Thursday, January 23, 2014

A Start-Up Run by Friends Takes On Shaving Giants

[Editor’s note: With some recent changes to Blogger, I may experiment with new posting formats and see if it looks better. I like posting several paragraphs so that the words are here in case the links ever change, but maybe I’ll post more in block quotes after linking to the article first.]

Link to article: A Start-Up Run by Friends Takes On Shaving Giants (The part I made bold below is especially interesting to me.)
EISFELD, Germany – For more than 93 years, the Feintechnik factory in this small German town an hour north of Nuremberg has produced billions of razors, its machinery transforming steel by the ton into the mathematically precise blades that end up in low-end safety blades and the hardest-to-manufacture five-blade razors. 
But as of Monday, the sprawling factory now belongs to Harry’s, an Internet shaving start-up that was not even open for business 10 months ago. 
Few companies contemplate striking $100 million deals before their first birthday. But Harry’s is wagering that owning its own factory will help it better compete against Gillette and Schick, the titans that together control nearly 85 percent of the market. 
“For a nine-month-old company to buy a 93-year-old one is a lot to bite off,” Andy Katz-Mayfield, 31, one of the start-up’s co-founders, said with a laugh in an interview at Feintechnik’s offices here. 
Harry’s is but the latest start-up to reimagine a prosaic product and give it a panache that helps it stand out from the crowd. But virtually all other e-commerce ventures of recent years — from Warby Parker, the red-hot eyewear brand, to the clothiers Everlane and Bonobos — have relied on using the same factories that bigger and more entrenched players use, and then selling their wares for less. 
Harry’s and its backers, including the investment firm Tiger Global, are betting that buying Feintechnik will give Harry’s a huge advantage. By running everything from the manufacturing of the razors to selling them online directly, they believe, the start-up will control its entire customer experience, while allowing the company to change its products quickly.