When was the last time you stopped by a pharmacy to pick up a pack of razors and did a double-take at the checkout counter? Someone has been getting filthy rich off selling tiny pieces of disposable metal for $19.99, and unless your name is Gillette, it's probably not you.
How does Dollar Shave Club undercut the big-boys like Gillette and Schick by such a large margin? Like a growing number of "disruptive" startups, by cutting out the middleman: The company's razors come directly from manufacturers in China and Korea. Plus, the razors are sold with less capital because Dollar Shave Club doesn't have a storefront and operates exclusively online. Companies like Warby Parker, which sells eyeglasses and sunglasses for $95, have proven the model can work.
Michael Dubin, who co-founded Dollar Shave Club with Mark Levine in April 2011, officially launched on Tuesday with a hilarious viral video. (Dubin, the star of the video, has some comedic experience, having previously trained with the sketch comedy group Upright Citizens Brigade in New York.) Already, the ad (above) has generated 5,000 sign-ups for the service since it went live on Tuesday, according to Dubin.
OK, now that we've all seen the video, have you ever let a toddler shave you?
I have not. The toddler in the video is a daughter of my close friend. Cute, right?
Any advice for startups on making a video about their business?
Don't take yourself too seriously. If you can make people laugh, they'll remember what you're saying.
What's your background?
My background is in digital marketing and brand development. And my co-founder, Mark Levine, has 25 years of product-development experience and great contacts in the manufacturing space who have helped us get set up.
Can you offer advice for entrepreneurs who are thinking about starting a subscription-based business?
First, find the right niche. Everyone is creating subscription businesses these days. If you're going to be successful and hit the masses, you need to be very specific about what you're offering. Second, be a membership company, not a subscription company. It may just be semantics, but there's a warmth to the word membership that subscription lacks. Subscription is cold and impersonal. Membership makes you feel included, like lobster night at the country club. And I think that extends into the brand experience for the customer. We want customers to feel like every month we're adding the kind of value that the other memberships in their life bring them.
What are the different products Dollar Shave Club offers?
The Humble Twin razor is two blades and $1, plus $2 shipping. The 4X is a four-blade razor, costs $4, shipping included. And the six-blade, The Executive, is $9, shipping included. With the twin, you get five cartridge refills. With the four-blade, you get four cartridges refills. And with the six-blade, you get three. Oh, and we have The Lover's Blade, a subscription you can share with a lover, a friend, a girlfriend or a boyfriend.
How much do you estimate you'll save consumers?
If you make the comparison between our twin model and the upper-end Gillette models, at least $292 a year.
Do you endorse the use of your blades for areas besides a man's face?
Not quite yet -- but I think you just gave me a good idea for a new video.
Name: Michael Dubin and Mark Levine
Company: Dollar Shave Club
Age: Dublin, 33; Levine, 56
Location: Santa Monica, Calif.
Founded: April, 2011