R.I.P. Juicero — squeezing $120M from Venture Capitalists for a solution no one needed
If you don’t know yet — Juiceros main idea was to deliver a convenient cold-press juicing system that makes raw, organic juice with the touch of a button with no need of cutting fruits and veggies. Juiceros downfall can be attributed to many factors of which product-market fit was one of the major contributors. During the early stages of Juiceros development, they should have asked themselves if Juicero is really solving a customer issue and how much they are willing to pay for it.
Those key questions must include:
- Is the problem of cutting up fruit and juicing them really a major issue or just an inconvenience for the customer?
- Are there already solutions that suit the customer just fine?
Product market fit y’all
Sufficient research, including market sizing, customer needs and price should have been clarified during the development phase. As I see it Juicero solved a problem no one had to begin with. They failed to properly evaluate the need for their product before rushing to secure VC capital. A great way to validate the actual customer need for consumer-facing products is crowdfunding. The company will instantly get feedback if people are excited and willing to invest in a product they are both financially and emotionally invested. Moreover, this would also allow for instant feedback during the early development phase as crowdfunding investors are usually very critical of products.
Where was the market research?
Furthermore, the Startup should have evaluated the problem far more thoroughly through qualitative research including extensive interviews, building personas and focus groups. Most importantly, I think that the Startup grossly undelivered in value. During the development phase Juicero should have analysed the major emerging trends in the juice and health industry and examine specific areas where competitors fail to solve problems — and pivoted their product and business model accordingly. While I understand that this product might be seen as a convenient and fast way of making juice, I very much doubt that a sufficient market for Juicero ever existed. I assume that the company severely overestimated the total accessible market for their product. If we guesstimate the total US-market for juice and juice drinks we get to approx. $10 million, not considering the fact that most of those people are mostly “to-go” consumers of fresh-pressed juices at coffee shops and juiceries. It’s very doubtful that those individuals would actually purchase the machine for themselves as it feels like a more expensive and long-term commitment.
Go niche
Juicero should have done more market and customer research in order to figure out if their product would better fit on a niche or mass market. As I see it they aimed for a nice consumer-household-market while overpricing their product for their segment. A juicer might make significantly more sense in snack areas in hip co-working spaces or giant tech companies. I would have suggested to aim for a corporate clientele and offer a “vending machine” approach that allows customers to rent one or multiple juicers and price them according to actual usage including quantity discounts (by that I mean that additionally to the affordable renting fee the customer primarily pays for the juice bags). Alternatively, it would have been clever to design a machine that could not only squeeze fresh juice bags but also frozen ones.
This would have allowed the customer an even more convenient experience, extended shelf and overall more options. Another possibility could be to extend their market to the hospitality industry and supply big hotel chains, which primarily house young professionals who have an active and healthy lifestyle. The Juicero would have made an excellent addition to any breakfast buffet and large hotels certainly have the financial backing to invest in new “hip” technology for their guests.
