Don’t Get Dollar Shave Clubbed
Why visualizing your strategy is the first step to preventing disruption.
Disposable razor companies love their razors. They constantly iterate and release new razors with more blades, moisturizing strips, vibration and even lasers.
(Admit it, you don’t know if they have lasers do you?)
After years of well intended features, many of today’s disposable razor companies are in danger launching the Mach 20.
This is in part because over time they’ve mistakenly confused their product for the value proposition, and it’s an easy mistake to make.
I’ve sketched out the mistake below using a Business Model Canvas.
If you look at the center column, you’ll notice that “Handle” and “Blades” are not truly a value proposition. They are merely the product by which the value is delivered to the customer.
Tip #1: Treat Your Products as Key Resources
When we move “Handle” and “Blades” down into key resources, it leaves a gaping hole in the middle of the strategy. This small but important change helps your team articulate the value proposition. Remember your product is the means by which the value is delivered to the customer.
Disposable razor companies should be about offering a “Convenient, close and comfortable shave” to customers.
Treating your product as a key resource opens your team up to questioning other aspects of the strategy as well.
Questions disposable razor innovators should ask:
- Is the “Bait-and-Hook” model of marking up repeat blade purchases a good long term approach?
- Should we continue to focus on retail as the main distribution channel?
- What happens when our patents expire and competitors can plug their blades into the handle at a lower price?
Tip #2: Check Your Products Against Customer Jobs
In addition to the Business Model Canvas, you can visualize your strategy in a Value Proposition Canvas.
The Value Proposition Canvas helps you identify the different dimensions of value and customer. On the left, it includes your products & services and in addition the pain relievers and gain creators needed to satisfy the customer.
This is an effective zoom in tool if you go beyond the Business Model Canvas. Your team can sanity check the box on the left against your customer on the right.
Questions disposable razor innovators should ask:
- Does the “Handle and Blades” combo still solve for the customer jobs?
- Are the customer jobs still the same as they were a year ago?
- What job does our laser fulfill?
Tip #3: Map Your Strategy Against the Competition
Now that you have given yourself permission to view product as a key resource and think about the customer jobs, it’s not that hard to begin to see how others can Dollar Shave Club you.
The initial Dollar Shave Club strategy would begin to look like this:
At a glance, you can see how it’s less about the product and more about:
- Addressing consumer frustration about paying $15–$20 for razor blades (Bait-and-Hook model)
- Point-of-sale retail purchases as the only distribution channel is no longer enough. Logistics and operations have advanced so much in the past 5–10 years that it can now be a viable business model to do a subscription service.
Tip #4: Rapidly Test Your Strategy in the Market
None of this matters unless you test your strategy in the market with customers.
Today most strategy is emergent. You don’t want to internally refine it forever and become too attached to it.
Before they were acquired for a billion dollars, Dollar Shave Club’s website started out like this…
Two steel blades, lubrication bar and a pivot head? Wait no lasers?
The founders of Dollar Shave Club did not spend months building an elaborate supply chain before validating the need in the market.
They produced a YouTube video conveying their value proposition for a cost of about $4,500.
This viral YouTube video helped generate 12,000 orders in the first 48 hours.
This initial test was a success and it took a fraction of the time and money when compared to disposable razor companies.
Tip #5: Applying This To Your Company
Fast forward to the billion dollar acquisition of Dollar Shave Club. It wasn’t a build it and they will come approach. It was more of a make a video about our value proposition and see if anyone cares first approach.
“But we’re not a disposable razor company. This will never happen here.”
You don’t have to be in the disposable razor industry to be Dollar Shave Clubbed.
I advise corporations around the world and all of them are facing similar threats.
- Does your strategy only revolve around the product? What if there were other ways to deliver your value proposition?
- Does your product still solve for the customer jobs? When was the last time you checked?
- If you were to create a startup today that would take out your company, what would it look like? What would be your strategy?
- Instead of building out an elaborate network to deliver your product, have you validated the value proposition? What are other ways you can keep inventory and costs low while ramping up as demand grows?
In Dollar Shave Clubbed Part 2, I dive into decentralization and the left side of the canvas. If you’d like to learn more, go check it out.
If you would like to learn more, visit the Precoil library where you can access lean startup and design thinking tools, templates and videos.