AIB Featured Business Leader – Michael Dubin
Building a successful business takes determination, grit and a healthy dose of good luck. A good sense of humour doesn’t hurt either, as Michael Dubin proved when he launched the Dollar Shave Club on the back of a viral YouTube video. From a tiny business started in his apartment in 2012, Dubin sold the business in July of this year for a reported $US1billion. Rubin will stay on as CEO.
Dubin graduated from Emory University in Atlanta, Georgia in 2001 with a Bachelor of Arts in History. After graduating, he moved to New York and worked as a page (intern) for NBC, then moving to MSNBC in news writing and production. From there, he moved to digital media and marketing, creating custom content for big brand advertisers like Nike, Gatorade and Nintendo. He also created video marketing content on YouTube for brands including Ford and Gillette. Life wasn’t all work, though. Dubin also spent those ten years developing his sketch comedy and improv skills at the Upright Citizens Brigade as a hobby.
In 2010, Dubin attended a party at which he met one Mark Levine, the father of a friend’s fianc. The two made small talk and found themselves on the subject of razors and the expense of shaving. Levine, who worked in manufacturing, claimed he could source affordable double razor blades. Dubin had several years of marketing experience behind him. Together, they decided to start the Dollar Shave Club, a subscription-based model whereby subscribers receive high quality razor blades by post directly from the company. By cutting out the retail outlets, Dubin and Levine believed they could cut costs and offer a new solution.
The two began working on the project in January 2011. Levine connected Dubin with the promised manufacturers, but from there their mission diverged a little. Levine saw the opportunity as limited to selling razors on the internet. Dubin saw “the Starbucks of razors”. He wanted to build a brand, with its own culture and language, and he already had plans how to make that happen.
The viral video
Dubin approached angel investor Science, Inc. with his idea. They were initially reluctant. “I wasn’t wholly persuaded by the profit margins”, remembers CEO Michael Jones, although he considered the business model promising. And then Dubin unveiled his proposed marketing video, and Jones was sold. In that video, Jones saw that Dubin had something new to offer: a fresh, funny take on the mundane act of shaving, with the potential to disrupt the market. Science, Inc. came on board, and in 2012 they invested $100,000 in the company.
The video itself cost $4,500 to shoot on location in the original Dollar Shave warehouse. It was written and performed by Dubin, and shot by a friend from his improv days, Lucia Aniello. The advert was an immediate viral hit, both because it tapped into a shared grievance around buying expensive, unnecessary razors and because, simply put, it was funny. In the video, Dubin uses physical comedy and a multitude of jokes – many at the expense of big brand razors – to advertise the fact that Dollar Shave razors “were f—-ing great”.
Within a day of the video being uploaded, they had five thousand new subscribers despite the website crashing under its new burdens in just two hours, and his stock sold out in six hours. The video went viral, passed organically from person to person until three days after release, it had been seen by 2 million people. Today, it’s been viewed over 23 million times. Dubin followed that up with a second video launching a new range of moist wipes called ‘One Wipe Charlies’, which garnered another 2.5 million views shortly after launch. He’s even used viral video marketing to promote the philanthropic efforts of Dollar Shave Club, notably live streaming his own colonoscopy to promote the Colon Cancer Alliance, to which they donate a percentage of profits.
The Dollar Shave Club today
But viral videos alone, no matter how compelling, can’t account for all of Dubin’s success. Dollar Shave Club now has $1.7M subscribers paying an average of $10 per month for the service. Despite there now being a large number of competitors on the market, Dollar Shave commands 50% of the online market and 8% of the total razorblades market, a testament to the quality of its product. The company has added a few products to its line, including shaving cream, serum and ‘One Wipe Charlies’, which are personal wipes for men. But Dubin has never planned to branch out broadly. His mantra is “stay focused on what’s important, stay narrow”, and he’s stuck to that plan.
Dubin has not only refrained from branching out into extraneous product – indeed, his company doesn’t even try to market to women, keeping its products firmly on brand as a men’s lifestyle company – but he’s kept his main product, the razor itself, plain and simple. It’s not often that someone comes into a market and states that their product is less technologically advanced than the competitors, but that’s exactly what Dubin has done. Dollar Shave Club is a story of modern disruption, but it’s also a story about stripping a product back to its basics and favouring value over technology. It’s a narrative that’s obviously resonated, not only with consumers but with Dubin’s competitors.
In 2016, consumer giant Unilever negotiated an acquisition of Dollar Shave Club. Dubin will stay on as CEO and retain broad direction over the company. Venture capitalist David Pakman, who is one of Dollar Shave Club’s biggest investors, says that Unilever is known for leaving its acquired companies alone to pursue their chosen direction. For Dubin, it’s the best of both worlds, giving him the creative latitude to let his humour shine with the backing and resources of an industry giant.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: CNBC, Bloomberg, LA Times, Inc, Financial Times and Next Shark.
Photo credit: Palm Beach Daily News