How to turn $4000 into millions

This is a big story about a little company.

It’s a tale of charm and chutzpah, of smart ideas and dumb luck, and in many ways it’s a narrative for our times in retail, when online brands can emerge overnight to disrupt entire categories.American, Michael Dubin, developed a strategy to challenge the behemoths of the $13 billion global razor market, dominated by Gillette (owned by P&G).

The plan emerged from personal experience.

As Dubin explained to me in the US in January, he had been “totally flummoxed” by the price of razor blades, and intensely frustrated by the experience of buying them.

“You’d go into the drug store to pick up blades, only to find the ‘razor fortress’ was locked,” says Dubin.

“Then you couldn’t find the kid in the store to unlock it. The whole process sucked. And when you eventually bought the blades, they were ridiculously expensive and over-engineered.”

Talking with his friends, this turned out to be a pain point that many men shared.

So Dubin thought “what if?” What if you could deliver affordable, quality razors straight to home?In 2010 serendipity struck.

A father of one of Dubin’s friends happened to have been in product development, and helped Dubin source some razor blade prototypes.

A fledgling business then began dubbed “Dollar Shave Club”, funded by mortgaging everything Dubin owned and initially run out of his apartment in the typically hands-on way of start-ups.

And here’s where things really took off. Dubin had spent eight years learning and practicing improvisation comedy in New York City.

He wrote, directed and starred in a US$4000 video to tell the Dollar Shave Club story (http://www.youtube.com/user/DollarShaveClub) and uploaded it to YouTube.

The hilarious piece was entitled ‘DollarShaveClub.com – Our Blades are F***ing Great’. When it broke online in March last year, it was on a “slow news day” according to Dubin and became an instant sensation. (As I write this blog, the video has received nearly 10 million views.)

The only thing Dubin regretted was that he “hadn’t rented enough servers”, because his site went into meltdown.Many viewers thought that the video was a spoof and that “someone should actually start this business”.

When they found out it was genuine, Dubin attracted customers – 12,000 in the first 48 hours – and that in turn led to $1 million in seed funding.

The charm of the video permeates the Dollar Shave Club brand language, with every word crafted by Dubin.

The brand’s positioning line is “Shave Time. Shave Money”; the top of the line razor is described as “muy sexy”; and customer communications warn, for example, not to “drink and shave”.

It’s all designed to build customer affection and loyalty beyond price. As I talked with Dubin, the only time he bristled was when I described Dollar Shave Club as a subscription service.


It is, after all, a “club”, and Dubin prefers to frame it as a “membership” concept, with the idea of “belonging” fundamentally critical to the long-term success of the business.

A year on from that video launch, Dollar Shave Club has attracted many competitors – including RazWar, and a new entrant called Harry’s, from the founders of Warby Parker (a company I wrote about recently on Inside Retail – http://www.insideretail.com.au/IR/IRNews/Lessons-in-realtail-7474.aspx).Will Dollar Shave Club survive?

Dubin thinks so – he’s already hatching plans to market razors to women, and to stock more products that will help him “own the bathroom”.

Jon Bird is CEO of specialist retail marketing agency IdeaWorks (www.ideaworks.com.au), and Chairman of Octomedia, publisher of Inside Retail. Email: [email protected] Blog: www.newretailblog.com Twitter: @thetweetailer

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