When the announcement was made that Unilever would buy the Dollar Shave Club for $1 billion, experts cited the Southern California startup as yet another example of a business coming up with new ways of selling to consumers, without the overhead of bricks-and-mortar. True. It’s also an example of a new breed of entrepreneur communicating with consumers in very different way.
On the week of the sale I spoke to David Pakman, the former CEO of eMusic.com and a partner in Venrock, the first major investor in Dollar Shave Club (DSC). Pakman, like millions of others, first saw DSC’s founder, Michael Dubin, in the viral video that put his startup on the map. You know the video—where Dubin calls his blades “F*** great.” Venrock led both DSC’s series A and B rounds of venture funding.
Pakman was impressed with Dubin’s pulse on the market. He saw an opening to disrupt a category where many customers found the product to be too expensive and shockingly inconvenient (anyone who’s had to ask a clerk to unlock the “razor fortress” can understand). According to Pakman, Dubin also recognized another major vulnerability of legacy consumer companies: They were broadcasting messages through traditional media while consumers were living their lives on social media. “Dubin intuitively understood how to use content and conversation as a marketing tool at a time when legacy brands were still shouting at their customers with TV ads,” says Pakman.
Building a “conversation brand,” as Pakman explains, means more than posting a television commercial on a company’s Facebook or Twitter profile. “A conversation is knowing your customers and having a relationship with them,” something that DSC did from its inception.
For example, while most people recognize the now famous viral video that Dubin created, DSC’s employees have created many more videos that are funny, edgy, and use conversational language. In one video titled, “Let’s talk about No. 2,” Dubin introduces a product that legacy brands gingerly call flushable wipes or cleansing cloths. In a video that’s been viewed 3.5 million times, Dubin calls his product “Butt wipes for men.” Why do you need one? “Because you’re not an animal and whatever you’re using now, it’s primitive… with One Wipe Charlie, you wipe once and get on with your life.” The video is short, shocking, irreverent and shareable—the makings of a hit on social media.
Entrepreneur Michael Dubin is an experienced communicator, a skill that impressed his investors. Dubin was a page at NBC and a news producer for digital news properties where he learned to write content that resonated with an audience. Dubin was also a student of improvisational comedy at the Upright Citizens Brigade in New York City. Dubin once said his eight years of improv classes helped him to plan, write and present a business case as well as connect to people through his humorous videos. “People tend to remember things when they’re musically presented, and comedy is a form of music,” Dubin once said. “When you’re launching a new business and sharing a new idea, if you can get people to remember it, there’s obviously a better chance at success.”
According to Pakman, “If you’re a brand in this age of splintered attention on social media, you have to be good at reaching people conversationally and you have to have good content that they want to see, otherwise they choose not to listen to you.” Dubin’s experience as a communicator in the digital age helped him to create content that people wanted to see and, more important, wanted their friends to see, too.
In a striking example of the difference between Dollar Shave Club and its “legacy competitors,” Pakman showed me a video that Gillette posted on Facebook as an answer to DSC’s viral video. “They’re both razors. Both can be ordered online,” the Gillette narrator begins. “But that’s where the similarities end.” The video shows a Gillette razor gliding back and forth on a rollerball, suggesting that Gillette razors give a closer shave. Gillette, however, didn’t anticipate the backlash from its own consumers who, by the hundreds, voiced their displeasure in the comments section of the post. Among the comments:
“Was a faithful user but your prices are insane.”
“Back off the marketing and lower your prices. You will sell more razors.”
“Since my face doesn’t roll side to side, I’ve never seen the need for a ball in my razor.”
According to Pakman, “Gillette was blithely unaware of what their own customers thought of them. They had no idea because they never talked to them.” Pakman says that Dollar Shave’s 5% market share (an astounding percentage considering the company is only five years old) cut into Gillette’s share of the razor market.
Pakman says the big lesson in the DSC’s success story is to see social media as a tool to build content and conversation. For the better part of the past one hundred years consumers had a few newspapers and magazines to read, and a few television channels to watch. It’s the environment in which Gillette thrived for 115 years. But times have changed and so have our viewing habits. “With the Internet and mobile phones, our attention has shifted from the legacy of one-way broadcast media to the conversational forms of social media,” says Pakman.
Dollar Shave Club’s cofounder Michael Dubin had the right skills at the right time to take advantage of the social media trend; a trend that rewards authenticity, shareable content, and two-way conversations between brands and its customers. DSC’s social media platforms (Instagram, Facebook, Twitter) often feature stories actual customers, invite customers to give a constant stream of feedback to employees, and encourage an ongoing relationship with the brand.
In short, Dollar Shave Club got close to its customers and found a winning formula through “content and conversation” on social media. It’s a lesson worth studying.