Merry Christmas, Happy Hanukah, and Happy Holidays to all of our loyal eCommerceFuel listeners. As 2015 draws to an end, all of us at eCommerceFuel are taking a break to celebrate the holidays with our families and friends. But we’ve still got a great episode from the archives for you to listen to today while you wait on that holiday roast.
Here’s an episode from over 100 shows ago when we had Michael Dubin, the founder of the Dollar Shave Club, on the show.
If you haven’t heard this interview with Michael before, or even if you have, you are in for a real treat. While I first aired this interview over two years ago, the incredible knowledge and lessons that Michael shared with me is still something I know all of us can learn from and use in our businesses today. Enjoy!
Andrew: Thank you so much for tuning in. And if you’re tuning in live, tuning in on Christmas Day 2015, I hope you’re having a wonderful, very Merry Christmas. If you’re celebrating a different holiday, I hope you’re having a wonderful holiday as well. I hope you’ll forgive me, I’m gonna take a quick little holiday break for Christmas and New Year’s over the next couple of weeks. But I did want to bring you a couple of my favorite episodes from the archives. And this week, on episode, man, almost 100 episodes ago, a discussion with Michael Dubin of DollarShaveClub.com.
Andrew: And I had him on in the early days of the podcast, and you’ll undoubtedly, almost certainly, have heard of him, if you’re in the eCommerce space. If you haven’t, he started DollarShaveClub.com with a fantastic viral video that launched the brand. They sell a subscription shave service. They kind of invented the actual niche. But anyway, chat with him, talk about his early beginnings, the making of the video, a lot of good stuff. So hope you enjoy it, hope you have a wonderful Christmas Day, if you’re listening live, and we’ll look forward to chatting with you again next Friday on New Year’s Day.
Andrew: Let’s go ahead and get ready for this interview with Michael Dubin. Before we do, I want to roll the video that he put together. You’ve almost certainly heard it, but for those few that haven’t, of course, there’s just going to be the audio track behind it. But here’s the audio track behind the Dollar Shave Club video that went viral in 2012.
Michael: Hi, I’m Mike, founder of DollarShaveClub.com. What is DollarShaveClub.com? Well, for $1 a month, we send high-quality razors right to your door. Yeah, $1. Are the blades any good? No. Our blades are great. Each razor has stainless steel blades, an aloe vera lubricating strip, and a pivot head. It’s so gentle, a toddler could use it.
And do you like spending $20 a month on brand name razors? Nineteen go to Roger Federer. I’m good at tennis. And do you think your razor needs a vibrating handle, a flashlight, a backscratcher, and 10 blades? Your handsome ass grandfather had one blade and polio. Looking good, Papa! Stop paying for shave tech you don’t need, and stop forgetting to buy your blades every month. Alejandra and I are gonna ship them right to you.
We’re not just selling razors. We’re also making new jobs. Alejandra, what were you doing last month?
Alejandra: Not working.
Michael: What are you doing now?
Michael: I’m no Vanderbilt, but this train may say, “[train whistle].” So stop forgetting to buy your blades every month and start deciding where you’re gonna stack all those dollar bills I’m saving you. We are DollarShaveClub.com, and the party is on.
Andrew: Obviously, very cheeky, very fun, and I highly recommend you watch it online, as well, for the visuals. It’s a video I’ve watched probably a dozen times and still enjoy each walk through. So, a little context being set, let’s go ahead and dive into the discussion today with Michael Dubin.
Michael, you worked for NBC right out of college, spent some time with MSNBC, and I know you studied at the Upright Citizens Brigade, which is a comedy and improv club in New York. So you were focused on media and writing and comedy. So how did you make the transition into entrepreneurship?
Michael: Well, I’ve always been entrepreneurial, in nature, and I’ve tried to start a few companies before. And though I did start a few companies before, none of them as successful as the Dollar Shave Club, which is, I think, the way it goes for a lot of entrepreneurs. You have a string of flops, and then you have a couple successes. So I always wanted to start something. I tried to start a social network for travelers in 2006, and Dollar Shave Club was the next thing in line after that.
Andrew: So in terms of the idea, was it something that you just came to? I believe the genesis was coming from a dinner conversation, or a dinner party conversation you had with your co-founder. Is that how it all started?
Michael: Yeah, yeah, basically. I met my co-founder at a holiday party, and we got on the subject and figured out what we might be able to do together. And we put the initial website together in July of 2011 in the beta site, and we were only selling twin razors, at that point, and doing some proof of concept stuff before we took the business out to investors. You always want to demonstrate as much traction as you can before you take outside money, so you don’t have to give as much away as possible. Obviously, you’re gonna get a better valuation on your company if you have a running business versus just an idea. So we were in the business for about six months, got about 1,200 customers with no marketing, and then started raising money in January of 2012, about three months before we launched the video and the full version of the site that you see now.
Andrew: And so you started with a $35,000 personal investment. And then your seed funding, your first was around $1 million. Is that correct?
Michael: Yeah. Yeah, that’s about right.
Andrew: Yeah. So, as a question – our community and our listeners here really are a lot of bootstrapped eCommerce businesses – why take the million dollar seed necessarily? Why not bootstrap the business and not give up some of the ownership? What was your thought process there?
Michael: Sure, and great question. I think that every business is different, and I think that, for whatever reason, there’s a lot of romanticism around the notion of raising money from venture capitalists. I think it’s right for some businesses. I don’t think it’s right for others. I think it was really the right move for us because I knew that we would need to scale quickly. I knew that we would need working capital because it is an inventory-based business. And I knew that we would need access to cash, once we hit a certain level of scale, which I was reasonably confident that we would after we launched the video. So I didn’t really see us having much of a choice than to raise as much as we could early on.
Andrew: That makes sense. And you and your co-founder, it sounded like, had different visions. It sounded like he really just wanted to focus on selling very affordable razors, and you were much more insistent on building a brand, which is much more difficult of a task. So what was it that made you so passionate and so convinced that that was the right direction to take?
Michael: Not to discredit my co-founder in any way, but I think that the real opportunity that I saw was in building a club for men, where it starts with razors. That’s the place where we are building a relationship with guys by offering them an excellent product at half the price of a market equivalent and building that trust and saying, “Hey, we brought you this great product, and now we’ve got other great products for you to try.” Anybody’s that in the eCommerce business knows that it’s very hard to get people to come back to your site and repurchase, make a second purchase or a third purchase. Your loyal customers will always do it, but it’s very hard, no matter how much they like the product.
For something like razors, it made a lot of sense for us to do the replenishment model, not just because you don’t have to have people to come back. You don’t have to force people to come back to the site and make a repurchase because it comes automatically. But this, in fact, was a product that made a lot of sense specifically for the replenishment model. People that shave and Dollar Shave Club members, 85% of them shave three times a week or more, and they need new razors, and they don’t want to have to think about it. So we started a real opportunity to create this replenishment model and offer other products to really improve the quality of life for guys in the bathroom.
Andrew: The clip, the minute and a half clip, which was played before this interview here, obviously it went incredibly viral and has been the poster clip for the business. Done extremely well, obviously. And so what was it that you were focused on getting right with that clip? You’ve got 90 seconds to convince people to sign up for it. What were the things you were really, really focused on nailing?
Michael: I think, if anything, that I’m proud of about that video is that it was so short and that most of the video, we’re talking about the core service and value that we’re bringing to the customer. There’s only one beat in the video that we talk about something else, and that’s the Alejandra beat, where I’m in the car and it’s, “Hey, are you working? Are you not working?”
Michael: Whatever. But the rest of the video, we’re always talking about the price, the convenience, the quality, and how this service can change your life for the better. I’ve always believed in the power of a video to tell a story. And you’ve got to keep it short, you’ve got to keep it focused, and I think we accomplished that.
Andrew: That video, it’s impressive. You only spent 4,500 bucks to produce, which may seem like a lot to some people, but for a super polished, quality video like that one, that’s not that much. And so what’s important to invest in it? If somebody’s thinking about trying to put together a cornerstone video to help promote their brand or store, what’s important to invest in it, in terms of video production, and what’s not so important?
Michael: That is the question, I guess. Not to disappoint, but I don’t know that I have the best answer. But I do think that you want to make sure that the piece looks professional, which is fairly achievable, given the quality of film equipment that’s out there and the ease with which you can get access to it. You want it to look professional. Other than that, it’s just calling in as many favors as you can. I worked with a friend of mine, who does some commercial stuff, who I studied with at the Upright Citizens Brigade. We also used our actual warehouse, where we were filling the packages from. That was not a set. And everything else was just hacked together. So I think you just want to emphasize the visual quality, emphasize the sound quality, and call in as many favors as you can.
Andrew: Yeah. I’ve got to ask you about the warehouse. So those were your actual warehouses? And I’ve always wondered at the very opening clip, when it’s like, “Hi, I’m Mike from Dollar Shave Club.” And it pans out, and you’ve got toy fighter jets on the wall and a bunch of random, it looks like just toys at a dollar store. So what’s going on in that office? Is that something you staged up, or is that the fun room for the office? I always wondered about that.
Michael: Yeah, that was 100% authentic. Our first warehouse was in Gardena, California, which is a couple of miles south of downtown L.A. They do a lot of other work there, and it’s a company that’s been around. It’s called Jo-Mar Industries, and they fulfill a lot of other stuff for some big businesses there. And that stuff that you saw on the wall is behind the President desk, and that’s all the stuff that they packaged up and shipped over the years. So again, that was not a set. That was totally authentic, really cool place.
Andrew: It makes a lot more sense. I always wondered about that. It’s cool to know. In terms of once you released that video, it’s up to 11 million views on YouTube right now. And when you released it, it got traction very quickly. What happened from your side of the aisle? Was it exciting? Was it pretty terrifying? What happened?
Michael: Yeah, it was pretty terrifying. Our site crashed. It took a day to get it back online, and your biggest dreams turn into your worst nightmare.
Andrew: Was that a couple of weeks before you were really able to get a handle on things and feel like you were back in control?
Michael: We got the site back up in a day. But yeah, I think it was still pretty crazy for the first couple weeks. We had a lot of orders to fill.
Andrew: I was checking out your Facebook page, and you’ve got 131,000 fans. (Update: Now over 2 million!) Was looking on your Facebook page and your blog, and there’s a guy in a rickshaw going across India with a Dollar Shave Club logo on it. You’re doing some really great things with social, in terms of engagement, in terms of entertainment, to bring people into your brand. How instrumental has social been, in terms of bringing in actual paying customers? Has it been mostly a PR play, or has it actually been instrumental in growing the business?
Michael: I think it’s been instrumental in growing the business. Anything that we do to create a deeper engagement with our customer and their communities that’s connected to them really helps us drive the business. And that stuff is really fun and genuine, and our members love participating in the club and all that stuff. So yeah, I think all of that drives business.
Andrew: And you’ve got great, fantastic writers, as well, and I’m going to go out on a limb here and say you’re probably not out there writing every Facebook post and blog post. They’re funny. They’re creative. How do you build a creative content team like that? Are those guys or gals that you’ve reached out to from real life, from maybe your days in comedy and sketch, and brought them on board? Or are they just people that you hire and test for great, creative writing?
Michael: Well, believe it or not, I write more than you think. I think it’s important to maintain a genuine, centralized brand voice. And to a large extent, that’s mine. Of course, there are other people that participate, and they’ve been with us for a while; they’re all staffers. And because they’ve been with us for a while, they know how we do things. And it’s an ingrained culture, and there are very few people that are allowed to speak on behalf of the club. All really know what they’re doing.
Andrew: Michael, one last question. There’s a lot of listeners getting going with eCommerce, and I’m a big advocate of building brands, especially where we are with eCommerce today. So for somebody who’s on the cusp of starting their own eCommerce brand, that’s unique, that’s got some personality the customers can identify with, that’s just not going to be hocking commodity products, what advice would you give to them to help them make it a success?
Michael: I would say focus on brand, for sure. There’s so much eCommerce out there, that to be pure play eCommerce is to compete against Amazon and a lot of the other big boys that are spending way more money than the little guys will ever have, us included. And by building a brand, I mean create an authentic experience with a strong, discernible tone of voice, and make sure that you’re doing something of value to your customers that is intangible to match the very tangible good that you’re selling. If you’re selling Christmas lights or holiday gear online, try to deepen that experience for people and celebrate the holidays in a really meaningful, unique way, so that people feel like they’re getting more than just…or not just feel like they’re getting more, so that they actually are getting more than just the product.
People want to feel like they belong to things and communities. And that’s what I love about our business, is that it is a community, and people reach out to us all the time. And if we were just selling stuff on the Internet, that wouldn’t be any fun for me, nor for our members. So we’re always focused on building a top flight experience and community through content, through promotions, through charity, so that people feel a deeper connection than they would to just making a transaction on a webpage.
Andrew: Mike, it’s been awesome hearing the story. Thanks so much for coming on. And if you’re listening and if by chance – probably unlikely – if you haven’t heard of Dollar Shave Club, head on over to DollarShaveClub.com. You can watch some high quality, wonderfully entertaining videos and score yourself some mighty fine razors as well. So Michael, thanks a lot. I appreciate your time.
That’s gonna do it for this week. If you enjoyed the episode, make sure to check out the eCommerce Fuel private forum, a vetted community exclusively for six and seven-figure store owners. With over 600 experienced members and thousands of monthly comments, it’s the best place online to connect with and learn from other successful store owners to help you grow your business. To learn more and apply, visit ECommerceFuel.com/forum. Thanks so much for listening, and I’m looking forward to seeing you again next Friday.