How To Build A Billion Dollar Brand w/ Michael Dubin

Hey, capitalists. Capcon is coming up soon. So we wanted to share one of our most popular talks from the last capitalism conference. Michael Dubin is the founder of Dollar Shave Club. And after the brand blew up through their viral videos and they changed the razor industry forever, getting tons and tons of loyal monthly subscribers, Unilever acquired the company for a billion dollars with a B. Ryan sat down with Michael to pick his brain about all things advertising and marketing and scaling physical product brands. So make sure to stick around for the Q and A from the audience at the end of this episode too. And if you'd like to see who's on the lineup the this year and meet them in person later this month, get your ticket today@capitalism.com capcon5. All right, let's dive in.

How many of you are familiar with dollar Shape Club? All of you.

Yeah.

How many of you are customers of dollar Shape Club? Yeah. And how many of you are familiar with our Razors are great ad. Yeah. Basically changed the way that I think E Commerce was played. So it makes for a very compelling case study of what this company did. Right. But it's more than just the video that a lot of us, most of us are familiar with that prompted us to reach out to the founder of Dollar Shave Club to share with us today. And it's also, you know, what happens when a business really starts to catch fire. What happens when you start to scale? You know, a lot of businesses break when they start to scale. We think that we want to go from 1 million to 10 million or 10 million to 100 million. But the fact of the matter is a lot of businesses can't successfully make that pivot because of the infrastructure that just breaks. So I'm really curious to unpack what happens when you have a company have a video explode, put it on the map, and what happens then? How do they sustain that momentum? And then, of course, that business went on to exit to a publicly traded company for an okay amount of money, some would say. And so we'll talk all about the beginning stage of the company, the scale, and then the exit of Dollar Shave Club. So would you please join me in welcoming Michael Dubin.

Thank you for being here.

What's that?

I said, thank you for being here.

What's that?

I see what you did there.

Michael. I've been stoked to have you for a long time. I guess we'll start by asking, what do you do now that the company has exited? I know you're still the CEO and you stayed on after this whole Ramp up. What are you overseeing now? Because most people are familiar with you from the videos and from the story of the company. But I'm curious, what, what happens now?

Well, I'm still the CEO. I'm still enjoying being the CEO. There's a lot to learn and, you know, I'm, some of it's motivated primarily by curiosity and by learning. And I have a great seat at the table right now. I get to do the same stuff that I loved doing when I was, you know, when the company was very young. And now I get to do a whole bunch of other stuff that, that's, that's fascinating as well. So I'm in no rush to leave.

Would you explain what you mean when you say there's so much to learn? That's something, that's something that I, you don't hear famous CEOs say, right? That I'm excited to learn and I'm not ready for the next thing yet. So what does that mean to you?

Yeah, well, I mean, listen, it's, it's your, your journey as an entrepreneur should be about learning. I think there's nobody, anybody that tells you that they've got it on autopilot or they've got it all figured out is probably being somewhat disingenuous. It's, it's. You don't start a business knowing everything about the industry that you're in. You don't continue in that business knowing, you know, without learning along the way. I think that the, the secret of being a great entrepreneur is really being able to be a fast learner and then to deploy those learnings in service of the business really quickly. And so it's important to keep track of what you're learning, record your lessons, the hard won lessons and the easy lessons, of course, and then deploy them in services, the businesses as fast as you can. But yeah, I mean, people that have been in business for, you know, 50 years will still tell you that they're learning. The great ones. I think so, yeah. It's all about learning.

So let's now go to the other side of the spectrum. Before you started Dollar Shave Club.

Yeah.

We were talking about how, you know, when you were a kid, you didn't dream up Dollar Shave Club.

Right.

So what was happening in the year or two before you started the company?

Well, so the year or two right before I was starting the company, I was working for, I was doing some freelance advertising work. I was, I had gotten laid off in New York in 2008, and so I moved to California. I'D always wanted to live in California for a part of my life and I, I was do. I went to work for a small marketing agency. Then I left there to do some freelance and then I started Dollar Shave Club.

Is this like ad creative?

Yeah, it's an ad creative and then ad. Ad buying and distribution.

Is this where you kind of started to hone the skills that would ultimately lead to the success of the first video that everybody knows?

No, I think that that was a function of a few other things. Partially that for sure, but, but I had studied. I, you know, I've always been passionate about the media business. My first job was in the media business. I was a page at NBC and then I worked at NBC News for a year or two. Then I went to work at Time Inc. Which publishes Sports Illustrated and Time magazine. I worked on the relaunch of Life magazine and then I worked at sportsillustrated.com building websites. And at night I was studying improv and sketch comedy. And those skills helped me think about how to write the video, how to perform in that video ultimately.

And then certainly deploy that video in a smart way to get the most amount of eyeballs on it. So I think that the roots of that original viral video went back very early in my career.

Would you help? I mean most, at least half the room is in E commerce selling physical products.

Yeah.

And.

Most of them are not. If we were to turn back, Time would not have thought the business that I'm going to go into is going to sell razors and position them as dollar raisers. That is kind of counter trend how most entrepreneurs are approaching it because they're looking at profit margin and like initial transaction value. So what was the thought process and the vision day one when you decided this was the opportunity you wanted to.

Pursue so well, so the name so right. So you know, selling razors for a dollar doesn't sound like the most profitable enterprise. I think that when we were, when I was searching for a name for dsc, what was really, what was interesting to me was a title that described what this business would do for you and how it worked. And so if you pulled anybody off the street and were to ask them what is the. What does a company called Dollar Shave Club do for you? You could probably piece it together somewhat accurately. So the dollar raiser which we launched back in 2011 was, was really a way of saying, you know, we have this thing that, that you can buy at this price plus shipping.

But there are other options for you as well. So I guess the seedling for DSC really began in 2006, 2005. I was living in New York City and I would always walk by the drugstore Duane Reade on my way from my office to the subway platform. And running out of razors is something that guys and girls, you know, it happens, right? And. And you have to go and buy them. But it's one of the most cumbersome, frustrating experiences that I can think of, which is you have to go to find the razor fortress. It's always locked. You have to find the person with the key. They're always doing something else. They make you feel like it's a huge pain in the ass to help them or to help you get the razors out. And then you have to pay this really high price. And so I would just kind of walk by and milk my old razor cartridge for a lot longer than I should have. And that was that, you know, led to other sort of problems, but none too major or life threatening. So but ultimately it was, you know, that was where the. That was where the seedling happened. And then, you know, but I didn't say to myself, right then somebody needs to do something about this problem or there's a huge opportunity to do something. The seedling came later or. Sorry, the. The. The sort of spark came later when. When I met my friend's wife's father at a holiday party and he had some. He was sort of this international distributor of goods and he had a bunch of goods in his warehouse. One of them happened to be some razors that he was trying to sell to drugstores. And I took them off his hands to. To drive. To drive sales. Was that first business.

Was, was that a separate business or was that actually the launch of.

No, that was Dollar shave Club. I mean, that was the very beginning. So we launched a beta site in 2011, ran it for probably six or eight months while we, you know, I say we. It was me at that point, just me and my apartment while we assessed what the best pricing was, was, you know, what the best method of engagement was. So we were selling the razor subscription. We were selling bulk razors that you could buy. And what we learned was the bulk razor customers would buy a big chunk and then they'd be totally disengaged from the brand. But with the subscription.

It was very. People came back and they wanted to know more about us and they were getting a shipment from us each month and that allowed us to communicate with them more regularly and not in an upsell y kind of way, just In a hey, don't forget about us kind of way. So the beta site was actually really formative in helping us design what we ultimately launched in March of 2012 with the original video.

So I didn't realize that the video came out very early in the, in the company's life cycle. So your infrastructure was probably fairly modest in the early days. Is that the case?

That's right. Yeah. We had, you know, we. The. The website itself was, was, was built by third party shop on the third Street Promenade in, in. In Santa Monica. And it was, you know, it was based on an open source platform called Drupal, which may or may not. Wow.

Yeah.

Yep, that was the first site. And then we went to Magento and then we went to Zora and then.

We built our own thing.

Oh, we've migrated up the chain over time. So yeah, it was.

It was, it was a very rudimentary early platform that was not ready for the scale that we saw in the early days.

So. What? What? Man, I. So many questions. I feel like a mosquito at a nudist colony. There's so many places I want to go. I'm not sure where to put my attention.

Take, take your time. I might end up in your lap in a minute when this sun just keeps creating. Creeping over here in my hot sweater.

More awkward, More awkward things have happened over the last couple of days. Yeah. So when you're ramping up and you obviously have some inventory ready to go, but there's no way that you could have been ready for what happened when the video really caught fire.

No, I don't think, you know, when you're planning a video like that, you're not thinking about, not thinking about it going viral. You're not thinking about.

You know, you're just thinking about getting it out there and all the things that you need to do on that day. I. The video, it was, you know, it was a good video. We're very proud of it. It put us on the map. We wouldn't be where we are without it. But when we were filming it, we didn't think that this was something that was going to go viral. And anybody that tells you that they can make you a viral video, be very cautious about because it's not something that you, you know, you can manufacture. There's no formula to it. It's just, it happens and there's no reason why. There's this baby shark video that maybe you've all seen or something and that thing is going viral and like, you could never have imagined that you could never have imagined that only somebody, only one person or group of people could find out. So it's, there's no, there's no formula for virality. So when I made the video, I, you know, I made that video because I wanted to tell the story of the business. I knew that video was a powerful tool to do that, but I didn't think of it as the thing that was going to help us break through the clutter or the noise or put us on the map. I just thought this is going to be something that when people come to the homepage, they can see what we're all about.

And who better than the founder and CEO to tell that story? So yeah, we launched that video on March 6, 2012 and, and it was right before south by Southwest when people are sort of in the market for a big tech story because that's the time of year when folks go to Austin and they start thinking about tech and what's happening. And we wanted to take advantage of that lull right before south by Southwest. And so it was well timed media wise. There wasn't much else going on. Right. There wasn't anything else really to talk about that day. So our video broke through and, and where I was, was I shocked? I think I was, I was shocked. I knew that the video was good, but I didn't know that it was going to break through that way.

And how did you manage the response? Because.

I mean most physical product sellers and e commerce sellers have trouble with inventory management and they don't have a viral video. So when you do have a viral.

Video, you have those problems and then some. So our bash to our, we ran out of inventory. You know, you scramble like any great entrepreneur. You have to figure it out and you have to figure it out quickly. You know, for, you know, we sold out of inventory. We put a little site page up that said, you know, we're sold out, but we'll be back in stock soon. We will continue happily to collect your money and then send you the product when it's back in.

And what was the infrastructure and team before it caught fire? And then how did you have to change when it started?

So before there was really just kind of a team of freelancers working on it. We had some freelance engineers, we had some freelance designers. I think we had an intern helping with fulfillment, but that was really it. And then we had to scale up our staff pretty quickly after that.

And how did for. For a business that's growing almost faster than you can control.

Yeah.

How do you how do you start to source that talent and make those moves quickly?

Yeah, so I was. So I had just moved to Los Angeles. I lived in. I'd lived in New York for, you know, 10 years before that, and, and my network was all on the east coast, and I signed up with, with an. Our first investor was in Santa Monica, and they were very well connected in Los Angeles, and they were able to parade a group of talent through the office for me to choose from. And I picked some really killer staff early on that had a lot of experience, not necessarily with E Commerce, but with finance or with operations and, and, and with media. And so I was very fortunate in that way to. Now I, I like to think that I, That I picked right, because anybody could have picked the right people or the wrong people. But that was, that's one of the hardest. I mean, you're right to, to seize on it, because that's one of the hardest things that you, that you have to do is pick talent. And if you get that wrong, it will, it will cost you months or years in terms of, you know, lost productivity and, and missing opportunities. And maybe it could have, it could.

Have sunk the business at this point if you hired the wrong people.

Absolutely. And I, and there were some people that I interviewed that I look back and say, thank goodness I didn't hire this person. Instead, I hired this other person because, because, you know, we just wouldn't have done what we did.

Do you think that's luck? Is that. Are you looking for something specific? What, what kept you from hiring the person you said thank God not to hire?

Yeah, I think that. So I, I do think that there's some. Well, look, there's always luck because those that are on the marketplace, you know, you don't have any control over who's looking for jobs at the moment that you're hiring, so that's that. I think that using recruiters is. You know, a lot of people don't like using recruiters because they don't like paying that bill. Right. They. They think it's a waste of time and a waste of money. I actually think the opposite. I think that recruiters are paid to have established networks in their field and know who's moving around and what people have accomplished at different stages of their career. And, you know, they're actually like the candidate whisperers, and they can whisper in the ear of somebody that can be transformative for your business. And the candidate, prospective candidate, knows that this recruiter knows what they're talking about and is accomplished and experienced. And so they trust the recruiter and the recruiter can actually woo them onto the field. Right. Whereas they might just sit on the sideline otherwise if you picked up the phone or used LinkedIn. So I actually believe very much in recruiters. And there's all kinds of creative ways to work with recruiters. You know, give them a little piece of equity in the business, pay them percentage of sales for the next upcoming year or pay them straight up, you know, the straight up fee, if that's, if you can afford to, to do that. But I really, really believe in recruiters. They just, they just weaned, they weed out the BS from the great hulking masses of available talent and they narrow the pool so they can tee that up for you. So is that luck? I don't know. I think that's strategic. So, but again, you don't have control over who's going to come onto the field of play, put themselves up for, for selection. And then I do think that, you know, you have to either have naturally or hone over time through experience, the ability to.

Interview somebody and sniff out with them whether or not they're the real deal or not. And even, especially when it's easy, when you're doing that in an area that you have expertise yourself. So for me, marketing, advertising, brand development, media, all of those things, that's my sweet spot. So it's very easy for me to sit down and interview a candidate that has experience doing that type of stuff.

Stuff.

But the hard part is when you have to interview somebody. Like for me in engineering, a cto, for example, because I don't come from a technical background. I've gotten proficient over the last 10 years because of all the work that I've done. But in the early days it was like you kind of have to have or hone the ability to check your gut and, and see whether or not, you know, and determine whether or not somebody can do the job that you need them to do. So interviewing becomes a skill, you know, reading between the lines, judging people by what they don't say as much as what they do say is really important. And you know, I think that that's, those are skills that any entrepreneur has to master because your journey will only go so far if you're not armed with a great team around you. And DSC has been a total team effort, continues to be this day. And you just have to be, you have to be a great hirer. And you should think of yourself, if you're the CEO, as the head recruiter. You should Always be looking for great talent.

Yeah. Someone said to me once, the job of a CEO is to cast the overall vision to ensure that you're recruiting the best overall talent and to make sure the company never runs out of money.

I think that's, I think those are three good things for sure. But no, I think that there's other things too that, you know, the CEO has to also, you know, deliver performance and make sure that the, you know, that there are people, you know, recruiting doesn't stop when they come in the door.

Right.

Recruiting continues when they are an employee, so to speak, because you're always recruiting them back every day to your vision, to your, to your company, because they are, they're always on the market, per se.

So, Michael, it's really easy at this point for someone who's running a, you know, a business that is still ramping up, still in the early stages, or someone who has had some success, but to look at your story and say, either, yeah, but he's Michael Dubin or yeah, but that's Dollar Shave Club. Because we just see the good side and we only ever see the good side. And when you're describing this experience, it sounds pretty good. I mean, the whole kind of ride of Dollar Shave Club. Yeah, sounds pretty good. So is that the case? I mean, well, obviously it's been overall pretty good, but like, was it always that way or were there days in which you late at night worried about the business and worried that it would all fall apart?

Yes. And there still. Are you never. If you're wired, if you're wired the right way, you'll always worry.

Would you, would you explain that if you're wired the right way, you'll always worry?

Yeah. Why? Well, I don't know. Maybe that makes me sound like an over worrier or, But I, I, does.

That mean if we're, if you're wired like Michael?

No, I think if you're, Listen, I.

Worry, I worry all the time too. So I understand.

Right. I think, I, I think that a good CEO and just a good business person in general is really thoughtful about what the great opportunities are and how to capture them, what the big risks are and how to avoid them. What could go wrong in your business next week, next month, next year that you need to get ahead of. And a lot of people miss the ball on those big life or death moments, which can be opportunities missed or risks unavoided. And, and you should be proactive in thinking about those things because otherwise they will just happen on you or you'll miss Them and that, that could, that could destroy your business. So yes, I think you do worry now. The, the artful. So, so when I say if you're wired the right way, that's what I mean. I mean, if you're the kind of person that thinks two to three steps ahead, what could go wrong? What needs to go right? What opportunities do I need to capture? What risks do I need to.

The way your brain works. Yeah, you're going to worry about those things. The balance is how do you figure out a way to not worry about those things so that you don't drive yourself crazy?

Yeah, I think a lot of entrepreneurs have a perception of, they're worried about getting to this level and when I get to this level, then it's fine and then I'll just go into defense mode and coast here. But the truth is if you're a growth minded person, you're always going to be thinking about the next opportunity and defending the risk that are, that, that are, that are coming out. Always.

And it's, and it's, it's just different layers, different, different levels of risk and opportunity. Right. When you're a smaller company, you know, it's maybe the opportunities are. Well, that's maybe true, but it's just, it happens at every stage of the business. You're, you'll never stop worrying.

Great, great news. Everybody would. Would you talk a little bit about how you rode the momentum and continued to develop momentum after.

The famous video? Plenty of companies have a spike and then they go back to where they were before. But Dollar Shave Club continued to grow and continued to develop brand recognition and then obviously caught the attention of an acquirer a couple of years later. So how did you continue to foster that momentum?

Well, I mean, it depends on how you mean momentum. Do you mean business growth? And how did we, how did we.

And attention.

Yeah, Well, I mean there's, there's a variety of ways that you keep, you know, you have to keep your customers attention, you have to keep the attention of venture capitalists if that's the way your business is funded.

Is that, is that the route that D.C. went?

Yeah, we raised, we raised probably $150 million. Okay.

At what, at what point in the business did that happen?

Well, the whole way. I mean, I bootstrapped it probably for the first year after that, it was.

Probably the first round I raised was January of 2018.

Oh, that's.

Sorry. January of 2012.

Okay. That changes it just a little.

Yeah.

Yes. So sorry. When did the video hit?

March of 2012.

Oh, okay.

So the funding beta site was in July of 11.

Yep.

Which I had bootstrapped till that point. First round of funding happened in, I think it was, we started talking to VCs in October of 11 and then we closed our first seed round, $100,000 in January of 12.

So with $100,000, that seeded the growth that happened.

That's right.

And that's absolutely amazing. So when you said 150 million.

Yeah.

I was like, well, wow, how did you pitch a vision of 150 million before a video hit? But $100,000 is a little bit different. So you went the route of VC after that. Can you talk a little bit about how the company was sustained financially and when you went and raised more capital and what that process was like? Like, I mean it's hard to value the, the, the momentum of a, of a video. So there had to be other metrics that, that were being analyzed.

Yeah, well, sales, I mean the growth of customer acquisition. Yeah, yeah, definitely. We were launched, you know, we, we, we launched more creative. We, we started making partnerships with radio endorsers, influencers started buying different types of media in the fall of 2012 and you know, that created a steady drumbeat of, of customer growth. You know, the viral sensation of March 2012 wore off. And people had heard about us once in that way, but then they needed to see us in a more formal way. There's something, there's something really important about people. Prospective customers need to see you in formal channels of advertising because it makes you believe, it makes them believe that you're a real business and not a fly by night operation that, you know, won't deliver on its promises. So there is something to being on tv, even though TV is changing and it's not necessarily where you should spend all your money, depending on what type of business you're running. But there is still something about turning on the television, seeing a company and being like, okay, that company must be a real company, whatever that means.

Yeah, it's like, it's like real life retargeting almost. So well what.

Post video. As you're scaling, you're bringing on these different team members, you're managing the venture capital world.

What areas of advertising kept the momentum and kept stoking the fire of the growth of the company?

Well, it's an ecosystem. You can't look at any one channel when you're growing your business. It's. How does one channel, you know, combined with other channels nourish your momentum? So, you know, we used a combination of television and radio and display ads and Facebook ads and, you know, through the right kinds of targeting, making sure that people got, you know, whatever the right number is, 2.7 touches on the brand before they convert so that, you know, and then, and so, and nobody's really gotten multi touch attribution, right? Completely. It's really tricky terrain, but you have to do a blend. I always recommend starting with. If you're a young company starting out, think about local media tests. Local media can be a little bit less expensive. You can get access to some great programming that way. You can buy it on Revenant, on television, and you can geotarget a little noise machine in one area. You can do a little bit of outdoor, you can do a little bit of radio, do a little bit of television, do a little bit of print and keep your costs down and see how one media, one medium nourishes the other towards your customer growth.

Yeah. I'm curious, as your video starts to scale, was there a temptation to say, let's just go all in on this since it worked once and I, and I asked because there's many entrepreneurs in the room who, and there's many entrepreneurs in general who have something that hits. And, and the natural temptation is just say, that worked. I'm going to keep doing that over and over and over again. And then there's fear over, well, what if this changes?

Yeah.

And what you're saying is, well, you took kind of a multifaceted approach kind of from the get go, and there's a little bit of a different mentality than I think most people approach their business. So was there a temptation to attack and defend the one thing that really put it on the map, or were. You always said, all right, we're just, we're going to scale this and acquire as many customers as possible and whatever the data tells us.

Well, there's some cases. There's, there's never any. There are very few, I should say, universal rules about how to do anything. In fact, I think great entrepreneurs, great CEOs are great at adapting and modifying those rules as they go along.

You know, what do you, you know, sometimes you double down on something that's working. Sometimes it's, you got to freshen it up. A lot of people will wait until the thing stops working before they switch it up. I try to get ahead of that. Maybe too soon, but, you know, I think that, yeah, you can't, you can't just keep, you know, pushing the same button for people. Right. You have to mix it up so.

It sounds like you scaled up infrastructure and costs really quickly. Was the company profitable in that scaling process?

Profitable in the sense that we were able to fund a lot of our growth spending from our existing business. Yes.

Yeah. What's, what's the story behind.

Well, you know, well, when you're subscription business, you're throwing off profitable, you're throwing off cash. Yeah. From your existing member base. And then how profitable the business is or isn't is just a function of how much your paid media is at that point. So you can decide to be profitable if you want to at any given moment by, by choosing to reduce your media budget.

I see. So you were, you were taking a loss on the acquisition, but at any point you knew that you could scale down infrastructure or media spend and ride momentum if you had to.

That's right.

But you also had access to venture capital to be able to continue that fund that growth going. That's actually a really interesting insight. When did the acquisition start to come knocking on your door?

I met the president of Unilever North America in, I think it was December of 2016. No, excuse me, 15. And we just started talking about, you know, each other's businesses and there was a, you know, we really enjoyed each other's company and we all were, we both were kind of on the same pages to what, what we were doing in our respective businesses. And our values seemed to be simpatico. And, you know, it started out as a conversation of how we might be able to help each other. Then it blossomed into maybe talk of a partnership and then it sort of morphed into this conversation about an acquisition.

So was it always a goal of yours to exit or to have an acquisition or did it just kind of come organically?

Yeah, I can't say that that was ever my goal, goal. And I don't think that it should be a goal of anybody, of any entrepreneurs to say, I want to exit, I want a big cash event. And I, you know, that's, that's, I know that how that may sound sitting here after having had a big exit, but it's really true. I never got into this business because I thought that I was going to, you know, become super wealthy. I, I, I knew that it was a good idea. I knew that DSC was going to be a worthwhile business endeavor because I had experienced the problem myself. I had no idea how big it could become or would become. But ultimately I never got into the business wanting to get out of the business. And if that's your mo, that will start to show up at a certain point if you're just in it for the cash. And, and again, there's, there are exceptions to the this I think, and maybe a lot of exceptions to this. It's, and it's okay to be motivated by money. I mean, we all need to eat, we all need to, you know, feel successful and drive lamb.

We all need to measure our success in some way. And certainly, you know, a financial return for your business and for you personally can be rewarding and can be an interesting yardstick. But that's never why I did it. I did it because I love building things. I did it because I'm driven by curiosity and I love building brands. And that's why I got into it. And so I can't say that it was ever my goal to exit. Yes, I wanted to make money. Of course, you know, again, you got, you got to eat. But I got into it for the reasons that I stated, not because I was looking for a big windfall exit. And I think my investors saw that, right? And I think that Unilever saw that. They, they, they, they saw that this was not something that, you know, I was not motivated by money.

When you look at Pre Dollar Shave Club hustle and scale of the growth post acquisition, when were you happiest?

When was I the happiest? Let's see. Honestly, I don't think that I was, I think the happiest I ever was was the day I sort of got my verbal yes to my first investment from an outside investor. Because that was the first time that I had, you know, I started, I had tried to start a social network for travelers and 2006 didn't go anywhere.

Social network for travelers?

Yeah, in 2006 didn't really go anywhere. And you know, and I had, I had always had a lot of different ideas. And then I had Dollar Shave Club and I had never been sort of validated by a third party. Your friend. You know, my friends and family gave me money for my first startup, but no outside investor had. And so for me that was like know that was the most validating thing that I could have imagined. And I remember, I don't think that I was ever so psyched as when somebody said, yeah, I'm going to give you a hundred thousand dollar check. Seems, which is, you know, hard to believe when, you know, you've had a big exit. I mean certainly that was exciting, but at that point it was like, we've got some big shoes to fill. We got some big promises to live up to. But when it was just like, hey, here's a hundred thousand dollars check. It was like, oh my God, somebody actually believes in me and my idea and I can, and that I can do it, that I can actually pull this off. And that was the first time that that had ever happened. And there's no time like the first time.

Can you talk about. What I'm wondering from that story is there might have been some like self doubt after a company that didn't go so well and you had raised friends and family money.

Yeah.

And that this was like somebody believing in Michael and Michael's idea and it was a huge shot in the arm. And so I'm curious, after the business that didn't go so well, what was kind of your view on yourself and your ability to be an entrepreneur? I mean, I can imagine that that would feel like there's something in you that wants to come out. You're not sure how because the previous one didn't go so well and that's why $100,000 was so impactful. I'm just curious if there were like feelings of failure after that.

Yeah, well, I think, look, how many of you have started a business before the business that you're currently in? Raise your hand. Right. So I think that the way that entrepreneurs are wired is we were a little obsessive, we're a little compulsive. We're a little obsessive compulsive. And I think that there's a, there's a, I don't want to call it a sickness. It could be a sickness. But you know, I don't want to say, you know, don't quote me as saying that entrepreneurship is a sickness. But it's, but it's, it's truly something that's in your blood and you get fixated on an idea that can work and oh, this is such a great idea and oh my God, I have to pursue it. And nothing is really going to slow you down. Right. Nothing is really going to stop you. Your friends are going to tell you it's a terrible idea. Your family's going to tell you it's a terrible idea. Business associates are going to tell you why it won't work. People are going to give you the blank stares and they're going to tell you that it's that they just don't get it. It's not that they don't want to get it, they just don't get it. And so, so, you know, who are you to be this crazy person that, that stands in front of that great tide of disbelief and say, I'm going to actually go through with this. You have to be a little sick. So, you know, it's like, you know, when you have your first idea that it doesn't go well, you don't want to be delusional. Delusional about the reasons why it didn't work. Because that has to be, you know, that has to be fuel for your success later on. But, you know, you're not gonna stop having ideas about what you could build if you're an entrepreneur, if you have this, I would say gift rather than sickness, you know, but it's, but it's true. Like just so failure for the entrepreneur is never, I don't really think seen as a failure. If you're really wired as an entrepreneur, you're just going to like, you're going to put that one down. You're going to be like, okay, well what's next? That's just, I think, how you're wired. I mean, would you agree with that? Yes.

My experience has been slightly different in the sense of I feel such a identification with that calling or that delusion, that illness, that gift.

Right.

That after failure I ride that emotion for a bit. It hurts.

Really?

Yeah, it hurts. And then it takes me a few months to really process and learn what that meant and then integrate. And then it's like, all right, now I have improved, but there's a period where I get pretty hard on myself.

Well, and that's not necessarily a bad thing. You have to watch the post game tape, right. You have to do the postmortem and say, what did we do wrong? Where, you know, what didn't, what didn't we do right? Did we miss out the product? Was the product wrong for the market? Was the service wrong for the market? Did, were we too early? What were we underfunded? Did we miss? What did we miss? I mean, you have to do those things. You have to kind of replay that in your head.

You know, but, but it's, you know, it's, it. Yeah. I'm not saying that it wasn't tough because it was, it was certainly, certainly discouraging when you're, when your idea, when you're, the thing that you're passionate about doesn't go well. And then you're like, oh my God, nobody's ever going to listen to me anymore. My family's not going to fund my next one. I'm not going to have any money to fund my next one. You know, it's like, you Know, what does this mean for my track record, et cetera, et cetera. So, yeah, it's very discouraging, don't get me wrong. But that will pass and then there will be the next thing.

What about after the video hit at Dollar Shave Club? I mean, I.

We all know the comments that happen and the pushback that can happen anytime there's any sort of publicity. And the video was immensely popular. I've never met anyone that didn't love it and love the brand as a result. But there had to be some media pushback or some negativity that came and I'm just curious if that was the case.

I'm sure there was. I'm sure there was. But again, it's like you don't spend a lot of time dwelling on that.

Okay. Michael, does anything throw you off track?

Oh, yeah.

Okay, let's go there. Because.

I'm like wondering where the, I mean, the way you present this story is like, like you had it all figured out from the get go.

Like, like, let me not. Let me dispel that. Please let me dispel that. It's, you know, it's, it's easy in hindsight to look back and be casual about what we've done and, and make that sound casual. But no, I mean, at every turn, you know, at every turn there were life and death moments, right? And, and every day, really, there are life and death moments. You don't necessarily see them as life or death moments, but you have to see the ripple effects of the choices ultimately can lead to great success or ultimate failure. And you know, like I said before, I'm a worrier. I continue to worry this day about what could go wrong and what we're not doing right. And I will never not be that. I will never not be wired that way. I think it's, you know, again, some of those qualities are what make great CEOs. But then you have to help prevent yourself from going absolutely crazy from, from worrying about things, because you will. And you have to figure out a way to say, I'm going to put it down and move forward. So, you know, just do things, throw me off all the, all the time. I mean, every single day. It's, it's, you know, because you're constantly thinking, okay, what just happened? How do I react to that? Or what do I need to go do to make sure that we have a future. So, yeah, it's, it's a constant, you know, barrage of, of, of stress and worry.

And do you still feel that way sometimes? Post acquisition.

Absolutely. I don't feel any less responsible for the success of the company than I did when I started it. I don't feel any less sense of, you know, wanting to build something enormous and awesome than I did when I started the company. It's, it's just because we, you know, I never viewed the acquisition as the end of, of the road. For us, the acquisition was a milestone on our path, and it allowed us to partner with a really great company, Unilever, to achieve what we want to achieve and allowed us to not have to go on the road fundraising every year because we have, you know, a very huge organization, you know, behind us. So, you know, it's, it's. The acquisition was, you know, it's a milestone on the journey, but it was not the end of the journey. And it's, you know, it doesn't mean that you stop worrying. Some people will, right? And that's okay. There's no judgment there. I think some people are like, cool, I did it. I'm out. Here's your thing I built for you. It's yours now. Do what you want with it. I'll see you later. I'm off to do the next thing, or, you know, I'm going to go, you know, start a conference.

Fair point.

Would you talk about what has changed since the acquisition? You now have a lot more relationships, partners and opportunities. And I'm just curious what has changed about the business since that. Since that transaction.

So one of the big things that's changed is our access to talent. So when you're a startup, you know, a lot of people think that when you're a startup, everybody's going to want to come to your office because you've got stock options to give away. And those stock options are going to be worth, you know, a bazillion dollars. Exactly one bazillion dollars. And it's going to change your life. And the reality is, is most people above a certain age, which is also to say, above a certain level of experience and certain position, don't have that level of risk tolerance. And those are the people that you need ultimately to help you scale your business to the great heights that you'll want to.

So. And that's, again, there are totally exceptions.

There are.

There are, you know, big fish, so to speak, that will come to your little pond to help you grow, to help you grow your business. But it's not a lot of people, you know, a lot of, you know, the, the, the older you get, the more experienced you get, the better you get hopefully. And those folks have families and they have lives. And if you want to uproot them and bring them to a new city or to your company from the same city, there has to be meaningful. There has to be either be enough potential upside to outweigh the risk and the concern or somehow de risk that for people. And that's hard for young companies don't have a lot of money and that haven't proven themselves yet once we acquire. And so we had some great talent in the beginning and, you know, don't get me wrong, I mean, extraordinarily talented people. Um, after the acquisition, a lot of people who had said no to us because we were a startup saw the acquisition as a validation of what we were doing. Oh, this big successful company, Unilever, sees what you're doing as really interesting and has done their diligence on your success. So I guess that makes it a bit of a safer choice, you know, and any job that anybody takes is always a risk. There's no guarantee it's going to work out the way you hope it will, but it was extraordinarily validating for us and for the business. So it's, it's. That's been a huge difference. Just people. People that didn't pick up the phone in 2015 started picking up the phone in 2017. Yeah.

And I mean, obviously this still the CEO. Has there been any. A conflict in the direction of the company, where it needs to go? I mean, when you have a big company come in and they have access to more resources than you've ever had access to, I can imagine there's some sort of a playbook sometimes of this is how we do things. And as the founder, there's going to be some like, well, this isn't what I wanted to do. Is there any conflict there?

Not really. Unilever and I sort of got this vibe through the, you know, the acquisition process, the process of diligence and doing the deal. They're a great company, they're well run, they've got an incredible value system and they're great acquirers of companies. They recognize what makes a company special and they support those companies in just becoming greater, higher versions of themselves. They don't come in like a lot of companies will and say, all right, we want you to do this and that and, and we don't want you to do this other thing. Unilever has, has really never said that to us. So I, you know, I always say if we screw it up, it'll be our Fault. So it's, it's, it's really a. It's been, it's been great. It's. And it's uncommon.

There's, there's been, I've noticed a lot more TV ads. I think since Postac was acquisition. There's been, there's, I think there's more of a retail presence. There's more of like an. It seems like more of a.

We're not in retail.

It's not at all.

No. We, we're not in retail. Our, Our mission is to own the relationship with the customer because that's how we think we can solve the greatest amount of problems for them. It doesn't mean that at some point we won't do some things in the real world, because that's important. But so far, the. Really, the only things that we've done in, in sort of retail is we just launched these really cool vending machines and in malls and airports.

Okay, cool.

Yeah.

Tell me, tell me about the, the next move. We were talking, we were talking before about, you know, you're. You're happy being CEO and kind of. And continuing to cultivate this and grow, but you wonder if one day you'll get the itch again to start something else.

Right.

Tell me about that.

Well, I'm sure I will. I, you know, there's always, you know, like we were talking about, entrepreneurs always have ideas rattling around in their brains. And, you know, I'm no exception to that. So will we do something awesome next?

I hope.

Or will I. I hope so. I don't know when that will be or what that will be, but I'd like to think that this is not my last job.

There's. I would, I would think there's a different level of expectation when you've had the level of success that you have when you go to start something else.

Yes.

So there's. There's a different. There's a different requirement of what would be compelling enough to get your attention on the next thing. But at the same time, your expectations were probably very modest when you started Dollar Shave Club. So that's an interesting paradox there. The thing that made you really successful was an idea that probably you had low expectations on. You raised $100,000, and then on the other side, you have all these resources now and all this track record and all these connections. So your expectations are higher.

Right.

What do you expect? How do you expect that paradox to play out? What would be your mindset going into the next thing?

Certainly not that I have to recreate this success of D.C. i think that that's, you're really setting yourself up for failure. I mean, I wouldn't want to do anything that didn't have the potential to grow really big and successful. But I would never put that sort of, you know, I would never sort of put that.

Expectation on myself or on my team, whatever that future hypothetical team to build, you know, another company that has the same type of success that DSC has had or measure that success in the same way. You know, I could just as easily find myself in the nonprofit sector, sector or the public sector. Those things are not those things, you know, just wouldn't have the same level of sort of financial success. But there would be other ways of measuring that success in terms of impact. So I don't want to, you know, I, I would never do that to myself. I would never do that to, to my, my team because you can't, you know, building something really enormous and successful doesn't not happen overnight. I've been at, you know, I started DSC in December of 2010, January of 2011. We didn't launch the beta site till July of 11, but I started the project back then. So now It's January of 2019. And so I started that company eight years ago. And by the time I'm done, it will be 10 years plus. And that's what it takes to build something huge. And so you don't have many 8, 10 year runs in your life. Right. So it's like, how do you. I will have to define success my own way. But it, but it certainly won't be, you know, do we have the same type of financial success as a dollar shave club? And that's okay. And if, and if, if we do, that's awesome. But like, that certainly won't be like, well, if we fall short of that, then we failed.

How will you know when you want to pursue a new opportunity?

I think I'll just, I, I don't know. I don't know how to answer that. I think you'll just know, right? I think you just wake up one day and you'll be like, all right, this is, you know, I'm proud of what we've done. It's ready to be passed off. And I'm excited about this new thing now.

Now I know you, you invest in some companies that you're excited about. Yeah. Would you tell me what the criteria of what you invest in?

Well, it always starts with the entrepreneur. It always starts with the CEO. You know, do I see in them? Do, do I See in the entrepreneur, something, a killer instinct, a relentlessness, a see around the corners, ability to see around the corners.

You know, is there some X factor credential that you have success in a field, expertise in an area? And I can usually sniff that out pretty well. I think I have a good gut for that. But I've certainly, certainly honed it over the years to identify people that just get it. Yeah, I think that's where it sort of begins and ends. I've, I've chosen to invest in people that haven't quite figured out their business model, but I really believe in them and I know that they're going to get it. And I've invest. And I haven't invested in people just because I was not impressed by what they brought at the first meeting.

Interesting. So, so it starts with the CEO. Is there any criteria for the company itself?

Well, I have to be interested in it, of course, but, but in terms of like, what stage it's at? No.

Can you tell me where you find the deals and the opportunities that you look for?

You know, sometimes they come to me, sometimes people will pitch them on LinkedIn to me, and sometimes I will just bump into people, and sometimes it's a, through a friend or a business associate. You know, you just kind of keep your ears open.

Yeah. So the, the threat I see is that it's all people and it's all relationships and it's all opportunities.

I think that's fair. I think you got to go out and put yourself in places where you can connect with those types of people. And, and, you know, I'm not saying it's all just going to drop in your lap, but, you know, the more you put yourself out there, the more opportunities will come your way.

Yeah. You said that you invest a lot in companies to kind of, to stay fresh and to learn new skill sets that are coming. I'm curious if you've seen patterns in entrepreneurs that have succeeded after they've worked with you or after you invested and those that did not.

To repeat what.

I said, but I do think that the companies where. So I have not, I don't have 100% track record, no investor, no one does. And I do think that when I look back on, when I look back on the ones that didn't go well.

And this is not universally true, because sometimes happens when I look back, I usually say, well, there was something that I missed in my diligence of the business model or the leadership team, including the CEO, that, that, that I, that I now know to look for the next time, one of those things is sort of the killer instinct in the CEO.

Interesting. So when, when you're looking at those deals is there you came from the, the venture capital world. No, I didn't, I'm sorry, I didn't.

Mean to say it that way.

Like, you, you were involved, you raised money via that.

Yes, that, that route.

So, so does any of that experience color how you approach how you invest in projects as well?

Yeah, I like businesses that are, it's. Venture capital is a very specific way to raise money.

Yeah.

And the constraints that are placed on your business when you are, when you are funded by VCs are very different than ones if you're just sort of funded by, let's call it more patient money. Money that's willing to ride it out with you for a very long period of time until you, you know, and, and are happy with you kind of throwing off cash and a cash return. I really like businesses that make money. I don't, you know, and it's not say I haven't invested or won't invest in other businesses that will, you know, that are more venture, that are venture capital backed and that are more like, more about making money in a big exit because that's possible and exciting too. But I really like businesses that, that just kind of throw off cash.

Yeah. Just so you know, we will take Q and A, so if you want to run to the mic, you are welcome to do so as we prep for Q and A. Michael, I don't mean to do like the traditional, like, what advice would you give to entrepreneurs? I don't, I don't care for that question.

Yeah, but I am face. Would you give.

But, but, but I imagine that a lot of people approach you and.

And if, and if you respond to LinkedIn messages sometimes, like you said, you sometimes meet people that way. So I imagine there's a lot of people that think you have a magic bullet or like, or think that you know something that other people don't. And so it's really easy to look at someone who has been really successful and to have that perception of there's something that you know that other people don't.

Yeah.

And so, so what is that? Instead of asking what advice would you give? I'm curious, is there something, you know, that other people miss or is it just the character traits of an entrepreneur?

There's nothing that I know that others don't. I don't think.

You know, like I said in the beginning, you are always learning. If. So if there's anything that I know that others don't. It's just what I've learned from my own experience.

But there was nothing, you know, anybody that's wired a certain way can be successful as an entrepreneur and as a CEO. And I think that the best thing, you know, I think the one thing that I know and really believe, and I've said it before, I'll say it again, is be really diligent about recording what you're learning along the way. And there's something to learn in almost everything every day. And I miss this a lot myself because I'm moving very fast and there's a lot happening in the office. But, you know, if you spend a minute or two at the end of each day just recording, like, what happened today, what did I learn? How can I deploy that in service of the business? Moving forward, your knowledge bank will increase and you just become a more dangerous weapon.

All right, let's go here.

So, obviously Gillette just made a massive misstep. The way they obviously advertise to men, it's now become the 12th most hated video in the history of YouTube. And I'm wondering, how do you advertise to men in today's day and age? It's a hard time to be a man. It's a hard time to, to walk that fine line at the same time. It's your main demo.

Yeah.

So do you use this as an opportunity to exploit, or do you just brush it under the rug and continue business, Business as usual?

I think, you know, sort of buried in your question is a question about competition and how you approach your competition. And competition is, is a. Is a huge part of business. And a lot of people get freaked out by the presence of competition. And, you know, I actually think competition is a wonderful thing because it ends up, you have to work harder, you have to, you have to make your product better, you have to make your service better. And you should really be inspired by your competition to work harder, to make your. To make your side of the fence better. But ultimately, you define yourself by what you are and not necessarily what you're, what your competitors aren't. Amen. Now, that said, if you go back to our original video, we did point out the flaws of this industry. So I say that, you know, that's where we started for sure. We definitely took advantage of a pretty problem in the marketplace created by the industry at large, some of which I talked about in the, in the early part, the frustrating shopping experience, the, the, the over the high prices. But if you really want to grow big. You can't be an anti brand. You have to be a brand that, that stands for something. And DSC has a mission which is to help guys take care of their minds and bodies so they can be their best selves. And we started off selling just razors and just selling razors once a month or every other month. Now we have almost three dozen products that you know, from shampoo to beard oil to body wash to hairstyling creams and gels. I won't list all the products for you, they're all on our website, you can check it out. But we went from razors once a month to everything you need to look, smell and feel your best a couple times a year. So that's been an amazing transformation. And the way we talk to guys is we talk about being this best version of yourself and taking care of your mind, taking care of your body. We produce a lot of content for guys. You can find it on dollarshaveclub.com under the original content tab or you can find it on Mel magazine, which is our independent men's lifestyle publication. And, and you know, we, we want to, you know, you know, shed this. It is an interesting time that we live in and we want guys to be self reflective and, and thinking about how they can improve themselves. And that's a journey of the mind as much as it's a journey of the body so that you're confident when you're out there in the world trying to be successful. So we try to take a very compassionate, understanding view of guys. We launched a campaign in July of 2018 which you can see on YouTube. It's called the Get Ready campaign and it features a really diverse, inclusive set of men and women that are all getting ready for their day. And we really sort of like take an honest look at what getting ready looks like for people. People struggling with their own insecurities, their hair thinning and having to make that decision, hey, should I keep screwing around with these little wisps that I have left or should I shave it all off? And just really tackling honest moments that guys experience and girls experience as they get ready to go out there to be, to try to conquer the world in their, in their own way. So that's how we talk to guys. Compassionate, understanding and try to celebrate inclusivity and diversity too.

Great answer. Thank you.

And Dr.

Carver, shave butter, closest shave ever. Thank you.

Awesome. Love it.

And I might add, you know, we don't know that it was a marketing mistake at this point. What the competitor did. I mean, we'll find out in a couple quarters. Quarters in a couple of years. But we're talking about it, right? So we don't know if it was a marketing mistake or.

A new day, but we'll see how that plays out.

Hey, Michael, loved your talk. Just curious, as someone who's about to kind of launch membership subscriptions for a.

Digital product, what does it take to.

Build a really successful subscription base? Members, users, whatever you want to call it, and things you've done to, you know, maintain them for a long time, keep them engaged and, you know, keep the churn rate low. What kind of advice would you have for that? Yeah, so the first thing to think about when you're building a subscription business is should you even be a subscription business? A lot of people get sort of obsessed with this notion of monthly revenue or yearly revenue, and they say, well, I'm going to build a subscription business. It feels really good to take that Excel tab and drag it across 12 months in assuming a certain rate of growth. But most people don't look at their business, their product and service and say, is this actually something that people need to subscribe to? Does it somehow enhance the consumer's life or enhance their whatever to subscribe to this product? In the case of razors, that was and is true. Because razors are a. Perishable is the wrong word. They are consumable. And when you use it, it degrades in quality over time and you need to replace it. And that process of replacing it is a huge frustration. And so just as you're running low on your cartridges, this next package will appear from dsc. And that really enhances the consumer experience because everybody that shaves with a razor knows that that first shave feels amazing with the new, with the new razor. So that experience reinforced the idea like, oh, I get it. This is how I'm supposed to be using that service. So it really works for, for razors. And so the first thing is, ask yourself, is a subscription something that people are going to enjoy getting repeatedly and repeatedly. Will it bring them joy when it shows up? Or will it be like, ah, I really need to cancel this thing because, you know, I'm swimming in, I'm swimming in apples because I just like, don't need this. I don't eat this many apples. So that's the first thing it really, you know, they be really honest with yourself, like, do I just love the idea of making money every month? Or does somebody really need this and does it improve their life and does it, you know, increase their sense of ease. After that, it's, it's really just making sure that it's good CRM, honestly, it's reinforcing what your brand stands for and then it's good CRM. That's a massive oversimplification, but making sure that you get in front of the customer at the right moments when they're likely to churn with a message. Using data science to be predictive about when they're likely to churn. What are sort of those leading indicators of churn and then, you know, changing the way that you think about your service or delivering your product, that can address those concerns. Asking your member base, customer base, what are you loving about the product, what are you loving about the service? What tweaks can you make? And then incorporating that feedback into your product or service development pipeline can all be great things for you to do. Okay, thank you. I'm going to squeeze one more. Why did you sell as opposed to just keeping forever or, you know, grow it really massive. Yeah, well, we are going to grow it really massive. We are growing it really massive. We, we sold the company because we. I saw, I always saw it as a partnership. There were a lot of things that Unilever brought to the table that could help us on that journey, one of them being access to capital. So I didn't have to spend, spend three months of the year raising money to being just access to great product development and great product development pipelines and great talent as well. So those are all great reasons for us to partner up with Unilever. Thank you. Yep.

Thanks a lot, Michael, for thus far your time learned a lot. So I'm just going to read a bit off here.

By all means.

Yeah. So I've typically self funded all the businesses I've done. But to speak on funding a bit like what were kind of the metrics or the trajectory where you kind of knew that funding was the, you know, was the right next step. Like, how did you decide, okay, now's the time to go after funding. What were the things that VCs or investors in general are looking for? Yeah, how do you, what are those indicators that are kind of telling you that's the next thing?

Well, for us it was very easy because we had no money. So that was a great indicator that it was time to raise.

So step one, look at your bank account. Step two, assess is your bank account filled with money? If no, raise money? No. So every business is different, right? And sometimes the question is, is, is, you know, listen, we have some money in the bank and we're doing okay, but we don't necessarily know if we're ready to go big big.

Or is now the right time to take on a little bit of venture capital or outside money so that we can grow a little bit faster? And I think generally speaking, so there again, there's no rule, but generally speaking, I would say the time to raise money is when you have an opportunity to capture that will put you far ahead of the competition, you know, or if you have to raise money because you have to accelerate your growth because you're, you're going to maybe miss an, miss the market or miss the opportunity you don't want. You know, I was talking to an entrepreneur recently and they're, they, they were about to raise some money and they were like, should I raise money? You know, we're doing okay. But you know, I, I'm, I'm afraid that, I'm afraid that the marketplace is heating up and, but if I take money now, I'm going to take dilution. And I'm not sure that I want to take the dilution. You know, I think we could probably, you know, probably have, probably squeak through and, and might be able to, to beat the market, so to speak, or beat the competition. And, But I'm not sure. And I said go raise the money because at the end of the day, you should be focused on winning the game more than maximizing financial return. Too often entrepreneurs get, get blinded by this notion of, I got to make the most amount of money possible and I don't want to take dilution. It's really the wrong lens to look at things through. You have to rate. You should be focused on winning and what you need to do to win. If raising money will help you win faster, if raising money will help you win more demonstrably, more certifiably, if it helps you get ahead of the competition, if it helps you create more recognition to dig a deeper moat around your castle, I would say go do it. Don't worry about that. Don't worry about the dilution. Now again, you also don't want to give it all away, right? And so there's an artfulness about when you do it based on your own business success, there is a time to raise what that's too early when you haven't proven anything, I think. And you're gonna have to give more away in those stages than you will later on when you sort of proven that you can be successful. So it's a, it's a, it's A balance. So I guess the one rule is really don't try to maximize financial return. Try to maximize your chances of winning.

Thanks a lot.

Appreciate it.

The investors who gave you that $100,000, are they happy with their return?

They are.

Okay.

Yeah.

That's good to know. Corin. Hi. Hi, Michael.

Hi.

Your thoughts on understanding your customer? So the knowing the customer's problem, focusing on that, then also focusing on talent. Awesome. I love that. Focusing on those simple things that really make a difference. But as a deal maker, I can't help but ask. I know you can't probably disclose everything, but could you talk to two points about the actual deal with Unilever? So, one, what does the general deal structure look like? To what extent you can talk about. And also a little bit about the process of the actual deal making itself.

Well, let me ask you a question. Are you asking because you're going through a process yourself?

I'm an advisor.

You're an advisor. Okay.

And there's more E Commerce acquisitions than anybody.

Got it. Okay. So, you know. Yes. I can't talk about the terms of the deal, but my approach to the deal was, you know, create a sense of independence for dsc, make sure that we're able to be run independently. We have board meetings just like we used to when we were a private company. Except my board is now Unilever people instead of my private investment team, my private investors. And that was. That was a huge piece of the deal for us. And they were only too eager to agree to that because they recognized that that's what makes companies special, is the greatness of the management team that's been doing what they've been doing, and they don't want to mess around with that special sauce, so to speak. So, you know, in terms of, you know, in terms of negotiating the deal, I think you. You just keep. This is going to be probably more general than will be helpful to you or interesting to you. But, you know, at every turn, you just have to ask yourself, do I continue to trust the people on the other side? Do I continue to believe that our interests are aligned? Do I continue to believe that they are acting in good faith?

And at each step along that path, those things were true for us and for Unilever.

That's awesome. So stay true to your code and what your mission is. Even in an acquisition with a lot of money on the line?

I think that's right. Yeah.

Awesome. Thanks, mate.

Yeah, Cheers.

Hi, Michael. My name is Jean Francois. Thank you very much for showing up here. That was awesome. Myself, like other people here, are trying to build a brand off Amazon. So you establish that you have products that people want and then you creating a brand outside and try to go toward the world to sell your products. And there's so many options, so many ways to waste your money. Do you have any advice, maybe three tips that you could give us on how to manage this early on expansion to reach more people?

So the question is you're taking sales on your primary channel, which is Amazon.

Yeah. And a bit on the website, but then the audience is there but not too big. And then you want to scale it up to attract more people to your brand and to your world.

And right now you're not sure how to allocate your resources in order to acquire more customers.

Exactly. There's many options and making a mistake at that stage can be hard.

So what are you, what's working right now?

Right now? I would say on the website that's mostly some Facebook ads, YouTube, but it's a bit frightening to just push a machine. And do I use influencers? Do I just use ads? Do you build a team around copywriting and marketing? You know these questions?

Yeah, yeah.

What's interesting, when you, you had one primary traffic channel that worked really well and then it sounds like, I mean, you went, you went kind of omni.

Well, when we launched the video. Yeah, when we launched the video, that was really all we did for the first six months. But then after that we took more of a multi channel approach to marketing, to advertising. Look, I think that there's a, that you know, without knowing your business and without knowing what you sell.

I mean, unless you want to tell me, it's hard to know. It's hard to give really specific advice. But in general, I think, yeah, you have to know your customer and you have to know what problem you're solving for your customer or what benefit you're offering your customer. And then you have to be really careful about, careful, full of care, how you talk to them.

And how you convince them that yours is the right thing for them to, to, to buy. So you know, again, the answer to how you go and do that and where you invest would be different. If you're B2B. B2C. If you're, you know, a certain type of product in a certain type of industry. Are you food, are you another consumer package? Good. So it's, it's, it's really hard to know. But generally I think you have to make sure that you work with prospective customers or existing customers. What do they love about your product or service, make sure that you're able to talk to them in a, in a, in a resonant way that touches on an emotion. That's a, that's a skill that a lot of startups don't focus on and invest in is that storytelling component. Because at the end of the day, you know, there's many different ways to sell a hamburger, right? And there's a zillion different hamburgers out there. Why do you know, and aside from taste, you know, why do you choose to buy a hamburger or a pair of sneakers? You choose to buy these things because they are imbued with values and emotions that have been well articulated explicitly or implicitly by the companies that develop them and develop those products and services. And if you can't find that value system and emotion system and emotion in your product or service and what you're saying, solving for the customer, what problem you're solving, or what opportunity or benefit you're offering to your customer, then you're just really a commodity like everybody else. And so it's, how do you stand out? And you can't just stand out by defining your product or your service and saying, this is what we do, this is how we do it. And you have to bring an emotion to it. You have to be able to communicate that the values that your product or service holds are the same ones that your consumer holds. So I think that that's where the conversation begins for me. But I'm a brand thinker, right? There's, you know, there's obviously exceptions to that rule. You can make a lot of money just sort of selling services, right? Or selling products. But that's, you know, for me, the conversation starts around, around emotion and brand and values.

And also I think it's important to restate that you were willing to go negative in the acquisition of the customer, knowing that you could ramp that down at any time in the event of a crisis. But there was an absolute commitment to acquiring and treating the customer well, knowing that they would stay for a long time and you were willing to spend what it took in a multitude of different channels in order to bring in, in that customer flow.

Absolutely. So again, if storytelling and sort of brand development doesn't come naturally to you, I'd put, you know, again, without knowing your business, there could be an exception to this, but I would, I would spend a couple bucks there.

It does apply. So I think acquiring someone who is very good at writing or thinking this with as experience could be a great asset if I understand what you said.

Yeah, yeah.

Thanks. Cheers very much.

Go ahead.

Hey, guys, I'm Pablo.

My third time asking a question, but I can't help but talk to fascinating people. I'll never forget the first time I saw your video, because before that, anytime I'd see a CEO out in front of an advertisement, I'm like, this company's dying. And whenever I'd see them employ humor, I'm like, oh, this is terrible. And then you show up and you're like, I'm good at tennis. And it obviously was a smashing success. Right? So now that's become pretty common, right, to have, like, the personality of the CEO out in front of it.

And whatnot. And my question to you is, how did you know to.

Did you.

Did you have, like, resistance when you were going to put out this video that has you in front of it showing a sense of humor, you know, being a regular dude? Or were there people in the room telling you, no, this is a disaster.

If it's.

It's not funny and people don't like it, it's going to go terrible. And, you know, when did you decide that, you know, humor was the way to go to. To reach your customer base?

Yeah, well, humor can be a powerful tool. So I always believe that you see that in a lot of advertising. Ironically, I was the one that said I was actually encouraged by my first investor set to put the video on the homepage. That was not what I had wanted to do. I did not think that that was going to be the successful way. I knew the video was good, and I knew that I was telling the story well, but I didn't want the consumer to have an adverse reaction to the spokesman, me, kind of like what you pointed out. So I was actually being like, I want this video to kind of live on YouTube and be there. And the investors are like, no, this thing goes on the homepage. It's awesome. And I did that reluctantly, and it turned out to be the right decision. But I wanted the business to stand up, you know, in speaking to what you've learned along the way.

I wanted the business to sink or swim based on the business model, on the goodness and the viability of the business model and the problem that we were solving. And not because we had a great video.

But the video was what brought the emotion to it. It's what brought the value system to it, that we were the straight talking, no bs. We're going to give you this product, which is really high quality for a really affordable price, and you don't have to go to the store to do it. We turned that very sort of plain story into something really fun and engaging, and that's what brought the emotion to it in the early days. So I think I was the one demonstrating the concern, but I was also encouraged by people to put it. To put it on the. On the front page.

Cool.

Thanks.

Yeah.

All right, we'll do two more.

Hey, Michael.

Hi.

So much for coming hanging out with us. And Ryan, thanks for bringing us all together. My question is you. You mentioned earlier that you can't predict the virality of video. However, what gave you guys the confidence to go forward or what market validation did you have besides your own personal frustration with the retail experience? For men trying to buy a razor, was there any backstory as to what validated your. Your. Your belief in going forward with this, as well as being willing to invest at a level that was maximizing the win as opposed to a financial return?

Yeah, so I, I think it goes. I'll touch on something that I said earlier, which is your business, the business model that you.

Choose to put yourself in. The product that you're selling, the service that you're selling, you have to believe that someone's going to buy it. And whether or not you're successful or not depends on how right you are to that question. Ultimately, obviously, there's a lot more that you have to do that's really critical to success, but the foundation of your success has to be. The foundation of your success has to be product market fit or service market fit. And, you know, I always believed that DSC was a good service because I had experienced all the frustrations and problems. And I trust my gut enough to know that if I'm experiencing a frustration or if I'm. If I'm experiencing a frustration or I'm experiencing a problem, I bet other people are having it, too. And then it's just a question of how do you reach those people that are having the same problem. In the case of razors, most people use them. So, you know, you didn't have to. You didn't have to throw the rock too far to hit somebody, so to speak. But ultimately the conversation for you is, or for anybody or any business, for any entrepreneur, is how do you assess the rightness or wrongness of the product market fit. Fit. Gotcha.

Was there a lid as to where you're going to stop spending before you realize that, hey, you know what?

We're.

We're spending too much to try to win, but we're not seeing a future of Return.

I think for us, you know, the payback period on, you know, in any, in any sort of online business or really any businesses should be measured on what we at DSE call the golden ratio, which is, you know, the, the, the CAC or CPA to LTV ratio. So cost per acquisition or customer acquisition cost to LTV ratio. And you want to make sure that, you know, over, you know, cost per acquisition or what does it cost to get a customer ltv, how much does that customer return to us over a lifetime? And you can define that window in various widths depending on how you want to look at your business. You know, but, you know, we, we look at like a 5 year LTV, how much does a customer make for us in 5 years and how much did it cost to get that customer? And as long as that ratio, as long as that payback period is, you know, reasonable for us based on how much cash we had, which I would say somewhere between 24 and 36 months. Again, remember, in the early days, we're just selling you a, a three, a six or a nine dollar raiser. So that takes a long period of time to pay that customer back. But some businesses make that back in the first sale, right? And then some. So you have to, you have to do that math as to how much your business can afford to invest in customer acquisition based on the, you know, based on your balance sheet, how much, how many, how much, how much cash do you have to, to invest in that growth so that you don't burn out and, and, and have to go raise more money. But ultimately it comes down to that for any business is that it's that golden ratio.

Thank you so much.

Yeah. Hey, guys.

Hey.

Thanks for a great presentation. Nice, no fuss, solid presentation.

Like it.

So my name's Anthony Bartlett. I'm the owner of an online meal planning SaaS business. It's going well. And my question is to understand at what point you, you start taking on VC money versus staying bootstrapped. So to give you context, last year we were like 91st on the Inc 5000. So we start getting investors inbound calls coming and going, hey, take some money. And we haven't needed money because we don't have any debt, don't have any investors. We're good. Money's rolling in, paying all the bills. But now there's a couple of big opportunities and some big companies like, ooh, we'd like some of your IP to slot into what we're up to. And we're like, holy crap. If the actual number of subscribers they're talking about. And we, you know, the 3% of what they're talking about, that's still gonna really maybe kill our service. So we should like, invest in a bunch of money and do this. So I'm wondering, we could just get a line of credit, which we've already got, which we could just slam down and update our software and hardware and get our consultants. But I heard you talk about that investors also help you with some of the recruitment of better talent and access to better stuff. So I'm trying to understand right now, you know, at what point to just keep balling it and bootstrapping it and keep going or when do you start going? All right, now I need to take on some money and give away some equity.

Right. Well, I think it, you know, again, got a similar question earlier. I want to make sure that I'm understanding the nuance of yours, but I, I think that if you are, there's the whole go it alone, continue to do what you're doing option, which you should do if you're well capitalized and you're growing at a, at a good rate to, you know, and you've built, you've dug sufficient moats around your castle so that you don't, you know, so that the competition doesn't, doesn't, you know, take you over. Because that can happen if you're not differentiated, if you're not telling your story well, if you're not growing and telling your story loudly. But if third parties are wanting to help you on your journey, that's only part of the conversation. If you're just talking about investors, then yes, then that's really the extent of it.

Well, maybe not necessarily, because sometimes investors bring other things to the table. Access beyond, beyond just the capital invest, you know, access to talent, access to advisors.

The story you told where you had the investors walks talent through your office like a lineup, and you went, I'll take one of those. And one of those.

Didn't quite happen like that. But yes, it was. They set up many interviews for us. But yeah, that, that's, that, that's certainly one reason to, to say it's one reason why I raised money. I was, I said to myself, not only do I need the money, but these, these folks have access to talent, and I'm going to need that since I'm fresh off the boat from New York, so to speak. So, you know, what are the intangibles that an investor can bring? What are the intangibles that a third party can Bring if you're looking at a strategic partnership or an investment from a strategic partner. But also. And I think that I heard you mention that, but be careful, because sometimes strategic partners, what they'll do is they'll write you a check and what they'll really do. You know, you said one of your. One of these parties is interested in, you know, getting your IP to help them with what they've got going on.

I'd be really careful about that because sometimes what they'll do is. And it's. And it's very validating when a big partner comes in and says, hey, we're really interested in what you're doing, and we want to help you on your journey, and we can. We. We've got things that can help you, but we want you also to give us some of what you're doing. But you could end up giving away the golden goose, so to speak, for not much. Right. And it prevents them from wanting to acquire you later because they've really gotten out of you everything that they. That they want. So I'd be really careful about. About like, you know, licensing IP or.

You know, taking an investment with the understanding that you're going to share that ip, because ultimately they might just, you know, take that from you, not take that from you. But even if it's just a process that you use, you know, they can now say, oh, got it. Love how you're doing that. We're now going to take that and implement that for our own benefit. So I would say be really careful about those types of relationships.

Okay. Yeah. And we're aware in SoCal that in terms of competition, you can't patent an algorithm. And essentially, we're an algorithm with good content.

Yeah.

And so we got to be protective.

Yeah.

Thanks, man.

Yeah.

Great answer.

Thank you. Michael, I know you don't do these very often.

Yep.

Only a few a year. And I don't know if you know or if you remember, we've been. We've been trying to bring you in for years. So it's. It's a real honor to have you and a real pleasure to meet you. Yeah.

Well, congrats. This is a great turnout and good luck to. Good luck to everybody.

Yeah. Thanks for sharing your insight with these entrepreneurs. Give it up for Michael Dubin, everybody. If you found value in this podcast and you're ready to go Deeper, here are three resources where we can help you. One, you can grab my book, 12 months to 1 million on Audible or Amazon. It has over a thousand reviews, and it's the playbook to building a seven figure business. Second, you can join our community of entrepreneurs who are following a plan to build a 1% net worth by building businesses and investing the profits. You can get plugged in@capitalism.com 1. And third, if you're looking to go deeper and build a seven figure business that you can sell, you can work closely with us inside the Capitalism incubator and you can get on the waiting list and find out what we do over at capitalism.com Inc. That's capitalism.com Inc.