By Jaideep Shergill
One of my favourite quotes about the value of money was coined by the legendary Yogi Berra, who said “a nickel ain’t worth a dime anymoreâ€. How prophetic in some ways. The value of money means so little today in the world of marketing and communication. With multi-million dollar budgets and fancy marketing blitzkriegs, a dollar can’t really take you that far anymore, or can it?
Well, this adage doesn’t apply to the Dollar Shave Club, DSC for short. The term “disruptive startup” is somewhat cliché these days, but its use is particularly apt when discussing DSC, the online razor progenitor and viral marketing sensation.
Since its launch in 2012, the California startup, Dollar Shave Club has amassed more than 3.2 million members and an estimated $240 million in revenue for 2016 through its irreverent, tongue-in-cheek films, inexpensive advertising and a successful digital and PR push selling low-cost grooming supplies.
And now the inevitable happened. Unilever announced on Tuesday evening that it is getting into the razor business, by agreeing to acquire Dollar Shave Club. No financial terms were disclosed, but multiple sources close to the deal claimed that Unilever is paying $1 billion in cash for DSC. If the pricing is true, the transaction will be the third largest ever in e-commerce, only beaten by zulily and Wayfair.
DSC has been so disruptive to the razor industry that rival razor maker Gillette decided to launch a similar online subscription service in order to keep pace, and it later filed a lawsuit against DSC. Taking on the might of the iconic P&G (Gillette) is truly a David and Goliath story in the world of modern marketing and DSC is now vindicated once again.
So, how did this minnow take on the giants and win? Dollar Shave Club was founded by Mark Levine and Michael Dubin. The pair met at a party and spoke of their frustrations with the cost of razor blades. With their own money and investments from a startup incubator, they began operations in July 2011.
Michael Dubin became an accidental YouTube sensation when he made a video to promote the start-up. The video featured Dubin, an improv-comedy hobbyist, walking through a warehouse, cracking jokes and encouraging viewers to buy into his product. The video was immediately effective: it crashed the company’s servers, and Dubin had to scramble to recruit a group of partners and friends to pack and ship the 12,000 orders the company received in the two days following the video’s launch and has since received over 22 million views as of March 2016.
This is the same video which has Michael spouting the now iconic line- “Our blades are F****** Great†https://www.youtube.com/watch?v=ZUG9qYTJMsI
The video won “Best Out-of-Nowhere Video Campaign†at the 2012 AdAge Viral Video Awards. DSCwas awarded a Webby Awardand earned the People’s Choice Webby Award in the Consumer Packaged Goods category.
In June 2013, DSC released a second video on YouTube called “Let’s Talk About #2”, which again starred Michael Dubin and promoted One Wipe Charlies. Â The video won the Shorty Award in 2014 for best use of Social Media.
Add a bunch of good PR and storytelling and you have a brand which broke barriers and broke the bank with it!
Our “desi†startups and their marketing machinery have a lot to learn from DSC. Strategic communication and money well spent can be far more effective than spending your investors money on large format/traditional marketing. Time for some reflecting? Best time to think, during #2!
Jaideep Shergill, Co-Founder Pitchfork Partners Strategic Consulting LLP is a PR and communication veteran and has always been contrarian about most things, drawing extraordinary amounts of irk and ire from industry peers. He can be reached on jaideep.shergill@pitchforkpartners.com.