSendIt to you later,”) would you change your name from YouSendIt to, well, anything else?

It could be a number of things.  It could be new CEO Brand Garlinghouse (formerly of Yahoo!) putting his fingerprint on the company he’s been appointed to run.

It could be that YouSendIt doesn’t sound sexy or silly enough, and they wanted to sound more like Yahoo!, or Hulu, or Etsy or whatever.

YouSendIt could have done a lot of things to refresh – which they’ve done with Hightail.  New, HTML5-coded website.  New features.  New look and feel.  Heck, they could have updated the logo.

And the folks at Hightail know the name thing is an issue.  It merits above-the-fold position on their homepage with a message that says “watch this short video to learn why we changed our name.”  Yes.  Let’s:

Okay, but still, the new name thing confounds me.  In the video, you hear some of the talking heads saying things like “the name YouSendIt constrained us in terms of our vision.”  [Tell THAT to Google.]  And “we don’t want a name that holds us back.”  And my favorite “we finally have a second chance to make a first impression.”  And that’s the quote that really stands out for me.

Because here’s the dirty little secret about branding that nobody teaches you in b-school.  You don’t get a second chance to make a first impression.  You only get one chance to make one impression to one prospect at a time.  And in my opinion, Hightail doesn’t make a bad impression.  It does something far worse.  It makes no impression at all.  It confuses rather than clarifies.

Don’t get me wrong.  I get “hightail” as a verb.  “I’ll hightail it over to you.”  Or “you hightail it over to me.”  But we’re not talking about meetings here.  [Really, “I’ll hightail it over to you” means “I’ll be right there.”  Not “I’ll get you that large file right away.”  So there’s even a semantics issue. Ugh.] Plus, it’s such a hipster-cum-corporate-acceptable piece of jargon. I wonder if they’re now headquartered in Dumbo?

From a pure brand perspective, the truth is that YouSendIt was a GREAT name for a brand.  It was functional.  It was short and sweet.  But mostly, and bestly (?) it conveyed a promise (You.  Send.  It. ) which, after all, is the heavy lifting of a brand.

Let’s watch and see what happens together.