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It was 25 years ago that the directors of Philip Morris and six other American cigarette companies testified before Congress that nicotine is not addictive. Even under oath, tobacco giants continued their decade-long practice of gaslighting the public on the negative effects of cigarettes, which were once marketed by doctors. The image of seven CEOs who have sworn to respond for the misdeeds of their companies has resisted as a powerful visual shortcut for modern corporate evil. While the lethal effects of cigarettes were being exercised in the minds of young aspiring smokers by middle school counselors and aggressive ad campaigns, smoking entered a continuing decline in use. Big Tobacco had been shot down.
Or so it seemed. At the end of December, a Virginia conglomerate called Altria bought a 35% stake in the San Francisco startup, Juul Labs, for almost $ 13 billion. Juul is a producer of e-cigarettes and says that his goal is to help adults quit smoking. Altria is the rebranded version of Philip Morris, whose entire company directive is to persuade adults to continue smoking. Juul says his wild popularity among teenagers is an unfortunate incident. Philip Morris once wrote an internal memo that said, "Today's teenager is tomorrow's potential customer."
This looks like a horrible business misalignment, unless you see it for what it is: the mating of two intriguing companies that skillfully perform a lengthy scam. In the decades after Big Tobacco it took so many PR lumps that his major player had to do change his name, technology has emerged as the most likely sector to sell people a bill of materials. The phones that should have made us more efficient have made us less. The social networks that were supposed to bring us all together have repeatedly turned us away. Joining forces with his declared enemy, Juul is jumping a little further in the Silicon Valley's starting timeline, which generally follows a three-step track: (1) Do not be bad; (2) to be sometimes bad, but only when it is at the service of a greater social good; (3) in reality, being bad is fine.
Juul is just one of the many technology companies that run a scam that involves snooking people from their money, their health, or their God-given right to go to the movies every day for practically nothing. Here is a rundown of the worst contrasts in progress, their unfortunate marks and their probability of surviving in 2019 without being discovered.
Juul
The Con Artists: The founders of Juul Adam Bowen and James Monsees, who developed their first vaping prototype during a product design program at Stanford. According to Pat's fiction, Bowen and Monsees were both long-term smokers who began experimenting with vaping technology to help themselves and other adults throw away the smoking habit.
The sign: The constantly renewed supply of teenagers, who are now so attracted to "Juuling" that in September the Administration for Food and Drugs called it an epidemic. Juul says he does not want underage customers and does not sell them, but the presence of the company's first social media was clearly aimed at a young audience, as well as its fruity flavors. The FDA is examining whether Juul has explicitly directed adolescents to marketing.
Flourishes: Stay ahead of FDA regulations by closing its social media accounts and limiting sales of its flavored pods so that its "fight" against teenage use seems voluntary rather than the result of an inevitable repression of the government.
The moment we should have known this was a problem: Years earlier, Juul existed, when Bowen and Monsees sold a stake in their previous vape product, Ploom, to the Japanese version of Philip Morris.
Will the Con work? Juul owns three quarters of the electronic cigarette market and is now treated as a verb. While its products can be further regulated, an absolute ban in a country where the legalization of marijuana is spreading rapidly seems unlikely. And now that Big Tobacco's lobbying lobby is supporting Juul, the company will be even harder to drop. For those who feel guilty of having children affected by nicotine blows, Altria reportedly offered $ 2 billion in bonuses to the 1,500 Juul employees, which translates to an average of $ 1.3 million per worker.
MoviePass
The Con Artists: Mitch Lowe, CEO of MoviePass, and Ted Farnsworth, CEO of the parent company of MoviePass Helios and Matheson. Lowe is an affable spokesperson with the established pedigree (he made stints on Netflix and Redbox). Farnsworth is the money man who was too keen to attract customers by offering the promise of a movie a day for only $ 10 a month (he used to own a psychic hotline).
The sign: The largest theatrical chains in America. The MoviePass plan was essentially to buy a lot of movie tickets, sell them to viewers at reduced rates through the subscription model, and then use those viewers as leverage to force theaters to offer discounted tickets for MoviePass. It was a brilliant idea that would probably work if a well-off company like Amazon had tried it. The problem was that MoviePass was held together by a data analysis company that nobody had ever heard of, word of mouth and tape marketing.
Flourishes: Using the phrase "We are the Orbitz of the theater business" as a flex; temporarily ban AMC from MoviePass before the theater chain could understand how to ban MoviePass from AMC; thinking that producing the film Gotti somehow it would keep the counter-current.
The moment we should have known this was a problem: When Lowe said that MoviePass planned to use the always-on location technology to direct customers' personalized ads in a talk titled "Data is the New Oil," then he said he was … kidding?
Will the Con work? MoviePass has finished its all-you-can-watch subscription months ago. Now, he asks customers to pay about $ 15 a month to see three films, but only some films and only some theaters. Meanwhile, instead of bowing to MoviePass requests, AMC recently launched its own subscription app. MoviePass can wilt on the vine, or it could go back to being a product for hardcore movie fans as it was in its early years. In any case, the company will no longer interrupt the world of cinema.
The boring society
The Con Artist: Elon Musk, who invented his tunneling transport company while hovering on Twitter, is funding part of selling flamethrowers.
The sign: Cities, like Chicago, are betting their transportation future on a charismatic business man outside the city offering a technological marvel that could simply put them on the map. Yes, this is literally the plot of a Simpsons episode.
Flourishes: Musk once promised that the Boring Company tunnels would be a mass transit solution, with pods of eight to 16 people whizzing on electric skids at speeds up to 150 miles an hour. But the first tunnel that opened last month saw normal electric cars move in single-file mode at 50 mph. Quite conveniently, the machines were Tesla, which Musk also happens to sell.
The moment we should have known this was a problem: When Musk said that public transport "sucks" in December 2017, not only because it is inefficient, but also because traveling between places with strangers is, in itself, repellent. Fortunately, the Boring Company tunnels now seem to be a Tesla transport network.
Will the Con work? Will Musk alone build a private transportation infrastructure that effectively reduces traffic in some of the largest cities in the United States, while it also sells electric cars, explores space and smashes on its online haters? Probably not, but it will certainly sell a lot more during the attempt.
Theranos
The Con Artist: Elizabeth Holmes, the 34-year-old entrepreneur who has moved from a praised technological visionary to an evil dishonored Wall Street newspaper reporter John Carreyrou got the journalistic equivalent of a killing on Theranos and its unethical business practices.
The sign: Honestly an incredible number of people and organizations, including Walgreens, FDA laboratory inspectors, Fortuna magazine, and Henry Kissinger. Theranos has evolved into a revolutionary blood testing laboratory that can diagnose hundreds of conditions with a single fingertip. The thing that made his deception so overwhelming was that his faulty blood analyzers were prone to giving people inaccurate diagnoses of the illnesses they had or did not have.
Flourishes: Holmes is an obsessive Apple who imitated Steve Jobs up to the black turtlenecks and the field of distortion of reality.
The moment we should have known this was a problem: When Theranos achieved a $ 9 billion valuation in 2014 without attracting much interest from Silicon Valley's flagship venture capital firms. After the company's history began to unravel, the VCs revealed that the company had been too secretive about its technology to trust.
Will the Con work? Theranos announced that it would be dissolved in September. Holmes has been banned from serving as an officer or director of a public company for 10 years to settle fraud claims by the Securities and Exchange Commission. And she is still scheduled to face a criminal case. Theranos was one of the most elaborate against in the history of Silicon Valley. He also had one of the most dramatic falls.
Initial offers of coins
The Con Artist: Initial tokens are a way for people to generate money by creating virtual currencies and selling digital tokens to investors. (He thinks Bitcoin meets crowdfunding.) The largely unregulated space is ripe with scammers; according to a study, almost 80% of initial coin offers are scams. But we will use the example of Maksim Zaslavskiy, a Brooklyn business man born in Ukraine whose real estate and ICO diamonds have put him in trouble with the SEC.
The sign: About 1,000 investors collectively gave Zaslavskiy hundreds of thousands of dollars based on the claim that their virtual currencies were backed by real investments in real estate and diamonds (they were not).
Flourishes: Zaslavskiy has marketed as a global philanthropist who had a team of lawyers, accountants and brokers who managed his real estate cryptocurrency (he did not). He claimed that 2.8 million tokens in his currency had been sold (they were not).
The moment we should have known this was a problem: When Zaslavskiy told his supporters that he was moving from investing in real estate to diamonds. Although he never made a real investment in both assets, "pivot to diamonds" is still an incredible phrase that I hope will enter the lexicon before the next recession hits.
Will the Con work? Pins rarely do it. In November, Zaslavskiy became the first person in the United States to plead guilty to ICO fraud, establishing a precedent that no doubt will cheat aspiring digital hackers in the future. Take up to 37 months in prison for cheating too close to the sun.
The Ultimate Con
Let's recap: Theranos is dead and MoviePass, at least in its iteration too good to be true, is just as valid. The Boring Company still has much to prove, while ICO scammers will have a harder time to move forward now that the SEC has decided on an application strategy. This leaves Juul, the startup that knew how much time it could sell to young people before the feds came knocking. The company has never claimed that its product was suitable for you, only that it was less good for you than the alternative; Meanwhile, the scourge of smoking will always be a convenient distraction from the potential risks of long-term vaping and nicotine addiction among people who will never smoke cigarettes. And now, starting last month, that company has partnered with the market leader who is aiming to stop a huge payday and a $ 38 billion valuation. Juul is about to save the world from cigarettes and make Big Tobacco a fortune to do it. It's almost a story too perfect to believe it.
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