The Exchanges

Q So October, 2011, Andy, you get an idea for what would become this business we're about to talk about. Tell me, tell me how that, what happened?

A Yeah, so I was driving home, uh, from work. I stopped at a drugstore, actually right around the corner from where I'm sitting right now, on 14th and Wilshire in Santa Monica, and I knew I needed to buy razor blades, because I needed to shave the next morning, I think at a meeting or something like that. And I had run out, and I went into the drugstore. Uh, the product was locked away, and still to this day, oftentimes, razor blades are locked away, and they're locked away because, uh, they get shoplifted all the time, and they get shoplifted all the time because they're extraordinarily expensive, so. I'm wandering around the store looking for an associate to come open the case, which I'm kind of like, this is sort of an absurd experience. I'm not buying, you know, a 5000 dollar diamond bracelet or something like that. I'm buying razor blades. And, you know, as I'm waiting for this associate to come and unlock it, I'm looking at sort of the packaging and the brands, and I think there was literally a picture on one of the packages of a razor blade, like, kind of Getting shot into space, um, you know, flying over the moon or something like that, which I understand what this brand was trying to communicate to me, which is like, yeah, you should pay an exorbitant amount because there's a lot of technology in this product, but it felt. You know, not resonant, a little bit inauthentic…

AI assessment note: “I stopped at a drugstore, actually right around the corner from where I'm sitting”

Q Andy, you were in LA, and Jeff was in New York, and you guys were just both kind of doing research from, you know, from, from where you were, and then you would kind of reconnect every couple days?

A Yeah, um, you know, we, well, Jeff had access to, like, you know, analysts and industry stuff through Charles Bank, and I actually had access to some of that stuff through Like the Stanford library database that I still had access to as a business school student. So we could get some of that stuff. Um, I remember we ran a consumer survey and, you know, we spent a lot of time just trying to sort of network to people that knew something about the industry and then just talking to, you know, Our friends, guys in general, and, and to, to what Jeff said, I think in some ways that last thing was the most confirmatory because when you talk to guys, everybody was like, yes, I have had that experience. I hate it, but. Yeah, this was like nights and weekends. I mean, as Jeff mentioned, we probably spoke every night. I could never, I had, I had like a job, but it wasn't, you know, an all-consuming job, and I was doing this. Jeff had like a really serious job, plus Warby, plus this. I was like, I don't know when this guy sleeps, but, um. We, uh, we, we spent a lot of time on it very quickly because I think we were really excited about the idea.

AI assessment note: “Yeah, this was like nights and weekends. I mean, as Jeff mentioned, we probably spoke every night.”

Q you guys have this money to launch, and did you, um, I mean, by the end of 2012, you've, you've, you've raised the money, and you've got a plan here. So what was the plan? What was the idea? I know you launched in 2013, in March of 2013, but what did you do to prepare for that launch? Did you hire people? Did you, what happened during that time?

A We, so we raised money over the summer of 2012. I quit my job like around Memorial Day, uh, and I think Jeff stayed at Charles Bank through Labor Day. We had all these designs. We had to go manufacture the product and ensure that, you know, we needed packaging. We needed the handle. We needed the cartridges. We needed to assemble all this stuff. We needed a website. Um, and we need some people to help us do those things. Neither Jeff nor I had really operated before. You know, Jeff had a little bit of experience with Warby Parker, but You know, and actually one of our, our, our biggest, earliest investor, they were like, look, we'll back you guys, but you need to find somebody that actually knows what they're doing, like from an operational standpoint. You guys seem smart, but, but you've never done this before. And so, um, they introduced us, uh, to this guy, Will, who's still our COO to this day. I would say that, you know, Jeff spent more of his time and energy and what he's really, really good at, you know, sort of brand and design and consumer and marketing. So he was really leading the charge on, A lot of that work and a lot of those decisions, I spent a lot more time and energy Uh, on the operations and setting up the manufacturing partner, and so that was sort of how we divided and conquered things, um, through that, I guess it was about a nine-month period from when we…

AI assessment note: “they introduced us, uh, to this guy, Will, who's still our COO”

Q Essentially, they decide They, they offer to acquire you. In May, in May, in May, it's announced that they would buy Harry's for close to 1.4 billion dollars in stock and in cash. I'm assuming that, you know, now you're You know, roughly six years in, your investors may, may want to return, and was that the thinking behind, behind the acquisition, agreeing to it?

A It was certainly a benefit of doing the deal, but it wasn't, it was a little bit more serendipitous than that, in that Edgewell, as you mentioned, owns Schick, and, ah, Schick historically had been the number two to, to Gillette, and Gillette is the 300 pound gorilla, And we thought it was potentially compelling to combine with Schick and have a more formidable competitor vis-a-vis Gillette. And, you know, we were actually, you know, Jeff and I were talking about, like, hey, could we buy these guys? I actually talked to a couple private equity firms about, because Edgewell was a public company, but a reasonably small public company, about trying to buy them Take them private and fold it into our business. That was actually how it started. And we could never get the math to work, um, to take them private, but it's a small industry. And so we got to know them a little bit through that process. And yeah, at some point they turned around and said, well, why don't you, why don't we buy you guys, but we'll just give you the keys.

AI assessment note: “It was certainly a benefit of doing the deal, but it wasn't”

Q and I think that's when the two of you left your day jobs, and you officially founded Harry's in September of twenty-twelve. Um, I mean, when, first of all, I mean, when did you decide? Do you remember when the two of you said, we're going to go for this, quit our jobs, And we're going to start a business. Like, it must have been a few months before that.

A Well, I remember a distinct, so we went back to Germany in May of 2012. That was our second trip. And that's when we actually negotiated and signed the contract. And so I remember being in the rental car with Jeff driving back to the airport. And kind of looking over at him and be like, we're doing this, right? Cause like, I'm going to go quit my job. Are you going to quit yours? I don't want to quit mine if you quit yours. And he was like, yeah, yeah, we're going to do this. I was like, okay. So that, and that at least for me was sort of the, the, the point of no return in the moment in time, uh, when, you know, it was going to go from a nights and weekend, uh, adventure to, to a full-time endeavor. I don't know if that was it for you, Jeff.

AI assessment note: “we went back to Germany in May of 2012. That was our second trip.”

Q And what about, what about you, Andy? I mean, was it, was it also just all consuming? You became really convinced that this could work? I mean, you mentioned that there were a few moments where you thought, okay, we've hit a roadblock, and maybe, maybe this isn't going to work.

A Yeah, I mean, it was all consuming, and I think there was kind of a trifecta of, of factors as I, you know, was getting increasingly excited about the idea, and You know, also trying to make a rational decision of like, alright, do I want to make this jump? Do I want to, you know, spend all my time and energy on this and take that level of, you know, career risk? But in Jeff, I had somebody who I respected tremendously. Um, obviously he had the Warby Parker experience and we had worked together, but You know, we were also close friends. It felt like almost the perfect match for somebody who you would want to start a business for. So, and yeah, the thing that the, really the only thing that was giving me pause, um, was this, hey, can we make a product that actually works and performs and is, and is sufficient quality?

AI assessment note: “Yeah, I mean, it was all consuming, and I think there was kind of a trifecta”

Q And, and what about just cultural differences? You know, um, what were some of the challenges that you had to work through?

A Uh, uh, we, we might need three hours for my, my German-American, uh, you know, cultural adventures. Um, probably the biggest difference that we had to work through is that, uh, You know, we were a fast-moving entrepreneurial culture, like, test, learn, iterate, like, two steps forward, one step back, and the Germans perceive that as just, these guys have no idea what they're doing. It's, it's complete chaos. It's, it's unorganized, disorganized, but, you know, the Germans are a lot of planning before doing it. And the American perception of the German team was, they're not doing anything. Why? They're not working. They're moving slowly. And of course, in a manufacturing environment, like, you need to be more planful. You can't just, like, test and learn things on the fly. On a website, you can do that stuff. So it was, uh, it was challenging.

AI assessment note: “probably the biggest difference that we had to work through is that”