Apple-for-the-TeacherSteve Jobs serves as a reminder that, sometimes, passionately pursuing your dreams — not a formal degree — is the secret to success as an entrepreneur.

Likewise, a Wall Street Journal article questions the value of an MBA degree at startups — both the knowledge acquired and the cachet of the degree itself. The article introduces General Assembly and Starter School; both focus on action over excessive ideation — similar to educational innovators like Khan Academy, Team Treehouse, and Code Academy:

  • Offering courses in web development and user experience design, business fundamentals, data science, product management and digital marketing, General Assembly is as a “full-time immersive programs, long-form courses, and classes and workshops on the most relevant skills of the 21st century.”
  • Teaching people how to build software and start companies, Starter School focuses on learning by doing, emphasizing practical skills in three intense phases over 9 months.

Each program (and others similar to them) offer a simplified curriculum without the formality of a traditional degree. They’re designed to give attendees enough information to get an idea going without impeding their progress.

In a time when the median cost of a four-year degree at a public institution has risen to $16,000 per year, even people who aren’t business majors are finding themselves performing a cost/benefit analysis when it comes to higher education.

But, maybe these programs are irresponsibly encouraging acting on ideas without first thinking things through? Consider this Wired article warning that the ‘failure’ culture of startups is killing innovation. Despite  Jobs’ achievements with Apple, an MBA is still a tremendous value to individuals with entrepreneurial aspirations — present company included.

Receiving my
Receiving my “Outstanding MBA Scholarship” award at Woodbury University (May 7, 2005).

On this date in 2002, I took the first step towards earning my MBA at Woodbury University. I found tremendous value in my MBA program, learning a great deal about running a business and discovering a new career path into teaching.

In my experience with startups or businesses operating with that mindset, I’ve found that they don’t necessarily value an MBA. Most startups are focused on producing “results” even if those results are rushed and need to be reworked later.

Conversely, earning my MBA taught me the value of “measuring twice and cutting once” which results in a more methodological approach.  This doesn’t always fit with the startup way of work that often values quantity over quality, usually in an effort to impress investors.

That’s not say an advanced degree holds no value in a startup, but there is no guarantee that it will. But, in my opinion, education is always a worthwhile investment, as long as you are willing to invest the effort to maximize its return.

Sometimes you are just too “F***ing Great” for your own good.

Early last week an irreverent and entertaining YouTube video for Dollar Shave Club (affiliate link), a Santa Monica, California start-up that ships razors directly to customers who subscribe to the company’s monthly delivery service, virally spread across the Internet faster than blood streaks down your chin when you cut yourself shaving.

The promise made by Dollar Shave Club Co-Founder & CEO Michael Dubin in the video (below): their blades are not good, they are  “F***ing Great!”

Social medianew media, and mainstream media were all abuzz with articles about the video and the company’s charismatic CEO. It went viral and the company went from unknown to unstoppable almost overnight.

The video — which cost $4,500 to produce — was uploaded on Monday, March 5, 2012 and, just 11 days later by Friday, March 16 (as of the time when this blog post was published) had 3,456,727 views  — an average of 314,247 per day!

Did views equate to conversion? Yes. According to a Huffington Post article posted on March 8, Dollar Shave Club had already generated 5,000 sign-ups. Imagine how many more signed up in the eight days since then; the video was so popular it caused Dollar Shave Club’s website to crash!

The company’s subscription based razor blade service offers three options:

  • The Humble Twin: Two blades and five cartridge refills — for a monthly cost of $1, plus $2 shipping.
  • 4X: A four-blade razor with four cartridges refills — which costs $6 per month with shipping included.
  • The Executive:Six-blades and three cartridge refills — for a monthly cost of $9 with shipping included.

They also offer affiliate arrangement and provides a unique URL (e.g., https://www.dollarshaveclub.com/ref/l14/13za2y7) with which members can refer others. The deal is simple: for every new account your link refers, you get one month of free service.

Founded in April 2011 by Dubin and his partner Mark Levine, Dollar Shave Club officially launched with the upload of the YouTube video. Despite it’s kitschy video, Dollar Shave Club is well funded, having announced almost $1 million in funding from Kleiner Perkins Caufield & Byers and Forerunner Ventures. Other funding sources include Andreessen Horowitz, Shasta Ventures and Felicis Ventures. It also received $100,000 in angel funding from Science, Inc. (which was founded by former Myspace CEO Mike Jones).

How does the business offer such competitive prices? Two words (rather, two countries): China and Korea. The razors the company sells are private-labeled products shipped directly to each subscriber from manufacturers in both countries — “cutting” out the middleman. But therein might lie the problem.

On Friday, March 16 at 3:38 p.m (Pacific) the company sent a letter to new subscribers who opted for the 4x razor with the following message:

In the e-mail Dubin earnestly explains the situation as follows:

Last week the Internet came to visit, and as a result, we’re unable to fulfill your 4X order right now. 

Yes, we think this sucks too. But we’re giving you options.

Here they are:

  • If you’d like to hold your place in line, do nothing, and you will receive your first shipment on May 15th.
  • If you’d like your $6 refund, no problem. Please Click this link. Log in, and click the refund button. We’ll handle the rest.

Please accept our sincere apologies for not being able to meet initial demand. We’ll make sure it doesn’t happen again.

Humbly,

Michael Dubin
Co-Founder & CEO
Dollar Shave Club

It is unclear if the delayed delivery affects all three razor options or if it is limited to the 4X razor. The supply delay could be more easily remedied if it is the latter and not the former — perhaps people could just switch their subscription? But, then again, the e-mail does not provide that option — so it is as yet unknown how significant this problem might actually be.

Update as of March 18, 2012: A colleague informed me he subscribed to the “Humble Twin” and also received an e-mail informing him of a delivery delay, but in his case it was only for one month, not two. He elected to wait and see.

Regardless, a two month delay — even a one month delay — is not a good way to begin a business relationship with new customers. Delaying consumer gratification is one of the worst sins a retailer (or in this case a wholesaler) can commit — once you lose that leverage most customers lose interest and go elsewhere.

As Tim Daloisio (whose screen shot of the e-mail he received is posted above) offered in a tweet: “Easier to win a customer the first time than to win them back — better luck next time @dollarshaveclub #fail.

Perhaps this was all too good to be true? Sales data was not made available so it is hard to know how many people were affected.

But, if you assume that, since they signed up 5,000 people in the first three days (1,667 new accounts per day), in eleven days there could be as many as 18,337 new subscribers.

If you further assume customers subscribed to each of the three options in equal numbers (also not likely, but for the sake of easy arithmetic, let’s keep things simple), there might be 6,112 sadly stubbled 4X subscribers. For shave! I mean, for shame!

At $6 per subscription there could be at total of $36,672 in revenue that was generated but for which no products were delivered. Not a king’s ransom by any means, but certainly not an insignificant amount.

But, more importantly, the company’s inability to meet the demand beg’s the question: had they already ordered inventory or were they waiting to see what the demand actually was?

Perhaps this was the case. From a business standpoint, why sink thousands of dollars into products if you are unsure they will be sold? And, in fairness, projecting and meeting demand is one of the more challenging tasks with which a business must contend.

But the fact remains that, despite their impressive funding and savvy marketing, the delay calls into question Dollar Shave Club’s operational abilities.

To their credit, they have provided an option to cancel and get a refund or to stay put and wait until the razors can ship on May 15th.

However, it could have been an added measure of good faith had Dollar Shave Club offered one month of free service for each month of delay.

Additionally, the company fairly clearly outlines their terms of cancellation in their Terms of Service (which we can also assume nobody has read).

However, as noted in an article titled How to Quickly Read a Terms of Service [Law], “Dollar Shave Club does a good job of explaining how to stop the membership, but requires a vague “reasonable amount of time” to cancel. You might be on the hook for another month.” Food for thought.

Lastly, and perhaps most importantly, Dollar Shave Club needs to make sure it does not violate the “30-Day Rule” established by the Federal Trade Commission (FTC). The relevant portion of this law is explained below:

The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the “30-day Rule.”

If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay — either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent — you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise.

So, despite having initially been lathered with success, let’s hope that Dollar Shave Club doesn’t cut it too close and improves its operations. Maybe they can even shave a few weeks of that two month delay?

Update: I finally received my order of 4X blades on Saturday, May 26, 2012!

Holy Kaw!

640px-guy_kawasaki_at_wikimania_2015_-_2
By VGrigas (WMF) – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=42237626

World-renowned evangelist, author, and speaker Guy Kawasaki was a guest on the radio show “Coast to Coast AM” during the December 20 to December 21, 2008 broadcast. He was promoting his book “Reality Check” and to discuss idea creation.

During the segment Guy shared a multitude of insights and anecdotes with host Ian Punnett, including a humorous obsession with the Mayan prediction of the 2012 opening of the Stargate! It was certainly one of the more entertaining broadcasts I’ve heard. Some of his comments that connected with me include the following:

  • “The better product doesn’t necessarily win.”
  • “Great ideas happen when people ask a very simple question: ‘Wouldn’t it be neat if?'”
  • “Many people ask the question ‘Wouldn’t it be neat if?’ but not that many try it.”
  • “My lesson on life is you ask this question ‘Wouldn’t it be neat if?’ and then, if you have the courage to quit your job, drop out, do whatever it is, try it — that’s what it takes.”
  • “At the beginning of my career I used to think that the idea is the key, and once you get a good idea, implementation is easy. Now, I’m at the end of my career and I believe the exactly the opposite: I think good ideas are easy and implementation is hard.”
  • “In my career I’ve noticed [for] the people who are successful as venture capitalists and successful as entrepreneurs one of the greatest correlating factors is luck.”
  •  “At some point little slips of fate help you.”
  • “I’d like to believe that [you can make your own luck], but some people are [just] lucky.”
  • “The majority of companies that were successful started off with a completely different market, a completely different model.”
  • “Entrepreneurship is all about thrashing: you just thrash , thrash and thrash — and sometimes you hit it.”
  • “If someone calls themselves a visionary, they’re probably a clown.”
  • “I can’t invent the future. Most people in Silicon Valley are delusional that way: they think they can invent the future.”
  • “The future happens by accident, by the law of big numbers, by an infinite number of monkeys pounding on keyboards and one of them is going to hit Beethoven’s Fifth.”
  • “The [dot-com boom] was a big biological explosion of all different forms of life: some forms of life (like Webvan) died, some forms of life (like Amazon) survived and thrived. It’s only looking backwards that you can say Amazon was smart, Webvan was stupid.”
  • “The way venture capital works: you make 20 bets, one or two are successful [and] you say ‘Oh, I knew that team was good. I knew that technology was good. I knew that market was good. I knew that business model was good. That’s why I invested in that company.’ If somebody asks you about the other 18 bets that you made that all were losers you say ‘I didn’t vote for those deals, my partners voted for those deals.'”
  • “Wall Street and the press always like a good story, and a good story always is extreme. Either you’re kicking butt, or you’re dying. There’s nothing in the middle, because being in the middle: that’s not news.”

While listening to Guy being interviewed I was following his real-time updates and interactions with followers on Twitter. He then invited his Twitter followers to suggest silly things for him to say on air; I dared him to say “cheeky monkey”:

And he did!

I have often wondered why some ideas catch fire and others don’t — especially when a superior idea fails commercially.  I was especially intrigued by his comments about luck.

  • “You could be lucky and still screw up. You have to be lucky and then work hard. There’s ways to increase your luck. One way is just to work so damn hard. It’s all about implementation.”
  • “At the moment you are lucky you don’t really know it.”
  • “I’d rather be lucky than smart.

Specifically, the quote below about successful individuals not accounting for luck as a component to their success struck a chord.

  • “If you are an entrepreneur or a venture capitalist and you are lucky, and you make this enormous success, retroactively you never attribute it to luck. You say you were smart, you worked hard, you had a brilliant insight, you were a visionary. Nobody stands up and says ‘I am successful because of luck.'”

It was that comment that inspired an epiphany about further exploring the idea through research that would result in a book. I shared my idea on Twitter:

I immediately received positive feedback about my idea from @NEENZ, @robynmcintyre, and @Bytemarks.

Although the idea was still crystallizing in my mind,  I joked the book could be called the “Guy Luck Club” (as spoof of the “Joy Luck Club” book). I considered creating a blog specifically about this topic; my idea was to use it as a conduit through which I could communicate and refine my raw thoughts while giving the book marketing exposure.

Incidentally, David Meerman Scott did just that when writing his book “The New Rules of Marketing and PR.” I actually received a direct message from Mr. Scott on Twitter (@dmscott) in which he encouraged me to write the book first as a blog (without any pretense for organization) and approach publishers in a year.  Great advice — especially since it was the path he took to get his book published!

I imagine it could be most effective to test Guy’s theory, by first identifying ten CEO’s of a startup (that is not a spin off of an established company). I would take a standardized inventory of each CEO, paying particular attention to their thoughts about luck. I will reconnect with them at regular intervals: 1, 3, and 5 years (enough time for the business to have succeeded or failed). I will re-asses their thoughts on luck and see if their views have changed when asked the same question over time.

In thinking about the past 14 hours since this experience began, I couldn’t have scripted a better example of the power of social media; I am energized about writing this book! Thank you to everyone who shared their enthusiasm and encouragement. Maybe I can convince Guy Kawasaki to write the forward for my book? Holy Kaw!

Until then, I will sign off saying “Go Luck Yourself!”