Here’s the Dollar Shave Club concept: Starting at $1 per month, customers get a month’s worth of razors delivered to their doors, with a razor handle included in the first shipment. As far as modern-day business models go, it seems halfway decent. Add in a hilariously offbeat ad that mocks the major razor companies while drawing two million page views in its first four days on YouTube, however, and Dollar Shave Club’s chances of success seem better than average.
After launching a beta version in April 2011, DollarShaveClub.com, a Santa Monica-based subscription razor service that aims to take on industry giants such as Gillette, officially opened for business last week.
Of all the products in the marketplace, why did the startup decide to focus on razors? “From the time that I was a little boy, I’ve always been passionate about shaving,” Michael Dubin, Dollar Shave Club’s co-founder and CEO, deadpans in his best formal Serious American Executive voice, before laughing off the idea.
Dubin, who stars alongside a random guy in a bear suit in the company’s online ad that’s sprinkled with coarse language (“Are our razors good? No. They’re f***ing great.”), is clearly not an executive from the days of old. His background is in digital marketing and brand development, and he also trained with the Upright Citizens Brigade improv comedy troupe in New York City. “Do you think your razor needs a vibrating handle, a flashlight, a back-scratcher, and 10 blades?” Dubin asks in the ad. “Your handsome-ass grandfather had one blade AND polio.”
A BusinessWeek post aptly describes the company’s unusual approach this way:
If Hollywood director and manchild bromance specialist Judd Apatow were a business model, he would be Dollar Shave Club.
Nonetheless, Dubin does offer a fairly standard sales pitch for the Dollar Shave Club service. “Alongside eating and showering, shaving is just one of the regular things we all do on a daily basis,” he says, noting that you’re supposed to change your razor once a week. “You might forget to change it, or you could try to use it more to save money. But you’ll cut your face, and it’ll sit there on your counter collecting germs.” Razors are unnecessarily fancy (seven blades?) and expensive, with cartridges costing upwards of $4 a pop, and shopping for them is annoying. “You might have to ask the sales clerk to unlock the razors from behind the glass, or they could come in a giant clamshell packaging. Why waste the time and hassle?”
The Dollar Shave Club pitch promises to eliminate the hassle and high price of buying razors. Members have three choices: the Humble Twin (five two-bladed cartridges per month); the 4X (four four-bladed cartridges); and the Executive (three five-bladed cartridges). The latter two cost $6 and $9 per month, shipping included. The Humble Twin is just $1 monthly, but shipping is extra. The razors, built in South Korea and China, all have pivot heads and Aloe Vera strips.
The Los Angeles Times reports that Dollar Shave Club is well funded, with high-profile backers such as Kleiner Perkins Caufield & Byers, and it’s the fifth company to launch out of the tech studio Science, Inc., which was founded by Mike Jones, the former CEO of Myspace.
Rather than any “passion” for shaving, Dubin says that Dollar Shave Club was inspired by all sorts of subscription-based businesses, ShoeDazzle especially. The New York Times recently rounded up some of the latest hot online subscription services, a list that indeed features the women’s shoe service started in part by “Chief Fashion Stylist” Kim Kardashian. The subscription category has expanded well beyond the early industry darling, Netflix, and now includes products such as pet food, flowers, and arts and craft projects, as well as women’s shoes and, perhaps, men’s grooming supplies.
The reason why businesses are so in love with the subscription model is simple: steady, recurring revenues from paying customers. Consumers embrace subscriptions because, in theory at least, they help save time and money, and generally make life easier. If you can put any part of your consumer life on autopilot, that’s one less thing you have to think about or bother with.
Thus far, the idea, combined with a funny ad campaign, has resonated with Dollar Shave Club customers. Some 5,000 subscribers signed the first day the ad was posted, and Dubin says that sales have been “extremely strong” since then, though for the time being he declined to give specific numbers.
As subscriptions pour in, Dollar Shave Club’s next step will be an expansion to razors’ counterparts, shaving creams and moisturizers. “We’ll send out free samples to subscribers and have them vote for their favorites,” says Dubin. “Then we’ll offer subscriptions for the best of the bunch.” When that happens, it’s a safe bet that there will be another ad campaign.
Speaking of which, here’s the ad, for those who haven’t already seen it: