Raising Capital :
Jeff Raider is an obsessed and somewhat masochistic man. In 2012, the entrepreneur put his life on hold to focus on an idea he had for a new kind of shaving company. He started leaving parties early to go over product designs. He stopped seeing his friends.
He and his co-founder spent months testing -- and consistently cutting themselves -- with new blades from a variety of distributors.
“We were literally shaving with blades from around the world and it was this emotionally and physically scarring experience cutting ourselves with these bad razors,” he said.
For the 34-year-old Wharton School graduate, this fanatical quality that overcame him while co-founding Harry’s, the men’s shaving startup, was essential to the success he is seeing today. In just three years (after finding a blade that worked, of course) Harry’s has established itself as a venerable competitor to century-old shaving brands like Gillette as well as other serious startups like Dollar Shave Club. With nearly $300 million in funding and its own manufacturing plant in Germany, Harry’s has more than one million customers and some 500 employees globally.
You would think given the dramatic uptick recently in startup activity and the rate of new entrepreneurs that hoards of founders have the same maniacal obsession with their idea as Raider still does. But the serial entrepreneur said that just isn't the case.
“It is amazing how many entrepreneurs that I speak with who say, ‘I am kind of at my job, maybe I want to do this if I can raise money.’ In my experience it doesn’t work that way,” Raider said in a wide-ranging interview at LinkedIn Studios in New York. “You have to jump in headfirst and really commit as you are so excited about the idea that there is nothing else you can think about.”
Last year, venture capital funding reached its highest level in over a decade with the industry giving a whopping $48 billion in capital to startups like Harry’s. In the U.S. alone, 84 companies are now valued at $1 billion or more. With all this capital sloshing around and driving up valuations, it would be easy to assume that entrepreneurs -- obsessed or not -- could rally support around their idea. Yet Raider, who has successfully raised nearly $290 million for Harry's, said the bar is even higher to get venture capital support now then when he started the firm in 2013.
While there is a lot of money out there, I think that investors are looking to invest in companies that have a fundamental reason to exist and a big vision behind them,” said Raider, adding that he started Harry's because he felt razors were too expensive and the brands on the market didn't resonate with American men.
Harry’s isn’t the first startup that Raider worked on that he felt had that “fundamental reason to exist.” As a student at Wharton, he walked around wearing a pair of glasses that were held together with duct tape because he didn’t want to pay to get them fixed. With three of his classmates, he came up with the idea for Warby Parker, the eyewear startup that is now valued at over $1 billion. Despite his passion for the brand, Raider said he “never planned to stay” on to manage the company as it grew and now leaves the day-to-day operations to fellow co-founders Neil Blumenthal and Dave Gilboa.
It’s clear he feels fundamentally different about Harry’s -- Raider wants to stick around to help it grow. Along with his friend and co-founder Andy Katz-Mayfield, Raider recently completed a $75 million round of funding to bring the company’s valuation up to $750 million. While some of that capital will go toward expanding his team, a majority of it will go toward research and development for “the next generation of razor blades,” he said.
When Raider came into the studio, I asked him if any of that R&D will focus on the half of the population that Harry’s has largely ignored: women. Without disclosing any details, Raider said they are thinking about creating a brand specifically for women, but don’t want to do anything until they are sure the product is perfect. Then he told me something surprising: In the meantime he has been experimenting with shaving his legs.
Why? This obsessed founder knows that if he is going to see success, he has to get his customers to be as hooked on the product as he is.
“I am weird. You have to be weird,” he said. “You have to be obsessed to the point where it almost posses you and it gives you the conviction that you have to go do it.”