Razor Startup Harry’s Raises $75M, Pushing It Over $200M | Hacker News Reader

Razor Startup Harry’s Raises $75M, Pushing It Over $200M

recode.net

24 pointsprostoalex21 comments

--If you want to scratch your head, I won’t stop you. At a time when capital is easy to come by for buzzy startups and valuations are frothy, some will view this news as another signal that the tech bubble is real.--

I find this angle in the article puzzling and something of an indicator of the gap between "startup media" and what real companies do. Both venture firms re-committed additional capital to the venture on the basis that the Harry's model is working well and that tighter control over production, R&D, and supply chain will benefit the business over rivals stuck in white label/OEM.

To me this is the opposite of a "tech bubble" and more an indication of what's supposed to happen to tech startups- they grow out of the startup phase and develop into expansion stage / established companies. This is the goal!! If your goal is to forever remain a startup you're doing it wrong- particularly in manufacturing, where economies of scale rule. If you want indicators of a tech bubble, observe the myriad of seed stage software startups with anemic growth going nowhere. Let's not throw manufacturing companies under the bus for doing what manufacturing companies are supposed to do as they mature. Full disclosure: I have a beard. :-)

It's a company that makes and sells razors.

It's no more a "tech company" than, say, Gillette.

Have you ever manufactured anything? A shitload of technology, engineering, and creative financing at huge risk is required. I'm not going to debate the semantics of what defines a tech company but I'd say their business model disrupting large incumbents and their rapid growth qualifies them enough for airtime here.

Well, the question is how they're more a tech company than Gillette, I suppose. I mean, Gillette has disrupted shaving several times over its history.

I'm not precisely sure what Harry's is bringing to the table here (lower costs? online only?), but that's probably due to my old-school unix sysadmin level beard more than anything else.

Is McDonalds considered a tech company [1]? Toy manufacturers? Supermarkets [2]? Financial services companies?

Pretty much all companies are "tech companies" to some degree...

I'd personally tend toward a narrower definition of "tech company", which would be one in which a new and innovative idea forms the core of the business.

Unfortunately many well known "tech" startups (Uber, AirBNB) wouldn't fit that definition. They are enabled by the widespread adoption of the Internet (in the same way the telephone enabled chat lines), but I don't think I'd consider them tech companies any more than a normal taxi company or hotel...

[1] Can be argued! http://caps.fool.com/Blogs/mcdonalds-a-tech-company/584132

[2] http://blogs.marketwatch.com/behindthestorefront/2013/05/01/...

I'm well aware of manufacturing: I live in perhaps one of the largest heavy and precision machine manufacturing marketplaces on earth (oil and gas represent!). However, manufacturing doesn't scale like software scales, especially when you're just building a new iteration of a product that's been around for a century. Nanojiggers, or robots, or electric cars, or whatever is one thing...this is razors.

I agree that it's fine to mention them here--that doesn't make them a tech company. Lots of businesses that are high-growth and successful aren't tech companies, and that's okay.

It's really annoying dealing with companies that aren't tech companies but think that they are. They seem to have work environments where the tech is driven in the wrong direction, at once both beholden to the business interests and yet still pursued as though it were an end into itself. This is not a good combination.

The question is: in what way is a razor manufacturing startup superior to Gillette?

And the answer is: possible Amazon/Walmart/etc. buyout target--nothing else.

So, the investors are banking on the fact that one of the big boys is going to want to buy this out so that they can demand better pricing from Gillette.

I'm the user of the product, and Harry's razors are both better and cheaper than Gillette's.

Well, most tech companies go in the opposite direction: figuring out where they can add value and focusing on that. For Harry's that is/was design and marketing. I don't see Harry's having a credible story for being a premier blade manufacturer for a long time, if ever. And even then, their blades won't likely be any better than Gillette or Dorco. Still scratching my head on this one.

Dollar Shave Club, by way of comparison, has a white-label relationship with a brand you've never heard of. (Dorco, originally a South Korean brand. Their US office is here: http://www.dorcousa.com I would assume they're also behind a lot of house brands at e.g. Walgreens or what have you. )

If it says "Made in Korea" it's probably Dorco. If it says "Made in Israel" it's probably ASR, aka Personna, owned by Energizer Holdings. The "German factory" in this article is Feintechnik.

So they bought a huge factory with the vast majority of a previous round raised ($100M of $122M), which is interesting. This reminds me of real-estate-backed investments. If you need to buy, say, a farm to test a pharmaceutical or machinery or drones or whatever, then that farm will hold its value, regardless of the fate of the startup. And I guess that means investors believe that money is coming back to them, regardless? So their only real exposure is the "liquid" part (the $22 million in the example)? If someone knows more about this, I'd be interested in hearing how it works on these sorts of deals.

I've been a Harry's customer since, I believe, the first day they went on sale. I like the product, but I desperately wish they offered a two blade razor. I find four-bladed razors to be very irritating to my skin.

My daily-use razor is the Merkur double-edged safety razor, which works very well for me - far better than any cartridge razor ever did. It's main drawback, of course, is that you can't take the blades on an airplane. So I use a cartridge razor for travel and for quick shaves at home.

I was drawn to the Harry's razor because it looked to be a solid handle (rather than the cheap plastic ones from Gillette) and the blades were a reasonable price. It lived up to my expectations. A notch above Gillette in quality and a better price. I just wish they hadn't felt the need to put four blades in it - two is more than sufficient.

My favorite non-safety razor of all time is the innovate, but unfortunately discontinued, Avid 4 Travel Razor: http://www.moderngent.com/avid/avid_razor.php

I switch back and forth between the gillette fusion and harry's. I find the fusion to be slightly better but the price is double. Harry's blades are $1.60 each, and the fusion is about $3.20.

The trimmer blade is nice on the fusion, and Harry's blades have an odd bend that requires more rinsing as the hair is more likely to clog rather than pass through.

Some people have a strong preference about the handle, but I find both to be good.

I really want to use Harry's but I noticed similiar problems. The clogging and it just not working as well as my old Mach 3. Even with a new razor, it can be tedious. Maybe my face has adapted to the silly vibrating razor.

The clogging is a big problem, and although I didn't mention it, it's probably my chief complaint with the razor - equal to the irritation.

I wonder how many millions in lobbying it'd take to reverse the silly no-razor-blades policy. Something like "only 1 blade, mounted and 1 spare" allowed.

I'm also a bit puzzled how there are razor startups. Harry's blades are literally an order of magnitude more expensive than DE blades. And outside of proper shaves from a DE, I find even bulk disposables do well enough (whatever comes up on top of Amazon Prime).

You do realize that not many people share your views on DE blades and disposables? But for good, cheap 2-6 blade blades, I could direct you to Dorco.

Share my views how? As in, they dislike DE blades? I was under the impression most people just didn't know of them or figured they were difficult or something. It would surprise me to find out that people actually dislike a DE shave. Maybe I'm extrapolating too much from personal experience :\.

Check out http://getbevel.com.

I did see that when it came out. It looks like a great product, but it's essentially a DE safety razor, which I already have and use. I need something that I can travel on a plane with, and safety blades are out.

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