Transcript

Dollar Shave Club: Michael Dubin, From Zero to a Billion Dollar Exit in Five Years (December 2018)

0:05 Hey everyone, it's Guy here. So we're giving our team a short break over the holidays, so we're bringing you an episode from the archives, and this one is from back in 2018. It's the incredible story of Michael Dubin and how he built Dollar Shave Club. It's one of the OG direct to consumer brands, and you'll hear how a viral launch video took Dollar Shave Club from zero. To a billion dollar acquisition by Unilever in just five years. This episode was actually recorded in front of a live audience in Los Angeles. It was so much fun, and I think you're gonna love it. So our first investor was a company called Science, they're out in Santa Monica. They gave us a hundred thousand dollar check. Actually, no, they gave us a hundred dollar check by accident first. And I got all the way to the bank. I literally I got to the bank and I was like here's my check for a hundred thousand dollars You had to fill out the form that said a hundred thousand dollars and I fill it out and the woman looks at me and she's like Uh

1:05 Welcome to How I Built This. A show about innovators, entrepreneurs, idealists, and the stories behind the movements. They built. Guy Raz, and on today's show, how Michael Dubin turned eight years of experience in improv comedy and video marketing.

1:28 Dollar Shave Club. So think about the billion dollar companies that didn't even exist ten or fifteen years ago. Companies like Airbnb or Lift or Snapchat or Spotify or Hulu.

1:49 Pretty incredible if you think about it because There's a pretty good chance that today You use at least one, if not all, of these services. And even if you don't like what these companies offer, you can't deny that they're innovative, that they all offer a new way to do something, to get around, or find a place to crash, or listen to music, or watch TV. These are some of the sexiest startups in recent years. But now imagine a completely opposite idea.

2:18 A business that not only offers a boring product, but a product that is dominated by one big company. I'm talking about men's razors, and just a decade ago, Gillette owned about seventy percent of the US shaving market. But today Gillette's overall market share is closer to 50%, and that's partly due to a company called Dollar Shave Club.

2:44 It's a company that decided to take on Gillette not by offering a better razor, but by offering a better story. In fact, the story of how Dollar Shave Club went from a scrappy website to a billion dollar exit in just five years is more about Michael Dubin's instincts and marketing shops than it is about anything else. Because for almost eight years before he launched Dollar Shave Club, Michael Dubin was doing two things that would help him figure out how to penetrate an impenetrable market. One of those things was creating videos for corporate clients.

3:21 And the other, probably more important Was taking improv classes at night. Those two skills would help Michael create one of the most successful guerrilla marketing campaigns in modern history. But long before any of that happened Michael had what he calls a pretty normal childhood in the suburbs of Philadelphia. His dad was a lawyer and his mom was a teacher and then later worked in real estate.

3:47 Earlier this month at the theater at Ace Hotel in downtown LA, I sat down with Michael Dubin in front of a live audience where I wanted to find out why, on snowy days, His mom used to force him and his sister to stay inside. And solve map problems. Alright. Welcome.

4:08 Michael Thanks for having me. Yeah, we weren't allowed to you know, it was like you can have fun, but before you have fun, you're gonna be productive. Um and I think we carry that with us wherever we go. There's like a little bit of guilt that we have whenever we have fun somewhere. Yeah, you're like I should be doing math problems. Yeah, exactly. That's a good lesson do your work first, have fun later, maybe. Um all right, so you grew up mainly uh I guess in in the suburbs of Philadelphia. Yep. So I'm I'm curious, um and this is a little bit foreshadowing here, so I don't want to get too ahead of ourselves here, but um As a kid or as a teenager, were you into theater or act or school plays and dramas? Did you do that kind of stuff? I did. I was always in the school play. I was the lead in a school play in fourth grade. It was called Peace Child. And Peace Child was all about

5:03 Preventing a nuclear holocaust through song And literally, no, truly, there was a song that was called I Want to Live I want to live and something like I want to live the right to live my life. I don't know. I mean it was really like I'd love to see it. I think you know why I'm asking questions about theater, because we'll get to that later and the the theatrical stuff. But what about in general academics? I mean Did you feel like you were a good student, or did you become a good student? I was not a good student. I was not a horrible student. I was good at the subjects that I was interested in. But if I wasn't interested in the subject matter, it was really hard to get me to pay attention. I'm also I was probably one of these kids that went undiagnosed with

5:49 A D D um and I think that probably contributed to it. But yeah, I I don't think that I was much of a student. I I did okay. Good good enough. I mean you went to a pretty good school. You went to Emory University. I did. Um and you studied history there? I actually started out as a poli sci major, but I flunked poli sci one hundred actually twice. I flunked the same class twice. in back-to-back years, which goes to show you what kind of a student I was my freshman and sophomore year. And then couldn't do that anymore. So I became a history major because I always loved history and I love reading about history and studying history. So I actually did fairly well at that. I had a killer internship with a with a company called Brighthouse And I also got super into my internships at CNN. So I actually did more extra curricularly, I think, in college, and I got really into those things, and that helped set me on my career afterwards. So you graduate college and what did you what did you do?

6:44 So I became a page at the NBC Page program. Like Kenneth Page. Correct. Exactly. But but this was before Kenneth made the Page program cool. Or not cool. Kenneth wasn't very cool. So so yeah, I was a Page program, which for anybody that knows what the Page program is, you get to it's fifty kids that they take right out of college. And um You basically have the keys to the castle. You run around NBC, Rockefeller Center, and the studios, and you seat the audiences for the shows, you give tours of the studios, and the trade off is that they give you an opportunity to take many jobs. in different departments. Yeah and so those mini jobs can be with Saturday Night Live or Nightly News or you know at that time the Rosie O'Donnell show was still on the air and you do those uh mini jobs or assignments for 10 weeks each. So I had some pretty cool assignments and it was just I mean I've said this before, but outside of this job at DSC That was my favorite job. So so was that your idea that you would stay in journalism or media? Like was that

7:45 where you start to think, you know, this is what I'm maybe this what I'll do. Yeah, I was super passionate about it and went to work at NBC and then went to work at MSNBC, first as a PA and as a writer, and I I thought that I would have a career in the media and maybe even in journalism. But I think at a certain point the 24 hour news cycle, you you work all day to build a story and a narrative, and then at 5 p.m., right before your show would air, they would, you know, there would be some breaking news and all your work would get thrown out. Um and then I also felt like It was right around the time that I started thinking like I really want to be in marketing or advertising. How did you

8:23 I mean how did you make that leap? Like had you been exposed to marketing and and advertising, or did you just think this could be interesting? Um Well I had I had I had this really sort of formative internship in in Atlanta, and I got an opportunity through a a friend of mine's cousin who ran a small marketing firm in New York City that was doing client service work for a couple of minor league sports teams. And the main project that I worked on was I worked on an early website for an alarm company. And then I left with the one of the partners at that firm to go over to Time Inc. uh and Life magazine and the relaunch of Life magazine in two thousand five, I think this was.

9:02 I spent a couple years at Life and then I spent a couple years at Sports Illustrated, sportsillustrated dot com, and that work in general was I built a you know, uh back in the day people might remember the term micro site. I built micro sites for some of the big brand advertisers at Life and for Sports Illustrated. You know, those could have been for Gatorade or for Sega. And you were just learning how to do this on the job. Exactly. So like you would build a micro website or make a video or something. for these brands. Yep, exactly. Just figuring out what would be interesting to a user, how to present visual information with some copy in a way that's digestible. How would I lay out this website? And you know I've always been a a bit of a visual thinker, so it's fun. U UX UI's a maze or a puzzle. That's what great architects do. That's what great restaurant designers do when they lay out a space or design a hotel lobby. You know, it's great what great product designers do, UX UI designers do. They create these mazes for people to go in, and that's enormously satisfying when you can watch masses of people follow your Lead. Yeah.

10:08 All of this is happening Um in New York, you're in New York in the early two thousands and You decide to take improv classes, something you did for Almost eight years. How do that? start uh was it just something you want to do for fun?

10:22 So I I've always been passionate about comedy and I had heard when I worked at NBC that all of the great comedians that were on SNL had trained in improv and a lot of them had trained at the Upright Citizens Brigade, which at the time they only had one studio in the in the West Village. No in Chelsea. And I was just you know, I said, Well I want to do that. And it just stuck. I fell totally in love with it. Before too long I was taking sketch classes as well. And you do this like weekly or Yeah, you take a couple classes a week. If it's sketch class, you have some homework to do, you have to write comedy sketches, you you go and you practice the in private night with a bunch of people that you have never met before, and you go rent some weird studio space and you make jokes at 9 p.m. and it's you know, a very bizarre experience. So you had you got this marketing job during the day. Making videos and

11:18 And and at night you were Doing improv. And I was also trying to start my first startup, which was a social network for travelers. So yes, I was busy. And and what happened to the social network for travelers? Okay, I got you. Okay. So you had yeah, you know.

11:33 But I'm trying to understand. I mean There must have been something about improv. Like I I I have to imagine that in your mind you're thinking maybe I have a shot at being a comedian or being on SNL or was that What you were thinking?

11:45 I would never admit that, but yes. Got it. Yeah, that's right, right, because why would you take improv classes for years and I would go to the Upright Citizens Brigade Two, three nights a week, and just watch the most amazing comedians perform. People that have gone on to have amazing careers, people like Donald Glover. You know, I went to go see Donald Glover when he was doing these shows in the at in a basement in Chelsea under a grocery store. And you're watching six to ten people on a stage. pull ideas out of thin air and weave them together into a story that that makes you laugh. And comedy is one of the hardest things to do, period. There's a setup

12:26 And then there's the equal sign, right? It's A plus B plus C equals ha ha ha ha. And that takes magic. That takes real talent. And so it's addictive. And when you get it right and when you do it well. Um it's a high. And I also It was such a great way to blow off steam in the evening as well, because you would have these really hard long days at work where you're getting grinded by your boss at work, and you know you're trying to start this social network of trip for travelers in the margins. And you know, then it's like You know, you could go to the gym or you can go just completely blow your mind and do some improv. Was there any part of you that thought This can help me one day if I want to start a business. Was that

13:07 No. Wow. 'Cause right like today you would think okay. In your twenties, do some improv, learn marketing, and then you'll be Yeah, right. Then I'll s sell razors on the internet. Yeah, right. So you are in your twenties, you're in New York, you're I guess you're by this point approaching your early thirties, um, and you decide to leave, you decide to just

13:35 go and move to here to Los Angeles. Why? I mean quit your job in marketing in New York, leave improv troop there and come here. What Yeah, well I I got laid off, so that's like a lot of people, this is There's no hero story there. Yeah. Sorry, sometimes life happens on you. Um So yeah, I got laid off. Um

14:00 I was dating a girl at the time in in uh who lived in Los Angeles and I had always wanted to live in California at some point. So you know life happened on me and I said now's the time, like you know. Screw it. I've not got nothing to lose. So no plan, no job, you just came out here. No plan, no job, just came out here. And what did you what did you start to do? So I uh through a friend, I was able to get a job at a small video marketing agency, um, and what they were doing is they were helping brands develop and distribute uh video content. And this was probably two thousand, two thousand ten. So similar kind of similar to the work you're doing in the internet. Yeah, related very related to the work that I had been doing, doing work for big brands, putting it online, but doing it in a space that was, you know, pretty squarely in video. So I'm curious to find I I guess it is sort of Somewhere near the end of two thousand ten, um, this is a fateful moment for you because you meet somebody, you are at a holiday party

14:58 Here in LA You meet a guy uh named Mark Levine. Yep. at this party who is Mark Levine What's that party what happens there? So Mark Levine is um my friend's father. He's a businessman, he's had a successful career uh in South Africa, then came to the United States, you know, and he he was an importer. He's like our family friend who you know would show up sometimes with like

15:23 You know, a truck full of soccer balls or like a truck full of bikes, and you'd be like, Where are the bikes from? He'd be like, Do you want a bike or not? And and so you're like yeah, I'll take a bite. Um So Yeah, we'd been trying to get connected for a while because he had heard that I had worked in

15:43 you know, worked in the internet, um inside the internet. And he wanted to meet me because he had all this stuff in a warehouse that he was looking to, you know. Unload when you say stuff, like he would just he would just import whatever stuff. Well the two things that he approached me about were he was like I've got um Uh I got about two hundred fifty thousand razors.

16:09 Um okay. Uh He also had a couple thousand cake slicers. Cake slicers. In a warehouse. Yeah, so the cake slicers were called piece of cake. The slicer themselves was shaped like a wedge piece of cake. And so

16:27 You know Forget about the worry of having to slice twice when you want a piece of cake. Now you take your piece of cake. And you put it over the cake. Wow. And out comes the perfect slice of cake. I need to know why we are not talking about Dollar Cake Club.

16:47 How how was that How is that not the product that you said uh Mark, oh my God, amazing the cake slicer, yeah, I'm in. I just I knew that, you know, gluten free was gonna be the next thing and I just wasn't gonna be a market for it. All right, so you are at this party, uh this holiday party, and he's like, Yeah, I've got a warehouse of two hundred fifty thousand razors and uh thousands of cake slicers. Are you in? Is that what he said?

17:19 What do you think? And I was like well let's let's give'em a try and we'll see what we can do. So what happens? Like you go home and then you you call them and say, Okay, I want to go check out these razors. Yes. So I so I knew that I wanted to get access to the razors because I had always bristled at the price of razors and I had always there was a time and I remember this specifically When I was living in New York, I would walk right past the Dwayne Reed on my way from Rockefeller Center to the subway on the F train when I go downtown. And and I would need razors and I just wouldn't want to go into the store to by the Razors because the Razor Fortress is always locked, you have to find the person with the key, they're always doing something else. And you actually feel like you're inconveniencing them for you know helping you get a product. It's the only product that's like that or one of the only products that's like that. In the store. And I didn't in 2006 say this is a problem that I'm gonna go solve, but at that party he said, the razors are great, what do you want to do with them? I had the idea for a dollar shave club right there.

18:19 Alright, so you go and you what, you you go check out this warehouse? So the Razors are in a warehouse in San Bernardino or Rancho Cucamonga, which is like an hour east of here. And I get out there and There's a guy there and I'm like, Hello, I'm Mark Levine's you know partner and um I'm here for the Razors and he's like oh You're Mark Levine's partner, and I'm like, yes, yes, I am. And they're like, great, you gotta go get me$700, or I'm these razors, I'm about to throw these razors out. So the razors had been there for so long and the bill hadn't been paid. Like I'm sure that Mark had just forgotten about the rental of this space. Like I'm sure that he had almost forgotten about these razors. So I had to go get seven hundred dollars sight unseen and give it to the guy so that he didn't throw out the razors and I could have access to them. So you go in, you see the razors, and I go in, see the razors, I look at them, and I say these look like razors that I would use. I take them home, I shave with it, and I knew that we had something. Well.

19:14 So you get home and and you call them and you say, Hey I think I can sell these and he says, Great. Go knock yourself out. Um more or less, yeah. He was like, what do you want to do with them? And I was like well, I you know, I want to put them online and I I think that the best way to do it is to create you know a subscription mechanism where people don't have to go to the store to get them, they come automatically and Um

19:36 Yeah. How is it at that very moment 'Cause it sounds like that's what you're saying. You were thinking This is the business I'm gonna do.

19:44 I'm gonna drop everything. I'm gonna focus on this thing. Like what what was it about two hundred fifty thousand razors in a warehouse in Rancho Cucamonga? That inspired you to Well, because I knew there was a problem. And I think that

20:00 A lot of entrepreneurs will tell you that you know they trust their gut, and I trust my gut. And my gut told me that the problem that I had observed back in 2005, 2006, when I had that feeling of not wanting to go into the store because the razors were overpriced and the buying experience was super frustrating, if I had that feeling, I knew there were other people like me that would have that, that that were experiencing that same frustration. And I knew that there was an opportunity. And like also like a lot of entrepreneurs, um, once you become focused on an idea and you've identified a problem that needs solving or a thing you want to bring into the world, it's really hard to get that out of your head. I believe truly that there was a problem worth solving here. And I certainly didn't think that it was gonna become what it has become, uh, but I knew that there was enough there to um To you know, make a couple bucks.

20:49 And and what about the name? How did you was the name also part of the idea from within a few days of meeting Mark? I wanted the function of the business to come through in the name. And I think if you were to pluck somebody off the street and say Um what does a company called Dollar Shave Club do? You should probably be able to figure that one out. So

21:11 If I was If I knew you then, right, and I I probably would have said to you, and I have to imagine other people said to you Michael, you're like a thirty something dude and You want to try to enter one of the most impenetrable markets. Razors and shaving in America. I mean

21:27 Gillette chick Did anybody your family or anybody say to you But like razors, this is like This market is dominated by like two or three companies. Yeah, I I don't know that anybody quite phrased it like that. Um

21:44 Mm-hmm. Um So yeah, I mean you're you know, my family, you know, but like Don't listen to your family because y'all For a lot of reasons. I mean listen to your family for a lot of reasons, but don't listen to your family for some things. I mean the way you've laid it out is exactly right. This is you know

22:03 Gillette at the time had an effective monopoly on this particular consumer product in this category. And for a nobody to come in with his Rancho Cucamongo razors and and like change the way that people think about that category. Like, you know, I would never have said it that that's what I was gonna try to do. Yeah. Cause it would have sounded crazy. When we come back. How Michael Dubin and his Rancho Cucamonga Razors actually did end up changing the way millions of people would buy shaving products.

22:41 Stay with us, I'm Guy Raz, and you're listening to how I built this. Hey, welcome back to How I Built This. I'm Guy Raz. So it's around the beginning of 2011. And Michael Dubin wants to see if he can get any traction with Dollar Shave Club. His new company that sells razors on the internet.

23:18 And to fund it, he puts in some of his own savings and he also gets an investment from Mark Levine, the guy who had that warehouse full of razors that he needed to get rid of. So Michael hires a few people to help him put together a beta website. So the goal of the beta site was really to test different pricing models, test different forms of engagement. And you know, the first brand that we launched was not what it is today. It was really just, you know, what we have all come to know as an MVP, uh minimum viable product. And let's just get something up, let's see how it does. And let's see what the feedback is. What we were trying to learn is what was the best product to sell, what was the best assortment to sell, what were people liking, what did they want more of, and really just you know can we can we move these razors and what yeah, what do people want out of this type of a service?

24:08 So all right, so in that first year you were really kind of Seeing if people would get to the site, seeing what what they were buying. How did you even reach people? So early.

24:19 Like by Google ads and things like that. Yeah, we did a group on Um I went to a mom blog conference down in like San Diego or something. And I mean, you know, this was real street hustle at the time. And like you know, you buy you buy you do your own SEM in your house. And I still remember our first customer was Imran Charnania of Houston, Texas. He just found you online?

24:43 He just found us online. I remember where I was sitting when this first order came in, which was the first stranger validation, right? Because obviously my mom had bought some and p other people, my buddies had bought some and Yeah, the first real sale came in and like that validation like Yeah, that first thrill. of that first sale is like all the encouragement that you need as an entrepreneur to be like yes

25:09 Somebody gets it. Yeah. So Obviously at a at a certain point and and this really comes to a head in March, I think of the date was March sixth, twenty twelve. Your background in video and your background in improv

25:23 Magically come together. Unplanned. um when you release a video. What what was the Yeah. So

25:34 I knew that This was a a fairly simple story. Razors are overpriced, you are overpaying for the technology, and you can get a great shave from w without having to pay such a high price. I knew that if you just told that story flat It would sound flat.

25:49 So I want a human to be a part of the brand and I wanted to make a video and I knew how to write. And I sort of knew how to act or perform. And I I called up a a friend of mine, Lucia, creator and director of of Broad City Now. I met her. directed one of the shows that I was in at one point. So yeah, I met her as part of that community. And you asked her to help you with this video. She had just moved to LA too and I said, hey, I am starting this company, I want to do a a video advertisement that tells the story. It is going to go on the homepage. You know, I wrote a script, will you meet me for coffee and and like give me notes on the script and and then help me film it. So we met for coffee. Uh the script, um, she says, I really like it, added a couple jokes, um, so the line, are our blades any good? No, they're fucking great. Used to be are our blades any good? No.

26:41 And then some other bad joke. And she gave me that line. So I actually owe that to Lucia. And we rented out the warehouse that we were fulfilling packages in out for the day. Um that background that you see, I mean they fulfill all kinds of crazy stuff over the years. For people who haven't seen it, which is it's you s starting with you behind a desk and it tracks you. It follows you through this warehouse and we meet a toddler shaving the head of a a grown man. We see um a bear, a man in a someone in a bear costume, um you've got one of your warehouse employees in a go kart with you. Um It's very, very funny if you haven't seen it. Uh twenty five million I think was the latest number. It's amazing. Um you released it. On March sixth, twenty twelve, was there a reason why you picked that date or that time of year to release the video? Yeah, so um

27:32 So we were ready to launch. We had just raised about a million dollars in in um in venture capital. raise that money. You went around and So our first investor was a company called Science, they're out in Santa Monica. They gave us a hundred thousand dollar check. Actually, no, they gave us a hundred dollar check by accident first. And I got all the way to the bank. I literally I got to the bank and I was like here's my check for$100,000. You had to fill out the form that said$100,000 and I fill it out and the woman looks at me and she's like Uh uh

28:03 But w who were the I mean I have to assume there were some investors or maybe many who looked at this idea and said, I'm not gonna get into the razor. Right. So what was the pitch that convinced those who agreed to or who you know who said, Yeah, sure I'll I'll I'll put in a little seed money. Well they saw the video. before you released it. Correct. So that was how you were able to convince those initial investors. Yep, they were like, well you wanna do this? And then they they were the first ones that said all that stuff about there's no way you can do it. And then I said, the how you gonna they were like, how you gonna do it?

28:34 Um and I was like, Well I'm gonna build a brand and they're like, Yeah, but what do you mean? And I was like, Well then I tried to explain and I was like, You know what, just watch this. You said just watch this video. Yeah and instantly many of them laughed that it was funny and thought it was creative and obviously believed in you. Yeah, and they were like sure I'll I'll I'll give you a hundred bucks. Alright. So you you raise the seed money. March sixth, twenty twelve.

28:57 Why was that date or that time of year significant? So I had spent time in the media. I I knew how the media would think about um using a video like this to tell the story of our funding. And so I wanted to make sure that we announced our funding at the same day that we launched the video. We also chose that date because there was a nice lull right before South by Southwest. People get really excited right before South by Southwest, or at least they did then. They look for a big tech story. They hope something is going to break the way Twitter did in 2006 or whatever, when, you know, and that was when Twitter kind of had its big moment, was at South by and it became a thing. So there's a lot of anticipation in the air, and people are looking for something exciting in the tech space. So I wanted to do it before the festival, before that got noise.

29:43 There's not a whole lot of noise out there right now, and and maybe this will get some traction if I do it. In this window. Yes, exactly. So you you guys put it out there. What hap what happens? You you upload it to like YouTube or Upload it to YouTube, um turn the site on late the night before and and how do you get

30:04 People to know about it or click on were there journalists that you targeted? Were there people that you specifically went after? Yes, so we had done a round of press um you know to announce our million dollar uh seed round and we talked to all the usual suspects, the tech crunches of the world, the Bloombergs, et cetera, and all the stories went live at the same time. And first the tech ecosystem picked up on it. And this video, which People found funny and engaging, and also that it was promoting a real business was sort of a unique combination for people. I don't think there were too many examples at that time of a direct-to-consumer business that launched with a video that was funny and good. And I think that that tech community is a very important thing. surfaced it and then from there it sort of caught wildfire.

30:52 And what happened to I mean that that day, the sixth I mean, were you surprised were you show I mean because it a lot of people Watch that video. Yeah. Um I

31:05 You never build anything like that and think it's going to go viral. Anybody that tells you that they can build you a viral video or don't believe them, I did not have huge hopes for this video. I just thought that this was a really compelling way to tell the story of what our business was. And we launched it and I you know we I woke up at my you know normal time is six thirty on March sixth, and I looked at the site and the site wasn't there. And I was like Oh my God, what's wrong? Why is the site not live? Like we should be live. And I saw some text messages and some of my friends that are up on the East Coast earlier, they were like, you know. Dude, amazing video. Like but the site, they I can't order my razors. And you know, you're sitting there and I'm literally in bed, and every entrepreneur has had a moment like this, or a hundred moments like this, where they look at their phone first thing in the morning and they're like, oh

31:54 Sh whatever. Um and that was one of them. So the site had crashed. I had to go figure out how to get the site back up online. Eventually we did, and then we sold out. And the Var sold out and these are these are the still the razors from Mark Levine's warehouse. Yeah, yeah. So you you cleared that warehouse. Yeah. We had we had some other we had some other razors as well. We had we had some twin razors. The first razors were twins, then we had some four blades, then we had some six blades. So we actually had but all they all sold out. And so they sell out and You know, you're now you're like What do I do? What do I what do I do in this moment? Do I you know Pull down the closed shade and say, sorry, like we'll be back in a couple months once we can make more razors. Or do I we keep selling, put up a note that says, hey, you know, we're gonna sell these razors to you in advance. We're gonna keep your money and eventually, eventually we'll send you these razors. And people thankfully, you know, were okay with it.

32:50 I mean some people some people did. We were very transparent about the fact that there was a delay in the razors, but you know, they they hung around because the proposition was resonant, and we actually had tapped into something. We had solved a problem that many, many people uh had, and we did it in a way that resonated with them, and they wanted At this point, Dollar Shave Club was still you and Anyone else? So science was our first investor, and we had

33:22 I was the only full time employee at that time, but science had a studio of folks, they had some designers, then there was a tech team that was third party tech shop that did all of our engineering, um, and but I was the only full time employee. Yeah. And where were you sourcing your razors from? So a manufacturer in South Korea. And here I mean here's the thing, you you see these ads, right, for Gillette or whatever Razor it is, and they talk about this incredible technology as if it's like, you know, something that NASA invented. If Gillette was selling a You know, a four pack of razors, let's say, for four or five times the cost that you were offering. Which was a dollar plus two dollars for shipping and handling. Yep.

34:04 I have to assume that you were this was a lost leader, that you were not going to make money off this for a while. On that twin razor, No. On the other ones, yes. And so Explain why I mean we've talked to the guys who founded Warby Parker and they explain why Frames. were so expensive because it was essentially a monopoly. And and they said there's no reason why is it was it the same with racers like why

34:29 Why were razors? That you could buy at a at a pharmacy so much more expensive than the ones you were selling. Right. Well, you know, if you think about it is a very small community. There are not that many people in the world that make great razors. And you think about the science that's involved, for such an old school sort of product that has been around for a long period of time, there's an extraordinary amount of science that goes into Taking raw metal, then thinning it out, then creating a blade edge, then then coating a blade edge, you know, that can actually slice hair off your face and not skin off your face. There's a lot that goes into it. You can do it. People do it. But it's hard. And that's why there's not that many people that do it.

35:11 How were you fulfilling those those orders in that after the video came out? Was it like you and a few people like Packaging them up and Yeah, we had printers. We had a couple printers hanging around the office and you know we were running labels and you know it was so frustrating because we had thousands and thousands of orders, and this label printer is like But the What the

35:34 So like the only answer is get more label printers. So At certain point we had these label printers and you know, we're we're filling out these rolls of labels and then we put them in these big trash bags and we drive them down to the warehouse where we shot the video and that was doing our fulfillment center. And this was not an e commerce fulfillment center. This is a place that like on Monday they're filling like windshield washer pellets into tubes. On Tuesday they're putting vodka bottles in crates, and on Wednesday they're filling orders for Dollar Shave Club and like Whatever, so we have to go over there, take the big bag of of labels and a big trash bag, throw them over the fence, and hope that in the middle of the night nobody comes by and steals the big bag of rolled labels. Um which would be crazy if they did that, but Um but that's yeah, that was how the operation worked.

36:21 When we come back after a quick break, Dollar Shape Club expands beyond just razors, and how that expansion put them on Unilever's radar. for an acquisition offer. Stay with us, I'm Guy Roz, and you're listening to How I Built This. Hey, welcome back to how I built this. I'm Guy Raz. So Dollar Shape Club launched in 2012 with a viral video that got lots of attention. and demand was overwhelming.

36:57 But even with all of the momentum, Michael says raising money to scale the business was still a challenge. Raising money has never been easy for us, and I think for unless you're Snapchat circa two thousand, whatever, you know, it's hard to raise money for any kind of company and and for all the reasons that you pointed out in the beginning, you know, wh how do you think that you are going to, you know take on these giants that have been doing this for, you know, over fifty years and and aren't they gonna squash you, aren't they gonna copy you? And so it was never easy for us. Yes, there was always you can always raise some money from some portion of the market, but the people that you want to raise money from, the smart money so to speak, the smart money asks the smart questions.

37:39 and they asked all the questions that that they should, and it was never easy for us, even you know, into our series D. Mm-hmm. You know, once you started to gain traction, obviously competitors came in, Harry's Razors, for example. Did that make you nervous when when you started to see other People who were also using the subscription model.

38:00 Yeah, I mean I I think of course. Any time that you create something and Um you put it out there. And it's naive to think that people aren't going to copy your great idea. And I think the f your first reaction is to be like, uh oh. But I think what you learn over time is that the presence of competition pushes you to define yourself more specifically and focuses you on the things that you want to do.

38:27 you know, definitely makes you work a little bit harder. So you know, most people when they first start a company and then they experience competition, don't think that's a good thing. I think it's a wonderful thing. We've benefited from that in some ways. It's been validating in so many ways, too. Did you have to do a whole lot of advertising or were those viral videos because you d went on to produce more? Was that really driving The customers was that bringing in new customers. Yeah, we we shot our first television commercials, I believe, in two thousand thirteen. We did another video for our one wife Charlie's, which is our Butt Wipe for Men.

39:12 Do you want to talk about that? Well, I mean sure. This is twenty thirteen. To expand and to diversify? Decided to diversify our first expansion was one wipe Charlie's. It's a butt wipe for men, it's a moist towelette that you use. Some people like to mop before they sweep, some people like to sweep before they mop. It's a better way to do it. You know, anybody

39:38 Unless you're very flexible, you know, you're not spending any time back there. But other people that that care about you might Might be. And so that might be a that might be a a service that you provide not for yourself but for your loved ones. Uh a couple of things happened to you guys that that are not surprising because it happens to successful startups. The first is

40:15 the big play got into the game. They got into the subscription game, the Gillettes and the other companies. They are much bigger. That time certainly were much, much bigger in terms of the the capital they had, the cash, the marketing dollars they had. Um was there ever a concern when they got into the into that game that They could actually Crush you?

40:39 Mm. Um Ani smart entrepreneur, ani smart CEO or business person should absolutely be afraid of that type of thing when something like that happens. And you should be doing the chess on how to make that not happen. So yes, of course, when any competitor launches, and many have You have to think. How are we gonna be different? How are we gonna fend this off? If you don't take competitive threats seriously, uh that's foolish. So we absolutely took it seriously. The other thing, of course, is that Gillette sued you for patent infringement.

41:13 Um as your you began to take away market share from Gillette. Um it's still pending but Did that lawsuit freak you out when that happened? Um, well yes and no. I mean, you know, it was the first time I think that we had gotten sued and you know, your first the first time he got sued, you're like What do you what how do you react to something like that?

41:35 But I think at at a certain point you people had been telling us along the way to expect that. because that's a playbook that big competitors, big incumbent competitors can do, you know, to make you look unattractive to capital, to make you look unattractive to potential acquirers. And so For me, you know, like look, you take everything very seriously as a CEO, but You also say that There was a business calculation to it also that made a lot of sense from their side. So

42:07 You put it all together to and and and rationalize it that way. So you guys I think at a certain point, maybe it was twenty fifteen by twenty fifteen or twenty sixteen. You had about three million subscribers. Do you remember what percentage of the subscription market you guys had at that point?

42:23 of the online razor subscription market? I mean most most of it at that point. Well. I won't know the exact market share numbers off the top of my head, but I think that You know, as of now there's about twenty to twenty five percent of the men's uh non disposable razor market that we have. Do you remember when you became profitable?

42:47 Uh no comment. We are owned by a very big company and we're not allowed to disclose financial information. Twenty sixteen Dollar Shave Club was acquired by Unilever. Reportedly for a billion dollars.

43:03 Okay. Um I mean it's a a mind boggling astounding amount of money. Were you looking to sell or did they come to you? How did that happen? So I met um I met one of their executives at a dinner in New York, and we just started talking about where I wanted to take the company, and he was telling me about some of the things that uh Unilever was working on, and that men's grooming was a big priority for them strategically.

43:30 And uh the conversation really just started out as a hey, how is there a way that we can potentially help each other? Um and the conversation, you know, took another step and then another step and then we ended up with the acquisition. the founding of the company and there was a lot that went into it and a lot of Stress and hard work, but Just to I mean just to put it into perspective.

43:53 Talk about a five year period from the time you founded it to the time Unilever bought it. I mean When you think about that. Are you astounded at that? Арю? Амі до С фас. And this is what what we built. I mean it it is pretty mind boggling.

44:10 It it is mind boggling. Um it was a huge moment in the company's Life. and history and certainly a huge moment in my life and career, no doubt, but I knew that all the hard work was really yet to come. The acquisition in and of itself is a nice moment and an acknowledgement of the progress that we made, but there was still so much to do that, you know, I didn't spend a lot of time sitting around being like, Yeah you know.

44:37 Popping a lot of champagne bottles because there's just It's just you still run the company, you're the CEO. Correct. You work for Unilever. Uh I'm trying to think where I get my paycheck from but yeah, more or less. Yeah. I mean yes, my boss is Unilever. For all the people here tonight who might be in your position in two thousand ten or two thousand eleven, who might be starting something up or

45:01 You know If you were in this audience then and you were watching somebody like you, what do you wish you knew then that you know now that Would have been helpful. Um I think there's a lot of times when you is starting a company and you're faced with

45:17 Certain death. or near death. You have a near death experience, which will happen a lot. Um It's never as bad as you think. great as you hope it will be either. And you know, yes, there are some times when the worst possible outcome happens.

45:35 But it's really rare. And you go through enough sort of crises and near death experiences, and you come out on the other side, and you kinda like in your mind you say to yourself, Uh okay, I know what it's like to be chill on the other side of the crisis. I'm just gonna put myself there and know that like Eight out of ten times. It'll be true. And two out of ten times it's not.

46:00 And it helps you, I think, get a little bit less scared because starting a business is is scary. Yeah. Um Michael, this is a question um that I ask everybody who comes on the show and and and and if you've heard the show, you've heard me ask the question, but I'm curious, from your point of view, how much of what happened to you Um do you think is because of luck and how much do you think is because of your hard work and your intelligence and your skill.

46:24 I think that anybody that's successful in business has benefited from luck. And Anybody that tells you that They haven't Or don't

46:34 is not being truthful. Luck plays a role in everything, and I think that you continue to get lucky throughout your career and and throughout our business. You know, we've gotten lucky in in many ways. Some sometimes Good luck is a manifestation of hard work. Um and sometimes luck is just luck. I like to think that a lot of other people who who met Mark Levine at that party that night, you know, would not have done what I did with with it, um what we have all done with it, um, because this is not a one man show, it never has been. Um but yeah.

47:11 Luck's luck is important. Michael Dubin. Found of Dollar Shave Club. That's Michael Dubin, he's the co-founder of Dollar Shave Club. This live interview was originally recorded at the theater at Ace Hotel in Los Angeles back in 2018. Michael stepped down as CEO of Dollar Shave Club in twenty twenty one, and since then he's been involved in advising and investing in other startups, and he's also written a screenplay. A few months ago, Michael

47:42 Also came back on the show as a guest on the How I Built This Advice line. He joined me to take questions from a few early stage entrepreneurs, and he gave them some really awesome and hilarious advice, so you should check it out. Thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, Ideas and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at gyros.com or on Substack. This episode was produced by Casey Herman with music composed by Ramteen Arablui. Our production staff also includes Neva Grant, Catherine Seifer, JC Howard, Sam Paulson, Chris Massini, Alex Chung, Carrie Thomson, John Isabella, Andrea Bruce, Ramel Wood, and Elaine Coates. I'm Guy Raz, and you've been listening to how I built this and Don't stop the podcast just yet.

48:31 Пизну you're about to hear an amazing small business story that you don't want to miss. This segment is presented by American Express with a business platinum membership, the best just got even better. Today's story begins in Hollywood, where husband and wife Floyd and Julia Albee first met.

48:52 At the time, Floyd was a production designer for TV and film, and Julia was a photographer. Floyd and Julia built a life and a family together in LA. But in 2018, Floyd went up to Mill Valley, California to shoot a commercial, and he fell in love with the natural beauty and small town feel. We were shooting on top of Mount Tam every morning at 6 AM. It was like walking into heaven every day. And then at night, I would see this incredibly charming town with 10 or 11 year olds going out to the movies by themselves at night.

49:24 I've never seen anything like that. He came home and was like, We're moving to Mill Valley and I was like, We are not moving to Mill Valley. But it turns out Julia was ready for a change as well. So they decided to make the move. Floyd figured he'd get enough work as one of the few production designers in the Bay Area. That was sort of the logic. I like to say my plan of moving up here failed. I've done one commercial up here in seven years. Yeah. That part didn't work.

49:49 What did work was their idea for a home goods store in Mill Valley's downtown. it was gonna be a side hustle. Like, oh we'll just open this little concept store. They'd focus on modern and minimalist designs and sell a little bit of everything. A little apothecary, a little jewelry, plus furniture, which for Julia had actually become a health concern. So I have

50:12 a autoimmune issue and I'm really sensitive to the chemicals. Like I walk into stores and sometimes I'm overwhelmed by the amount of plastics and I have trouble breathing and I get hives around my neck. I just wanted some furniture that didn't make me sick. So Floyd and Julia traveled around the world and started sourcing furniture made from natural materials. And by the end of 2018, Prevalent Projects opened up its brick and mortar store in downtown Mill Valley. Pretty soon after, Floyd spotted another opportunity. Because he'd built sets all around the world, why not offer interior design services as well? One of our first like real clients.

50:53 Came in and somehow gave us a giant project to do in Hawaii. Turns out they are people from the tech industry who've done quite well. They had cashed out, they were 35 year old billionaires, and just gave us the opportunity of a lifetime. And it floated us. through the l next couple of years.

51:14 And through another chance meeting, they connected with a partner who wants to expand their brand across the country. We're looking for a second location now, trying to figure out where to land in Silicon Valley somewhere. Possibly LA, interested in New York, interested in Colorado, interested in Seattle. All this from a decision to pick up and move to a new place, a place that gave them new energy. Even as they worked a hundred hour weeks. We'd just be till your eyes are bleeding, like working as hard and fast as you could. And at a certain point during the day, I would just grab her and go, come on, we'd walk out our front door. right up into like the most beautiful old growth redwood forest.

51:52 And it would just be like a bath for like twenty minutes. to just breathe all in all that oxygenated air and then get back at it. That's Floyd and Julia Albe, co-founders of Prevalent Projects. Their story was presented by American Express. To build a business like no other?

52:08 You need a card like no other. There's nothing like business platinum.