E-Cigs: The Next ‘Big Thing’? Napster Founder Thinks So

Sean Parker likes to get involved in “Next Big Things.” He co-founded Napster, which changed the way we consume digital music; he founded Plaxo, an online Rolodex with viral tools that integrated with Outlook and quickly reached 20 million users; and he was the first to see the potential in Facebook and became its founding president when it was a few months old.

His new Next Big Thing – Electronic Cigarettes.

Parker has joined several investors in the recent $75 million funding of Scottsdate, Ariz.-based Electronic cigarette brand NJOY, money the company says it will use for marketing, clinical trials, research and development, and international expansion.

“As an entrepreneur and investor I'm drawn to disruptive companies in explosive new markets,” Parker said. “The common thread between these companies is a missionary desire to leverage technology to change the world. I'm optimistic that the clever application of technology might someday obsolete the combustion cigarette and all the harm it causes. Solving this problem takes a world-class leadership team that brings together executives across a range of disciplines from electrical engineering, to chemistry, to consumer marketing.”

And while he’s investing in the NJOY brand specifically, Parker sees this as an investment in the e-cig segment overall. NJOY has also demonstrated a commitment to advancing research and scientific understanding of the electronic cigarette category and recently announced that Former Surgeon General Dr. Richard Carmona was appointed a member of NJOY's board and chair of its scientific advisory committee.

“We are excited to be an investor in this company and to participate in the massive growth of this segment,” Parker added.

Right now, the electronic cigarette market is still in the Harvard Facebook stage – with a steadily growing group of consumers that is poised to explode once critical mass of retail availability, word-of-mouth promotion, and TV, print and digital marketing is reached. Indeed, shelf space for these products at my local drug and convenience stores – even the 100-square-foot c-store in our office building -- has quadrupled these past few months, which has led me to wonder if grocers have decided to stay out of the business or think it’s a fad that will disappear.

People once thought Facebook was a fad as well.

Sean Parker believed in it…now virtually every grocer in the world has a Facebook page, which, incedentally, is a great way to engage your customers in a discussion as to whether e-cigs are right for your business... at least until the next “Next Big Thing” comes along.

So my question to grocers is: Are you in or are you out of the e-cig business?