What the Dollar Shave Club can teach the car industry

Photo credit: Shanina on istockphoto.com

Unilever recently paid $1 billion for Dollar Shave Club. Not bad for a four-year-old startup that sells razorblades on subscription starting at a dollar a month. Who would have thought of shaving as a service?

My school years were like those of other 70s suburban kids. We had to leave home at 7.15am sharp to avoid getting stuck at the bottleneck on the Umgeni bridge as we headed south into Durban. In his haste my father would often nick himself with his Wilkinson double-edged safety razor and join the breakfast table with a patch of toilet paper stuck to his chin. In the afternoon my mother picked us up in the family second car and as there was no traffic we did the return trip in half the time.

For 200 years men used a single blade, cut throat razor, which was tricky around the chin — hence the olden days fashion for goatees. In 1904 Gillette patented the safety razor, which gave men a relatively safe shave for the next 70 years. By the time I started shaving, in the early 80s, all hell had broken loose: disposables, double blades, triple blades, quarto blades, flexi blades, lubrication strips, etc. The logic of consumerism meant the likes of Gillette and Schick kept rolling the Sisyphean boulder up the hill of unnecessary tech evolvements to shave a jaw that has changed little since the days of Homo erectus.

Dollar Shave Club founders Mark Levin and Mike Dubin get the irony — they more than get it, their advertising campaign is built on it. As Mike says in the online commercial that went viral: “Do you like spending $20 a month on brand-name razors? Nineteen dollars goes to Roger Federer…Do you think your razor needs a vibrating handle, a flashlight, a back-scratcher and ten blades? Your handsome-ass grandfather had one blade — and polio.”

So, two youngsters disrupt an industry that has been dominated by three brands for close to a hundred years. They do it not by creating a better product, but by offering the consumer a simpler, cheaper proposition — a subscription model or, if you like, ‘shaving as a service’.

Similarly, the car industry has been dominated by a few brands who compete by building better product for a problem that has not changed in at least 50 years: drop the kids at school, go to work, shop, return home. For most people that’s a round trip of no more than 15 km. For such a simple task almost any car would do; but to gain market share the car companies get ad men to create needs we have not yet imagined. And to pay for these new needs, costing around $9,000 a year, the finance and insurance companies figured out how to stretch a modest salary so we can drive the car of our dreams. The result: forty years on and my peers are driving their kids to school in two-ton SUVs that could compete in the Paris Dakar rally and the bottleneck is worse than ever.

In creating Autonomy I am starting to meet the Dollar Shave Clubs of the mobility world, that will disrupt the classic car industry. Last week I met the founder of a Chinese startup that raised $500 million to establish a factory to build a connected tandem electric commuter. Price: $4,500.00; range: 100 km; top speed: 80 km. Perfect for city commutes. Imagine putting that through a peer-to-peer sharing platform. The result would be an urban mobility asset costing around $100 per annum per user.

The car industry is beginning to understand that some smart kid like Mike Dubin might soon make an ad that says, “Do you like spending $9,000 a year on some brand name car? $8,000 of it goes to tech you don’t need and that you’ll never use. Your handsome-ass grandfather had better mobility on a horse — and it was half lame…Welcome to the 100 Dollar Car Club…”

(I have registered the domain 100 Dollar Car Club, and am open to partnership propositions)