Fri, 17 May 2019
250: How Dollar Shave Club Used Mission, Humor, and Viral Videos to Lead Up to a $1B Acquisition, With Michael Dubin
A viral video put Dollar Shave Club on the map, but it took a team to get it where it is today. CEO Michael Dubin talks about DSC’s growth, acquisition, and expanding product line.
It was the commercial seen round the internet. On March 6, 2012, Dollar Shave Club uploaded its first YouTube video, featuring one-and-a-half minutes of offbeat humor, during which founder Michael Dubin rides in a kid’s wagon, wields a machete, and encounters, among many other things, a person in a bear suit.
“Do you think your razor needs a vibrating handle, a flashlight, a back scratcher, and 10 blades?” Dubin deadpans while riding a forklift. “Your handsome-ass grandfather had one blade—and polio.”
It was a totally unique way to explain a simple concept: For an affordable fee, Dollar Shave Club subscribers would get quality razor blades delivered to their doorsteps on a regular basis, thus skipping the trips to the store for overpriced, gimmicky alternatives. And people loved it—the resulting traffic from the video’s launch crashed their site.
Since then, that commercial has been viewed over 26 million times on YouTube. It cost only $4,500 to produce, yet it launched the company on a trajectory that would later lead to a $1 billion acquisition by Unilever.
“It put us on the map, no doubt,” Dubin says. “We wouldn't be where we are without it.”
But this isn’t a story about Michael Dubin and his famous viral video. It’s not even a story about razor blades. As Dubin is quick to point out, getting DSC to where it is today required a team effort. And with its ever-expanding product line, today, the company is about so much more than a good shave.
Timing Is Everything—In Comedy and Business
They say the most important thing in comedy is timing; the difference between roaring laughter and painful silence can be a fraction of a second.
Maybe this was something Dubin learned during the eight years he spent training at New York City’s Upright Citizens Brigade, an improv theatre with notable alumni such as Saturday Night Live’s Horatio Sanz and Amy Poehler. While taking improv classes, Dubin worked various media jobs, starting as a page at NBC, then moving into production and news writing at MSNBC, and eventually, getting into digital marketing at SportsIllustrated.com.
But it wasn’t just Dubin’s punchline delivery that set DSC up for success out of the gate. Even the timing of its launch was strategic. As Dubin told NPR’s Guy Raz in a “How I Built This” interview, he chose that specific date—March 6—because, with his media background, he knew that news outlets would be hungry for a tech story leading up to the annual South by Southwest conference that takes place in Austin in mid-March. The launch date also coincided with Dollar Shave Club’s announcement of its $1 million seed round.
It Takes a Team
A viral video can be a major boost for any company, but it’s far from the secret to a successful business. For that, you need great people, and assembling them is easier said than done.
“Big business is a team sport,” Dubin says, “and it requires talent from all corners of the universe that will help you build what you're looking to build.”
Knowing where to find your future teammates can be a challenge.
“Finding great talent is always going to be the hardest thing that any entrepreneur does,” Dubin says. “Because, ultimately, there's somebody out there in the marketplace that can help you do your job really well and help you build your company the best way possible. But you've got to go out and find them in the great wide world.”
That’s why Dubin is a fan of recruiters, “because recruiters are paid to have knowledge of the network that you're looking in.”
When building his team early on, Dubin had just moved from New York to Los Angeles and lacked a network in his new city, so he relied on his early investors to make introductions. “That's a great reason to take investment—besides, obviously, needing to take it to drive growth and invest where you need to.”
To attract the right talent, Dubin recommends founders do two things. First, focus on your company’s mission. What are you trying to achieve? What gaps in the market are you trying to fill? Why do you come to work every day?
“Really talented people want to work for companies that have purpose,” he says. “And that's defined in the mission of the company.”
Second, consider granting employees equity. “People want to feel like they're participants in the success—if you ultimately do have the success—and that's super meaningful.”
And if your mission changes, that’s okay. It’s natural for it to evolve as your company grows; that’s certainly true for Dollar Shave Club. “It started out more as a shave-only proposition,” Dubin says. “And then it grew out into becoming…more of a men's health, more of a men's grooming platform.”
What’s their mission today? “Help guys take care of their minds and bodies so they can be their best selves.”
Growth, Acquisition, and Expansion
Taking on the shaving industry was a gutsy move. To put that into perspective, it was around the year 1900 that King C. Gillette invented the world’s first disposable razor, according to Gillette’s website. So when Dubin decided to disrupt the shaving market, he was going up against a company that had already been in it for over 100 years.
Eight months after the launch of its first commercial, Dollar Shave Club secured a Series A round of $9.8 million. And two years after that, the subscription razor blade company hit 1 million members.
In July 2016, Unilever acquired Dollar Shave Club for a reported $1 billion. At the time, DSC had 3.2 million members and was expected to exceed $200 million in turnover (which is sometimes defined as net sales and sometimes defined as revenue) that year. Dubin stayed on as CEO and continues to serve in that capacity today.
“Unilever's been very good to let us run the company our way,” he says, “and that was part of the design.”
Today, Dollar Shave Club boasts over 300 employees and continues to expand its product line and global footprint. Beyond razors, DSC now sells cologne, body wash, shampoo—even flushable toilet wipes (they’re called One Wipe Charlies). It also has sites live in Australia, Canada, and the UK, with plans to expand further in the next couple of years.
Knowing When It’s Time to Add a New Product
For a long time, razor blade subscriptions were Dollar Shave Club’s bread and butter, and it gained a loyal following with its single product line. But growth almost always means product expansion, so how can a founder know when it’s the right time to add new products?
“You have to stay true to your core,” Dubin says. “You have to develop credibility in your core categories before you can expand outward. There is such a thing as doing that too fast.”
Timing matters. Move too fast, and you could confuse your customers and dilute your brand. Too slow, and you may miss your opportunity to take the market.
As for figuring out what your next product should be: ”You should definitely do your research. It's always a blend of gut and research.”
Time Well Spent
These days, Dubin doesn’t star in any viral videos, but he told Foundr about a recent, albeit lesser-known, YouTube video of his commencement address to the 2018 graduating class of his alma mater, Emory University. In it, he sums up the lessons he’s learned over the years, including one about “little choices.”
“They're the ones you make more frequently, maybe even every day,” he says to the graduates, “the ripple effects of which, I believe, actually have a bigger impact over the course of your life. They’re choices about where to invest your time.”
Given Dollar Shave Club’s meteoric success, it’s safe to say that Dubin and his team’s time has been well spent.
5 Entrepreneurial Lessons from Michael Dubin
Dollar Shave Club is a massively popular company that attracted a billion-dollar acquisition. What are some parting lessons we can take from this interview with CEO Michael Dubin?
Direct download: FP250_Michael_Dubin.mp3
Category:general -- posted at: 12:18am AEST