Unilever buys Dollar Shave Club for One Billion Dollars

[juan917]

They did invest profits back into the business...
Amazon didn't turn a profit for something like 20 years straight.

Let me give an example of the situation I'm thinking of. Say I have a business that brings in $10 million / year. Before salaries it costs $1 million / year to operate the business. If I give myself a $9 million / year salary, am I allowed to say I don't have a profitable business? I'm sure the IRS have regulations against this?

 

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[MakeItHappen]

Let me give an example of the situation I'm thinking of. Say I have a business that brings in $10 million / year. Before salaries it costs $1 million / year to operate the business. If I give myself a $9 million / year salary, am I allowed to say I don't have a profitable business? I'm sure the IRS have regulations against this?

That's not what I mean.
Dollar Shave Club is in a huge market. Instead of paying themselves huge salaries they reinvested all the profits into business growth to get more market share. By getting more market share the value of the business increases so even through they didn't payed themselves huge salaries they increased there net worth year by year (equity ownership) and tax free that is.

 

[RHL]

I don't care about shaving enough to try to change people's lives.

I'm sure Elon Musk didn't care about credit card processing that much either.

For a billion dollars, you would care.

 

[TonyStark]

I'm sure Elon Musk didn't care about credit card processing that much either.

For a billion dollars, you would care.

He said 5 things that would change the world:
The Internet, sustainable energy, space exploration, artificial intelligence, and rewriting human intelligence.

I'm not gonna argue whether or not shaving has as much merit or value. Just not for me.

 

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[Longinus]

Just not for me.

Great example. This razorblade case basicly screams: "it's not about me, it's about the customers".

That's why he's killing it.

You think @IceCreamKid gives a damn about the fact if carpets are something for him? No, he just saw a saturated market which he could improve by excellent customer service.

That's why he's killing it.

Since I realize this, I'm giving away ideas simply because I don't have time and energy to chase them all.

 

[healthstatus]

That's why they got bought.

Or that Unilever now has a mailing list of thousands of people that could be willing to buy their 1000s of SKUs of product on a subscription basis.

 

[AllenCrawley]

This kind of disruption is a highly legitimate business strategy. All the business geniuses in the comments section of the various news sites reporting this are like "lol what a rip off it only made $150M last year!"

If you are new to market and sell product X and your competitor has been in the market for a long time and sells product X, and you sell product X for $5 and your competitor sells product X for $20, you making $150M in sales a year costs your rival roughly $600,000,000 a year.

That's why they got bought.

Unilever did not previously own a shaving brand. Over 2B customers using their products everyday. None of which are shave products. That's 2B customers they can sell their razors to now. Unilever is going after Gillette full throttle. That's why they bought DSC.

 

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[RHL]

Unilever did not previously own a shaving brand. Over 2B customers using their products everyday. None of which are shave products. That's 2B customers they can sell their razors to now. Unilever is going after Gillette full throttle. That's why they bought DSC.

Lol, wow, I always assumed they had one in there somewhere. They own so many personal care lines.

 

[Raoul Duke]

Looks like another person will be buying a Bugatti and posting the pics.

I hope it's somebody here next time.

 

[Andy Black]

Funny how most big successes start with the 'narrow and deep' sales method of doing things that don't scale but make people brand advocates. One by one, brick by brick.

^^^ This.

Paul Graham has a whole essay on doing things that don't scale:

• http://paulgraham.com/ds.html

 

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