Everyone has bad days at work. For Jeff Raider, his worst day just happened to be his wedding anniversary.
Only two months after launching Harry's in 2013, Raider recalls, razor maker Gillette slammed the company with a lawsuit, alleging it had stolen Gillette's patent. "It was the Saturday of my wedding anniversary, and I was driving to get away with my wife for the weekend, when I got a call from my co-founder that we'd received this letter from Gillette," Raider told me, onstage at the Collision Conference in New Orleans last week.
"More than just upsetting me on my anniversary, we were such a young company," Raider continued. "Even though we knew these allegations were baseless, we were worried that it could disrupt the growth that we were having or put the entire company at risk."
Instead of letting it derail him, however, Raider fought back. He and co-founder Andy Katz- Mayfield were able to demonstrate that Harry's--which makes artfully designed, more inexpensive razor blades that it sells online via subscription--did not actually copy the Gillette patent, he says.
In less than a week, Gillette dismissed the lawsuit, despite having demanded a jury trial per the initial letter. In the time since, Harry's has even swiped back at Gillette; in January of last year, the brand's lawyer sent Gillette owner Procter & Gamble a letter of its own, accusing the company of using false data to imply in an ad campaign that Harry's customers ultimately drop off and return to Gillette razors. (A Gillette spokesperson told Fast Company that its data was accurate and independently verified, though it's worth noting that an August 2016 report from Slice Intelligence found that Harry's first-time online buyer retention was 14 percent greater than Gillette's.)
"We stood up to them, and have continued to do so," said Raider, noting that the gulf between Harry's and Gillette is vast. "We feel like we're offering something different, and we have lots of loyal customers."
A Formative Moment
Perhaps ironically, Raider says that the cease and desist letter was a real turning point for the company. "We realized that the fact that it happened meant that we were having an impact on our market," he said onstage. What's more, he added that would-be customers actually seemed to empathize with the company's David-versus-Goliath attitude, especially as it played out publicly.
"I think people identify with the entrepreneurial journey of us trying to go and change this industry for the better," he said. Rather than seeing the brand's reputation tarnished, the lawsuit, Raider noted, led to an outpouring of support and customer growth. The company claims it quintupled revenue between 2013 and 2014, attracting more than one million customers by 2015. Today, it counts more than three million subscribers.
To be sure, Harry's is still nowhere near Gillette when it comes to scale. The incumbent counted 54 percent of the market as of 2016, though that was down from as much as 70 percent in 2010, according to 2017 data from the research firm Euromonitor. Last year, Gillette began across-the-board price cuts averaging 12 percent, in response to competition from Harry's as well as from Dollar Shave Club, which sold to Unilever for $1 billion in 2016.
Still, the startup seems to be growing substantially. In January of this year, Harry's closed a $112 million funding deal, and said it would be expanding into new products in the months to come. Raider also confirmed that the company is on track to become profitable sometime in 2018.
"We have used these competitive threats as a source of strength," Raider added. "What's been amazing is that people realized we are trying to be disruptive, and that's how big companies tend to respond."