It All Started With Shampoo and Tequila
Editor's note: After taking a trip to Italy years ago, Porter set out on a mission...
He wanted to create the best shaving razor in the world.
Today's Masters Series is adapted from the November 14, 2014 Digest. In it, Porter shares what he learned on his trip... how his idea grew into a new business venture... and two questions every aspiring entrepreneur should ask before starting a business.
Be sure to read to the end of today's essay to learn how you can take advantage of a special, limited-time offer to try one of these razors for yourself...
It All Started With Shampoo and Tequila
In today's Friday Digest... a complete departure from our normal fare.
Rather than writing about investments per se, I'd like to share a personal story with you – my ongoing entrepreneurial odyssey. I'm in the midst of starting a big new business... one that has nothing to do with publishing or finance.
If you've ever thought about starting your own business, I hope you'll read today's Friday Digest carefully. This is the story of why and how I decided to launch a new company in a totally different industry. I hope my story inspires you. I hope it helps you develop your own business ideas.
But I'm getting ahead of myself. Let me start from the beginning...
Every great entrepreneur starts out by noticing a problem. Before I launched Stansberry Research, I noticed most investors didn't understand the basics of finance. They didn't have the skills required to make rational investments. Instead, they were relying on an industry (mainstream financial services) whose incentives were poorly aligned with its customers.
As I like to remind people, the financial-services industry doesn't exist to make its clients rich. It's the other way around: The clients supply all of the wealth. That created a huge business opportunity to provide investors with tools needed to succeed as investors – without charging them a percentage of their net worth.
My new company is doing something similar: We're providing a sophisticated tool almost every man in the world needs, at a reasonable price. The company is called OneBlade. And the tool we're making is the world's finest shaving razor.
Let me explain the opportunity by asking these questions...
- When is the last time you had a great shaving experience?
- When is the last time you enjoyed your shave?
- When is the last time you thought about your shaving routine as being a privilege and not an obligation?
About 10 years ago, I was visiting Italy with a group of friends. While we were in San Marino (a tiny city-state near Rimini), one of the guys suggested going to a traditional barbershop to get a real straight-razor shave. The experience changed my life.
Before that day, I had no idea what a "real" shave felt like... how my face could feel that smooth, that "clean"... or how a shave could last that long. I didn't need to shave again for three days.
Perhaps like you, my entire adult life I had been shaving with expensive, multi-bladed, cartridge razors made by Gillette or Schick. As a result, I thought it was impossible for me to get a good, close shave – that would last – without significant amounts of skin irritation (including painful ingrown hairs).
As a result, I hated shaving and did whatever I could to avoid it, including growing a short beard and using a beard trimmer to maintain it. I've discovered that most of my friends who don't shave regularly have the exact same problems. They experience a significant amount of skin irritation from cartridge razors.
Since then, based on my own experiences and discussions I've had with experts (including the two most renowned barbers in the United States), I've learned that most men suffer from skin irritation when they use cartridge-shaving devices. The reason isn't hard to understand: Multiple dull blades don't lead to a higher-quality shave.
These cartridge devices aren't popular with men because they give you a great shave... They're popular because they can't cut you. It's nearly impossible to cut yourself with modern shaving cartridges, no matter how inexperienced the user is. And of course, they're popular because billions of dollars are spent advertising these products.
That's how we ended up in a world where most men don't know how to shave with a real blade... or even understand why they should use a truly sharp edge that has been honed with shaving in mind.
But everything changes the first time you shave with a high-quality blade. Try it for yourself. Pick up a Feather blade – made in Japan – and use it inside a regular, double-sided safety razor. It will give you a great shave, far better than anything you can achieve with a cartridge.
Or, even better... go to a skilled barber and get a straight-razor shave. There's no other way to understand what you're missing when you use a mass-produced, plastic-encased, multi-bladed "toy."
The irony is, men normally enjoy acquiring the right tools and developing skills. Walk into any guy's garage and you're sure to find dozens (if not hundreds) of high-quality steel tools. Why, I wondered, has the skill of shaving – and the pleasure doing it right – been abandoned?
Beyond the quality of the shave, something else is missing from modern cartridge shaving – masculinity. Razors have evolved from being sharp, precise tools that men used exclusively into completely anodyne and androgynous, disposable pieces of plastic.
Men – whose fathers and grandfathers had daily shaving routines that included hot towels, high-quality soaps, exotic brushes, beautiful steel tools, and fine porcelain basins – now get up in the morning and have to search for a five-bladed, gimmicky piece of plastic... one that has gone missing because their wives borrowed it and never put it back.
In contrast... I vividly remember watching my father use his badger-hair brush and his soap dish. I remember his brilliantly polished steel-handled razor. I knew it was dangerous. And I knew he knew how to use it. As a boy, the process was mysterious... and uniquely male.
For my dad – and probably for yours – shaving was a ritual. In our busy home – filled by three children and two working parents – it was nearly the only time he had alone and totally undisturbed.
Over the past decade or so, a trend toward more authentic, "artisanal" experiences has developed in men's shaving. This has caused more and more barbershops to offer straight-razor shaves, especially in upmarket settings. When I was living in Miami Beach, I got a straight-razor shave once a week. In Baltimore, I know a place downtown where you can get one.
Meanwhile, nobody gets up in the morning and picks up his plastic, five-bladed, disposable shaving tool and thinks, "Boy, this sure is a beautiful razor and a precise piece of steel." Likewise, few men enjoy shaving. They have forgotten the ritual of the process, the meditation men are supposed to have with their mirror every morning.
I believe there's a huge opportunity to sponsor a rival in traditional men's shaving. I want to give men their ritual back. I want to give them the skills and tools they need to get a professional, barber-quality shave at home. There's no reason they can't have a great shave every morning. All they need is a little instruction and the right tool.
In my opinion, the major razor-makers have made a huge mistake by trying to make shaving completely safe. There's no way to get a great shave without using an extremely sharp razor. Here's a hint: If your wife wants to use your razor, it's not sharp enough.
I created OneBlade to make the world's best shaving tool for men. That means using the best possible materials to create the sharpest, best-performing razor. Rather than spending a fortune on marketing, we've spent our capital developing the world's best handle and blade combinations.
We also want to give men a tool that's stunningly beautiful and carefully engineered. Rather than merely building a new blade to fit into a cheap, double-sided safety razor, we believe the world's best shaving blade deserves a handle to match.
So we set out on a quest to source the highest-quality materials around the world to build our razors – some you've never seen used in shaving before, like military-grade "PANACEA" solid stainless steel for our flagship razor, Genesis. (PANACEA is an acronym that means "protection against nickel allergy, corrosion, erosion, and abrasion.")
Each Genesis razor handle is beautiful, precise, and collectible as industrial art. Men always love their best tools, whether it's their watches, fine leather wallets, or exclusive sunglasses.
We interviewed 30 renowned design firms from around the world, looking for the right mix of artists and engineers. We were determined to fundamentally redesign the razor handle – a tool that has remained essentially unchanged for more than 100 years.
We needed something that offered concrete improvements over the existing designs and, just as important, we needed a shape that would become iconic and instantly recognizable. We needed something akin to the famous curved Coke bottle. We needed a shape we could trademark and brand. We wanted a shape that would stand the test of time and could be embraced by men around the world as a mark of outstanding quality.
We picked a world-class team of designers working in a loft in Brooklyn, New York. The firm is led by an artist and an engineer. They embraced our project and have spent thousands of hours on designs, prototypes, and testing.
Here is our final design for the Genesis razor:
There's nothing like this shaving tool on the market today...
Each Genesis razor undergoes more than 50 individual steps of manufacturing... including state-of-the-art metal injection molding, military-grade physical vapor deposition ("PVD") coating, and hand-polishing. We individually number every Genesis shaving handle we sell (in the order it was made) and include a lifetime warranty.
Likewise, nothing currently on the market can compete with our blades. By using a single-sided blade made by Feather, a world leader in precision blade-making (even for surgical equipment) instead of the traditional double-sided approach, we are not constrained to symmetrical, dull-edge designs.
Combining these perfect leading-edge blades (sharp yet ultra-comfortable) with our innovative razor handles is the key to delivering a straight-razor-like shave with a safety-razor tool.
We have a significant amount of capital backing this new venture. We've pulled together a handful of our most successful friends and partners to help us develop this business. And most important, we recruited the former CEO of Ronco, one of the world's most successful direct marketers of consumer products, to lead our executive team.
This effort is not a "hobby" or a sideline for us. We believe OneBlade will become a vastly larger business than our publishing efforts – simply because no other luxurious, finely built shaving tools are available on the market today. There's nothing else like OneBlade available – at any price.
Recently, rare Rolex watches from the 1940s and 1950s have begun selling for more than $1 million. Early Apple computers are selling for more than $500,000. Even recently made Montblanc pens have been routinely selling for more than $25,000 on eBay.
The point is, while we can't say for certain whether OneBlade will develop this kind of high-end cache, that's certainly our goal... And I'm confident we have the capital, the executive team, and the marketing power to accomplish it.
The headline of this Digest is a reference to shampoo and tequila. It's actually how I explained this whole venture to my wife...
You might wonder why an investment-advisory publisher believes he can establish a new luxury shaving brand. My wife also asked that thoughtful question. Or, as she delicately put it, "How much is enough, Porter? How many businesses do you have to start? How many people do you need to employ? When are you going to take the time to enjoy the things you've built... or even just spend some time with your kids?"
Maybe I can't explain my motivations to you, but I can't help myself. When I look around, I don't see the same world that most people do. I see the world as what could be. I believe there should be a truly world-class tool for men to use every morning for a great shave. I know I'd love a product like that. I felt the same way when I launched Stansberry Research. Why shouldn't individual investors have access to Wall Street-quality research, without any conflicts of interest?
That's when I brought up the shampoo and tequila...
You might not know his name, but John Paul Jones DeJoria asks the same kinds of questions. Over the last 30 years, he has built two of the world's greatest brands – John Paul Mitchell Systems (premium shampoo) and Patrón Spirits (premium tequila).
What do shampoo and tequila have to do with each other? Nothing, of course. But in both cases, the public was eager for small – but material – increases to quality in these product categories. DeJoria simply built the kind of products he wanted to use and then charged the public a sensible premium to get that level of quality.
That's exactly what I've tried to do with both businesses I've founded. Do our advisories cost more than magazines and newspapers? Yes, in most cases they do. Do we deliver a lot more value? You bet. And that value proposition – even at a relatively high price – has attracted hundreds of thousands of subscribers. I believe the same thing will prove to be true of our razor company, OneBlade.
Now... I'd like to make one final point about starting your own business. Most new businesses fail for a simple reason. I would estimate at least 75% of the private business deals I've seen in my career have failed. And the No. 1 reason most of them have failed was simply poor economics.
Most businesses don't offer attractive returns. That's the nature of capitalism. It's hard to make a profit. (The other most common reason these businesses failed was bad management. Most people are simply not willing to do whatever it takes to push a business forward.) So before you go out and ask your friends (or me) for investment capital, ask yourself these two questions...
1) The first question to ask is simple: Does the business you envision have excellent basic economics? Is it scalable? Can its product or service be distributed and sold globally? Does it take advantage of the world's massive – and nearly free-to-use – digital infrastructure?
If the answer to any of these questions is "no," you want to think carefully before you get started... and don't do it. There's probably a good reason that the business you envision doesn't exist yet. Remember, when a business with a reputation for poor economics meets a manager with a reputation for brilliance, it's the business' reputation that will endure. That's one of the reasons, by the way, that I'm skeptical about Elon Musk's efforts at Tesla. The car business has terrible economics.
2) The next question to ask yourself is: If the business you want to start existed already, would you want to try to compete against it? If the answer is "no," you're probably onto something that's worth doing.
To be successful in business, I believe the top quality you must create is a sustainable competitive advantage. At Stansberry Research, our sustainable competitive advantage is a combination of brains, ethics, and empathy.
We have some of the best financial analysts in the world working for us. But more important, we have developed a culture that puts our clients first at all times. That has attracted a huge number of talented people whose primary professional goal is to help even the odds between individual investors and the pros on Wall Street. I believe it's difficult for any of our competitors to match this combination at anything close to the price we offer.
Regards,
Porter Stansberry
Editor's note: With Father's Day just around the corner, Porter has arranged a generous offer for Digest readers to try a premium OneBlade razor yourself (or to give to your dad or son)... While supplies last, you can get $50 off any OneBlade shaving kit. Get started right here.