The Exchanges

Q But just because you have one big product, it's not easy to scale the next one, right?

A Totally, totally, and that's where I think direct-to-consumer is so powerful. Because as opposed to just making, you know, millions of something and trying to assume that everyone's going to want it, what we can do is start on direct to consumer, start to sell to a few people, see what they like about it, what they don't like. If we have to make changes to it, we can figure out how to talk about it, understand if we build a set of products, which ones people like the most, and then lean into those and learn in that experience. And so when we started Harry's as an example, We got a ton of feedback from customers that they wanted a precision trimmer on the back of their razor blade. Um, we have five blades in our cartridge, but precision trimmer helps get to these hard to reach places like under your nose.

AI assessment note: “Totally, totally, and that's where I think direct-to-consumer is so powerful.”

Q What did you give them? What was the incentive?

A Graduated. It was like graduated rewards. So if you told five friends and they came back and they had like your link that you got free razor handle and up to, I think a hundred friends, you got like shaving for a year. And it was this fun game. They're great. And I can't underestimate like just the importance of doing that and building community. And then I'd imagine there's lots of other communities out there that you could tap into rather than spending a lot of money on marketing day one. Think about what are the communities that you can tap into just to build awareness of this around groups of parents that you can just start to spend time with who can get to know you and you tell your story. That might mean you grow a little bit more slowly in the early days, but I think what you get from that is you get to start to really understand how customers feel about your products and how they talk about your products, and then you can use that as kind of the core of any of your future marketing campaigns.

AI assessment note: “graduated rewards. So if you told five friends... free razor handle and up to”

Q Jeff, what do you remember about that conversation, about when, when you first heard this idea?

A Yeah, uh, I was sitting at work, and Andy G chats me, and, um, it felt to me like the early days of Warby Parker, when I was like, ah, I just want a pair of glasses, you know, that are great, that don't cost very much, and so I think, like, his experience resonated, um, and I was like, let's, let's go look into this, like, this is exciting. And I think, you know, the first conversation we had was, was I think about the brand and being able to deliver high quality product at good value. And then a lot on like direct to consumer, like we felt like that was an exciting channel and opportunity to go and get to engage with people. Like the one thing that I learned at Warby or one of the things I learned at Warby was like, it was an amazing place to have direct dialogue with customers. And the cool thing about shaving is that it was going to be a repeat purchase. And so you're going to have multiple bites at the apple to get to know people and try to sort of tailor an experience to them, which at the time was exciting. And I think would enable us to bypass at least to start a lot of the existing industry dynamics so that we could build something that was a little more consumer centric, at least as, as we defined it.

AI assessment note: “I was sitting at work, and Andy G chats me”

Q you, you, you've developed products in house and then you've purchased kind of small brands and, and made them bigger. But before we talk about the details, what was the idea here? About diversification, because at some point, right, there was going to be more competition in this space, and your market share might, you know, might have stalled out. So was that the idea behind creating an internal incubator?

A Yeah. I think that was part of it. Um, you know, Harry's was doing great, but we were kind of looking at this saying, okay, how big could Harry's really, really be over time? Even if we got to, you know, huge market shares everywhere, like there's going to be some cap on our growth and shave. And so if we thought about it, we thought, Hey, like, you know, if we could increase our addressable market, not just to kind of men's grooming and personal care, um, But to all of CPG, that's a pretty significant sort of shift in the opportunity set that we have. And then we're starting to build good relationships with some of these great retailers like Walmart and Target and, you know, later Kroger and Grocery and Meijer and Costco and CVS and Walgreens and all these places. And they're excited about this. They're excited about us building brands online that are kind of modern brands that have interest and awareness around them. And then Coming to retail eventually.

AI assessment note: “I think that was part of it... there's going to be some cap on our growth”

Q Four of you guys. Um, you were all students at Penn, and tell me how you Like, how, I mean, from your perspective, how did it, how did it start?

A Yeah. So, um, for me, the journey at Warby started, uh, when I was sitting around after class with Neil one day and Dave walked up to us and said, what do you guys think of the idea of selling glasses online? And at the time I was wearing prescription glasses that I'd had for many years. And I was like, oh, that I would love, you know, a pair of glasses that, you know, sort of well-made that spoke to who I like the sort of fashion statements that I would want to make kind of, you know, or a representation of who I am. And, uh, That I could get at a much better price. Um, and Neil was just sitting there being like, you could totally do that. Like the reason that glasses are so expensive is because yeah, the industry has been dominated by a couple of companies and there's a significant markup between sort of the cost to make the products and then the cost that they're sold for. Um, pretty quickly, uh, four of us and Neil and Dave, um, our other co-founder, Andy Hunt and I, uh, got together and started working on Warby.

AI assessment note: “for me, the journey at Warby started, uh, when I was sitting around”

Q Yeah, great. Jeff, I'm curious on this question of quality standards, like, did you guys early, early on build sort of a brand Bible for what it means to represent, represent Harry's?

A Not in the very, very early days. I think what we were doing was much more like what Travis is doing, which I applaud, which is to be the customer service rep yourself and to teach people what great looks like by having them work with you, engage with you, follow you, and then hire incredible people who can take that forward. Over time, we totally did. You know, we thought about CX experience across a number of dimensions and then started to measure customer satisfaction. But a couple thoughts for Travis. I think one, I love that you're the first delivery rep. I think that goes a long way in that you're setting that standard. I think two, the first people that you hire at the company are going to be so pivotal setting the culture of the company. You know, when businesses get bigger, you can have values and behaviors that you really want people to live by. But in the early days, lots of it is like really tribal culture. You know, it's people looking to you and the other early employees are For signals of how to act. And so I think taking a tremendous amount of care in who those people are, are really, really, is really, really important.

AI assessment note: “Not in the very, very early days. I think what we were doing was”

Q So Jeff, let's talk about customer acquisition, and then maybe we divide it into subscription retention into two. Where does Carly start?

A Yeah, so I think in the early days, one of the thoughts I'd have for you is to start with your own network and your friends. They're the people who are going to be the biggest advocates for the brand because they know you, and they know your story. And then figure out how to get them to tell their friends and their friends. When we started Harry's, Had this crazy idea to build this referral campaign. And I think a lot of other people have done similar things. And maybe now it's, you know, many years later and a bit played out. But when we started, we're like, we just want to tell all our friends about this. And then we're going to give them incentives to tell all their friends about this. And then their friends, we turned into a game.

AI assessment note: “to start with your own network and your friends. They're the people”

Q How did you come up with a name? Is there a person named Harry?

A Yeah, so there was a grandfather figure of mine named Harry who we liked. We liked the idea of shaving being passed down from grandfathers to fathers and fathers to sons as like a general idea. So we, we wrote down all of these kind of like people in our lives who were kind of grandfather, father figures as like a beginning of inspiration. Then we kind of saw Harry's and we're like, can we really call a shaving brand Harry's? And we both kind of laughed. It was like, you know, funny in that way. And then when we started talking to people about it, We're like, you know, what do you think about calling it Harry's? They're like, oh yeah, like my uncle Harry, or like my neighborhood bar Harry's. Like, and we're like, that's what we want. Like, that's the, the feeling we want. And then we felt like we could pair it with kind of warm masculine colors like navy and olive green and burgundy to make it kind of, you know, build this kind of warm, but, but sort of design centric world around it. I forget the references we were thinking about at the time, but like we liked, you know, Barney's or Even Fred Siegel, you know, they were just like kind of these like elevated, but warm. And so we felt like that was a good kind of place in contrast to the other brands of the category that we felt like maybe we're trying to tell guys to be the best and perfect. And you know, the traditional kind o…

AI assessment note: “there was a grandfather figure of mine named Harry who we liked.”

Q And we're, we're most Razors made, I'm assuming, probably China? Germany? Korea?

A No. There's a significant concentration, probably relative to lots of other industries, of manufacturing in North America and in Europe. And the reason is, one reason is because, um, a lot of this stuff is highly automated. You're talking about machines that have to make little, grind a perfect edge on little blades millions and millions and millions of times over with, like, zero deviation. Otherwise, you're going to feel it in your shave experience. And then slot them into cartridges with, like, Immense precision, and so what you, I think where, where the industry grew up was in places with really, really strong engineering cultures, and, and the, the dynamic in the industry, which is interesting, is that most of the brands are fully vertically integrated.

AI assessment note: “significant concentration... of manufacturing in North America and in Europe.”