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Dollar Shave Club: Can the Web Sensation Become a Viable Business?

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If you've not see the hysterical viral ad by the new start-up company Dollar Shave Club, you're missing out. In just under a week, more than 3 million people have watched the ad campaign on YouTube, which cost just $4,500 to produce.

Drew Kerr, a public relations consultant and founder of Four Corners Communications, says Dollar Shave Club's ad uses "tongue in cheek" humor to draw attention to the company's quirky new mail-order razor blade service.

"The tone is very very funny [and] that's why people want to pass it on," says Kerr, who thinks the ad resembles the marketing style of the successful Old Spice commercials.

Dollar Shave Club's business model is similar to Netflix (NFLX), which sends subscribers movies in the mail for a monthly fee. Dollar Shave Club will send customers a monthly supply of disposable razor blades starting at $1 a month. The company estimates its service will save members nearly $300 a year in shaving costs.

In the first 24 hours after the online ad went live, the company received 5,000 new subscriptions. More than 12,000 people have signed up for the service since the company officially opened for business last week.

Dollar Shave Club is one of a handful of start-ups to launch from Science, a tech studio that supports and funds start-up companies. It was founded by the former CEO of MySpace.com. According to the Los Angeles Times, Dollar Shave Club has received nearly $1 million in venture capital and angel funding.

There is no question that the Dollar Shave Club ad video is hilarious. Aside from the online hype, is there a need for this type of service? Can the Dollar Shave Club compete against razor blade industry leaders like Gillette and Schick?

Kerr says the Dollar Shave Club's success depends on more than just popular ad campaigns. He hopes the company doesn't follow in the footsteps of music group OK Go. "People remember the videos more than the songs that accompanied them," Kerr says. "They completely overshadow what the product is which is the song."

In an interview with Business Week, Michael Dubin, the co-founder and chief executive of Dollar Shave Club, talked about the business of razors. "There is no such thing as the average shaver," he said. "Everyone has their own grooming habits. People don't change their blades because it's so expensive, and that's unhealthy. That is one of the things we are trying to get away from. Blades are dirty. You cut yourself and scrape skin and hair off your face and have the razors sitting on a dirty bathroom counter. You want a fresh blade."

In addition to his digital marketing background, Dubin (not surprisingly) has a background in comedy. He spent many years performing at New York's Upright Citizens Brigade. He also spent a two years as a writer for a number of cable news shows, such as Keith Olbermann's old show on MSNBC.

Dubin has revealed a few details about the business. For example, in terms of sourcing and who is manufacturing the blades, he told Business Week, "It is not a traditional big-name blade company. For competitive reasons, I won't go into much more detail, but the blades are made in Korea and China." He also kept quiet when asked about consumer demand, saying "It's been wildly strong."

The next products Dollar Shave Club hopes to sell are shaving creams and moisturizers. Along with the new products, we can only hope there will be yet another ad!

Tell us what you think! Would you subscribe to Dollar Shave Club?

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