Recently, Lorillard, one of the biggest manufacturers of tobacco cigarettes in the United States, purchased an e-cigarette company called Blu Ecigs for the sum of $135 million. Blu Ecigs was founded by a young Australian entrepreneur named Jason Healy in 2008, and is based in the town of Charlotte, North Carolina. The young Australian, who hails from the town of Mareeba in north Queensland, founded the company with $50,000 that he managed to raise by convincing investors from Charlotte that he had a great business idea. Despite selling the company he founded, Healy has remained at its helm.
Healy says that he got the idea to start an electronic cigarette company when he was shown one by a Charlotte businessperson. He says: “At the time, I was spending time between Brisbane and Charlotte, North Carolina and while on a trip to Charlotte a local business owner was asking me to take a look at a new product hitting the market, e-cigs.” Healy immediately saw the potential: “Being a smoker and an avid marketer it immediately captured my mind and I was originally looking at purchasing the rights to an existing brand and marketing it in Australia.” The problem, however, was that nobody was actually branding their e-cigarettes, instead preferring the generic names used by the Chinese manufacturers: “Once I started to take a deeper look, I saw so many issues and opportunities that weren’t being addressed and basically came to the opinion that I needed to start a true brand of my own.” Thus, it is probably more accurate to say that Healy just took a good product and marketed it well, thereby making himself a millionaire in the process. He would not be the first person to have done this, and it in no way diminishes his great achievement.
There were, unsurprisingly, many hurdles that needed to be overcome. Questions existed about the safety of electronic cigarettes, which was far more of an issue in 2008 before any research had been undertaken into their safety as a quit smoking device. A number of health groups were, and indeed remain, opposed to e-cigarettes, claiming that they have not been sufficiently tested and that they might encourage children to take up the habit of smoking. These arguments hold much less weight today as more scientific evidence is accumulating that demonstrates that electronic cigarettes are safe, effective and improve the health of people by helping them quit smoking.
Source: Oliver Milman, “Sparking up a smoking hot start-up idea”, StartUpSmart, 12 October 2012.