We can all use a chuckle from time to time, right? When it comes to innovation failures, the funniest I've seen in a long while popped up last week, and it provides a lesson while not having cost anyone in the insurance ecosystem a penny, so I think it's safe for all of us to laugh—and then think, "There but for the grace of God go we."
The innovation, called Juicero, was designed to be a Keurig for juice. It uses a ton of technology to give people a great glass of juice at home or in the office as conveniently as Keurig has given us coffee and tea. Juicero met all the traditional criteria for venture capitalists:
Proprietary technology? Check. The device used some 400 custom parts.
Hot market? Check. The market for juice is very tempting.
A proven founder? Check. He had started a juice company called Organic Avenue.
High-minded purpose? Check. The founder, Doug Evans, compared himself to Steve Jobs, and Juicero talked about things like life force, while avoiding the term "juice" (generally in favor of "plant-based nutrition").
Great business model? Check. The company used the long-proven "razors and blades" model that had worked so well for Gillette—once you get the razor in someone's hands, you have a license to overcharge for blades forever. HP used the model with laser printers, Keurig with the pods for coffee and tea, etc.
With all the boxes checked, Juicero lined up $120 million in investment from smart guys at places like Google Ventures and Andreessen Horowitz.
The problem: The device is totally unnecessary. It's also expensive. While going through their checklists, Juicero and its investors never stopped to ask that most fundamental of questions: Does this solve a real problem for a real person? Instead, they talked themselves into the more common question: Would this make me a lot of money if people bought into the concept?
In these days of ubiquitous media, it didn't take long for someone to let the emperor know he was naked. Bloomberg did the honors in this article. A reporter took a Juicero bag of juice and squeezed it by hand faster than the super-high-tech, $400 Juicero machine did. (That's the discounted price, down from the initial price of $700.) The reporter, helpfully, provided video proof with the article. So what you're really buying with Juicero is bags of juice, which cost $5 to $8 for each eight-ounce glass—meaning there has to be an awful lot of life force in there.
The company is now a dead man walking. It won't acknowledge that yet, but it is. This Atlantic article shows that the piling on has already begun.
We'll all make mistakes as we sort through the innovations being bruited about in insurtech, but we'll make a lot fewer if we start from the customer and work backward, if we ask that simplest of questions: Does this idea make someone's life demonstrably easier?