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I'm sure you've seen them somewhere before. Maybe you saw an ad at your local bodega. Or maybe you walked past them as they were sold at a mall kiosk.

Electronic Cigarettes.

Electronic Cigarettes, or E-Cigs, are a niche product in a growing market. The first time I saw an e-cig I couldn't help but laugh to myself. They just seemed so dumb, for lack of a better word. Imagine my complete and total surprise when reading a recent Bloomberg article that pegged the market for e-cigs at $300 million in 2012, with it predicted to grow to $1 billion in the next three years.

Now before I proceed, I want to be clear, this isn't a post about the wonders of the e-cigarette market. Rather, it has two focal points:

1.) Many people are too quick to be myopic and skeptical about the work and ideas of others

2.) It doesn't matter how silly a business idea may sound to you. What matters is that there exists a market for the product / service and a means to provide the product / service profitably

When I read the article on e-cigarettes, which is a pretty eye-opening read for someone who is both a non-smoker and an e-cig skeptic, it made me think of an interview that recently ran here on WSO. DonVon's interview with an ex-banking analyst who founded ThePillowPocket.

Why? Namely, because the same immense skepticism and attitude I had toward e-cigarettes was showcased in some of the responses to the idea behind ThePillowPocket.

Now, I'm not saying that the market for Pillow Pockets is going to explode and rival that of the e-cigarette market. Rather, I'm saying that it's foolish to knock any business that serves a market, assuming it's doing so legally and ethically. There may be legitimate questions about the product and the business model, but it's better to ask them to gain understanding instead of trashing the product outright because it doesn't suit your sensibilities.

It's far too easy, especially if you're in the bubble of high finance, to sit back and forget that there is an entire world of tastes that differ from your own. Instead of knocking a product idea because you wouldn't buy it, try instead to think about who would buy it. And, if a market legitimately exists, then think about how it could be served profitably.

Now, I might still personally find e-cigarettes to be stupid, but who cares? They aren't being produced for me, but for the millions of people who are looking for a safer alternative to traditional cigarettes. People are far too quick to hate on the ideas and work of others. It's a lot easier to criticize than it is to create something. Rather than hating on something, try and analyze and understand its potential merits.

When you're going down the Path on your way to Finance greatness, it's hard to imagine a way to make a living outside of banking, consulting, PE, or hedge funds. But, something I learned from my time in banking and PE, thanks to putting together countless pitches and reviewing hundreds of CIMs, is that there are literally millions of ways to make money.

Once you realize that and train yourself to drop the hater-first mentality, you'll open yourself up to a world of possibilities. Want to start a business but don't have any ideas? Open your mind. Spend some time reading and studying things that are outside of your usual comfort zones and areas of interest. Learn about something new and you might just come up with an awesome profitable idea that you can work on in your off-hours. But, as long as you're of the mind-set to dismiss out of hand instead of analyzing it critically, don't bet on coming up with any great ideas.

On the flip side, for companies like GroupOn, businesses that do more harm than good to their partners, that are built more on hype than anything else, and that have seedy management, bash away. My point is that it's important to have an open mind and to analyze the topic at hand before dismissing it.

Or else you'll risk doing as I did with e-cigarettes and completely dismiss a billion dollar market.


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Comments (22)

  • WallStreetOasis.com's picture

    So true. I thought the exact same things when I heard about e-Cigs but have been seeing a lot more of them lately so people must find value in them. Again, not my idea, but must be making some people a lot of $s or they wouldnt be around :-)

  • accountingbyday's picture

    I've seen them a LOT in certain poker rooms. The poker rooms don't allow smoking, but do allow e-Cigs.

    They seem ridiculous to me as well, but someone is rich from the idea.

  • Nefarious-'s picture

    I saw some fuckhead in the gym the other day with one. Like, smoking it between sets.

    You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.

  • wolverine19x89's picture

    lol I was actually pretty excited when I heard about them... I guess you have to be a smoker that realizes that cigarettes are f#$#@ing bullshit. I bought a Vapor King brand of e-cigs.

    -healthier than real cigs (my only pro, but that's a biiiig pro)

    -I have to buy the refills online... if I could go to the store and pick some up I'd still be using it instead of smoking real cigs.
    -you're not going to get the real taste of a cigarette... I know real cigs actually taste horrible to non-smokers, but when you're drinking, nothing hits the spot like a Marlboro.
    -no long-term medical research on the side-effects... big con to me, I don't like ingesting experimental stuff.

    there are a looot of different flavors you can get, so I guess that could be a pro, but I just stuck with the menthol flavor that tasted like mint.

    smoking it between sets does seem weird, but it shouldn't actually have a negative effect on your lungs. I've heard that the stuff inside of the liquid used to fill them up is what's found in inhalers (just not as strong of a "dose").

    If your dreams don't scare you, then they are not big enough.

    "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

  • Going Concern's picture

    Haha, need some e-juice for your e-cigs so you can live your e-life. For some reason reminds me of 2001 A Space Odyssey where instead of food they're gobbling up this colorful paste that's easy to scoop up.

    "He who fights with monsters should be careful lest he thereby become a monster. And if thou gaze long into an abyss, the abyss will also gaze into thee."

    "Life is infinitely stranger than anything which the mind of man could invent."

  • wolverine19x89's picture

    Yeah, I'm ahead of you guys. Get with the times. Geeze.

    If your dreams don't scare you, then they are not big enough.

    "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

  • Underground's picture
  • AndyLouis's picture

    no e-cigs down here, ha they still have old fashioned cigarette vending machines (didnt those go away in the early 90's? except for bowling alleys I guess).

    good points on people jumping to conclusions and being skeptical, so many niche profitable products out there where the idea may seem absolutely silly to one person, but extremely useful to another

  • Kenny Powers's picture

    i'll never give up the real thing and i know im not alone.

    My drinkin' problem left today, she packed up all her bags and walked away.

  • sandsurfngbomber's picture

    Hahaha. I fucking lost it at the "smoking at gym" comment.

    My chain-smoking buddy actually bought these and was all stoked about quitting. Less than a week later he was back. According to him these taste like shit and he would have to smoke all day to get a similar effect

  • wolverine19x89's picture

    The stuff I was getting from Vapor King had various amounts of nicotine per "dose" or whatever and a lot of different flavors. Like I said though, it's not a cigarette...

    If your dreams don't scare you, then they are not big enough.

    "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

  • In reply to down on the upside
    gstackle32's picture

    down on the upside:
    I vaguely remember e-cigs being brought up as RJR Nabisco's future in Barbarians at the Gate, it sounded like the only person who thought it would go anywhere was Canada's own Ross Johnson, could it really be making headway in the 21st century?

    As I recall the main issue RJR had was that their product was poorly made (hard to inhale) and tasted like shit. I'd say there has been some headway made in the technology. That being said, until they have some long term study on the effects of inhaling liquid nicotine I'm skeptical how big the market will grow due to the FDA or some other agency stepping in.

  • ladubs111's picture

    i remember back in 2005-06ish i met a guy that wason those e cigs. He said he liked them cuz he could smoke at work and not have the cig stench.

  • In reply to wolverine19x89
    duffmt6's picture


    -no long-term medical research on the side-effects... big con to me, I don't like ingesting experimental stuff.

    This is kind of hilarious, coming from a cigarette smoker. As far as I can tell it seems like you are saying that if the long-term medical research definitively says a product will kill you, it is better than a product that doesn't have any research on it.

    "For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."

  • Febreeze's picture

    problem with the e-cig is, it takes the element of "cool" away from smoking. you can't flick it to the side as you're walking away, when you're finished. it's the closest thing to walking away from an explosion without looking back.

    seriously though, i just don't like plastic in my mouth. it's weird.

  • Edmundo Braverman's picture

    They just opened an e-cig store downstairs from my apartment about 8 weeks ago. My initial reaction was WTF? Now I see a line out the door every time I look out my window. The French smoke a fuck-ton of cigarettes. These things are taking off like a rocket here.

  • cphbravo96's picture

    While I share the same view that e-Cigs appear silly, it's pretty easy to see that this would certainly catch on. Think about how many people, in just this country, smoke. Then think about the push to ban/outlaw smoking. Most people outside of high school don't smoke because they want to look cool, they smoke because either (a) they like it and want to or (b) don't like it but can't quit.

    I've never actually smoked before so I can't claim to be an expert, but coming from Florida...a place where smokers receive harsher reception than child predators...it seemed rather obvious there was a substantial market for this. Most places in Florida, and increasingly more across the US, have banned smoking from their premises...the most relevant one being restaurants, airports the other. The e-Cigs offer an alternative for these folks that need or want to smoke and the device eliminates some of the 'evidence' that leads to potential ridicule. That all seems like a 'win-win' to me.

    The pillow pocket, on the other hand, seems like a tougher sell in my book given the many reasons someone would not purchase one...the existence of bedside tables, the need to charge the phone, the need to match the color and quality of the sheets (although they could use this under their normal pillowcase), etc.

    At any rate, I do think you are right...people should be less skeptical about ideas, especially those that aren't their's. I've notice that I can be a real pessimistic when contemplating potential business ideas...likely a result of my inherent risk adverse nature and my incessant need to over analyze everything. And don't get me wrong, I think playing devil's advocate can certainly serve it's purpose, I just have to wonder how many potentially successful business ideas or dreams were never put into action because of pessimism? Surely a lot.


    "The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so."
    - Ronald Reagan

  • In reply to duffmt6
    wolverine19x89's picture

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    If your dreams don't scare you, then they are not big enough.

    "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

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