You probably come across this several times each day: someone makes a suggestion, you hear an idea or you come up with one, and in a quick moment you evaluate the idea. You say to yourself something like “this might work”, “this is impossible”, “”takes too much effort right now” or some other snap judgement.

Here’s a story of what’s possible when you’re ready to break existing molds:

In 2011, Mark Levine and Mike Dubin founded Dollar Shave Club. They were frustrated about the high cost of disposable razors. The disposable razor market had been dominated by two global players, Gillette and Schick.  They controlled about 80% of the market and were able to charge what seemed (and still seems) enormous prices.

Dollar Shave Club offered a deeply discounted mail order razor blade kit. It took the price down from about $3 per razor to $0.25. No sign-up fees; no subscription periods; no high shipping costs. For a small amount, you could try it and check out their razors. What’s not to like about that?

They even had a cool marketing video to get you to sign up.

These two guys were willing to take on multi-billion dollar companies and disrupt the industry. What’s just as remarkable is that they were able to produce the marketing video with a budget of just over $100 (they could use the warehouse for free on a weekend, one of their friends was studying Film and could borrow the equipment from his college, and another – an amateur improv artist – helped with the script). Also remarkable was that if you were among the first people to sign up for the Club, you were told that the first order would take about 2 months to ship (because that was the time they planned for figuring out how to get the blades produced).

The business took off right away and became an innovation sensation. It’s the classic story of David vs. Goliath. It went on for a few years, until in 2016, Dollar Shave Club was acquired by Unilever for a whopping $1billion in cash. Since then, they have raised the prices of their razor blades back to previous levels.

Let’s a take a peek behind the curtain and see what’s left:

When you look at the prices of the razor, you’ll discover that the low price point was possible because of the constant influx of money from investors. The blades were much more expensive to produce. The customers didn’t pay full price. It was the investors who made the price possible. From the start, it wasn’t sustainable and, Unilever footed the final bill. Why did they pay the bill? Because they wanted to buy the market share and connect with the young customer base of Dollar Shave Club.

Has Dollar Shave Club created sustainable product innovation? It doesn’t look like it at the moment.

Have they made a dent in their chosen industry? Absolutely.

Is it really a success story? I’d say so. It’s obviously one for Dubin and Levine. The other stakeholders also walked away happily. But most importantly, it can be a success story for all of us, if we take the right lessons from it.

If these two guys can take on an established industry in such a massive way, you can do it too. The paradigms they shattered were that some ideas or companies are too big to take on; that the customer has to pay for the product; that marketing is expensive and that you need to have a sustainable business model.

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