I am founder of blu eCigs Jason Healy I sold my business for 135 million dollars - AMA!

This is gonna sound like a backhanded compliment, but thank you. I bought one of your e cigs at walgreens and it helped me move on to better PV's, courtesy of /r/electronic_cigarette. I've been smoke free for 4 months now.

I like backhanded comments.... its the Australian way!

Will you encourage business owners to put money into educating the public on ecigarettes and lobbying to prevent it from being over regulated?

If so, what plans are there?

If not, how can we prevent misinformation from making this product look worse than it is.

I know blu is putting a large amount of resources and money into education and in particular the education of public officials. These are the ones that scare me the most as they are making the quick snap judgments. The general public is being very thorough and getting the facts

I started using electronic devices only a few months ago. One of the things that helped me most was a reddit sub http://www.reddit.com/r/electronic_cigarette/

Would you consider reading and contributing to this sub occasionally? I almost feel like this sub is beta testing in a way, the amount of help and information shared is great. I know i would not have gotten this far without them.

I would but keep in mind I have the worst attention span. Even for this thing there is someone from blu sitting next to me at my home keeping me focused!

How did it feel to make your fist dollar in business?

edit:took me ages to work that one out.

I'm not into fisting but each to their own

Hey you never know, that could be the ticket to your next 100 million!

Good point! I like the cut of your jib!

If you need an advisor, I would be more than happy to help you with your fisting services, from a business standpoint of course.

LOL nothing like fisting to bring people together. Let me guess you'd be in all the way??

I am a hard working, motivated person who always gets elbow deep into his work.

LMAo I have a second knuckle rule!

yea, better stick to consumer products :) In a not so serious note while I have your attention. I am and IT professional only a year out of college, start something up and hire me, you can pay me ecigs and peanuts, no fistings please (ok I will consider it if its critical to my job). Consider this anonymous internet post as my resume.

See people this is how you network.

This is definitely how you network with an Aussie with short attention span! Well done mate!

What is the cancer risk with ecigs?

THis is largely unknown in cold hard facts but from what we do know the signs are extremely promising. Even if you look at the fact that ecigs are not combustion and are not burning an organic plant. That is where most the nasty stuff happens for tobacco cigarettes. More and more tests are being done and the more that are done the more positive it is

Many current vapers are dismayed by the "you can 'vape' anywhere" marketing claims/push by companies like Blu and Njoy.

• The Blu disposable page says Beat the smoking ban: Smoke anywhere, even indoors.
• Courtney Love Njoy commercial (youtube)
• Alternacig infomercial (youtube)

What are your feelings (personal and/or "blu's") about vaping in places where smoking is not currently allowed due to federal/state regulations? Is it truly acceptable to "vape anywhere"?

/r/electronic_cigarette

I think it's generally stupid to ban the use on ecigs where traditional cigarettes are banned. Its part of the product and industry where we see a little rebellion and I think that's a good thing!

Great question. I hope he answers it.

I'm honestly surprised no one's asked about the 1 disposable = 2 packs claim; I never used disposables so would feel disingenuous asking, but it's the biggest lie/turnoff re: "drugstore" type ecigs.

/r/electronic_cigarette

Its related back to puffs rather than nicotine. The tough part is for every user of ecigs there is a different way of using them so the math changes. Its the great part and the challenge in marketing the products. We try to underestimate the comparison but at the end of the day people will find the comparison will not meet their expectations

When you sold to Lorillard, supposedly one of their prerequisites for the sale was that you settle with Ruyan over a patent they had for an electronic cigarette. Ruyan's patent however only covered piezo-electric atomizers. All other e-cig manufacturers had switched to using heating coils in their atomizers which they believed were not covered by Ruyan's patent. Philip Morris had a prior patent for an e-cig from 1993. This more closely resembled the e-cigs other manufacturers were now making but it was out of date.

In fact Ruyan had previously failed in a Chinese court to stop an e-cig manufacturer (Cixi Ecig) from continuing to sell e-cigs all apart from one model which had a piezo-electic atomizer. Were you and Lorillard aware of this case? Did you or they think Ruyan's patent actually had merit? was it more of a precaution?

Are you following any current e-cig cases, I think Ruyan still might have ongoing one against a number of other e-cig businesses in the US.

Did you offer any support to Njoy and Smoking Everywhere when they fought the FDA?

Lorillard did not require a settlement and no I did not contribute to NJOY and Smoking Everywhere

Did you know that Ruyan (Dragonite) issued a press release claiming that you settled with them?
http://www.tobaccotoday.info/2012/04/23/blu-cig-settles-with-dragonite-and-dragonite-gets-new-patent-issued/

The Board is also pleased to announce that the Plaintiff has executed a settlement agreement with defendant BLEC, LLC which provides for the payment of monetary compensation to the Plaintiff. A request for dismissal without prejudice of defendant BLEC, LLC from the case will be filed in due course

What do you make of this?

I did settle but it wasn't because of Lorillard

Can you tell us why then? Really would appreciate an answer to that.

It was simple and easy mathematics, spend a fortune to prove a point or be done with it and get on with developing the product and brand

Does blu have any plans to expand past the cigalike type ecigs it currently markets into larger batteries with more power (for longer life between recharges and more vapor), and/or liquid dispensers (cartomizers, clearomizers) that have more capacity?

Will standalone liquid available from blu?

/r/electronic_cigarette

I don't think so as I think liquid may be a point of contention when it comes to regulations

Is it blu's position then that prefilled cartomizers will not be a "point of contention" re: FDA regulations?

Cartomizers will still need to be filled with a liquid, be it available separately or not.

(For those reading along + not familiar with "cartomizers"... they are a hollow metal tube with a coil that heats up inside; the coil is surrounded by a "filler" material and saturated with liquid. The cartomizer is attached to a battery which powers/heats up the coil, vaporizing the surrounding liquid into inhalable vapor.)

/r/electronic_cigarette

Yes you are correct. I believe regulations will require pre-filled carts made in a controlled FDA approved environement

blu is concentrating on better technologies and keep the size down. We'd rather give a better experience in the smaller size than get bigger and bigger

We'd rather give a better experience in the smaller size than get bigger and bigger

Can you actually do that though? There are limitations based on current battery technology without making it prohibitively expensive.

You wouldn't have thought watching video on a cell phone was possible just a decade ago

What is the future of eCig regulation in the US? What role will big tobacco play?

Sorry I missed this one. I think big tobacco will play a large role in the future because they are entering the market and when you look at we are stealing their customers LOL. It's smart business for them to get involved plus they have tremendous experience with regulations and the government

Tough to say anytime you are dealing with a government body but I think they will be largely positive. I believe the FDA see's the huge potential in ecigs so they will make their regulations to ensure maximum responsibility for manufacturers

Thank you for the alternative that I use on occasion! I wish they were not as heavy!

Glad you enjoy your blu. The weight is due to the batteries and while some make them smaller so therefor lighter but in my mind that can be a bit of a rip off. I'd rather get more time out of it than compromise for the weight

I honestly like the slightly heavier feel, gives me something to grip onto (no homo) and doesn't feel all fragile-like.

I laughed at a friend who complained about the weight of his ecig, then pulled out his Galaxy Note2 with extended battery... Some people...

So what your saying is size matters??

Do you see LO trying to push for legislation that will make them or the other big brands the only avenue for purchasing e-cig/supplies? I was on board with big tobacco helping push legislation through that would help us vapers, but now I feel like they are going to do the same things they did with tobacco, creating a scenario where the current vendors (mainly mom and pop) shops will be run out of business due to the costs of obtaining certain permits.

crickets

/r/electronic_cigarette

sorry mate, I thought I answered this in other posts. I think business will always push what is good for them but at the same time you have to pick your battles. Would you rather ecigs as a whole disappear or give on some aspects to keep the industry alive

so what do you do now with all of that money? what other businesses are you trying to get into? how old are you?

I largely haven't changed my life, I'm a home body at heart, some would say recluse LOL. But I am a watch and car freak so there have been some cars and watches. I'm 38 years old. No new businesses yet, I still consult to blu and love working with the team there.

do you drive a lamborghini or ferrari?

I've always been a ferrari and porsche guy. Lambo's aren't as fun to drive in my opinion. I also love classics, being from Australia, American muscle cars are pretty cool for me

I like the questions about cars and fun stuff!

What's the most expensive thing you've bought after the sale?

Definitely a car, love my cars

Dude, tell me about your watches. I'm a theoretical watch freak, so to speak. Though funding is very limited, I like to learn as much about them as I can.

I have 36 watches. Only about 5 are expensive. I just like interesting cool watches and its not about how much they cost. I have ones I got as a kid even

Is Stephen Dorff nice in person?

Dorffman (as I call him) is a great guy, he and I talk regularly and he's become a good mate. Very genuine and straight forward guy. We both have ADD so my wife thinks its funny when we are together. Like two kids hopped up on pixie sticks!

Have you ever tried one of the larger PV's? And if not, what do you think about the emerging culture of people who vape?

I have and I think it's awesome, smoking is about freedom and choice and so you have to embrace that!

Awesome, thanks for the reply. People may knock you, but its undeniable you were instrumental in the popularization of ecigarettes and PVs in general.

Thanks mate, appreciate that. I think ecigs in general are great and I'm happy to see the industry expanding, not just blu

When I turned 23 I developed Psoriasis on my left hand and left foot. It pretty much ruined my life for years because I was self-conscious about it. It was also painful at times due to rawness. The doctors said smoking cigarettes was a huge factor. Thanks to your product I was able to quit smoking. I'm 27 now and it's been 2 years since I smoked a cigarette... and my psoriasis is gone! You literally increased my quality of life and for that I am truly grateful. Thank you, Jason!!!

Very cool story, never heard of it helping that before! Thanks for reaching out

A lot of people have Psoriasis their whole life and don't even know it because it is dormant. Tobacco products & the chemicals within them can cause it to become active and visible. So I was one of the people that didn't know. After years and years of smoking it came out, and it was horrible. The entire palm of my left hand was red and raw, skin falking off. Just disgusting. I ws embarrassed to even touch anyone or let them see my hand. I tried several prescriptions from Dermatologists and nothing worked. At this point I was depressed and desperate. Finally I decided to switch to blu-cigs to eliminate my Tobacco intake & see if it worked..... a few months after switching to blu-cigs my Psoriasis started to fade away. I don't think I would have been able to quit cold turkey, as there were other stressful factors in my life.... so thank you again for this awesome product. It changed my life. Enjoy your success, it is well deserved!

glad we help, thanks again for your story

Do you still vape? Even tho Blu is your baby, do you use any other gear? If so, what is your favorite non-cigalike device?

I test other products but I only use blu. I just enjoy the product and I personally don't like the flavor or size of others out there. Personal choice... I even purchase blu like everyone else

I'd like to know what your personal description of the Tobacco flavor is.

I think it definitely has a coffee flavor.

its made up of about 20 flavors so sometimes people are more susceptible to certain flavors within it like coffee or carmel

I'm only ranking 5th in the AMA's that sucks! Damn it!

Don't worry about that man! Unless it's a huge celebrity, someone who's popular in the news right now or someone really loved by the reddit community, most AMAs almost goes unnoticed. Combine that to the fact that Serj Tankian is also doing an AMA at the moment, it's probably not helping. There's still plenty of good questions in here (more than 200 comments in the thread, that's good!) and I would like to say you are doing a great job at replying at questions.

Now my own little question: Do you use an e-cig? Vaping is a huge hobby for a most of the people in the e-cig community, I wonder, what's your relation with vaping?

Yes I use blu. I test others but use blu day to day

Cool! More questions :) 1. What is your setup like? 2. What's your favourite flavor? I'm really curious, do you use it just like anyone would or do you have a little something unsual on your blu kit (special battery, carts) since it's your baby? 3. What is your favourite vaping setup other than a blu?

I use the same blu and products that everyone does. People always think I have some special setup of version of the product. Its the same as everyone else

Does Blu intend to join CASAA in any of their efforts to stop some of the mindless attempts of regulation in a lot of local governments in the US?

Edit: I am referring more to the knee-jerk type of bans many legislators are pursuing. I agree some regulation will be needed, but outright bans based on inconclusive data are ridiculous.

blu works with its own lobbyists and associations. My issue with CASAA is they don't want to have affiliations with ecig companies last I heard so it makes it tough

Mr. Healy, thanks for doing this.

1) How involved do you remain with Blu since you sold to Lorillard?

2) Does Blu have any projects in the R&D pipeline that will hold up to the (currently) far superior products offered by other smaller vendors? (non-cigalike, specifically talking about the PCC)

3) What do you perceive as the future of the legal hurdles for PV's?

4) Would you rather fight 100 duck sized horses or 1 horse sized duck?

Glad to be here, here we go:

1) I remain heavily involved but more in the background now days. blu is like my child and the staff are like my family so I hope I will always stay involved as long as they are doing the right things 2) Most definitely the strides we are making with new technologies is huge. We have a fantastic team in Silicone Valley CA that focuses on R&D 3) Overcoming the tag of 'cig' 4) Its not size of the horse in the fight but the size of the fight in the duck

Has Blu done any environmental impact research regarding the "millions" of disposables (and their attendant spent batteries) ending up in the trash/landfills?

I know I recycle household batteries (aa, etc.) but have not seen or heard of how these large numbers of disposed, spent batteries are being addressed by the companies selling them. (Other than a photo of a trashcan shaped like a large ashtray with Blu's logo on it...)

/r/electronic_cigarette

No but it is on the radar. What is know right now is the amount of cigarette butts each ecig prevents from going into lakes and oceans

What steps do you think ecig manufactures should take to protect their users when unlike traditional cigarettes there are no regulations (yet) for E cigarettes.

I think firstly they have to be in the industry for the long haul and for their consumers. Then look at their manufacturing and ingredients to ensure what you say is in the product is accurate. Then from there it will be a matter of undertaking a lot of testing to prove your claims. Unfortunately these tests are extremely expensive and time consuming. That's why I say you have to be in it for the long haul

What do you think your biggest competition besides regular cigarettes down the line will be? Is Blue pretty much controlling the market for the eCig. I am seeing other products out there. Thanks for doing this! :)

I think our biggest competitor or threat is misinformation and anti smoking groups who ideologically have an issue with smoking rather than looking at the fact that ecigs could answer all their dreams and eventually eliminate tobacco

And Njoy.

Who??

So would it be correct to assume you do not consider electronic cigarettes a tobacco product?

I don't, even though the nicotine is derived from tobacco

Thank you for doing this IAMA!

What are the chances of cancer with the blu eCig compared to a normal cigarette by a major tobacco brand like Camel or Morlboro and are they FDA approved?

Edit:(I ask because i'm interested in switching to these, specifically blu as i've seen a lot about it.)

Legal minefield this one but in my personal opinion I think ecigs are much safer and more research will confirm that without a doubt

What are the health risks associated with your product?

Again this is something that we will see overtime but keep in mind the facts I mentioned in the other similar questions

Ok thanks. Also what is your all time favorite car?

I'd have to go with a 69 Ferrari 250 or a 70's Chevelle

Have you ever used a mechanical mod or rebuildable atomizer? Any other non-cig a like e cigs? What are your general experiences with e cigs outside of your own product?

My general experience is positive. My big issues and concern within the industry were always related to marketing and selling the product responsibly. There was and still is a lot of subscription selling and bait and switch crap. Still some cowboys who aren't interested in their consumers, just $$$

How quickly do you think we will see mainstream use of e-cigs (blu or otherwise)? I live in DC and have seen an uptick, but still have 2-3 people ask me what I'm smoking every time I vape in public. "Is that a mini hookah?" (WTF is a mini hookah?)

Its moving very quickly especially when I look back to when I started it. The product is very polarizing so I expect it will continue to increase awareness dramatically over the next few years and regulations will only increase that

From what I've read, regulations have only served to make them less accessible. You're much more informed than I, so have you seen differently?

I think regulations and anti smoking groups have only expanded the awareness of ecigs because of their attempts. The more they push back the more people want to know

Name 3-5 regulations you would like to see implemented right now.

1) not for sale to minors 2) Good management practises 3) No more regulations and let people make their own choices

Given the FDA's recent comments on menthol, do you think vapers have a stake in that discussion given any precedent set on the basis of a flavor could apply to the flavors we enjoy as well?

I think the menthol debate is a mute point as is the debate on ecig flavors. The problem is that people don't want to parent anymore so they push big business to do it. Who would have thought the 'time out chair' wouldn't work....

I started using Blu in 2009, and it was my first step into the world of electronic cigarettes.

For all the crap that gets thrown your way, I will forever be grateful to the company that got me to quit smoking and find a healthier alternative. You also gave me a new hobby!

Between the products and customer service at that time, Blu changed my life. I don't use your products anymore but I just wanted to say thanks for being there when I needed you most.

thanks

A lot of study's have shown that most E-Cigs that claim they contain no nicotine, a specific value of nicotine like 20mg or whatever are wrong. For example, says tehre is no nicotine but found 2mg of it, or says 20mg but it's never 20. Sometimes more or sometimes less. Thoughts? How accurate is blu compared to others E-Cigs?

This is largely due to equipment error by using the same equipment on the zero nic carts or products as the nicotine products. The residue causes cross contamination. blu uses completely separate lines so zero nic products are not cross contaminated.

Why did you found a company focused on ecigs?

Because I am a smoker and I enjoy smoking. I saw ecigs as a way for smokers to come out of the corner and to get some of their freedom back. I also think that ecigs have a very huge possibility to save a lot of lives. More testing yes but I feel strongly about this potential

Thank you for being such an outstanding human being!

I know a bunch of smokers and I hope your ecigs help a few of them get their freedom back.

Have a great day!

Thank you

Who do you feel is Blu's biggest competitor?

Regulations and tobacco cigarettes

When you first started, some people said blu was owned by some people who owned or had leverage in porn sites and that is why blu was heavily advertised on porn sites, some of which were the most trafficked in the world. A lot of people first heard about e-cigs from a blu ad on porn sites. Did you own or have leverage at porn sites to be able to advertise there so much when starting off?

What kind of money did you spend to get the business up and running? What percentage of your gross goes to affiliate fees?

We advertised on porn sites in the beginning as it was cheap traffic and I had friends in the industry. These people know the internet and how to get traffic. When you are a start up on a shoe string you find ways to grow and be successful. That's what being an entrepreneur is about, finding a way to get shit done!

Affiliate fees were still very small I think about 15% back in the day

Could you take us through the development of the business? Where did you get the idea? How did you develop and receive funding for your untested product? etc.

I've always gone with my gut, I don't put of lot of faith in consumer research and I don't get involved with anything I don't understand and am not passionate about. I started blu because I am a smoker. I started blu with $50,000 on May first 2009.

Do you / did you smoke cigarettes yourself?

Why did you pick the color blue as the center of your marketing point?

If marijuana were to become legalized in the states, how difficult would it be to make a cartridge that released THC and do you think it would be acted upon?

I used to smoke about a pack and half of cigs a day, now I only smoke one tobacco cig in the more with my tea (more if I have a drink).

I picked blu because it was the opposite to red/burning ember on a cigarette

How did you transition from the startup process to getting angel investors/funding? Who was instrumental in building the brand for your business?

the people and staff at blu were instrumental and still are today. No one does anything alone

What kind of work did you do prior to blu? Educational background? Do you see any potential uses for ecigs and marijuana now or in the near future? What inspired to create your product?

I was horrible at school, hated it and did what I needed to to get by. Never went to college. I was heavily involved with professional sports in Australia and the mobile phone industry prior to blu. I created blu as a smoker and being sick and tired of being told where and when I could smoke. I think the marijuana debate will continue and it may cross over to ecigs

Why are e-cigarettes so popular?

I think because there are 45 million smokers in america and because smoking is such a hot topic

Could you and would you pay off my mortgage?

I would have to say no..... but thanks for writing in Mum

What is the first thing you wanted to buy when you found out you were getting $135M?

For me it was a car

Hey, really nothing to ask you. I quit cold turkey many moons ago... unfortunately I was never able to get my mother, a smoker for 40 years to quit with me. She wouldn't even humor us about considering it.

I want to just thank you for a product that gives nicotine addicts an alternative to tobacco. My mother uses Blu only now. I don't know the side effects of the product but I can't imagine it being worse or even equal to the cigarettes. Anyways, Thank you.

Thank you, I love hearing people's stories. I appreciate them taking the time. Most people spread complaints now days, not compliments.

What separates your product from NJOY or Fin e-cigarettes besides the business end ex. strictly speaking product only.? It seems to be exactly the same product and same components.

inside there are subtle differences but the biggest right now is the appearance. In the next 12 months the differences will be much larger

Just want to thank everyone for taking the time to ask questions and respond. I have to make dinner now but please hit me up anytime on twitter @jasonwhealy

Thanks again

Jason

Now that you have an assload of money, what philanthropic aspirations do you have? Please say you have some.

I do but I don't tell people, I think that defeats the purpose. I like to help people and causes but I don't feel I have to tell people

Can I get about tree fiddy?

how about too fiddy??

Are online sales the biggest selling point or it in retailers? Initially when you started out, wow did you promote your product and build the brand?

Online was all we had in the start, no one was selling at retail, now with our retail growth it is the largest. We built a very large consumer base on line then converted them to retail which is why we have seen such huge growth at retail

What is your stock listed under, I would like to invest a large amount of money?

Lorillard's main business line is still standard Tobacco products such as Newports.

For now....