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What Dollar Shave Club Did Right
In 2012, Michael Dubin broke the razor blade monopoly with a viral video. 4 years later he sold his company for a billion dollars.
Here’s the strategy behind his success.
Let’s go back to 2011, Gillette controlled ~70% of the market for razors, but Michael identified several weaknesses in the company’s products:
They were overpriced: Gilette has large marketing, R&D, and retail expenses including paying massive fees to celebrities that endorsed them which forces them to increase prices.
Overcomplicated: Gilette kept on introducing new blades with technologies and gadgets that customers didn’t need.
Inconvenient to buy: In many stores, the blades were kept inside locked cabinets and you had to ask someone to unlock them in order to buy one.
Michael spent a year testing different sales strategies and the model he came up with at the end is simple yet brilliant: a monthly subscription for razor blades priced at $1.
And to double down on the idea of selling $1 blades, he named the company DollarShaveClub.
This brings us to 2012, the website and products were ready and only needed marketing to get the customers coming. The only issue is: the company didn’t have a large marketing budget.
Michael’s sense of comedy and Improv training came in handy. With the help of a friend from an Improv class he attended, and at a cost of $4500, he shot a video to promote the company’s razor subscription.
The video was a direct attack on Gilette, making fun of their overpriced and technologically advanced razors!
I was just really trying to find a fun, resonant way to tell the story of what our business did and why it existed.
In order to ensure that startup media outlets covered the launch, he released the video just before South by Southwest, to avoid competing with other startups for reporting after the infamous tech conference.
Customers loved the promotion and within 1.5 hours of uploading it, the website crashed from the traffic!
By 2016, Dollarshaveclub had gained a 5% market share. That year, Unilever bought the startup for $1 Billion!
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