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Comment by cft | Hacker News Reader

We are in what will be called "the private equity bubble".

At first I thought the same thing. But if you'll bear with me for some back of the envelope math, with 2 million members paying an average of $5/month, that means they're bringing in $120,000,000 a year. That's a multiple less than 6x of revenue, hardly that outrageous.

What is the gross profit margin on the back of your envelope?

Gillette's brand is valued by forbes at $20B (~2.5x Revenue)

http://www.forbes.com/companies/gillette/

About about the gross margin?

Still great.

Key to subscription based businesses are retention and cost of customer acquisition. Which, I predict for this business with no knowledge about the industry at all, are low and high, respectively.

That is a high multiple for a company that sell physical goods.

"Dubin claims Dollar Shave Club accounts for 7 percent of all razor cartridge sales in the U.S."

I find this hard to believe given that I don't know anyone personally who uses it. But if that's really the case, it's not as absurd given that Gillette was bought for $52 billion in 2005.

http://recode.net/2015/06/21/dollar-shave-club-raises-75-mil...

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aA.la...

I'm curious, for how many of your (say) 10 closest friends do you know where they buy their razors?

For me I'm going with one; I know one friend who swears by his electric and although I'm sure he also has some sort of low tech option it almost certainly isn't DSC.

You're right, it'd be strange if I did. However, given that they have a referral program I would have expected a bit more buzz for 7% market share.

http://www.dollarshaveclub.com/faqs#/faq11

I don't think so. The inverse, 93% of razor cartridges, aren't from them. So you're far more likely to not even have one friend who uses them.

They must be resonating with some group that doesn't really overlap with the HN crowd... I've not seen any advertising other than the original YouTube video.

They advertise on TV, nationally. I've seen the commercials. They also advertise heavily on Facebook.

We're in a bubble? http://imgur.com/a/GaGtl

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