From one Dollar Shave Club to one Billion sellout

18

September

2016

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How come that a razors company can be worth 1 Billion Dollars? Maybe you have heard about the unofficial 1 Billion dollars that Unilever paid to acquire Dollar Shave Club early this summer. Dollar Shave Club was founded by Michael Dubin and Mark Levine in 2011 with the idea to provide low cost razors to its customers. How has Dollar Shave Club managed to gain some of the market share in a market overly dominated by the old time Procter and Gamble’s Gillette?

The “winning formula” they used were the following:

Michael and Mark created a monthly subscription for razors. For one dollar a month they will send customers brand new razors. Simple right? By doing this, Dollar Shave Club not only solved the new hurdles of the current industry’s problem and at the same time built a brand around it. Let’s take a look into this winning formula:

  • Price: Selling extremely affordable razors as compared to the ones available at the supermarket.
  • Convenience: dollar shave club sends the razors every single month the consumer’s home. The customer does not have to worry about going to the supermarket and dealing again with the dilemma of what razors to buy. This has become an increased problem as razors where becoming fancier with multifunctional features.
  • Brand: dollar shave club really understood its niche customers. Its customers want to shave and get on with the day. Too much information on the packages of common products, such as Gillette, can be at times “annoying” for the shopper. Dollar Shave Club designs a very simple package, which includes a thank-you note and an interesting quote that customers want to read. Hence, creating an experience value. By engaging in Dollar Shave Club’s subscriptions, customer felt that they were part of a club which also helped the raise its value.

As opposed P&G’s Gillette kept spending on R&D adding more blades and vibration features to their razors. Gillette did not realize that razors were already good enough, however their kept increasing the prices of their razors due to the additional features they incorporated. For me, seeing a Startup like Dollar Shave Club rise this fast, the biggest take aways are:

–  We really need to carefully listen and understand our customers. It really does not take millions of dollars to beat the big company in the market, but one needs to listen to what customers are saying and implying.

– Once a product has achieved its optimal quality, customers will starting to pay for experience and the feeling of belonging rather than only for the product itself.

– A witty marketing strategy can help the product take off exponentially as company has a solid and clear value proposition important for its targeted customers. Dollar Shave Club’s very first video was viewed so many times that it broke their.

So, I have a question for you, what would you be willing to give for a dollar?


Sources:

https://medium.com/@pakman/dollar-shave-club-how-michael-dubin-created-a-massively-successful-company-and-re-defined-cpg-f2fa700af62b#.kdl7mlobe

https://stratechery.com/2016/dollar-shave-club-and-the-disruption-of-everything/

https://www.youtube.com/watch?v=Rh1FXXW-qIk

https://www.youtube.com/watch?v=ZUG9qYTJMsI

http://www.ft.com/cms/s/0/2aca7c08-4e69-11e6-8172-e39ecd3b86fc.html

 

 

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The meaning behind ‘artificial’ and ‘intelligence’

17

September

2016

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Artificial intelligence was officially born in 1956 when John McCarthy organized a workshop at the Dartmouth Summer Research Project[1]. The goal was to create an artificial intelligence being. Decades of unsuccessful trials in the attempt to create an artificial being that had an independent intuition have passed. After waiting for 60 years, this March of 2016, the artificial intelligence program AlphaGo beat Lee Sedol, the grand master in Go (the ancient Chinese board game).

But is Go such a difficult game?

Although the concept is simple, the number of moves are almost endless. Go is a game of two and the goal is to surround a total area that is larger than that of your opponent in a 19 by 19 grid. To give you a comparison, in chess 35 is the number of possible moves a player can choose from in a given turn. In Go, a player can choose from 200 different possibilities in one turn. Now, if one were to account to the total number of possible moves of a Go player in a given game, it could amount to 10 to the power of 170. So how much is 10^170? A lot, given that the number of atoms in the universe is estimated to be around 10^81. Therefore, AlphaGo has achieved a big milestone for beating the best Go human master in such a complex game with almost endless possibilities.

How did AlphaGo manage to beat Lee Sedol? Let’s start from the general idea. AlphaGo uses a deep learning technique that is programed to mimic a human neuron. Deep learning belongs to a branch of algorithms and techniques called machine learning. And Artificial intelligence can be defined as a set of algorithms and techniques that mimic the human intelligence. In short, AlphaGo is specific deep learning system of machine learning that built upon algorithms and techniques.

My guess is that deep learning is going to help us understand the human brain better and consequently develop improved techniques for learning. Why? Because deep learning operates and processes information like a human neuron. By feeding the machine a lot of data, the computer can learn to recognize and classify objects by itself[2]. This leads to the creation of the so-called artificial intuition. As a result, I can imagine a world where artificial intuition will provide out-of-the-box perspectives and guide human beings to solve grand challenges.

AlphaGo vs. Lee Sedol enlightened our species once again. Let me explain. After watching the match between AlphaGo and Lee Sedol, Go players grasp an understanding of the possibilities of deep learning. Go players were fascinated with how AlphaGo was playing because it played unlike any human has played the game before. It made moves that did not seem to make sense at first sight but were very fruitful at last. By playing with or watching AlphaGo play, players are influenced by the way the machine plays the game. In turn players are able to learn from AlphaGo by observing these new strategies, which creates a feedback loop. The master himself, Lee Sedol expressed his positive thoughts after the match “I have improved already. It has given me new ideas” referring to AlphaGo[3].

This has been the first glimpse of what AI can bring in the field of learning. Artificial intuition challenges us to think differently, which will reinforce and disrupt the way the human brain thinks time and time again.  Because of this constant thinking enhancements, I believe that Al will challenge the “Homo Sapiens Sapiens” status that modern humans currently hold.


Sources:

[1] http://www-formal.stanford.edu/jmc/history/dartmouth/dartmouth.html

[2] http://www0.cs.ucl.ac.uk/staff/d.silver/web/Publications.html

[3] https://www.wired.com/2016/05/google-alpha-go-ai/

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