It’s not that often that I come across a new product or service that has the potential to save lives and make money. I think the e-cigarette is such a product and is poised to disrupt the industry. What I find strange is that it hasn’t blown up yet …. but then, I might just be on the cusp of something here.

First, what is it?

Electronic cigarettes resemble real cigarettes in size and color, though they are not made of paper and tobacco. The tip has a fake ash on it that glows when you inhale, the main body of the cylinder is a battery, and the business end has a heating element in it along with a cartridge that contains propylene glycol. As in a theatrical smoke machines, the heating element reacts with the propylene glycol to produce the smoke. Cartridges are available with nicotine at several concentrations, without nicotine, and in a variety of flavors.

Image from New Scientist Magazine

Image from New Scientist Magazine

You can watch many video demonstrations of e-cigarettes online here.

I was skeptical about how convincing the experience would be, so I bought an NJOY Pro to test it out. NJOY is the largest domestic e-cigarette company with distribution in all fifty states and overseas. I have to admit that it’s very convincing. You’ll notice that some things are different than a traditional cigarette though, such as a slightly harder draw, the fact that it’s not soft like a traditional cigarette, it’s heavier,  and the flavor is not exactly the same. I found the flavor to be close to a hookah, which is more fruity than straight tobacco. I’ve tried a couple flavors and vanilla is my favorite so far. I should also note, that I have smoked cigarettes in the past but am not a smoker so I’ve been using the non-nicotine cartridges.

How can it save lives?

Approximately 20% of the population in the United States smokes cigarettes, globally you can raise that to almost a third of adults. As to be expected, smoking rates drop somewhat as nations become more developed. The health consequences and costs associated with smoking are overwhelming. In the US alone 6% of total health care costs were smoking related in 1999 (World Health Organization (WHO) Study) for a total of about 76 billion dollars. And, that doesn’t count all sorts of other environmental costs.

If electronic cigarettes are not bad for your themselves, and if they can help some of these people quit smoking than they should be able to save lots of lives.

Are they bad for you?

Helen Thomson’s article in New Scientist Magazine, Electronic cigarettes: A safe substitute? , considers this question:

So what precisely is the evidence for and against e-cigarettes? Laugesen is one of the few researchers tackling this question. In early 2007, his company – Health New Zealand – began a research programme to investigate what hazards e-cigarettes might pose. The research is funded by Ruyan but Laugesen insists it is independent, a view backed by the WHO. “Dr Laugesen is a respected tobacco control researcher,” emphasises Raman Minhas, technical officer of the WHO’s Tobacco Free Initiative.

Though Laugesen’s conclusions have yet to be published in a peer-reviewed journal, his preliminary results have been released and seem positive.

If you’re interested in getting more detail, check out the New Scientist article in full. You can also read about Langesen in Michael Field’s article in the The Dominion Post.

Will it the help you quit, and is it about quitting?

If the evidence is pointing to the fact that e-cigarettes are AT LEAST better for you than traditional cigarettes, than the real question is whether or not people will transition to e-cigarettes from traditional ones. In other words, even if people don’t quit smoking there will be massive health care benefits if they simply transition to an e-cigarette. Here’s an interesting article from the NY Times that supports this idea, but also talks about A Quitter’s Dilemma: Hooked on the Cure.

My own experience with the e-cigarette tells me that people will be willing to switch because of the fidelity of the experience, the ability to regulate nicotine, the health benefits, and the cost benefits. On the last point, If you calculate the cost of the batteries which last for about 300 charges, plus the cost of cartridges, which cost about $1 – $1.50, but last as long as about half a pack of traditional cigarettes, than the cost of smoking e-cigarettes is significantly less than smoking traditional ones. And, we can safely assume that this cost will go down as e-cigarettes gain adoption and greater competition.

Marketing: A Grass Roots Approach

E-cigarettes have only been on the market since 2004. In that time, they have developed a small user base with Ruyan, the largest manufacturer, claiming to have sold over 300,000 units in 2008. That’s a tiny sliver of the potential market, and compared to growth rates for comparable products like nicotine gum that seems odd. On the other hand, they have not been brought to market is a comparable way. Thus far it’s been a grass roots effort. I think this gels well with such a new and disruptive product. The slow growth may also be an indication that additional product development is required. Don’t forget this is a completely new product category so there will be a lot of learning to do about how customers actually use the product. You can bet that it won’t be the same as a traditional cigarette, and that product development teams will be iterating quickly to keep up. When I spoke with NJOY they also said that they are working on a second generation of technology that will make the e-cigarette an even better experience. I don’t have details on this, but they did say that patents are pending.

This approach will also provide some time to conduct additional scientific research into the health issues/benefits of the product, and those studies are surely underway. There is also a need to conduct additional studies to measure conversion rates of traditional smokers, and eventual quitters. Like nicotine gum, it’s likely that a significant percentage of the converts will become regular users of the e-cigarette rather than quitting all together. Meanwhile, the folks at NJOY have partnered with McMurry (marketing) and TSC Group (distribution) and are gearing up to make a giant splash once they have all their ducks in a row.

Meanwhile, consumer generated media will continue to proliferate around e-cigarettes with online forums and video demonstrations, though I’m not seeing much response for the manufactures in these forums. This seems like a major missed opportunity to engage and gain insight, though I did see one post in which NJOY offered a discount code to forum members “smokey”. So you’d think they’d have a following on Faceboook, right? Only 125 people currently in the group though. MySpace? Not there. NJOY events? Nope. I see a huge opportunity to create a core group of evangelists around this product before the big marketing push. Any campaign should tap into what’s happening in the forums, for example, users are developing their own language around the topic. Traditional cigarettes are called “analogs”. Also, many of the posts I came across included footers with a mention of how long they have been “analog free”. Plus, there is also a secondary market developing around “juice” refills.

Marketing: It’s Not A Cessation Device!

It’s important to point out that e-cigarettes are not positioned as “smoking cessation devices”, meaning that they are not making any health claims which would be subject to FDA review. This positioning is unlikely to change unless significant medial benefits can be demonstrated through research. That said, you’ll see plenty of testimonials online about how people are using e-cigarettes to quit. Knowing that it won’t be positioned as a cessation device, I think there are some interesting opportunities to talk about other potential benefits. From my conversation with an NJOY spokesperson, my guess is that you’ll see e-cigarettes with caffeine and/or vitamins coming soon. I think that’s a good way to manage the legacy of negative perceptions around smoking which is a huge challenge.

Marketing: Bringing Value Through Innovation

Here’s one idea based on what I’ve learned so far that would bring value to NJOY, or any other player in the industry. This observation is not “feature” related, but focuses on the overall experience of the device. The fact is that features can be managed by product development teams, but it’s much harder to create an experience for the customer that is bigger than any feature set.

When people transition for traditional cigarettes to e-cigarettes their behavior fundamentally changes in many ways. For example, they no longer have to go outside to smoke. This changes the ecosystem in which smoking takes place and presents many opportunities. In the past, you might have seen ash-trays where smoking took place, or a cigarette box on the surface of a desk. Though the legacy of these objects has been overwritten by smoking policies, the memory remains. Following this, there is an opportunity to make the chargers for the e-cigarettes tap into this legacy. Currently chargers look like ugly cell phone chargers, but there is no reason they couldn’t be more attractive and inviting. Based on this, it should be possible to make smoking more social again in environments that have been off limits for many years.

Plus, the actual act of smoking changes. You don’t have to light up an entire cigarette to enjoy a single puff. How does this change the way we use the device, and how should this impact the design? And, that’s just the tip of the iceberg when you consider the opportunity to bring community and technology into the conversation.

Thanks for reading, and I look forward to your feedback.

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5 Comments to Why Has The Electronic Cigarette NOT Exploded?

  1. The post is really informative. Personally, I feel that the revolutionary electronic cigarette is the best option for the smokers who want to quit smoking altogether as well as enjoy their urge for nicotine. Also, by smoking the electronic cigarette, you are not going to violate the rules against smoking. While purchasing the smokeless cigarette look for the accessories and refill programs available with it.

  2. […] on it that glows when you inhale, the main body of the cylinder is a battery, and the business end Read More|||A Belgian company hopes its %26quot;electronic cigarette%26quot; once again makes lighting up […]

  3. Jim Palasota says:

    First, I want to say thanks to Roland Smart for publishing such an important article. Unlike other publishers who run from facing the facts of life, Roland stands strong to ensure that his readers get the real facts. And the facts today are that over 5 million people die every day due to smoking, or the effects of. NJOY is an alternative that provides a current smoker the ability to satisfy his craving for a cig, without all the harmful effects associated with a traditional cig. No tar, no carcinogens. If you are a current customer of NJOY, or wish to become a customer, go to NJOY.com for more details. And from your friends at NJOY and Roland Smart, we want to offer you a 10% discount on your first order, and all future orders. Simple use the Coupon Code 15455 when you checkout.

  4. Number1Smoke says:

    An article that really “Hits the Nail on the Head”. Well written, informative and accurate. Electronic Cigarettes without question is the best technology break-through for smokers EVER. The perfect alternative to traditional tobacco cigarettes without the harmful tar, tobacco, 1st or 2nd hand smoke and void of the thousands of chemicals found in traditional cigarettes. Electronic Cigarettes are smokeless, virtually odorless and emits a vapor mist which feels, tastes & looks like real smoke. In my opinion the best nicotine delivery system ever.

  5. Taking Care says:

    The only information I found on exploding e-cigarettes was in there sales activity. Sales exploding everywhere is because even the seemingly non caring smoker does in fact care.

    The nicotine in these cigarettes are still poisoning, BUT it is the only poison. E-cigarettes eliminates about 598 other harmful poisons found in tobacco. People will be sparing themselves a less poisoned and weaker body for the change.

    PLUS there is absolutely NO SECOND HAND SMOKE oozing out and lingering in the air to poison other people(especially young Children) in the vicinity.

    This is a step in the right direction to putting deadly tobacco to rest.

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