Transcript: Michael Dubin shares startup lessons

CEO and Founder of Dollar Shave Club at Vator Splash LA 2015

At Vator Splash LA 2015, Michael Dubin, Founder and CEO of Dollar Shave Club, sat down with Bambi Francisco to talk about owning the bathroom. See full video transcript below.

Michael Dubin - Owning the Bathroom - Vator Splash LA 2015

Introductory music followed by the Dollar Shave Club video advertisement.

Francisco: That was so well done, wasn’t it worth stopping it to make sure you guys were focused on it. Michael, congratulations on that video.

Dubin: Thank you.

Francisco: And congratulations because I think you just put out another commercial and I think it was trending on advertising major Adweek this week, its Jacques the razor.

Dubin: Jacques the dirty razor, yeah. That move too long.

Francisco: Yeah, how many people here have seen that video? Quite a lot. Have you seen the latest one, Jacques the dirty razor too?

Dubin: It’s just that – it’s very new.

Francisco: How many people here shave... It’s personal?

[People laughing in the background]

Dubin: Something, shave something.

Francisco: Shave something. How many people here use Dollar Shave Club?

Dubin: Oh, tough crowd.

Francisco: Oh, we need to convert everyone here. Anyway, this is – I’m thrilled to have Michael here. It’s been a long day but an awesome day and it’s nice to have him here because as you can tell he has a great sense of humor. He’s going to be quite entertaining, I’m sure. 

Dubin: Don’t get your hopes up.

Francisco: And we’re going to have fun with this a little bit of fun anyway, not too corny. But we would try to have fun with the interview by sort of interjecting some words into my questions and his answers, they would be words like shave and cut and slice and smooth.  So we’ll see how long we can do that of course, I’ve already told Mike, so I’m sure he’s got some very edgy comments already, cutting, edgy…

Dubin: Nice, nice.

Francisco: So yeah. Trying to stay ahead of you cause’ he – I’m sure, he can be well over my head with his humor.

So and I also want to make this interactive because it is at the end of the day I’m sure there’s many of you who have questions about how he’s built his company? He’s going to be generating by 140 million in revenue already, started three and a half year – 4 years ago, amazing marketers.  So, get your questions ready. If you have a question since it’s the end of the day, let’s open it up and I’m happy to share the stage with the –

Dubin: How many founders? How many founders in the room?

[Crowd responding]

Dubin: Cool. And non-founders that work at companies with fewer than 25 employees?

[Inaudible]

Dubin: Okay, cool.  And how many people work for Procter and Gamble?

[Laughter from crowd]

Dubin: Okay good.

Francisco: And Gillette? And Harry’s? Harry’s shave, what’s that other – you’ve never heard –

Dubin: I’ve never heard of them.

Francisco: Alright so let’s start, over the last, most of these guys here – who works on hardware, anyway? Anybody work at hardware?  One, so mostly software and over the last 20 years since the commercialization of the internet and the improvements in infrastructure and mobile computing a lot of these companies have emerged to make our lives more convenient, more smooth and –

Dubin: Nice, nice. Somebody keeping score?

Francisco: Who’s keeping score? And I am curious, what are some of the advancements in razor technology that enabled you to create the sort of this new revolutionized razor, if that’s the case?

Dubin: So yeah, so that’s actually the opposite of what we’re doing. We are selling you – as you see in the video. Our story is – the big boys are serving you up superfluous technological advancements that don’t really measure up, so to speak. Gillette’s latest flex ball product, they claim to shave 13 microns closer than the previous version of Gillette.  I mean, raise your hand if you know what the micron is, or how big a micron is?  Or how long it takes to grow up one guy. Yeah, how big is a micron?

[Someone answers in the crowd]

Dubin: How much?

[Inaudible answer from the crowd]

Francisco: Those guys are pure scientist.

Dubin: Yeah, so you know then it said how long does it takes for 13 microns to grow? Maybe, half an hour. So you decide, if that’s technology that you need or not?  The vibrating handles and the LED guide lights that they have, I mean these are what Gillette and Schick to a certain extent have been upselling the customer on. And we make fun in the video by saying your grandfather had a great shave and he only had one blade.  But the fact is – that you don’t need a revolutionized razor to get the job done. 

And so that “go to” market tone has really made us the people’s hero of the men’s grooming category because you know, we finally  called bullshit on what the big boys were doing to take advantage of the customer.  So it’s not actually a revolutionized razor that we’re selling.  We’re selling a more humble version of what you already are getting. 

Francisco: Yeah, but that’s disruptive. I mean, you’re basically taking this state old industry that continues to manipulate or influence our thinking. Thinking that we need something bigger, and better when we really – it’s sort of like medicine one versus so many different drugs for so many different things. We talked about this and Aspirin works pretty well.

Dubin: Right. Somebody there’s big opportunity out there to create a brand or an aspirin. 

Francisco: Right, that’s the next for you.

Dubin: Yeah, as soon as all this goes bad for me I’ll get on to –

Francisco: Which it won’t. So it’s sounds like what you’re saying – by the way I want to thank you because my husband sometimes, he goes and he buys me razors and he gets this really, really complicated ones and I just don’t get them and they are expensive.  So I do want to thank you for bringing this sort of – to somebody who’s very cost conscious.

Dubin: Of course.

Francisco: Thank you for rightsizing that market. 

Dubin: Happy to do it.

Francisco: So it sounds like what you’re saying is that we have a great value proposition?

Dubin: Yeah.

Francisco: You’re lowering the cost, keeping the product simple but it’s effective, it’s always been – it’s pretty effective already. And you also have a really great marketing savvy and strategies.  What’s made Dollar Shave Club? It doesn’t sound like it’s the razors, it sounds like it’s more the marketing or it’s more of – what’s made it successful?

Dubin: Yeah, sure. I think – look, the razor is excellent and you know, we have 2.4 million members in Dollar Shave Club.  They get a shipment from us every month or every other month.  I don’t care how funny the commercials are if your product isn’t good or great you’re not going to achieved that level of adoption.  I think what Dollar Shave Club is doing that’s different from what everybody else is doing or the way we think about Dollar Shave Club is – it is a lifestyle brand and an experience company. 

We don’t think about ourselves as a razor company.  We’re providing a service.  We’re providing guidance and we’re providing – we’re writing great content to build this experience and help guys find what they need in the bathroom.  And that philosophy infuses our approach to everything that we do. So yes, the commercials are great, it’s the first touch that a lot of people have with the brand.  You get a laugh from it whether it’s this video or any of our other eight or nine commercials that are running at any given time.  And then you come to the website and you have this very easy browsing experience and a lot of that heart, you know, it’s very hard to make something look so simple.  But there’s dozens of engineers and digital product people that are working hard to make that experience really seamless and nice.

And then you get the package in the mail and it’s simple, humble but well-constructed and there’s more humor and great content in there.  We send a little magazine out that’s kind of like highlights for men, for you to read in your bathroom.  It’s called the bathroom minutes.  And we have people that say, “I subscribed to dollar shave club just because of the bathroom minutes, not the because of the razors.”  And again, you hope that’s not true but it illustrates the point that people feel an emotional connection to this brand. 

They want to have – and that reflects a larger conversation that’s happening – not a larger conversation but a larger femine business today. If you want to be a successful you have to create an emotional connection with your customer.  You have to have a conversation with your customer, you don’t want to talk at your customer and I think brands of this generation are doing that a lot better than the incumbents.  And it used to be just product, place, price, promotion or the four P’s. They’ll teach you in school and now it’s the 4E’s (Exclusivity, Engagement, Emotion and Experience).

But those are – that’s how we think about building our business and yes of course the razor has to be of high quality but people don’t think of us as a razor company and that’s the way we want it.

Francisco: Exclusivity, so that they feel that they’re part of something unique –

Dubin: Yeah.

Francisco: And that’s how it made me feel.  So I want to jump into that brand building since we’re moving in that direction and a lot of companies here, I think, because it’s becoming competitive out there, you have to build the brand.

Dubin: Yeah.

Francisco: You really have to build the brand.  So what are some – and you’re really good at doing that with your social video.  So I guess a couple of questions, how do you create a great brand in social video? And then what’s your strategy around creating a brand versus just promoting your product?

Dubin: Right.  So I think the first thing to say is – I agree with what you’re saying.  Digital companies today and I’m assuming most of the companies here have some important aspects of their company that’s digital if not the whole company.  But digital companies have a lot to gain by thinking about building a brand.  It’s not the first thing that comes to mind when a lot of entrepreneurs in the Tech space get started.  Because they focus on the product itself; the digital product itself.  And that’s probably smart but not everybody is going to be like in Uber where it’s completely word of mouth and totally viral. 

You go out to dinner with a bunch of friends, you talked to your friend – everybody walks outside afterwards and somebody says, “I’m calling an Uber”, the other five say, “What’s Uber?”, now six people know about Uber.  And that’s how that word gets spread. But most businesses whether they’re B2B or B2C don’t do a good enough job at celebrating their reason for being and the resident idea that’s at the core of what they’re doing. 

So I encourage anybody starting any kind of business that think deeply about what they’re offering the customer, who they are as a company and then bringing that to life using great advertising or great social assets.  And what we did is – we created a video that was used as a social asset to help tell the story of our brand and it was into inside a conversation among men not really even inside the conversation but just help them have –

Francisco: That’s a good point actually. 

Dubin: Help them have a conversation that they’re already having with each other.  Guys talk about how ridiculous it is to buy razors in the store.  All we did was give them a funny thing to look at that told the story that they’re already having with each other. 

Francisco: Yeah, it is kind of a story that you’re telling?

Michael: Of course.  It is, it’s a story and I would say that again Tech founders their first hire is in always the marketing guy but you should have somebody that understands brand and marketing or advertising.  Even just a great copy writer at the start.  Somebody that can communicate your ideas clearly on your website.  And it will pay for itself.

Francisco: So who your end customer is; what kind of discussions they’re having and create some sort of campaign to kind of fit into that discussion.  Those are good things to –

Dubin: Yeah, absolutely. 

Francisco: Think about if you’re a startup trying to figure out how to – what your brand is, right?

Dubin: Yep.

Francisco: So let’s start from the beginning because you just went from zero to 60 in the first year, it seemed with sales.  First let’s start off with how you got started?  Because it’s not something that you think about, “I’m going to make razors.”  And you had an interesting start to your company because you actually had a friend who had a warehouse full of razors.  Talk about how this started? 

Dubin: Yeah, I met – my friend’s wife’s father was a guy who did a lot of business in Asia and he had a warehouse full of razors and he was like, “Can you help me sell them on the internet?” and I said, “Sure.”  And I had the idea for Dollar Shave Club pretty quickly thereafter.  

I’ve been working in advertising and eCommerce before so he kind of knew to asked me of all of our group of friends. And yeah, that was very fortuitous but I think the hard work began once we got down to business on building the website and figuring out how are we going to do logistics.  And I did that, I mean, like any founder does, you start by yourself or maybe with the small group and figuring out to do things on a very small level and then perfecting it as you go. 

So I started the company in my apartment in early 2011.  We didn’t launch the – we launched the beta site in July of 2012. And we didn’t launch the video in the modern kind of incarnation of Dollar Shave Club until March of 2012.

Francisco: Okay, you already had your seed funding which is what – a million?

Dubin: We closed the seed funding – we shot the video on October of 2011 and we used that – I mean me – I used that video to shot the concept around.  And we closed our first round of seed funding in – well we closed an angel round in January of a $100,000 –

Francisco: Of 2011?

Dubin: Of 2012 and then we closed the million dollar seed round in March of 2012.  So before that it was all bootstrapped.

Francisco: And then you ended up that year, 2012 you also had a Series A. 

Dubin: Yeah, yeah in October.  We did a $10 million Series A in October.  

Francisco: Wow! That’s because you had a lot of revenue.  So you’re showing a lot of traction and that’s how you are able to get the Series A.

Dubin: Yeah.

Francisco: So March 2012, you launched the video which is effectively when you actually launched the – you started selling.

Dubin: Uh-huh. Yeah, so we started selling three razors.  We’re only selling one razor in July of 2011.  That was the beta site.  So yes for all intense in purpose and purposes, March 2012 was the beginning of what we know now is Dollar Shave Club.

Francisco: Right.  And so you’re selling three tiers and then you ended up the year with $4 million in razor sales.

Dubin: Yes, we did $4 million in sales in 2012. 

Francisco: That’s pretty incredible and a lot of that was marketing after the video or what else did you do to drive up sales?

Dubin: The video drove a lot of sales organically. We started spending a little bit more money in October.  We started – we did a little bit of radio at the end of 2012 but not much.  A lot of that 2012 stuff was organic and maybe a little Facebook. 

Francisco: So from the video, so that’s quite of bit of sales in one year. 

Dubin: Yeah.

Francisco: And it wasn’t just the dollar razor, so even though it’s a dollar –

Dubin: Its dollar plus shipping. 

Francisco: Its dollar plus shipping but still – you have the $6, it’s not really a dollar.  It’s like a dollar store. 

[Cross talking]

Francisco: What’s that?

Dubin: It says a dollar. 

Francisco: It says a dollar but its multiple dollars, it should be the multiple Dollar Shave Club.

Dubin: Tomato, tomato. 

Francisco: But it’s true.  Did you ever go to a dollar – the dollar, was it a dollar price store? Just a –

Dubin: Nothing in there is worth – nothing in there cost a dollar. 

Francisco: No but what they do, they just give me one little – one toilet paper. 

Dubin: Yeah but then you got to pay a dollar for the bag so at least $2. 

Francisco: That’s true, so anyway. So what’s amazing is that you’re doing a $140 million in sales and you have three skews.

Dubin: That’s not true.  We have –

Francisco: What’s happening?

Dubin: We have three skews – three razor eschews and then we have a line of grooming products as well.

Francisco: Oh, that’s right. What percentage of your sales comes from the grooming products?

Dubin: No, no I can’t tell you that Bambi.

Francisco: A little bit. When does it go over?

Dubin: No.  I would have to cut that out of the video. 

Francisco: Okay.  That’s the first time you’ve actually sliced in – a line, a word.

Dubin: What are the other words I’m trying to –

Francisco: Dull, smooth, close, shave. 

Okay, so let’s move on.  Business model – oh yeah just curious, so you were making – so you sold $4 million dollars. Were you able to make money or do the razors cost a lot more than that? A dollar. 

Dubin: No, we made money on all of our sales – product wise.

Francisco: So just the marketing was really expensive, was pretty expensive?

Dubin: Not in 2012. We spend a lot more in marketing now than we did in 2012. 

Francisco: You spend more – you spend a ton on Facebook, is that where or is it more the commercials I guess are pretty expensive to make? 

Dubin: We spread it around.  We think of marketing as an ecosystem as one must – will have – we think of it as a big funnel, right?  And anybody in eCommerce will talk to you about the awareness and conversion funnel.  There’s really big channels like big television and radio. Then there’s medium channels or not medium but middle of the funnel channels like Facebook and radio also and then lower parts of the funnel which can be Facebook also and digital or any other type of digital media.  And it’s just will hit you at a different message at the different parts of the funnel.  So Facebook certainly an important part of the ecosystem but we’re not spending all our money on Facebook by any means. 

Francisco: So I want to just back track this sort of getting off the ground, because you know a lot of startups here are probably trying to get their series A and they’re probably looking at you and thinking “Oh man, you have a really cool business. You got to make fun.”

Dubin: It certainly not dull.

Francisco: It’s not dull.  That’s good.  And but there are a lot of them here are trying to raise their Series A and so maybe to you it came pretty quickly because you’re able to actually ramped up so quickly with revenue.  But what would you say to everybody here like where do they have to be to get a series A?  What do they need to do?  I’m sure you had a lot of conversation with a lot of VCs.  What were they telling you that where you needed to be at that point? 

I’m sure the hurdle is on –

Dubin: Yeah.  How many people out there are now raising money right now for their company?  How many here are raising Seed?  Series A? Okay, so more seed than Series A.

Yeah I mean look in – at the Seed stage, you know I can share my experience.  At the seed stage it was all about me and the idea and the market.  And that’s what you’re selling, right?  It’s a job interview.  And somebody is interviewing you to see if you’re the kind of person that can bring your idea, if it’s a good idea in a big enough market to life and what kind – you get a sense of what type of entrepreneur you’re going to be.  And that’s what ought to focus on. 

There’s a zillion blog post out there about what makes a good entrepreneur and what you need to focus on, it’s out there for you to read.  I don’t need to talk about that but remember that that’s what they’re going after.  Nobody expects you to have it all figured it out at the seed stage.  When you get to Series A that’s where you want to get to, Series A? 

Francisco: I had another question. 

Dubin: Okay, now well series A is a bit of different volume and we’re very fortunate because we gain a lot of notoriety after the first video launch and people were knocking on our door and we didn’t have to do a ton of – we did hit the road because you’ll always want more than one offer if possible but we were fortunate.  We were pretty sure that we would get funded eventually.  And I think every Series A can mean so many different things, it can be 5 million, it can mean 3 million, it can mean 10 million.  It just depends on what kind of company you are and where the money is going.  You got to be really clear about where that money is going. 

Francisco: And was there any talk about valuation and did you just – was there – talk about valuation, how did you establish that?  You’re pretty fast growing. 

Dubin: Yeah, I mean, look I was very fortunate to have some folks with me that had raised a lot of money, that had raised a lot of money before it help me think through the mechanics of valuation.  It’s as much an arbitrary signs as it is an emotional one and a financial one.  The only guidance that I would really give around valuation is don’t overvalue yourself.  And that’s the philosophy that we’ve had even long before people were talking about unicorns and companies not being able to justify their really high valuations.  But you don’t want to box yourself in with too high a valuation because when the next guy is going to come in and say well either you deserve that or you don’t.   And then you really hope that you do because otherwise you’re going to take the down round and too many entrepreneurs I think go after the frothy valuation because it feels really cool.  And they see raising money as the “be all and all” of their success and it’s not. Raising funds keeps your business alive and that something to celebrate but that’s not to “be all and all.” 

Francisco: So can you be candid here and talk about maybe what was like the biggest fundraising challenge and maybe which round was the toughest and maybe a decision – a road, you decided to go down which is sort of backfired? 

Dubin: Yeah, I mean, I think – fundraising is tough, even when you’re a great company.  I mean, look there’s a Snapchats of the world which will never have a problem raising money because it’s just – I mean – and Uber, right?  Those companies that are very blessed because they’ll never have to knock on any doors proactively. The money, people are just throwing money at them but for most of us, we have to work for it.  And even Dollar Shave Club we spend weeks and weeks on the road and even with our success, people still had doubts and you’re always selling your business to VCs. 

And I think the best thing that you can do if you’re lucky enough to have a choice is find a VC that believes in what you’re doing and supports your vision because ultimately things will go a little sideways and you want people that will persevere with you as you encounter headwinds and they have to share your vision. 

Francisco: Times up, really?  Can’t be.  Oh, there’s a question – do you have a question? 

Audience1: Yes.

Francisco: Okay.

Audience1: So you started with your video? 

Dubin: That’s right. 

Audience1: You started by launching your video, is that correct?

Dubin: Yes.

Audience1: And where did you launch this video? 

Dubin: YouTube. 

Audience1: Really?  You actually did it on YouTube?

Dubin: Yeah.

Audience1: Interesting! Okay.

Dubin: www dot y-o

[People are laughing]

Francisco: Okay, hold on right there. Funny, we have two women asking questions. He doesn’t even make pink razors.  He makes through brown.

Audience2: I just have a quick question. The 4E’s again are? 

Dubin: Exclusivity, Emotion, Experience, Engagement.  Remember that. That’s all you need to know to build a great business. 

Audience3: Hey Michael!

Dubin: Hi!

Audience3: So a lot of entrepreneurs and founders right here I have question on how did you get your first ten customers?  And what did you do to move to first thousand or strategies to get to first thousand?  Or maybe if the first hundred thousand customers?

Dubin: So this answer will probably not be helpful to you, what kind of business do you run?

Audience3: Telemedicine.

Dubin: And so your customer is who? 

Audience3: Asians talking to a doctor in his time.

Dubin: Okay, well maybe we’ll be helpful to you then but for us the market that we’re playing in is huge. Most people shave something on their body a couple of times a week.  And most people have a general perception that razors are pretty expensive.  What we did is we told a story that people had been telling each other for a very long time.  And we just put ourselves in position to really share that story.

So we got the first ten customers and the first ten thousand customers at the same time.  It was really about the – the best advice that I can give is really to get a great piece of – you don’t have to do a video.  Just understand what the value is that you’re bringing to your customer and find a great way to tell that story somehow.  Doesn’t need to be a video.  But then you might have to put a little bit of money behind it to get it in front of the right audience.  And then you’ll get your first ten and your first thousand customers at the same time.  If you don’t have a really great digital marketing person on your team that should be one of your first hires, because they can help you do that.

Audience3: Got it.  Thanks.

Dubin: Yeah.

Francisco: I would just do a spoof video on his video and then just change all the words around. 

[People are laughing]

Dubin: Yeah, you would be the first. 

Audience4: Hi there, currently I believe you guys are only a subscription business.  Do you guys have any plans to do eCom or offer your products to more people that are members of Dollar Shave Club?

Dubin: Yeah, eventually.  Yeah.

Audience5: Also given the fact that your subscription commerce, do you feel that the more people know about your brand, the more that reduces your monthly churn?

Dubin: The more people that what with the brand?

Audience5: That know about your brand and the more you spend on performance marketing to let the broader world know about Dollar Shave Club, do you feel that from a matrix stand point that has reduced your churn overtime? 

Michael: I don’t know if that, I think that certainly an insight for way to look at it and I’m sure that there’s some correlation there that we can’t really measure write the recognition of the brand, relative recognizeability of a brand.  Or where some sort of brand contributing to lowering churn.  I’m sure that you could connect those dots somehow.  But lowering churn is – the best way to lower churn are pretty unsexy right?  It’s not the commercials, it’s –

Francisco: Have a good product.

Dubin: Well it’s have a good product of course but its understanding credit card churn.  I mean the biggest reason that people churn and leave Dollar Shave Club is actually credit card declines.  And so if we can fix that problem which we constantly do, churn drops pretty quickly by its great CRM.  Creating the right rhythm and cadence of communication with your customer within the CRM channels, giving them the right features on digital product so that they can toggle their membership to their desire or best fit. And then just like the really unsexy stuff with credit cards, it’s all kind of like wrap up in that.

Francisco: Okay, two more questions.  There’s one over here.

Audience6: And one here. 

Francisco: Oh, okay.  Go ahead, since you have a mic. 

Audience6: Has any of the big guys try to buy out the whole company? 

Dubin: Have any of the big guys try to buy us?  I cannot answer that question in such a public setting. 

Audience7: So your video is the first time I heard of your club. It was actually presented at a Fortune 500 company with an example of disruptive technology. These are kind of upstart that you have to watch out for, Uber and you were mentioned at the same breathe at the time. 

Dubin: Yeah. It rather be Uber.

Audience7: How much was the cost and who came up with the idea, was this all from you?  I mean was this something that you scripted everything yourself up?  I just want to kind of get a background on that.

Dubin: Yes I mean look, we have a 150 people and that’s the reason why we’re very successful today.  But yes, in early days it was all my idea. I wrote the video. I figured out the logistics. I did the customer service.  I mean and it was fun, I’m not saying it’s not fun now it’s a different kind of fun but those days were great because it was just kind of me doing my thing.  And who could have thought that it would get to where it’s gotten? But yes, the early days was on me. 

Francisco: Since this is such an engaged audience, all over the now.  It’s the end of the day.  So we have two more questions; we’ll take those.  Anybody have a – oh right there.  

Audience8: Oh, hi! Just a a quick question if do you think it’s – did you have some innovation in shaving?  I saw this campaign on kickstart and it was totally – heavily over funded about a razor .

Dubin: Yeah, I know that.   Yeah the scarp razor? 

Audience8: I think so, yeah.  I just want to see you thoughts on – like what do you think of that?

Dubin: Yeah, I mean if you ask me a week ago, I would have a different thought that I just read that they took that kickstarter campaign down.  

Audience8: Which is –

Dubin: I don’t know.  I mean there is a gazillion reason why somebody’s kickstarter campaign gets taken down and everybody’s money’s funded.  But it certainly sounded like an interesting idea but then they took it down.  So who knows, if it was even a real thing?  But yeah, a good question. 

 Francisco:  And then –

 Audience9: The question is, since you have a brand that says Dollar Shave Club and you are competing on price, what are your thoughts about competing with other ones like say Harrys or not necessarily competing on price are coming up with more premium experiences?

 Dubin:  Yeah, well Harrys is competing on price.  They certainly are.  What Dollar Shave Club is saying to you is across the board whether it’s a razors or non-razor products we’re saying that you should be using the best in class product but you shouldn’t be paying a best in class price.  Or look like a million bucks but don’t pay it.  So, I don’t know if that answers your question. 

Audience9: I mean the question was that eventually we’ve always been competing price because of the name like Dollar Shave versus Harrys come up with a more premium version [inaudible] the brand allows them to expand beyond that? 

Dubin:  Oh, I see what you’re saying is the name Dollar Shave Club somehow limiting?  I don’t think that’s an unfair question.  I think that the way that I always intended Dollar Shave Club to be was a stylish, edgy no pun intended although I get points, brand that has panache to it, right?  Like you can make Dollar Shave Club cool just even though it has the word dollar in.  And I think that we’ve been successful if you look at our demographics.  Our median age is 36, average household income is around the $80,000 mark and it’s waited you know – we have a huge percentage that’s over a 100,000.

This is not a discount shopper that shopping for Dollar Shave Club.  There are lots of places that you can get cheap razors on the internet, we’re not the first, and we’re not going to’ be the last.  But I think that people don’t look at Dollar Shave Club and say, “Oh, that’s the cheap razor company.”  I think they say, “That’s the really fun company that is changing the razor business or I can get the razor that’s not as much as my Gillette.”  Maybe down the road we started we’re calling ourselves more something like DSC?  But I don’t that today, I don’t think that concept is limiting but it is a right question.

Francisco: But it is a cost conscious consumer, right?  It’s not a –

Dubin: Well, I don’t know.  I mean I don’t know how many rich folks there are in the room but rich people are some of the most frugal people of all. I mean – nobody likes getting the ripped off by anybody. 

Francisco: Yeah.  I think cost conscious is actually a good –

Dubin:  But I won’t call them cost conscious.  I would call them smart.

Francisco: Right.  Frugal, okay smart.

Dubin: I mean it’s smart not to get ripped off for paying the stuff you don’t need.  You know extra features. There’s always going to be the guy or the girl who wants the extra trim on the car or the extra woof in the subwoofer or whatever. 

Francisco:  I’ll call them sharp. 

Dubin:  Okay, good.  Nice.

Audience9: Yeah, Michael just a quick question.  In the beginning you said you have that connection already into the supply chain? 

Dubin: Yeah.

Audience9:  How important was that to develop the momentum that you guys have, the really quick momentum that you guys had.  Would you have maybe start the company if you didn’t have the access to the supply chain? 

Dubin:  No, I don’t think so.  I mean you have to be able to – I mean look consumers will be patient if you run out of inventory, but to a point and we sold out of inventory for like three months because of the big viral push that we got from the video and fortunately because we were tapped into the supply chain we could – it didn’t take us long to refill the warehouse. 

But you do have to – I mean it’s hard to estimate how fast you’re going to grow in the early days.  I mean now we know exactly how fast we’re going to grow because we’ve been doing it for a long time.  And we have an eye on our marketing spend and we know how much inventory we have in warehouse, etc.  But in the early days it’s very hard to predict what your growth is going to be. 

But you should understand your suppliers or your partners that are on the supply side should be very aware of your business and what you’re doing.  It’s important to build that relationship.

I talk to founders all the time who started businesses, I was talking to a company that sells flowers and they source some of their flowers from South America and elsewhere.  And they were saying like they were just echoing that point which is they wish that their suppliers and their partners on the supply chain side really understood their business and what was important to them.  Because their business is so dynamic and changing all the time.  And going through different growth spurts.  So yeah, you really do have to build those relationships right. 

Francisco: I know this is, it’s hard to end this conversation because we’re getting so much out of you and you’ve been awesome.  I think everybody wants to continue this discussion but we can’t because we have an after party to go to, we have winners to announce but I’m sure Michael will stick around.

Dubin: Did I win?

Francisco:  Yeah, who had more points?  I think I had four.  Yeah.

Dubin:  Yeah. 

Francisco: Anyway everybody give Michael a big hand of applause. 

[ End]

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