Why did Kleiner Perkins Caufield & Byers and Google Ventures invest in Juicero?

A guess:

  • Proven founder. The CEO had already previously founded Organic Avenue, which had a positive exit (he sold it for $30m), amazing branding, and was an innovator in the space. Betting on a proven founder that wants to do it again, just bigger, is an expensive but often high return bet. Also, likely he was the super charismatic / visionary type (I’ve never met him).
  • Keurig coffee pods + hardware (machine) as a comparable. Keurig proved you could make billions on the disposable side of the business. And healthy drinks could leverage macro trends here to be the next Keurig. Keurig was purchased for $14 billion. Keurig to Go Private in $13.9 Billion Buyout Led by JAB. After that, you go hunting for a few more Keurigs.
  • Leveraging the “healthy at home” trends. The delivered meals trend has some flame-outs, but the overall trend is large and unstoppable in a very large market.
  • Probably assumed initial hardware costs were OK with early adopters as long as they came down. Probably a fair bet. It’s easy to imagine the 2.0 or 3.0 hardware could come down to $199 or even less, Keurig-type pricing. We had one in the office. It was cool, but it just smashed a pack and squeezed out the juice. Keurig did just fine selling $149-$199 simple coffee pod makers. Juicero likely could have gotten there, too, over time.

Doesn’t sound like the worst bet ever in that light.

Not all the bets all have to work from an investor standpoint. They just have to have a chance to work, and a chance to be big.

And having read the press, I almost wonder if with more discipline, Juiceo could have made it. They spent a ton with little cost discipline, or so it sounds like it. Perhaps spending less, being more careful on hardware costs (and maybe hiring better people here — costs can quickly spiral out of control on hardware), and thinking through more the ingredients costs earlier. Seems to me it could be around today, doing just fine, potentially.

View original question on quora

Published on June 9, 2018

Pin It on Pinterest

Share This