Two Jewish men, Mark Levine, 56, and Michael Dubin, 33, met at a party in 2010.
They griped about the steep price of razor blades - thanks to the unnecessary features, expensive packaging, advertising expenses, and store overheads. That coupled with the inconvenient buying process, they realised that they had spotted a problem worth shaving off.
Dubin and Levine started working on the Dollar Shave Club full-time by January 2011.
Dollar Shave Club offered high-quality razor kits on a monthly subscription basis for dirt cheap. By designing, producing, and shipping the products in-house, they were able to sell it for almost half the price of the industry giants like Gillette.
With a compelling value proposition and a viral launch video, they sold out their first batch of 2,50,000 razors on the first day. Fast forward to 2016, Dollar Shave Club got acquired by Unilever for $1 billion, when their annual sales was approaching $200 million. A silky smooth success story.
Dollar Shave Club is a classic case of product-led growth. While the video did give it the initial push, what still keeps the company on a steady growth trajectory is its product.
"Product-Led Growth is defined as a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.
Unlike sales-led companies where the whole goal is to take a buyer from Point A to Point B in a sales cycle, product-led companies flip the traditional sales model on its head. Product-led companies make this possible by giving the buyer the “keys” to use the product and helping them experience a meaningful outcome while using the product. At this point, upgrading becomes a no-brainer."
~ Wes Bush, Author, Product-Led Growth
Dollar Shave Club pulls off the three core elements that Wes believes are necessary for a strong product-led foundation:
The product is in tune with user needs.
Dollar Shave Club disrupted the industry with a low-cost, personalised, online subscription model that ships razors right to the customers' doors. A simple, straightforward promise to solve a then-overlooked but nagging problem.
The product is the acquisition engine.
With features like the risk-free personalised starter set, flexible shipment option, 30-day money-back guarantee, and the ability to cancel anytime, they gave users an easy way in, and the flexibility to try out the product on their own terms.
The product is also the retention engine.
At the time of their launch, Gillette owned 70% of the razor sales in the US. By 2018, Dollar Shave Club and Harry's, its rival startup launched a year later, won over 14% of the market. When the perceived value aligns with the experienced value, the customers return the favour. Case closed.
Like Wes, we at SaaSBOOMi also believe that product-led growth holds the key to the future of SaaS. We want to enable Indian SaaS companies to join the product-led movement, and we're kickstarting our journey (and yours too, we hope) with this MRR edition.
~ Sadhana, on behalf of Team SaaSBOOMi