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Ploom Pax Could Be The IPod Of Tobacco. But Marketing It Is A Battle

The Ploom Pax may be the iPod of vaporizers, but how do you sell a product that’s so hard to fund and market?

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It’s built of anodized aluminum and fits right in your palm. It features no physical buttons, yet is easy enough for your mother to use. A magnetic latch makes the trickiest mechanism a snap. And of course, it comes in three colors.

It’s not the latest iPod. It’s the Pax, a $250 electronic cigarette replacement from a young company called Ploom. Out in August of this year, the Pax accepts any loose leaf tobacco (or recreational herb), and within 30 seconds, transforms it into a puffable, smokeless vapor.

Sparked in 2004 by a pair of Stanford students as a graduate project, Ploom released their first e-cigarette a few years later. To this day, their modelOne has just a few thousand loyal users worldwide—a number easily tracked through the purchase of its proprietary tobacco pods—but Ploom has never called it more than a "beta" product. (And they, themselves, call their tiny operation a skunkworks project.)

The Pax is their swing-for-the-fences product, one that Ploom hopes to distribute to almost every country in the world with the help of the third largest tobacco company in the world, Japan Tobacco International, who recently purchased a minority stake in the company.

You see, despite health warnings and regulation, tobacco use is growing worldwide. It’s a $600 billion market, "but in that large of a space, there are very few options in tobacco," Ploom co-founder James Monsees points out. Pre-rolled cigarettes, chew, and loose smoking tobacco don’t begin to compare to the myriad of options offered by other large markets, from cell phones to household cleaners.

Within tobacco, the e-cigarette niche is a strange one. Its earliest days were actually driven by investment from the Chinese government (the tobacco industry is state-owned in China, and the country houses 350 million smokers), who no doubt hoped its rising, tobacco-craving population could be weaned to less-pollutant (arguably healthier) vapor. And maybe as a result, most e-cigarettes are silly facsimiles, toy-looking tobacco products that glow with fake embers when you inhale. "It’s a very literal interpretation that I think is far from a real tobacco experience," explains Monsees. "We don’t think that’s the way to go."

To Ploom, there are two big unsatisfied groups in the tobacco community who’d be potential customers for a designer smoking experience. The first is what they call the "sometimes smoker," that person who doesn’t usually buy cigarettes, but always bums them at bars. And the second is the "conflicted smoker," the smoker who feels ostracized for their habit but isn’t changing it.

"There’s no excited smoker?" I ask. "There are some. But at least in California, that subset’s diminishing," Monsees laughs.

Their approach makes sense on paper: Don’t copy the silly fake cigarettes. Make a premium electronic device—a lustable gadget—for people who want a cigarette but don’t necessarily want to be associated with cigarettes. "Cigarettes have been around for a very, very long time. They’re a really successful product category," says Monsees. "They have a lot of value to people, but also a lot of baggage." Ploom’s challenge now is to capitalize on the "value"—a pretty decent euphemism for an addictive, carcinogenic stimulant—while navigating the "baggage"—not just the market’s outlook on cigarettes, but health concerns that have reshaped laws and even investment practices.

If a pair of Stanford grad students approached most VC firms in the Bay Area with a potentially disruptive product in a huge global sector where coming in 10th place can still mean billions in profits, they’d invest in a heartbeat. But for all Pax’s well-honed ease of use, investors have proven few and far between. "Most venture firms have a charter that limits the kinds of companies they can and can’t invest in. As it turns out, most of those charters are set on similar templates, and most of those templates say that tobacco investments are not allowed," Monsees explains. "So traditional venture investment was generally difficult or off the table to us."

Ploom found funding in angel investors and private groups, but even solid funding and a well-made product can’t possibly ensure success in this space. Assuming the public loves Pax—assuming Ploom is right about the need for diverse products in the tobacco industry and the appeal of a premium vaporization device—tobacco products are banned advertising on TV (in the U.S., at least, since 1971). Then, the 2009 Family Smoking Prevention and Tobacco Control Act (PDF) placed even more limitations on marketing tobacco products.

But here’s where things get interesting: Pax isn’t a traditional tobacco product like a cigarette; there’s no tobacco inside. It’s just an electronic device, so the current FDA mandates on tobacco advertising actually don’t apply to them. Whereas Marlboro couldn’t sponsor the NBA Finals because of current regulations, technically speaking, Pax could. It’s a massive opportunity to market where the competition can’t.

Yet Ploom is passing on it, officially stating: "It is our intention to create the trustworthy brand in the tobacco space, including in the eyes of regulatory agencies like the FDA. Exploiting loopholes is not a good way to foster trust and goodwill particularly among regulatory agencies."

To ignore this marketing advantage is a crucial business decision that could affect the company’s long-term success. But even if Ploom could advertise the Pax itself, they probably couldn’t advertise the Pax’s biggest draw anyway: that less carcinogenic compounds are produced through vaporization than combustion. Despite the company’s "extensive testing" on the chemicals outputted by their vaporizer, they’re banned from, not just advertising that information, but even disclosing any potential health benefits to consumers within their own informational materials. Regulations are such that you can’t make health claims about tobacco (other than that required Surgeon General’s warning that it’ll kill you, of course).

People know cigarettes because they’re an established industry. People know e-cigarettes because they’re a media novelty. But do people, beyond marijuana enthusiasts, maybe, know vaporizers? If the public doesn’t know your product and has little opportunity to learn about it, how can you possibly sell it? Somehow, you’ve got to get people trying it out.

I’ve sampled vaporizers before, but I’m not a smoker—not even a "sometimes smoker," since my college days at least—but during a particularly beautiful sunset on Chicago’s Lake Michigan, I pull the Pax from my pocket to give it a whirl. It’s a hefty little thing that I’d pre-filled with some sweet tobacco Ploom had sent me for testing. The loading process was extremely simple. I just stuck a pinch into its basket and secured it by replacing the back panel, which snapped straight from my fingers thanks to some tiny, powerful magnets. I clicked on the mouthpiece like ballpoint pen, an LED lit up and, within 30 seconds, the Pax grew warm in my hand.

I took my first puff, tasting the faintest bits of fruit and toast. I took a second, deeper, with more flavor and a whisp of white on my exhale. Then I took a deep drag. And despite a complete lack of smoke or burn, I coughed like an amateur. I’m guessing this is pipe tobacco I’ve got, not really meant to be inhaled.

Within a few minutes, I find a balance. The visceral feeling was nowhere as satisfying as a cigar or a cigarette, and the taste was nowhere as rich. But I had to admit, the flavor of the tobacco vapor matched its natural smell—unlike cigars I’ve tried that smell amazing out of the box, but turned to regretful burnt garbage in my mouth. The vapor quality itself seemed on par with tabletop machines I’d tested in the past, and this gizmo fit right in my pocket—as a smokeless THC delivery system, it’d probably be fantastic. (Just saying!)

Strolling through an upper-class neighborhood, down the same streets wealthy retirees often puff giant cigars without a pang of guilt, I find myself remarkably self-conscious, hiding the device between drags. I’m worried the strange pipe will insinuate, not that I’m smoking tobacco—I couldn’t care less about the tobacco stigma—but that a cop or neighborhood busybody will assume that this metal pipe in my mouth is delivering some more illicit drug that requires their investigation.

Despite the premium black anodized aluminum and hypnotic LED—surely, a vaporizer worthy of Batman—all I can think is that I’d be so much more comfortable smoking one of those gaudy glowing cigarettes right now, or better still, the real thing. And in more than one sense, what a horrible thing to think.

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