Thursday, March 22, 2012
Interview with Michael Dubin, Dollar Shave Club
Story by Benjamin F. Kuo
Earlier this month, Los Angeles startup Dollar Shave Club (www.dollarshaveclub.com) made a huge splash with its launch of a subscription, monthly delivery service for razor blades. The company also made quite an impression with its viral video--which you have to watch to appreciate--of CEO Michael Dubin extolling the virtues of the company's products, and panning overpriced, expensive razor brands. We talked with Dubin earlier about the company. The company is also one of the companies to recently emerge out of Science, Inc., the business startup effort headed by former MySpace CEO Mike Jones, and is venture backed by top VCs Kleiner Perkins Caufield and Byers, Forerunner Ventures, Andreesen Horowitz, Shasta Ventures, and Felicis Ventures.
What's your background, and how did the company start?
Michael Dubin: My background is digital marketing, and a little bit of editorial. My first job was as a page at NBC, and after that I went and did a year and a half of writing and production at MSNBC with Keith Olbermann and Chuck Scarborough. After that, I went to a digital marketing for a firm which provided marketing for Sports Illustrated and other big brand advertisers like Gatorade and Nike, driving video views of social video. Dollar Shave Club came to me about two years ago, in December of 2010, when I met my co-founder, who was my friend's fiancÚ's father. We somehow got on a conversation about shaving, and he mentioned the price of brand name razors. He had lots of contacts in the manufacturing space, and had somehow gotten a hold of some twin blade inventory--which we are live with. If you look on our site, the Humble Twin is the first inventory we had. We also knew we had to develop newer inventory to keep pace with Gilette and Shick, so we also launched with a new four blade and six blade razor. It was all a happy accident on how the company came to be, meeting at a friend's holiday party.
What's the opportunity here?
Michael Dubin: Gillette and Shick are great at making you think you need all that fancy shaving technology like a vibrating handle, LED guide light, and all that stuff. They've really done a good job thinking you need that, but you don't. I felt that most guys spend an enormous amount of energy around brand name razors, but in conversations with friends, can't believe how much they spend on razors today. You might spend $20 on what is only a couple of pieces of metal and plastic. The opportunity is, if you could manufacture a really great blade at an affordable price, it would be perfect to get into the subscription space. Subscriptions are all the rage, and for good reason, because going to a store is a primitive experience. There is no reason to go to the store for something as regular as a razor. You have to deal with parking, hours of your time, and it's just impractical. What we're hoping to do, is build a brand with guys and girls with well developed self images, who can feel great about using our product. We also want to constantly add value to their lives every month. It's not just with razors, but also shaving cream, aftershave, and moisturizers. We've got a really cool, social product development formula, which is a fancy way of saying we'll be sending sample formulas to our customers in the second month, send out two formulas to them, and have them come back and vote on which one they like better. That's the one we'll mass product. I really think this is the brand of the future, which is talking directly to consumers. This is an opportunity for us to talk directly to consumers, to find out what they want, and give it to them on a regular basis.
You're going up against some giant companies, and marketing budgets. How do you expect to win consumers over?
Michael Dubin: There are razor users who don't know what brand they're shaving with, who are stealing blades from the gym, buying cheap disposables, or who are just sick of paying for razors from Gillette and others. When people try our blades, they find they are just as good as the brand name razors, and don't see any problem with it. Are we ever going to be as big as Gillette? Sure, they've spent billions on marketing and R&D and whatever, and there's lots of brand loyalty. But, I don't think that is going to be a problem for a very large number of people who try our blades. They're not affiliated with a particular brand or are just fed up with paying brand name prices.
How did you get involved with Science?
Michael Dubin: Science is a group of five or six partners who are extremely experienced in their various areas. Under the executive leadership of Michael Jones, there's a great designer, great CTO, great operations guys, and great lawyers. Those guys have all built and sold businesses, and not only do they bring an enormous amount of experience to the table, they bring a blue chip network to the table, in a highly competitive space. Our opportunity was to be backed by guys who know everyone in every area, and that is really a recipe for success. It was a no brainer for us, and even though we could have been very successful on our own, we would not have gotten to the point where we are now as quickly as we have.
It looks like lots of what you are doing is around branding?
Michael Dubin: It's a brand building story. In consumer packaged goods, it's all about brand. You can get just about anything made under the sun in the manufacturing space. Our story is a brand building story. If you watch the video, you'll see the brand we're trying to build. It's very social, and you'll see that the big guys are ripe for a fall. It's David vs. Goliath. We're the little guy with a great product, very nimble, online, and built for speed and virality. That's what the game is all about. Just about everyone shaves with some regularity, and this market is a huge, $25 billion market. It's all about if you can tell a good story, and build a good sales funnel. There's lots of content we're going to be rolling out in the next one to three months, to help build the brand that we want to have.
Was it difficult to build out the operational side of the business?
Michael Dubin: Actually, operations have been pretty easy. It will become a greater challenge when we have more products, like shaving cream, and people on different schedules. Right now, with razors, it's very simple, once a month. However, with shaving cream, people might not need it once a month, and we'll have to figure out a smart algorithm. But, right now, it's just a turn key warehouse and fulfillment center.