
Dollar Shave Club Is Valued at $615M - chermanowicz
http://blogs.wsj.com/digits/2015/06/21/dollar-shave-club-valued-at-615-million/
======
nobleach
I liked their branding. It had that hip internet company feel. The little
leaflets and stuff that they sent with each razor pack were just fun. After
time, their razors began to hurt and feel like they were pulling hair more
than I remember at the beginning. One Saturday I did an A/B test with a store-
bought Gillette 5 blade against the DSC ultimate 6 blade. I lathered up and
shaved with a brand new DSC blade and it was just a little painful. Brand new
Gillette, smooth as silk. I decided that even though the Dollar Shave Club was
cheaper (Gillette from a drugstore is 15-20 bucks for refills) I couldn't have
a painful shave experience. I had my phone in hand to take pics of the
experience and thought... hey, I'll just cancel right now. I could not find a
way to do it. I could only pause my delivery. Finally a couple of months
later, I hunted around their website a bit and didn't immediately see anything
related to "quitting the club". After a google search, I finally met with
success.... only to start receiving plenty of email from them. I unsubscribed
and so far I haven't heard from them again. I doubt I'll try Gillette's shave
club as I've heard they just send out their "not as sharp" razors for the
reduced price. Maybe I should just grow a beard....

~~~
raverbashing
Funny how their strategy seems to be based on annoying ads and locking people
to their service

About shaving: after I got an electrical one I never looked back

~~~
markdown
Relevant: [http://imgur.com/gallery/fkkn3](http://imgur.com/gallery/fkkn3)

~~~
dagw
While interesting, is it really relevant? As in does the observed visual
difference amount to significant practical difference

~~~
seivadmas
Actually it does make a practical difference but I would argue in favor of the
electric razor.

Ever wonder why it itches in those first couple of weeks if you decide to grow
your beard out?

Look at that picture.

Shaving with a straight-blade razor basically leaves a bunch of tiny little
hypodermic needles behind. When those suckers start growing out, they curl
back into your face and start jabbing you, resulting in that annoying itching
sensation.

If you want to grow your beard out, take my advice and make your last shave
with an electric razor, it's a lot more comfortable.

~~~
eru
> If you want to grow your beard out, take my advice and make your last shave
> with an electric razor, it's a lot more comfortable.

Shouldn't make too much of a difference after a few days, should it?

------
jewel
I've never understood the appeal of the dollar shave club. Razors are very
cheap when bought in bulk, and they take up very little space to store, even
an entire year's supply. Wouldn't it make more sense and save money to ship a
year's supply at a time?

For example, here are 64 razors for $16:
[http://amazon.com/dp/B00XKVH4O6](http://amazon.com/dp/B00XKVH4O6). The
comparable dollar shave two-blade option would cost you $48, since it's $1/mo
for blades and $2/mo for shipping.

On the high end six-blade model, here's 24-cartridges for $30.49:
[http://www.dorcousa.com/pace-6-cartridges-6-pack-
sxa1040/](http://www.dorcousa.com/pace-6-cartridges-6-pack-sxa1040/) The same
thing from dollar shave would cost $54.

~~~
wodenokoto
Do you know if the quality is the same?

The dollar shave club not only sells cheap shaving gear (compared to gillette
at the supermarket) but also sells reassurance that the gear isn't crap, which
I think many consumers fear about no-name alternatives.

~~~
mynameishere
Razors are practically, not quite, but practically caveman technology. I'd
imagine that any products making it it to the modern market are roughly the
same grade.

One thing I'm sure of: A good sign of a superior product is that it doesn't
need monthly replacement.

~~~
allengeorge
This is untrue. First off, facial hair has different consistency (tougher,
finer, curly, straight, etc.) and what may work for one person doesn't always
work for someone else. Second, (as someone who has to shave every day) there's
a vast and noticeable difference between safety cartridges; there are _really_
bad ones out there.

------
DiabloD3
Honestly, I like their branding.

It is unique enough to stand apart, but not so far out there that its
unapproachable or unnecessarily too hipster, and manly enough without scaring
off the metro-sexual or gay crowd (and please, don't take this as offense,
it's just that they gravitate to certain brands that are more "gentlemenly"
than flat out "manly").

Their website portrays their brand extremely well, their famous video
([https://www.youtube.com/watch?v=ZUG9qYTJMsI](https://www.youtube.com/watch?v=ZUG9qYTJMsI))
is absolutely amazing for how low budget it is, and, well, how fail it is and
they just keep rolling with it. Its genius.

I just wish they'd veer into the double edged safety razor market, which in my
opinion, needs a bit of disruption too.

~~~
caryme
As a gay subscriber, I completely agree with "manly enough without scaring off
the metro-sexual or gay crowd." Masculine without being defensive about it.

~~~
jen729w
How on Earth did this get downvoted?

------
WizzleKake
I remember when Dollar Shave Club popped up on my radar. I thought to myself,
"You know what? They are right. It's ridiculous that I spend so much money on
Gillette razor blades. I only get 2-3 good shaves out of them."

I ended up buying an $80 Philips electric razor and haven't looked back. Takes
way less time, I don't have to use shaving cream, and I don't have to be
careful either.

~~~
nkozyra
I did the same until I got a safety razor and found some good blades.

Smoothest shave of my life, refills come out to about $.50/week. The first
shave wasn't pretty, but after that it was smooth sailing and I'll never look
back.

Makes things like DSC seem quaint; people think safety razors are either:

\- archaic \- dangerous

But the truth is they are a fantastic, cheap way to get a high quality shave
and I don't mind being an evangelist about them if it gets people away from
fully disposable razors.

~~~
geoka9
I did the same, until I saw a tip that somebody posted here :) Since then I've
been using the same Gillette cartridge (it's been over a year) and it's still
as sharp as it was when I bought it.

The trick is to rub it against your bicep or forearm (effectively stropping
it) before use. I also do that after use, which helps to dry it up (keeping it
even sharper).

I've already saved a small fortune on cartridge refills. Best shaving tip I
ever got!

~~~
girvo
Interesting: [http://lifehacker.com/5502841/extend-the-life-of-your-
razor-...](http://lifehacker.com/5502841/extend-the-life-of-your-razor-blades-
with-your-forearm)

I'm going to give it a try, cheers for passing the tip along!

------
stevenmays
Private equity bubbles occur when there's not much money to be made in
publicly traded companies. This is because there's a capital surplus because
of quantitative easing, and a lower cost to access capital. Everything in
economics is cause and effect.

~~~
brownegg
All true. Also been true for ~7 years, so maybe it doesn't matter much.

~~~
toomuchtodo
At some point, the balloon will get squeezed and all that money is going to
rush elsewhere. I don't envy either part of the balloon.

~~~
wmil
But will it? The big lesson of 2009 was that ratings agencies aren't
trustworthy and investment banks have no problem selling you junk investments.

The Dollar Shave Club looks like a prudent investment in comparison. Perhaps
it's overvalued, but it's safe from outright fraud.

------
saboot
$20 Merkur Double Edge Safety Razor $20 Large sample pack of razors from
amazon $10 bristle brush and lather bar soap

That was three years ago, haven't bought anything since. I'm confused why if
people want an affordable solution this route isn't more popular? Is it simply
because most stores have stopped selling plain razors for much more expensive
handled disposables?

~~~
arh68
Those brushes are amazing even using 'regular' 2/3/4/6 blade razors. Same goes
for shave soap.

I've got a double-edged Merkur and a straight Classic Samurai razor: both are
great. Blade-wise, I've only tried Derby Extras & Sharks, but both are great.

There is a market to find and distribute varieties of double/single-edge razor
blades, not that anyone's tapping it. Wouldn't it be nice to get a couple
blades sent in advance to every hotel you fly to? Or just to get a few
different blades for $1 or $2/mo? (what _are_ Feathers like?) You don't always
need or want the 100-pack (though it usually is just $6 or $7).

------
cft
We are in what will be called "the private equity bubble".

~~~
jdavis703
At first I thought the same thing. But if you'll bear with me for some back of
the envelope math, with 2 million members paying an average of $5/month, that
means they're bringing in $120,000,000 a year. That's a multiple less than 6x
of revenue, hardly that outrageous.

~~~
bbcbasic
What is the gross profit margin on the back of your envelope?

~~~
001sky
Gillette's _brand_ is valued by forbes at $20B (~2.5x Revenue)

[http://www.forbes.com/companies/gillette/](http://www.forbes.com/companies/gillette/)

~~~
pkaye
About about the gross margin?

~~~
coldtea
Still great.

------
apapli
Neat concept, but they didn't get my money. I assumed they would be cheap (per
their name), but quickly realised that my local Aldi is cheaper. Furthermore,
I shave daily and use disposable razors but simply don't need them at the
frequency DSC ship them to you. So DSCs ad got me thinking, and all I ended up
doing was swapping from Gilette to Aldi.

Furthermore, it isn't more convenient for me - I still need to go and buy
other things from the store, so as long as I remember once every 2-3 months to
pick up blades DSC certainly isn't making my life simpler or easier.

This is just another pets.com to me, neat idea but really just not that
compelling.

------
TheSpiceIsLife
I just want to be that person who brings up the oppression inherent in the
clean-shaven-male culture.

The skin on my face hates shaving. I disagree with the resources spent on
shaving, and the pollution. I've shaved my face fully once in the past 10
years, but I do shave around the cheeks and neck, so I have to deal with the
shaving thing a bit anyway.

Also, I'm from Adelaide, home of 'The Beards', here they are with their track
'If Your Dad Doesn't Have a Beard, You've Got Two Mums'
[https://www.youtube.com/watch?v=RmFnarFSj_U](https://www.youtube.com/watch?v=RmFnarFSj_U)

------
adrr
Flattered to be on featured on hackernews.

We're hiring Devops, Platform Engineers, Mobile developers and QA automation
engineers.

For more info email: engineering-careers@dollarshaveclub.com

------
bkeroack
We're hiring software engineers at DSC: SDEI (software development engineer in
infrastructure), SDET, iOS/Android engineers and platform engineers. Email
engineering-careers@dollarshaveclub.com

~~~
fdanconia
For what application?

~~~
bkeroack
To shave the world, of course.

------
rayiner
I don't see DSC as overvalued at all. They're selling real products that
everyone needs (not wants), in an arrangement that makes total sense (razor
blades are the sort of consumable that needs restocking at predictable
intervals). They face high competition in the sense that I wouldn't bet on any
retailer that isn't Amazon, but I'm sure that's priced into the valuation.

~~~
cactusface
> They're selling real products that everyone needs (not wants)

Sikhs?

~~~
knodi123
alright wise guy

------
siscia
It is around one full year that I am growing a beard, but when I use to shave
I used a straight razor.

The one like the old far-west movie, but more secure and safe.

It is a niece white piece of plastic, (2€) and I bought a little packet of 10
blades (1.2€) if you shave every morning I guess a blade will last at least a
week.

But you need to learn how to shave with a straight razor, the first time is
just little piece of your face floating in blood, the more you practise the
less you will cut yourself, I used to don't have the little scratch on my
face... It is definitely a different and more enjoyable experience...

------
wyc
Their premium model has six blades[0]. Made me chuckle remembering this
article[1].

[0]
[https://www.dollarshaveclub.com/blades](https://www.dollarshaveclub.com/blades)

[1] [http://www.theonion.com/blogpost/fuck-everything-were-
doing-...](http://www.theonion.com/blogpost/fuck-everything-were-doing-five-
blades-11056)

~~~
vacri
Gag from the early '90s, being the "Gillette 3000, with 16 blades..."

[https://www.youtube.com/watch?v=YleuLyCUx28](https://www.youtube.com/watch?v=YleuLyCUx28)

Worth watching for the description of what the blades do.

------
kayge
It will be interesting to see if Harry's will "catch up" with a similar
valuation in the near future. Estimates at the end of 2014 put them in the
$200-300 million range, although they seemed to be neck-and-neck otherwise.

------
IgorPartola
Personally I have been following the forearm method [1] of keeping my
disposable five-blade cartridges sharp. Maybe it won't work for everyone, but
it certainly seemed to make a difference to me. Then again, I also grew out a
beard so now I only shave a part of my face, and generally do so twice a week,
not every day. Having said that, my most recent cartridge lasted me just about
a year.

[1] [http://lifehacker.com/5502841/extend-the-life-of-your-
razor-...](http://lifehacker.com/5502841/extend-the-life-of-your-razor-blades-
with-your-forearm)

------
ild
I have a nice 1/2 inch beard, and my razor is scissors. $8/10-15 years.

~~~
venomsnake
Not working for goatees though.

~~~
MrBuddyCasino
If you have a goatee or a soul patch, your shaving method is not your biggest
problem.

~~~
Kevin_S
First time laughing at a HN comment this week. Wish one of my coworkers would
see this...

------
toxican
I don't have to shave very often (once or twice a week), so the price and
convenience of not having to remember to buy something I already don't think
about very much is great. They deliver the 6 pack of blades once every other
month or so and I'll often pause it if I get a backlog of blades.

I can't really speak to the quality of said blades or the shave, since I'm
pretty sure 14 year old boys shave more than I do. But I've never experienced
a painful shave as others have.

------
thucydides
"Dollar Shave Club is burning through 'low single digit millions' of dollars
each month, according to a person familiar with the figures."

~~~
obstinate
Missed opportunity: "Shaving away 'low single digit millions' ..."

~~~
evan_
Missed opportunity to you, "dodged temptation" to others perhaps.

------
pkaye
I think they get their blades from Dorco. I can buy that much cheaper in bulk
on Amazon.

------
seekup
Bring on the armchair private market economists.

------
arafa
Tried DSC (even with the quad blades) for several months, had terrible shaves
and switched to a Fusion and never looked back. I wanted to like them since
they're cheap and the marketing was cool, but the product just didn't live up
to expectations.

------
JimmaDaRustla
I had an epiphany when I switched from Mach 3 razors to a safety razor - some
markets are dominated by marketing, meanwhile there is equivalent, sometimes
better, solutions that exist but don't have the means to market their product
due to having such low operating margins.

Dollar Shave Club comes around as is able to mimic that concept, but hits a
middle ground between a low-margin and mainstream marketed solutions.

The irony in all of this is that the Dollar Shave Club is still too expensive
when compared to my safety razor that costs me about 10 cents per shave. So it
is actually more like the mainstream solutions they're trying to undermine
than not.

------
JanSolo
The valuation seems high to me. I've been told that valuations should be
around 3.5x revenue; at $615m, that should mean that DSC has sold $175m of
razors last year. I would be astounded if that were the case.

~~~
toephu2
where did you hear that 3.5x number? I thought 10x revenue was common for
internet companies. Although this isn't an internet company, but they did get
their start on the internet (I think?)

~~~
tinco
The short cut is to compacte with other players in the same industry.
Somewhere else in the thread it's said that Gilette is valued 2,5x. So 3,5x is
not too far off.

The real way investment managers calculate potential worth is much more
complex, calculating expenditures per dollar earned, looking at the market
saturation, risks from competitors etc. Because these calculations are usually
the same for businesses in the same industry the shortcut is usually close.

In this case their multiplier might be higher than that of Gilette because
they spend less on marketing and they're smaller but with a steeper growth
curve.

------
paulpauper
Everyone says it's a bubble and yet seven years later, since 2008, I can only
think of three major VC implosions off the top of my head: fab.com, zynga, and
groupon. Fab was a train-wreck that anyone with a pulse could have seen
coming. Zynga... way too dependent on Facebook and a fad. Groupon is the
better of the three, only seeing its valuation fall from $30 billion to just
$4 billion - but still well over $1 billion. These valuations, as lofty as
they seem, ain't goin' lower.

------
douche
I found a Schick injector razor probably five years ago, and bought a supply
of blades for it off of Amazon for about $15. I really only use it for
cleaning up my neckbeard, but I'm not even halfway through the blades I
bought.

It does take a little care until you know what you are doing, since you can
really carve yourself up with the single blade if you go too hard. But it's
certainly sharper and does a better job than any of the multi-blade disposable
razors I used to use.

------
intrasight
If you clean and dry your razors - whatever kind - you'll get many more good
shaves out of them. I clean mine and then blast with a can of pressurized air.

------
stevehawk
What amazes me is that their business strategy is so easy to replicate- 1 -
buy another manufacturer's blades in bulk 2 - sell

yet they pull in that kind of valuation.

~~~
ben010783
I think the subscription model is a big part of the valuation. Investors love
seeing steady (and predictable) income.

------
baby
I really like what they're doing, I keep seeing their ads in facebook and I
wonder if that's because I look at razor stuff on google, reddit or amazon...
But yeah they're marketing well, they're doing something nice!

Having say that, I wouldn't buy any, and I advise clever people here of not
doing so as well. Safety razors are super cheap and are amazing.

~~~
mattdotc
I don't really look up razors or related products online and I also see their
ads all over Facebook. I'm pretty certain they're just aggressively targeting
the 18-35 demographic.

------
fapjacks
You can buy a box of their top-of-the-line razors from South Korea for like
ten dollars. This is 100% marketing. I don't mean there's anything wrong with
that, just that this valuation is for something that is pure marketing. They
don't really have an edge in their products...... badum-psh!

------
totalrobe
If for some reason you love DSC's razors, you can buy direct from the
manufacturer, Dorco USA, for even cheaper.

dorcousa.com

------
mrisse
Another way to save money on razor blades

[http://www.instructables.com/id/How-to-extend-the-life-of-
yo...](http://www.instructables.com/id/How-to-extend-the-life-of-your-Razor-
Blade-keeping/)

------
ssharp
I remember reading about the development of Gillette's Mach 3 blade in the
book "Good to Great". From what I remember, the spent considerable money in
developing the tooling required to manufacture those blades. I think that
razor has been around for quite some time now and maybe some of that tooling
is easier duplicated now, but it seems like a market that would be very hard
to enter because manufacturing a razor that could compete on quality and
convenience would be very expensive to do.

From reading some of the comments here, it sounds like DSC's razors are not
nearly as good as Gillette's and they are able to sell razors mostly because
of their marketing, which confirms what I had thought about new players coming
in. I was less skeptical of Harry's because they specifically including
messages in their marketing about how they took over an existing manufacture.

~~~
eli
I'm pretty sure DSC doesn't make the blades. They're just a middleman.

~~~
thesimon
IRRC they use Dorco blades, which can be purchased significantly cheaper
elsewhere (e.g. Amazon)

------
avodonosov
Even if they were selling perfect blades, is this company really worth $615M?

------
belugashave
At Beluga Shave Co. we make single edge shaving like a Professional Barber
easy for the first time with our Beluga Razor, and it looks like for many of
you we have the perfect solution. Why pay a few bucks when you can pay a few
cents right? Happy to answer any questions regarding shaving, especially for
those who might be having some issues.

Quick highlights on our Beluga Razor: 1\. We don't even sell blades, but they
cost as little as 10 cents each and available in over 75+ different varieties.
2\. A single edge cuts easier and closer than multiple blades, while
eliminating irritation because a single edge generates far less friction than
multiple blades. 3\. No clogging issues because our Beluga Razor is designed
to eliminate this issue.

------
nsxwolf
I shave with a razor about once a week and I think I've been using the same
blade for 2 or 3 years now.

~~~
toephu2
so? do you think you represent the average Western adult male?

~~~
nsxwolf
I could. If they'd use a Wahl trimmer on their face a few times a week and be
fine with stubble. What's with society's obsession with clean shaven men?
Still? In 2015?

People can mutilate their ears with gauges and tattoo their faces and it would
now be considered discriminatory to allow that to hamper a man's career goals.
But some stubble? Whoah hold up.

It's good for the environment to shave less, right? Isn't that all you have to
say to justify something now?

~~~
prawn
I use a Wahl also. Haven't shaved clean in 10 years - just don't like the
feeling so I avoid it.

I wonder as to the reasons people shave clean?

    
    
      - tradition, expectations
      - partner's preference
      - prefer it personally (feel or way it looks)

~~~
Retra
\- it makes you look younger

~~~
dagw
My biggest reasons for avoiding being clean shaven most of the time.

------
zorbadgreek
If you really like their blades, you can buy them direct or on Amazon for
less. [http://zorbadgreek.blogspot.com/2012/09/how-dollar-shave-
clu...](http://zorbadgreek.blogspot.com/2012/09/how-dollar-shave-club-is-
ripping-you-off.html)

------
brobdingnagian
Expensive Gillette razors can be resharpened with just a leather belt. Look it
up!

------
theklub
One of the few subsciption services that made it big, congrats to them.

------
yarrel
Subscribed for a while.

There's not a single word of the name that's accurate.

------
ksherlock
Who uses this? neo hipsters use safety razors. real hipsters use straight
razors. Neckbeards ... I think that speaks for itself.

~~~
xigency
How about normal people.

------
pkaye
I think they get their blades from Dorco. I can buy that much cheaper in bulk
on Amazon.

