I'm Bethany McLean. This is making a killing in this show. I cut through the hype and handwringing to reframe the stories you thought you understood and uncover the ones you didn't know were important. Today, my guest is Joe no Sarah, an opinion columnist at Bloomberg. Here's how the pitch to investors went. Look, smoking hasn't evolved in a hundred years. It's literally killing millions of people. We are smokers were at risk of suffering the same fate, and we're scared. So how do we create a new ritual to replace the old one? At least that's how founders Adam Bowen and Jane Monsey's came up with their big idea for Jewel while they were getting master's degrees at Stanford. And so it is that Jewel was born, the now wildly popular, wildly valued, and wildly controversial vaping company. It's probably, as my kids would call it, one of the biggest drama lamma companies in the last year. If you could imagine Saint Peter presiding over Jewel in the way that he weighs your and your merits before you can enter the Kingdom of heaven. On one side of this morality play set people who argue that Jewell, whether on purpose or not, remains to be seen, is grotesquely addicting a whole new generation of kids who were previously non smokers. To that end, Jonathan Winnikoff, a professor at Harvard Medical School, told The New Yorker, if you were to design your ideal nicotine delivery device to addict large numbers of United States kids, you'd invent Jewel. On the other side of the morality place that people who defend Jewel as a company focused on harm reduction, arguing that vaping gets existing smokers off of lit tobacco, which is deadly, and who cares if it still delivers nicotine, the addictive substance, because hey, that's better than lung cancer. Although the public health community is loath to acknowledge it, the decrease in smoking correlates pretty straightforwardly with the increase in vaping. Jewel just closed a major strategic investment with Altria, who, of course also makes the Big bad Cowboy Marlborough. I wonder, is the lesser of two evils really the heart and soul of good business? Is that what American industry has made for or. As Fast Company wrote, if the traditional startup narrative once followed the outlines of identify needs, scale the solution, the modern version looks something more like identify a need, scale the solution, and deal with the unintended consequences and regulatory backlash. It's no coincidence that jewel like uber has become a verb today. My guest is Joe no Sarah, an opinion columnist at Bloomberg. I first met Joe over two decades ago when we both worked at Fortune. He's a friend and my co author on my last book, All the Devils Are Here. You can always count on Joe for an opinionated, although often nuanced view, and he's been thinking about this particular issue of harm reduction for at least ten years. The first time I wrote about tobacco wasn't two thousand and seven, and I did a big cover story for the New York Times magazine about Philip Mars. I remember that piece part of the process of that story was them telling me we're working on these new products. They're called harm reduction products, and I was like, what is that. I couldn't envision it, and I even went down to Richmond, to the factory. I met the scientists and I saw some of the work they were doing, and I still couldn't understand what could a harm reduction cigarette look like, what it would act like, how would it work? Cigarettes are killing four hundred and fifty thousand Americans every year. This is despite the fact that has gone from sixty percent usage in the nineteen fifties. Too, among American adults, it's under twenty percent, it's seventeen or so. It's really remarkable what's happened. Dramatic. Some years later, a product came on the market which was not introduced by tobacco companies, but by these startups that were harm reduction products. They gave you a hit of nicotine. They came in flavors, as we all know. We'll talk about that, I'm sure, but they didn't have tobacco. And the thing people have to remember about cigarettes is saying, is nicotine ad dicks tobacco kills. Back in the day before the public health community decided to attack the cigarettes, they actually used to say, if I had to trade one for the other, I would of course trade nicotine for tobacco if I could get rid of the tobacco and keep to nicotine. I would take that deal. It's a little bit like the environment in the sense that Exxon is not going to be the company that makes wind power or solar power. It's going to come from other different companies. Right. So these companies started to crop up and I got started to get interested in them, and adult smokers started to switch, not a lot, but some. The one of the reasons jewels attractive more than these other companies is that people are used to a certain amount of nicotine and they're they're used to hitting your throat in a certain way, and they're just used to it acting the way it would act in a cigarette. And the reason Jewel was originally successful is that it could do that. But it's also a very cool looking thing and it's more of a silicon valley type device, and so it became very attractive to use, which is part of the problem. Right, Well, it depends on how you define the problem. So their pitch is the original pitch of Jewel was that it wasn't supposed to be about the money. It was supposed to be about doing good, about coming up with a solution to this problem of smoking. Do you believe them. I don't think they ever said it's not about the money. I think they said we don't want to sell to kids. I don't really believe that, particularly because if you look at the early advertisements they especially what was on Twitter and Instagram, they're very oriented towards youth, no question about it. Here's the tough part. You smoking is down to about eight percent smoking, and that's a drop of over fifty percent just since two. That's an astonishing thing. As Juel, the cause of that or is it just a correlation? Well, I mean the correlation seems pretty obvious. I mean you look at the line, it kind of stalled out, and then suddenly smoking goes like that down and vaping goes bloom up. The reason you don't know that, Why don't you know that? The reason you don't know that is because the government defines tobacco use as smoking and vaping, even though vaping doesn't have any tobacco in it. The statistics that are put together by the CDC basically are about any kid who has used an east cigarette, wants or more over the past thirty days. That's what the definition is. Does that mean they're experimenting? Does that mean they're hooked. Does that mean they're going to be an addex twenty years from now? We don't know. We don't know, but I would venture to guess that a whole lot less than twenty percent of high school kids are hooked on vaping. I think it's much more likely that's a lot of experimenting going on. So why isn't the federal government choosing to help people understand the difference between smoking and vaping. Should they be doing more? I strongly believe they should be doing more. The government in Great Britain has, basically it's it's government policy to say that vaping is ninety five percent safer than cigarettes because it doesn't have combusted tobacco in it. So in America there is a kind of I'm sorry to say this word hysteria over the evils of vaping. A lot of it has to do with the history of the tobacco companies and how they hid the dangers of cigarettes, and how they were the bad guys for so long, and how they hook kids, and so now today we have this different product, but the mentality of the public health community and the government is, oh my god, it's still big back tobacco. We have to stop them, so it's historical baggage. Well. And one other thing, if I dare say, there is a view in public health that the only way to stop smoking is to stop smoking, and that vaping, because it still allows you to have this addictive habit is somehow bad. And I would argue that if you've never smoked before and you start vaping, that's not a good thing. But if you're a lifelong smoker and you smoke for twenty years and suddenly you know you have a chance to get your nicotine fixed without killer tobacco, it's a great thing. I was just on the phone with a friend this morning and I told her what I was doing, and she said, oh, I know all about Jewel. My kids are really into it. She has a junior and a ninth grader. And how do you square that side of Jewel, the fact that they did originally try to appeal to kids, and that that is a huge, some chunk of their market even if they don't break it out. Let me ask you this first, is your friend horrified, She's I'd say, moderately horrified. Is that an oxymoron? Moderate? I actually think that's the right position to have. Moderately horrified. Yeah. Yeah, it's like two of my three older kids smoked. And this is despite all the indoctrination they get in grade school and even in high school. But smoking becomes irresistible at a certain point. And you know, my daughters in her mid thirties now, and she's tried to get off a bunch of times, and sometimes she's successful and sometimes you're not. The fundament was still a smoker, and so it's my other son who's just turned thirty. I would much rather they had used jewel when they were teenagers than cigarettes. So your argument would be that jewel appeals to the kid who would have been a smoker anyway. It doesn't convert the kid who would never have been a smoker into someone who uses nicotine. That's fundamentally my argument. The problem with my argument is that the product hasn't been around long enough for anybody to know whether it moves people into cigarettes or not, or whether the use themselves wind up, you know, stopping because it's less addictive. We don't know the answer to those questions, and really won't know those answers for another ten fifteen years. So then the question is what do you do In the meantime, the impulse of the American public health community and also to launch part of the federal government, is to try and put the clamps on these cigarettes as much as possible, which you should be trying to do. Is two things at once. The government and the public health community should be saying, we have this product that addicts you but doesn't kill you. We don't want kids to use it, but we really, really really want you, the twenty years smoker, to switch to this, to try it. It's way better for you, and it works better than the patch and all that other stuff, and you should do it. What's happened instead is that everybody's saying don't let kids use it. That's bad, bad, bad, bad bad, without saying the adult smoker should switch to this. It has a bad part and it has a good part, and the government and everybody else is only the bad part. Given that the government is only stressing the bad part, and the government, it would seem to me, has the power to put this company out of business, how do you reconcile that existential threat with the thirty eight billion dollar valuation. Oh, that's a good question. I mean, the reason for that is because the market, and investors don't really believe the government will ultimately put it out of business. Do you believe the government could also that a business. I think they could. One of the things that's happened is the government has actually pulled back from some very tough regulations, I guess because it's a Republican administration and given the companies a little bit of new life. If you put them out of business, what would ultimately happen is the only company selling reduced harm products would be Philip Mars, Altria and Reynolds. And is that really what you want? How do you contrast their reduced harm products with Jewel? Is it really clear that Jewel is much better than the cigarette companies reduced term products? I believe it is. The company that has the most potent product is Philip Mars International. And I'm a little suspicious of it myself because it does have tobacco in it, but it's not combusted. It's been a huge hit in Japan. It's actually got an insane seventeen percent of the cigarette market, not the vape market, the cigarette market, right, but it hasn't really caught on anywhere else. What's also interesting is that Philip Marris International, which makes its money on cigarettes. If you go to their website, basically says we want to get out of the cigarette business. This is our future. We see this as the future. And I think another reason for jewels thirty eight billion dollar valuation is that there is a perception the world will eventually move to vaping. It's a little unclear when. So then the question about Jewel becomes is this the right time for them or is this way too early? And maybe this valuation will blow up and it will become an e Toys, maybe it will find the sweet spot and become an Amazon. Okay, here's some truly stunning numbers. The twelve point eight billion dollars deal, which all Tree announced at the end of December twenty eighteen, values the less than two year old vaping company at thirty eight billion dollars. At that point, Jewel became the fastest startup ever to reach a valuation of more than ten billion dollars, beating the pace set by tech giants Facebook and Snap by four times. Jewel is also worth twice as much as left Are, about eight billion dollars more than Airbnb and Elon Musk's SpaceX at thirty eight billion dollars. Jewel is even bigger than popular publicly traded companies like Target and Ford. Over the past year, Jewel captured about seventy percent of the total three billion dollars E cigarette market, according to Nielson data compiled by Wells Fargo's Bonnie Herzog, But that E cigarette market represented just three percent of the seventy two point eight billion in overall tobacco sales, which includes cigarettes, E sigarettes, chewing tobacco, and cigars, according to Nielsen. In other words, the opportunity is huge. What we don't know is what percentage of Jewels sales are coming from former adults smokers and what percent comes from teens, although critics would say that too much is coming from the ladder groom. Given all that you know about this market, if you had been in the boardroom when Ultrea was making the decision about whether or not to make this valuation, would you have said yes or no? I probably would have said yes, simply because all the tobacco companies are trying to get into this business. Philip Mars has more money than it knows what to do with, and Jewel is by far, by far the best product. I wrote a couple of columns about Enjoy, which at that point was a leading contender to be the best product, and Jewel just wipe them off the map in like six months. Is that because of the product design. Product design definitely has a lot to do with it. It doesn't look like anything else. It looks more like a flash drive than it does a cigarette. And kids can hold it in their hand, and adults can hold it in their hand and put it up to their mouth. You don't even see it. So it's the Apple of vaping bingo. That's what it is. And you know, Apple's got a valuation that's pretty high too. So if you had been in Jewels boardroom when they were making the decision about whether or not to take this investment from Philip Morris, what would you have said, is the risk worth it for them of affiliating with Big Tobacco. That is a problem because to this day, Big Tobacco was demonized with good reason based on things they did historically. The problem is that the vaping companies are being demonized too. So it's like, you know, why should I worry about being demonized since it's not like it's going to change anything. If we're with a tobacco company, if the country, if the government, if the public health community had been willing to make a distinction between big tobacco and little vape, then yeah, it would have been much more dangerous. But given the situation, it's like, well why not. You know, whenever you see a scientist put out a paper and he says, you know, I was aided in my res search with money from Bristol Myers or merk or something, the people on the other side say, oh, see, it's tainted. It's tainted by money from big corporation, So you can't really believe that research. But I think that ideology is as powerful a force in coming up with studies and creating studies and creating science as money is. And I think that the vaping versus anti vaping is the great case study of this, because each side says, my science is good, Your science is bad, your science is tainted, my science is pure, And if you look at them, the science on both sides has problems. See, your argument is there's no such thing as pure, not in this sphere, not in this sphere. It's interesting, there's this recent news that Jewell took the flavors that appealed to kids. They took them off the market. That's great, but why didn't they start there? Well, the reason they didn't start there is because weirdly, adults like a lot of those flavors, and that's actually turned out to be part of the appeal of vaping as the flavors. What Jewels thinking is, I think we have such a lock on the market that we can afford to do this and not lose very much market share. People may go to other devices, but they probably won't, and therefore we can do something that's good without hurting ourselves financially. I think about how this company builds itself, and it looks like how Uber or any other Silicon Valley company has worked, which is find a need, scale it, aggressively, wrap yourself in a shield of altruism and damn the torpedoes. Let the investigations and the regulations come and deal with that later. Is there a way that Jewels should have been smarter about this to get the public health community on their side from the beginning. There is no vaping company that the public health community likes, none, and there's nothing they could have done. Nothing, Well, there is they gave the public health community AMMO by doing. Those who hip Instagram ads, Yeah, yeah, that hurt them for sure, because every time somebody wants to whack Jewel, they pull those ads out and say, see, see they're marketing to kids and jewels saying, well, we're not marketing the kids anymore, and we've pulled all those ads. It's too late, it's too late. Do you believe they were marketing to kids with those ads? I don't know. You know, I'm rooting for them. I think it's important for the health of the world. You'd still argue that even though one cartridge of jewel contains the same amount of nicotine as an entire package of cigarettes. So to me, that's a red herring because nicotine doesn't kill. If you took all the nicotine out of cigarette and still had combustible tobacco, it would still kill you if you smoked it. So maybe part of the problem is this confusion in all of our minds between nicotine and tobacco. Absolutely, and this is another place where the federal government could really help. Don't forget. Under the law, none of the vaping companies are allowed to say this is a healthier alternative to cigarettes. They're not allowed. You have to get FDA approval to say that, and it's a long process and most of them can't afford it, and they might not get it anyway. So they're not allowed to say we're a reduced risk product that they're not. That's actually stunning. So the federal government is in control of saying what's reduced risk and what's not. And the federal government has chosen not to do that. And why is the federal government chosen not to do that? Are they too influenced by the public health community. Yes, they absolutely are. The public health community believes that abstinence is the only answer. And there are a few outliers in the public health community, and they're really interesting outliers as ken Warner, who's an economist at the University of Michigan, very highly respected. The former president of the American Cancer Association is pro vaping. But they're the outliers. And when Scott got leave, the head of the FDA makes a speech, he'll mention reduced risk and it's importance and so on. But they have never done anything to promote that idea, and they have never allowed the vaping companies to say they were reduced risk. And part of the reason is they say, look, we don't have the science. We don't really know. You know, maybe twenty years from now the stuff will turn out to be horrible for you. Has duel made an effort to cater to this community, to get people in the government on its side if they can never convince the public health community, is there a government path? By and large, the public health community won't speak to anybody in the industry. They won't speak to anyone in Philip Mars or Altaria. They want speak to anybody in the vaping community. You know, alternatives speaking alternative here and now. Alternative said, yeah, exactly. The federal government is trying to figure out how to regulate them, and they're busy making comments and there's all that kind of formal back and forth. But they really have no ability to go into the government and say, could you think about this in a different way. Congress doesn't really have much to do with it. Not since the tobacco legislation was passed in the mid nineties, Congress has lost interest in the topic. What about this idea that it's the less or of two evils? Coming back to this notion that that's how Jewela is set itself up. Is that good enough? Or should a company aspire to more than that? It is good enough. One evil is to die. The other evil is at its absolute worst, to be addicted to a substance. That's basically like supercharge coffee. I'd take supercharged coffee. We don't even know whether vaping truly addicts the way cigarettes addicted. We don't even know that yet. You know, all these use who are using jewel now, are they going to use it when they're twenty one? Are they going to use it when they're twenty five? Are they going to use it when they're thirty? We don't know. I want to come back to that notion that you've talked about about harm reduction, about this idea that vaping is okay if somebody who was a smoker starts to vape, it's not okay if somebody who has never smoked starts to vape. How do you think about that? Very easily? Harm reduction is a widely accepted technique in public health. You know, if you've never shot up to done is a terrible thing. But if you're a heroin addict, methadone is a huge improvement. Right, it won't kill you. It's the same thing cigarettes will kill four hundred and fifty thousand Americans every year. We don't know the dangers of vaping, but it's hard to believe that it would have that kind of impact given that there's no combusted tobacco. Combusted tobacco has the carcinogens that kill people, not the nicotine. Right. But though we don't know the danger is of vaping is what's terrifying to every parent of a teenager, right. I think that's true. But I think if you told the parent, look, would you be happier if your kid was smoking a cigarette? I would hope they would say, no, that's worse. Let's come back to this notion the lesser of two evils, and that's how Jewell has set itself up. Vaping is less evil than smoking? Is that? Do you think what a corporation should aspire to the lesser of two evils? I think if a corporation is setting itself out to say we want to be the replacement for smoking, I would say, yes, that's worth aspiring to. I mean the United States, you know, a fifth of the country still smokes amazingly, even after every fifth adults. I'm talking about adults. I think that's about right, twenty percent, maybe a little less eighteen or seventeen. But I just saw a statistic that there are one hundred million smokers in India. Wow, and think about how many smokers there are in China and Russia and Poland and hungry places where people really smoke a lot. And if somebody could say, I have a product that will satisfy your craving for nicotine, but you won't die from it, I don't view that as the lesser of two evils. I view that as a product that could really help save a lot of lives. So you'd see the lesser of two evils as a false dichotomy in this particular case. Yes, again, it depends a fifteen year old high school kid. Yes, it's the lesser of two evils, smoke or vape. Yes, an adult smoker. It's not the lesser of two evils. It's potential salvation. So are there any problems with being cooked on nicotine? You will liken it to a giant cup of coffee, right, I do, which I'm not sure everybody would agree with. But they complain about Now what you read now is that it can be harmful to the brains of teenagers. That's what they say. But if that were true in a real sense, then all the people who smoke cigarettes all those years would be brain damaged. And that doesn't appear to be the case. Who says it would be harmful to the brains of teenagers? Where is this coming from? You see it in public health stuff, and there's a glimmer of it once in a while. You see the CDC kind of mentions it in passing. When people complain about the harmful effects of vaping, they don't really talk about the nicotine per se. They talk about the ingredients in the juice, particularly apparently there's a trace of fmaldehyde and some of thatmaldehyde. Yeah, but you know, it's like one of those things that's all around us. The question is how much. Don't even look too closely at your cup of coffee exactly. And then, of course there's the whole issue of the flavors, which is another entirely interesting argument, because the public health community says, with some validation, some of these flavors like bubble gum and so on, are directly aimed at children, but a lot of adult vapors say, you know, I like the flavors and I'll be very unhappy if they take the flavors away. Are there benefits to nicotine? Well, I mean every writer you ever saw in the nineteen sixties and seventies has a cigarette coming out of their route. I mean it makes you more alert. Is that what's gone wrong with journalism? It could be it makes people more alert, it helps their short term memory. I mean, it actually has benefits. You know, I'm not saying you should get addicted for that reason, but it does. And on the notion of addiction, we're criticizing to all for potentially providing an addictive product. And yet there are many people who would argued that social media is addictive, and yet we don't criticize, or at least we haven't until recently, criticize the social media giants for the addictiveness of their product. Would you argue there's a double standard there, I would. The difference is that Jewel acknowledges from day one that it has an addictive product, and Facebook and Google and the other social media companies have never acknowledged that and don't to this day, even though it's it's very, very true so at least Jewel isn't hypocritical. If the company's core mission is to get people addicted to its product, that means its core mission is to get people addicted to nicotine. Yeah, how is that? Okay? The society has been brainwashed into believing that nicotine is as bad as tobacco. So what Jewel will say is, we're not trying to get people addicted to nicotine. We're trying to get people who are already addicted to use a different form of ingesting their nicotine. That's what they're saying. And given that, you know, a fifth of the country or something like that smokes, that's a heck of a big market. It's not an infinite market, but it's a heck of a big market. And now then you say, well, what happens twenty years from now or thirty years from now it really catches on, then you're going to bump up against these issues of what are kids going to do? Or is the company's market cap going to shrink and shrink and shrink because fewer people are using it? Right? But I want to push you on that because when in all your years of covering business, have you seen a company that is really content just to say, this is our existing market as it's defined. Our existing market are the people who are already using tobacco. We're not going after any new market, and we never will. Have you ever seen a company not do that when the opportunity presents itself and when the bottom line is at stake. No, right, Okay, no, this is where the federal government should come in. But the world has been handed a great opportunity because now there's a product that exists that can, for the most part, satisfy the cravings of smokers around the world, not just in the US. There are a lot of smokers around the world. A government that jumped in early on this business and said we are going to try and regulate it in a way that keeps it confined to this universe of people who already smoke would be doing a remarkable thing. And it's the government's job to put limits on what companies can do and who they can sell to, and so on and so forth. That's why we have government. I don't expect Jewel to say, if you non smoker want to try our product, we don't want to give it to you because you don't smoke. I don't expect Jewel to say that, but I do expect the government to find ways to discourage that person from crying Jewel. So the company should do what a business should do, and the government should provide the guardrails. Essentially, yes, absolutely so, more broadly than Jewel. Putting Jewel aside for a moment, asking this larger question about the role of business in society. If a company like Jewel is making a lot of money, is that what its goal should be or does a company have a larger responsibility beyond that? Well, you know Howard Schiltz says they should have a larger responsibility, and he's running for president. But it hasn't worked so well when Starbucks has tried to do that. Right, it has in terms of how he's dealt with his employees, but it certainly hasn't when he has tried to single handedly man race relations. People who work for companies want to feel that they have a sense of mission that transcends dollars and cents. I think that's really true for most people and for most companies. I think a lot of the stuff that companies do that is characterized as socially responsible as bs and my favorite example is Ford. When Bill Ford was the CEO, he retrofitted their factories so that they were completely green. They were the most environmentally friendly factors in the world, except the way he made his money was by selling trucks gas guzzling trucks. That was Ford's biggest product. I'm skeptical of social responsibility, but on the other hand, I do think companies ought to care about more than maximizing profits. I do believe that they should support the communities in which they exist. I think they should not expect their employees to need food stamps. It's one of the things I find so fascinating about the dual debate is it does shed a slightly different light on this question, which is so relevant to where we are Today's what is the responsibility of a business, whether it is broader than the Milton freedmen esque idea of just making profits. And yet, as you say, when we see companies that position themselves as being about something else, it's usually just so much be us layered on top of a profit motive. A good way to think about this is the farmer industry. Twenty five years ago. The farmer industry did not view maximization of profits as their sole goal. One consequence of that is that you didn't see these huge run ups in drug prices. On an annual basis. Insulin would remain the same price for twenty years. And Mark famously helped care blindness in Africa right by providing a drug low costs. Don'ta salt wooden patent, the polio vaccine. Now farmer companies are totally about maximizing profits, and it has been horrible for society. Drugs are expensive and even when you can afford the co pay, your insurance company is picking up a big tab and ultimately we are all paying for their share price. Right, But the devil is always in the details. Right in terms of how you parse this argument for any individual company, Yeah, well, you're right. You can't be Murk and care about you know, low prices when Fizer doesn't, and you can be Jewel and sell a product that is arguably harmful or arguably somewhere in the middle, but makes a great deal of money for its investors. One of the reasons Jewels interesting to companies like Altrea and also you know in the press, is because they don't come out of the traditional cigarette industry. They are classic Silicon Valley people technologists, and that's how they approached it. One of the reasons their product is better than the product that Philip Marris International or Altrea came out with themselves is because they started with a completely blank slate. They didn't have a cigarette in their mind when they were doing this. It's just like, how do we get nicotine into somebody's lungs in a way that will make them feel okay and it will be kind of cool to hold? And what does that tell you about innovation? Does it, generally, in your mind, come from somebody who has nothing to do with the existing industry. I totally believe that. I don't understand why environmentalists are always yelling at the oil companies to be green renewable, Yeah, to be greener, to develop renewable energy. That's not what they do. They know how to drill holes on the ground. That's what they know how to do. Let them drill holes on the ground until you're done. So then that actually makes perfect sense to me. But then doesn't it become a problem When an Altria takes over a Jewel, can jewel maintain it independence in its fresh sense of the world world When suddenly it's a part of the oil company. I think that is always a problem. Absolutely. I mean it's kind of like what Facebook is about to do to What's app, which is basically wreck it. But because Altrea needs this product and because Jewell knows how to do this way better than Altrea does, I think it's possible that Jewel will be allowed to go its merry way and Althrea won't get involved all that much. Going into this conversation, I thought the question was whether Jewel had a broader responsibility to society. Is it okay for a company to make a lot of money while arguably producing a product that's harmful. Joe actually convinced me that there is some value and harm mitigation. But I do think there still is a really important question facing Jewel, and the question is can Duel survive given the enemies that it's made and should entrepreneurs be more thoughtful from the very beginning about who they get on their side and who they offend. Making a Killing is a co production of Pushkin Industries and Chalk and Blade. It's produced by Ruth Barnes. My executive producers are Alison McClean no relation and Megan Casey. The executive producer at Pushkin is Mia Loebell. Engineering by Jason Gambrel. Our music is by Jed Flood. Special thanks to Jacob Weisberg at Pushkin and everyone on the show. I'm Bethany McClain, Thanks so much for listening. Find me on Twitter at Bethany mac twelve

I'm Bethany McLean. This is making a killing in this show. I cut through the hype and handwringing to reframe the stories you thought you understood and uncover the ones you didn't know were important. Today, my guest is Joe no Sarah, an opinion columnist at Bloomberg. Here's how the pitch to investors went. Look, smoking hasn't evolved in a hundred years. It's literally killing millions of people. We are smokers were at risk of suffering the same fate, and we're scared. So how do we create a new ritual to replace the old one? At least that's how founders Adam Bowen and Jane Monsey's came up with their big idea for Jewel while they were getting master's degrees at Stanford. And so it is that Jewel was born, the now wildly popular, wildly valued, and wildly controversial vaping company. It's probably, as my kids would call it, one of the biggest drama lamma companies in the last year. If you could imagine Saint Peter presiding over Jewel in the way that he weighs your and your merits before you can enter the Kingdom of heaven. On one side of this morality play set people who argue that Jewell, whether on purpose or not, remains to be seen, is grotesquely addicting a whole new generation of kids who were previously non smokers. To that end, Jonathan Winnikoff, a professor at Harvard Medical School, told The New Yorker, if you were to design your ideal nicotine delivery device to addict large numbers of United States kids, you'd invent Jewel. On the other side of the morality place that people who defend Jewel as a company focused on harm reduction, arguing that vaping gets existing smokers off of lit tobacco, which is deadly, and who cares if it still delivers nicotine, the addictive substance, because hey, that's better than lung cancer. Although the public health community is loath to acknowledge it, the decrease in smoking correlates pretty straightforwardly with the increase in vaping. Jewel just closed a major strategic investment with Altria, who, of course also makes the Big bad Cowboy Marlborough. I wonder, is the lesser of two evils really the heart and soul of good business? Is that what American industry has made for or. As Fast Company wrote, if the traditional startup narrative once followed the outlines of identify needs, scale the solution, the modern version looks something more like identify a need, scale the solution, and deal with the unintended consequences and regulatory backlash. It's no coincidence that jewel like uber has become a verb today. My guest is Joe no Sarah, an opinion columnist at Bloomberg. I first met Joe over two decades ago when we both worked at Fortune. He's a friend and my co author on my last book, All the Devils Are Here. You can always count on Joe for an opinionated, although often nuanced view, and he's been thinking about this particular issue of harm reduction for at least ten years. The first time I wrote about tobacco wasn't two thousand and seven, and I did a big cover story for the New York Times magazine about Philip Mars. I remember that piece part of the process of that story was them telling me we're working on these new products. They're called harm reduction products, and I was like, what is that. I couldn't envision it, and I even went down to Richmond, to the factory. I met the scientists and I saw some of the work they were doing, and I still couldn't understand what could a harm reduction cigarette look like, what it would act like, how would it work? Cigarettes are killing four hundred and fifty thousand Americans every year. This is despite the fact that has gone from sixty percent usage in the nineteen fifties. Too, among American adults, it's under twenty percent, it's seventeen or so. It's really remarkable what's happened. Dramatic. Some years later, a product came on the market which was not introduced by tobacco companies, but by these startups that were harm reduction products. They gave you a hit of nicotine. They came in flavors, as we all know. We'll talk about that, I'm sure, but they didn't have tobacco. And the thing people have to remember about cigarettes is saying, is nicotine ad dicks tobacco kills. Back in the day before the public health community decided to attack the cigarettes, they actually used to say, if I had to trade one for the other, I would of course trade nicotine for tobacco if I could get rid of the tobacco and keep to nicotine. I would take that deal. It's a little bit like the environment in the sense that Exxon is not going to be the company that makes wind power or solar power. It's going to come from other different companies. Right. So these companies started to crop up and I got started to get interested in them, and adult smokers started to switch, not a lot, but some. The one of the reasons jewels attractive more than these other companies is that people are used to a certain amount of nicotine and they're they're used to hitting your throat in a certain way, and they're just used to it acting the way it would act in a cigarette. And the reason Jewel was originally successful is that it could do that. But it's also a very cool looking thing and it's more of a silicon valley type device, and so it became very attractive to use, which is part of the problem. Right, Well, it depends on how you define the problem. So their pitch is the original pitch of Jewel was that it wasn't supposed to be about the money. It was supposed to be about doing good, about coming up with a solution to this problem of smoking. Do you believe them. I don't think they ever said it's not about the money. I think they said we don't want to sell to kids. I don't really believe that, particularly because if you look at the early advertisements they especially what was on Twitter and Instagram, they're very oriented towards youth, no question about it. Here's the tough part. You smoking is down to about eight percent smoking, and that's a drop of over fifty percent just since two. That's an astonishing thing. As Juel, the cause of that or is it just a correlation? Well, I mean the correlation seems pretty obvious. I mean you look at the line, it kind of stalled out, and then suddenly smoking goes like that down and vaping goes bloom up. The reason you don't know that, Why don't you know that? The reason you don't know that is because the government defines tobacco use as smoking and vaping, even though vaping doesn't have any tobacco in it. The statistics that are put together by the CDC basically are about any kid who has used an east cigarette, wants or more over the past thirty days. That's what the definition is. Does that mean they're experimenting? Does that mean they're hooked. Does that mean they're going to be an addex twenty years from now? We don't know. We don't know, but I would venture to guess that a whole lot less than twenty percent of high school kids are hooked on vaping. I think it's much more likely that's a lot of experimenting going on. So why isn't the federal government choosing to help people understand the difference between smoking and vaping. Should they be doing more? I strongly believe they should be doing more. The government in Great Britain has, basically it's it's government policy to say that vaping is ninety five percent safer than cigarettes because it doesn't have combusted tobacco in it. So in America there is a kind of I'm sorry to say this word hysteria over the evils of vaping. A lot of it has to do with the history of the tobacco companies and how they hid the dangers of cigarettes, and how they were the bad guys for so long, and how they hook kids, and so now today we have this different product, but the mentality of the public health community and the government is, oh my god, it's still big back tobacco. We have to stop them, so it's historical baggage. Well. And one other thing, if I dare say, there is a view in public health that the only way to stop smoking is to stop smoking, and that vaping, because it still allows you to have this addictive habit is somehow bad. And I would argue that if you've never smoked before and you start vaping, that's not a good thing. But if you're a lifelong smoker and you smoke for twenty years and suddenly you know you have a chance to get your nicotine fixed without killer tobacco, it's a great thing. I was just on the phone with a friend this morning and I told her what I was doing, and she said, oh, I know all about Jewel. My kids are really into it. She has a junior and a ninth grader. And how do you square that side of Jewel, the fact that they did originally try to appeal to kids, and that that is a huge, some chunk of their market even if they don't break it out. Let me ask you this first, is your friend horrified, She's I'd say, moderately horrified. Is that an oxymoron? Moderate? I actually think that's the right position to have. Moderately horrified. Yeah. Yeah, it's like two of my three older kids smoked. And this is despite all the indoctrination they get in grade school and even in high school. But smoking becomes irresistible at a certain point. And you know, my daughters in her mid thirties now, and she's tried to get off a bunch of times, and sometimes she's successful and sometimes you're not. The fundament was still a smoker, and so it's my other son who's just turned thirty. I would much rather they had used jewel when they were teenagers than cigarettes. So your argument would be that jewel appeals to the kid who would have been a smoker anyway. It doesn't convert the kid who would never have been a smoker into someone who uses nicotine. That's fundamentally my argument. The problem with my argument is that the product hasn't been around long enough for anybody to know whether it moves people into cigarettes or not, or whether the use themselves wind up, you know, stopping because it's less addictive. We don't know the answer to those questions, and really won't know those answers for another ten fifteen years. So then the question is what do you do In the meantime, the impulse of the American public health community and also to launch part of the federal government, is to try and put the clamps on these cigarettes as much as possible, which you should be trying to do. Is two things at once. The government and the public health community should be saying, we have this product that addicts you but doesn't kill you. We don't want kids to use it, but we really, really really want you, the twenty years smoker, to switch to this, to try it. It's way better for you, and it works better than the patch and all that other stuff, and you should do it. What's happened instead is that everybody's saying don't let kids use it. That's bad, bad, bad, bad bad, without saying the adult smoker should switch to this. It has a bad part and it has a good part, and the government and everybody else is only the bad part. Given that the government is only stressing the bad part, and the government, it would seem to me, has the power to put this company out of business, how do you reconcile that existential threat with the thirty eight billion dollar valuation. Oh, that's a good question. I mean, the reason for that is because the market, and investors don't really believe the government will ultimately put it out of business. Do you believe the government could also that a business. I think they could. One of the things that's happened is the government has actually pulled back from some very tough regulations, I guess because it's a Republican administration and given the companies a little bit of new life. If you put them out of business, what would ultimately happen is the only company selling reduced harm products would be Philip Mars, Altria and Reynolds. And is that really what you want? How do you contrast their reduced harm products with Jewel? Is it really clear that Jewel is much better than the cigarette companies reduced term products? I believe it is. The company that has the most potent product is Philip Mars International. And I'm a little suspicious of it myself because it does have tobacco in it, but it's not combusted. It's been a huge hit in Japan. It's actually got an insane seventeen percent of the cigarette market, not the vape market, the cigarette market, right, but it hasn't really caught on anywhere else. What's also interesting is that Philip Marris International, which makes its money on cigarettes. If you go to their website, basically says we want to get out of the cigarette business. This is our future. We see this as the future. And I think another reason for jewels thirty eight billion dollar valuation is that there is a perception the world will eventually move to vaping. It's a little unclear when. So then the question about Jewel becomes is this the right time for them or is this way too early? And maybe this valuation will blow up and it will become an e Toys, maybe it will find the sweet spot and become an Amazon. Okay, here's some truly stunning numbers. The twelve point eight billion dollars deal, which all Tree announced at the end of December twenty eighteen, values the less than two year old vaping company at thirty eight billion dollars. At that point, Jewel became the fastest startup ever to reach a valuation of more than ten billion dollars, beating the pace set by tech giants Facebook and Snap by four times. Jewel is also worth twice as much as left Are, about eight billion dollars more than Airbnb and Elon Musk's SpaceX at thirty eight billion dollars. Jewel is even bigger than popular publicly traded companies like Target and Ford. Over the past year, Jewel captured about seventy percent of the total three billion dollars E cigarette market, according to Nielson data compiled by Wells Fargo's Bonnie Herzog, But that E cigarette market represented just three percent of the seventy two point eight billion in overall tobacco sales, which includes cigarettes, E sigarettes, chewing tobacco, and cigars, according to Nielsen. In other words, the opportunity is huge. What we don't know is what percentage of Jewels sales are coming from former adults smokers and what percent comes from teens, although critics would say that too much is coming from the ladder groom. Given all that you know about this market, if you had been in the boardroom when Ultrea was making the decision about whether or not to make this valuation, would you have said yes or no? I probably would have said yes, simply because all the tobacco companies are trying to get into this business. Philip Mars has more money than it knows what to do with, and Jewel is by far, by far the best product. I wrote a couple of columns about Enjoy, which at that point was a leading contender to be the best product, and Jewel just wipe them off the map in like six months. Is that because of the product design. Product design definitely has a lot to do with it. It doesn't look like anything else. It looks more like a flash drive than it does a cigarette. And kids can hold it in their hand, and adults can hold it in their hand and put it up to their mouth. You don't even see it. So it's the Apple of vaping bingo. That's what it is. And you know, Apple's got a valuation that's pretty high too. So if you had been in Jewels boardroom when they were making the decision about whether or not to take this investment from Philip Morris, what would you have said, is the risk worth it for them of affiliating with Big Tobacco. That is a problem because to this day, Big Tobacco was demonized with good reason based on things they did historically. The problem is that the vaping companies are being demonized too. So it's like, you know, why should I worry about being demonized since it's not like it's going to change anything. If we're with a tobacco company, if the country, if the government, if the public health community had been willing to make a distinction between big tobacco and little vape, then yeah, it would have been much more dangerous. But given the situation, it's like, well why not. You know, whenever you see a scientist put out a paper and he says, you know, I was aided in my res search with money from Bristol Myers or merk or something, the people on the other side say, oh, see, it's tainted. It's tainted by money from big corporation, So you can't really believe that research. But I think that ideology is as powerful a force in coming up with studies and creating studies and creating science as money is. And I think that the vaping versus anti vaping is the great case study of this, because each side says, my science is good, Your science is bad, your science is tainted, my science is pure, And if you look at them, the science on both sides has problems. See, your argument is there's no such thing as pure, not in this sphere, not in this sphere. It's interesting, there's this recent news that Jewell took the flavors that appealed to kids. They took them off the market. That's great, but why didn't they start there? Well, the reason they didn't start there is because weirdly, adults like a lot of those flavors, and that's actually turned out to be part of the appeal of vaping as the flavors. What Jewels thinking is, I think we have such a lock on the market that we can afford to do this and not lose very much market share. People may go to other devices, but they probably won't, and therefore we can do something that's good without hurting ourselves financially. I think about how this company builds itself, and it looks like how Uber or any other Silicon Valley company has worked, which is find a need, scale it, aggressively, wrap yourself in a shield of altruism and damn the torpedoes. Let the investigations and the regulations come and deal with that later. Is there a way that Jewels should have been smarter about this to get the public health community on their side from the beginning. There is no vaping company that the public health community likes, none, and there's nothing they could have done. Nothing, Well, there is they gave the public health community AMMO by doing. Those who hip Instagram ads, Yeah, yeah, that hurt them for sure, because every time somebody wants to whack Jewel, they pull those ads out and say, see, see they're marketing to kids and jewels saying, well, we're not marketing the kids anymore, and we've pulled all those ads. It's too late, it's too late. Do you believe they were marketing to kids with those ads? I don't know. You know, I'm rooting for them. I think it's important for the health of the world. You'd still argue that even though one cartridge of jewel contains the same amount of nicotine as an entire package of cigarettes. So to me, that's a red herring because nicotine doesn't kill. If you took all the nicotine out of cigarette and still had combustible tobacco, it would still kill you if you smoked it. So maybe part of the problem is this confusion in all of our minds between nicotine and tobacco. Absolutely, and this is another place where the federal government could really help. Don't forget. Under the law, none of the vaping companies are allowed to say this is a healthier alternative to cigarettes. They're not allowed. You have to get FDA approval to say that, and it's a long process and most of them can't afford it, and they might not get it anyway. So they're not allowed to say we're a reduced risk product that they're not. That's actually stunning. So the federal government is in control of saying what's reduced risk and what's not. And the federal government has chosen not to do that. And why is the federal government chosen not to do that? Are they too influenced by the public health community. Yes, they absolutely are. The public health community believes that abstinence is the only answer. And there are a few outliers in the public health community, and they're really interesting outliers as ken Warner, who's an economist at the University of Michigan, very highly respected. The former president of the American Cancer Association is pro vaping. But they're the outliers. And when Scott got leave, the head of the FDA makes a speech, he'll mention reduced risk and it's importance and so on. But they have never done anything to promote that idea, and they have never allowed the vaping companies to say they were reduced risk. And part of the reason is they say, look, we don't have the science. We don't really know. You know, maybe twenty years from now the stuff will turn out to be horrible for you. Has duel made an effort to cater to this community, to get people in the government on its side if they can never convince the public health community, is there a government path? By and large, the public health community won't speak to anybody in the industry. They won't speak to anyone in Philip Mars or Altaria. They want speak to anybody in the vaping community. You know, alternatives speaking alternative here and now. Alternative said, yeah, exactly. The federal government is trying to figure out how to regulate them, and they're busy making comments and there's all that kind of formal back and forth. But they really have no ability to go into the government and say, could you think about this in a different way. Congress doesn't really have much to do with it. Not since the tobacco legislation was passed in the mid nineties, Congress has lost interest in the topic. What about this idea that it's the less or of two evils? Coming back to this notion that that's how Jewela is set itself up. Is that good enough? Or should a company aspire to more than that? It is good enough. One evil is to die. The other evil is at its absolute worst, to be addicted to a substance. That's basically like supercharge coffee. I'd take supercharged coffee. We don't even know whether vaping truly addicts the way cigarettes addicted. We don't even know that yet. You know, all these use who are using jewel now, are they going to use it when they're twenty one? Are they going to use it when they're twenty five? Are they going to use it when they're thirty? We don't know. I want to come back to that notion that you've talked about about harm reduction, about this idea that vaping is okay if somebody who was a smoker starts to vape, it's not okay if somebody who has never smoked starts to vape. How do you think about that? Very easily? Harm reduction is a widely accepted technique in public health. You know, if you've never shot up to done is a terrible thing. But if you're a heroin addict, methadone is a huge improvement. Right, it won't kill you. It's the same thing cigarettes will kill four hundred and fifty thousand Americans every year. We don't know the dangers of vaping, but it's hard to believe that it would have that kind of impact given that there's no combusted tobacco. Combusted tobacco has the carcinogens that kill people, not the nicotine. Right. But though we don't know the danger is of vaping is what's terrifying to every parent of a teenager, right. I think that's true. But I think if you told the parent, look, would you be happier if your kid was smoking a cigarette? I would hope they would say, no, that's worse. Let's come back to this notion the lesser of two evils, and that's how Jewell has set itself up. Vaping is less evil than smoking? Is that? Do you think what a corporation should aspire to the lesser of two evils? I think if a corporation is setting itself out to say we want to be the replacement for smoking, I would say, yes, that's worth aspiring to. I mean the United States, you know, a fifth of the country still smokes amazingly, even after every fifth adults. I'm talking about adults. I think that's about right, twenty percent, maybe a little less eighteen or seventeen. But I just saw a statistic that there are one hundred million smokers in India. Wow, and think about how many smokers there are in China and Russia and Poland and hungry places where people really smoke a lot. And if somebody could say, I have a product that will satisfy your craving for nicotine, but you won't die from it, I don't view that as the lesser of two evils. I view that as a product that could really help save a lot of lives. So you'd see the lesser of two evils as a false dichotomy in this particular case. Yes, again, it depends a fifteen year old high school kid. Yes, it's the lesser of two evils, smoke or vape. Yes, an adult smoker. It's not the lesser of two evils. It's potential salvation. So are there any problems with being cooked on nicotine? You will liken it to a giant cup of coffee, right, I do, which I'm not sure everybody would agree with. But they complain about Now what you read now is that it can be harmful to the brains of teenagers. That's what they say. But if that were true in a real sense, then all the people who smoke cigarettes all those years would be brain damaged. And that doesn't appear to be the case. Who says it would be harmful to the brains of teenagers? Where is this coming from? You see it in public health stuff, and there's a glimmer of it once in a while. You see the CDC kind of mentions it in passing. When people complain about the harmful effects of vaping, they don't really talk about the nicotine per se. They talk about the ingredients in the juice, particularly apparently there's a trace of fmaldehyde and some of thatmaldehyde. Yeah, but you know, it's like one of those things that's all around us. The question is how much. Don't even look too closely at your cup of coffee exactly. And then, of course there's the whole issue of the flavors, which is another entirely interesting argument, because the public health community says, with some validation, some of these flavors like bubble gum and so on, are directly aimed at children, but a lot of adult vapors say, you know, I like the flavors and I'll be very unhappy if they take the flavors away. Are there benefits to nicotine? Well, I mean every writer you ever saw in the nineteen sixties and seventies has a cigarette coming out of their route. I mean it makes you more alert. Is that what's gone wrong with journalism? It could be it makes people more alert, it helps their short term memory. I mean, it actually has benefits. You know, I'm not saying you should get addicted for that reason, but it does. And on the notion of addiction, we're criticizing to all for potentially providing an addictive product. And yet there are many people who would argued that social media is addictive, and yet we don't criticize, or at least we haven't until recently, criticize the social media giants for the addictiveness of their product. Would you argue there's a double standard there, I would. The difference is that Jewel acknowledges from day one that it has an addictive product, and Facebook and Google and the other social media companies have never acknowledged that and don't to this day, even though it's it's very, very true so at least Jewel isn't hypocritical. If the company's core mission is to get people addicted to its product, that means its core mission is to get people addicted to nicotine. Yeah, how is that? Okay? The society has been brainwashed into believing that nicotine is as bad as tobacco. So what Jewel will say is, we're not trying to get people addicted to nicotine. We're trying to get people who are already addicted to use a different form of ingesting their nicotine. That's what they're saying. And given that, you know, a fifth of the country or something like that smokes, that's a heck of a big market. It's not an infinite market, but it's a heck of a big market. And now then you say, well, what happens twenty years from now or thirty years from now it really catches on, then you're going to bump up against these issues of what are kids going to do? Or is the company's market cap going to shrink and shrink and shrink because fewer people are using it? Right? But I want to push you on that because when in all your years of covering business, have you seen a company that is really content just to say, this is our existing market as it's defined. Our existing market are the people who are already using tobacco. We're not going after any new market, and we never will. Have you ever seen a company not do that when the opportunity presents itself and when the bottom line is at stake. No, right, Okay, no, this is where the federal government should come in. But the world has been handed a great opportunity because now there's a product that exists that can, for the most part, satisfy the cravings of smokers around the world, not just in the US. There are a lot of smokers around the world. A government that jumped in early on this business and said we are going to try and regulate it in a way that keeps it confined to this universe of people who already smoke would be doing a remarkable thing. And it's the government's job to put limits on what companies can do and who they can sell to, and so on and so forth. That's why we have government. I don't expect Jewel to say, if you non smoker want to try our product, we don't want to give it to you because you don't smoke. I don't expect Jewel to say that, but I do expect the government to find ways to discourage that person from crying Jewel. So the company should do what a business should do, and the government should provide the guardrails. Essentially, yes, absolutely so, more broadly than Jewel. Putting Jewel aside for a moment, asking this larger question about the role of business in society. If a company like Jewel is making a lot of money, is that what its goal should be or does a company have a larger responsibility beyond that? Well, you know Howard Schiltz says they should have a larger responsibility, and he's running for president. But it hasn't worked so well when Starbucks has tried to do that. Right, it has in terms of how he's dealt with his employees, but it certainly hasn't when he has tried to single handedly man race relations. People who work for companies want to feel that they have a sense of mission that transcends dollars and cents. I think that's really true for most people and for most companies. I think a lot of the stuff that companies do that is characterized as socially responsible as bs and my favorite example is Ford. When Bill Ford was the CEO, he retrofitted their factories so that they were completely green. They were the most environmentally friendly factors in the world, except the way he made his money was by selling trucks gas guzzling trucks. That was Ford's biggest product. I'm skeptical of social responsibility, but on the other hand, I do think companies ought to care about more than maximizing profits. I do believe that they should support the communities in which they exist. I think they should not expect their employees to need food stamps. It's one of the things I find so fascinating about the dual debate is it does shed a slightly different light on this question, which is so relevant to where we are Today's what is the responsibility of a business, whether it is broader than the Milton freedmen esque idea of just making profits. And yet, as you say, when we see companies that position themselves as being about something else, it's usually just so much be us layered on top of a profit motive. A good way to think about this is the farmer industry. Twenty five years ago. The farmer industry did not view maximization of profits as their sole goal. One consequence of that is that you didn't see these huge run ups in drug prices. On an annual basis. Insulin would remain the same price for twenty years. And Mark famously helped care blindness in Africa right by providing a drug low costs. Don'ta salt wooden patent, the polio vaccine. Now farmer companies are totally about maximizing profits, and it has been horrible for society. Drugs are expensive and even when you can afford the co pay, your insurance company is picking up a big tab and ultimately we are all paying for their share price. Right, But the devil is always in the details. Right in terms of how you parse this argument for any individual company, Yeah, well, you're right. You can't be Murk and care about you know, low prices when Fizer doesn't, and you can be Jewel and sell a product that is arguably harmful or arguably somewhere in the middle, but makes a great deal of money for its investors. One of the reasons Jewels interesting to companies like Altrea and also you know in the press, is because they don't come out of the traditional cigarette industry. They are classic Silicon Valley people technologists, and that's how they approached it. One of the reasons their product is better than the product that Philip Marris International or Altrea came out with themselves is because they started with a completely blank slate. They didn't have a cigarette in their mind when they were doing this. It's just like, how do we get nicotine into somebody's lungs in a way that will make them feel okay and it will be kind of cool to hold? And what does that tell you about innovation? Does it, generally, in your mind, come from somebody who has nothing to do with the existing industry. I totally believe that. I don't understand why environmentalists are always yelling at the oil companies to be green renewable, Yeah, to be greener, to develop renewable energy. That's not what they do. They know how to drill holes on the ground. That's what they know how to do. Let them drill holes on the ground until you're done. So then that actually makes perfect sense to me. But then doesn't it become a problem When an Altria takes over a Jewel, can jewel maintain it independence in its fresh sense of the world world When suddenly it's a part of the oil company. I think that is always a problem. Absolutely. I mean it's kind of like what Facebook is about to do to What's app, which is basically wreck it. But because Altrea needs this product and because Jewell knows how to do this way better than Altrea does, I think it's possible that Jewel will be allowed to go its merry way and Althrea won't get involved all that much. Going into this conversation, I thought the question was whether Jewel had a broader responsibility to society. Is it okay for a company to make a lot of money while arguably producing a product that's harmful. Joe actually convinced me that there is some value and harm mitigation. But I do think there still is a really important question facing Jewel, and the question is can Duel survive given the enemies that it's made and should entrepreneurs be more thoughtful from the very beginning about who they get on their side and who they offend. Making a Killing is a co production of Pushkin Industries and Chalk and Blade. It's produced by Ruth Barnes. My executive producers are Alison McClean no relation and Megan Casey. The executive producer at Pushkin is Mia Loebell. Engineering by Jason Gambrel. Our music is by Jed Flood. Special thanks to Jacob Weisberg at Pushkin and everyone on the show. I'm Bethany McClain, Thanks so much for listening. Find me on Twitter at Bethany mac twelve