The last five years have been tough for King of Shaves founder Will King. Down to his last £1m due to costly R&D and legal tussles over US distribution, he tells us why he hopes his new razor’s IP will mean he can reflect on the turmoil as little more than a close shave
Waiting for Will King under an east London railway arch that now serves as a photographic studio, I wonder how an entrepreneur who has banked his life, livelihood and reputation on the wet shave will react to being interviewed by a journalist sporting a three-month-old beard.
Bursting through the door dressed in a leather jacket, black jeans and black pumps, with a suit swung over his shoulder, King looks me in the eye and, in a voice so loud it bounces off the curved brickwork, booms: “Why haven’t you shaved? Unacceptable. Bloody Shoreditch!”
A smile fills his face, his arm extends and he greets me with a firm handshake. The rise in popularity of Shoreditch-esque beards, as he refers to them, is just one of many obstacles to growth King of Shaves has faced. Recession, a legal fight with former US distribution partner Spectrum Brands (owner of Remington) that saw the company’s incumbent razor – the Azor, launched here in 2008 – locked out of the North American market, and a five-year slog to develop new technology to launch its replacement, have all taken their toll.
The company King founded in 1993 in his spare bedroom and of which he now owns just over a quarter, has a three per cent UK market share against Gillette’s 84 per cent. King knows that investors are looking for returns and, with a fraction of the marketing spend of Gillette and number two in the market Wilkinson Sword – “the monopolistic duopoly,” as King calls them – he is pinning everything on Hyperglide, the first wet-shave razor that needs just water. It features a patented superhydrophilic self-lubricating cartridge that creates its own slippery hydrogel over the front shaving surface when it comes into contact with water.
“We reckoned the lube strip was dated tech but clearly you can’t just get rid of it, you need to do something better,” he explains.
The company claims the glide surface of the Hyperglide will last for six to 12 shaves or longer if used with traditional shaving products – after all, King of Shaves has nine per cent of the preparatory shaving products market, with oils and gels being the original backbone of the range.
King had his first shave with the Hyperglide’s laboratory prototype on Valentine’s Day 2011. It has taken almost three years to commercialise and scale the technology. “The only person who has taken longer to bring a product to market is [Sir] Richard [Branson] and his spaceship,” says King. He signed up to Virgin Galactic six years ago – “I’m [passenger] number 73” – and has offered to shave Branson’s beard in sub-orbit. If Branson is banking on space tourists, King is banking on the intellectual property (IP) surrounding the Hyperglide technology to help his business fly. He strokes his barely visible, one-day-old stubble like it’s an alien object, telling us that, while happy to oblige our request to arrive at the photo-shoot unshaven, it is one of the few times in two decades he hasn’t shaven. “I don’t want to do a Gerald Ratner with my business,” he quips.
No fear of that. Always the evangelical standard bearer, King whips from his pocket the Hyperglide. Every part of the product has been designed from scratch.
He hopes the razor will do to shaving what Apple did to the mobile-phone industry, pointing out Nokia’s [almost 50 per cent] share of the smartphone sector pre-iPhone. “I knew that whatever we designed, both in terms of aesthetics and performance, it would need to comfortably sit in the hand of a Jony Ive [Apple’s knighted design supremo]. We wanted a very simple look. So I had a lot of asks of my team.”
Patenting the technology has cost £1m in legal fees. To finance its development and the growth of existing products, King of Shaves (which was demerged from its parent KMI in 2008) has received £10m in investment. Japanese manufacturer Kai, which had helped develop the Azor, invested £5m, a bond issue raised £1.5m, and King’s brother, hedge funder trader Doug, invested £4m with a mixture of equity and convertible debt.
The first big trade push for Hyperglide in retail stores will run into hundreds of thousands of pounds. “But the uptake will reflect that,” he says confidently. Certainly King’s own finances have taken a pounding. “I’m down to my last million and I’m burning that now – but we’ve launched. I won’t say raising money has not ever been a problem but it’s not something you want to go harrying forever. What I should have done is gone for a punchy raise some years ago and not drip-fed it, so to speak. The current enterprise value of the business is £25m. I’ve got to now deliver the enterprise value north of 25.”
King explains that the company’s philosophy is to be virtually integrated – commanding and controlling IP, marketing and finance and working with contract partners in specific fields, such as product and packaging manufacturing. With a staff of just 15, he expects to do the same with the licensing of the patented Hyperglide IP into other product sectors.
“I am essentially turning the company into an IP-centric business. It doesn’t make sense to be vertical on all of it if we can simply license out this tech. We don’t have electric shavers but we know our technology works in that space. It’s a question of who we can do partnerships with,” he explains. Discussions are already under way with winter sports manufacturers [read skis and snowboards].
“We’ve got to leverage the IP-ness out of us,” he says. “The whole area of 3D printing will explode and within two years you will be able to go to a 3D-printing shop on the high street, ‘bip’ a file from your phone and they will 3D-print you a handle for a razor. Can a customer make his own handle for less than we can make it? Not yet but in the future, probably yes – and he’s still got to buy the cartridge. As long as we retain the IP [a razor that eliminates the need for shaving foam], we can keep the value part of the chain,” he explains.
In 2011, having secured investment, King got the ball rolling on developing the Hyperglide technology and with the Azor achieving respectable sales [six million handles and 30 million cartridges since launch], he faced the public breakdown of relations with his North American distributor, Spectrum Brands.
“It was clear they had an agenda to buy us. I guess they had sight of what we were working on with Hyperglide and were interested. If anyone was going to buy us it would be for that IP position in the wet-shave space,” says King.
With the press picking up on takeover rumours and the company valued at £40m, the board explored options for a sale but with the Hyperglide two years away from market, the numbers didn’t add up, he says. “Remington/Spectrum made an offer. We looked at it, didn’t like it, and said no. They said they were not going to distribute us in North America,” claims King.
It took until June 2012 to unwind the deal followed by a period where King of Shaves was excluded from further activity in that market until Hyperglide launched in Target stores last month. “It has been a challenging three, four, five years and I was probably at a low point this time last year when I knew I was still a year away from launch and I had £2m left,” King admits. “It’s been an emotional time. I’m 48, not 28, divorced, remarried, with a son at an expensive private school, and I am fighting in a market space dominated by two massive multi-nats.
“What kept me going was the momentum build of 20 years and the belief in myself. If it [the shaving business] was easy, everybody would be doing it. If we get Hyperglide away, it will position us as the world’s best razor and blades firm not by size but by innovation,” he says.
The Hyperglide acknowledges its British roots with a small Union Jack on the reverse of the packaging, signifying that 97 per cent of the product is made in the UK. “A lot of people think King of Shaves is American because the logo looks a bit American Fifties retro. When I started 20 years ago I wanted us to have a service-level culture of a US company,” he says.
Was he tempted to tweak the brand and up the Britishness for the US? “As much as there’s an enthusiasm for British stuff there, there is even more of an enthusiasm for stuff that is the best. Have One Direction really used their Britishness? Probably not. They have used the fact they are a bit of a reincarnated Rolling Stones, with Harry Styles as a Mick Jagger angle – bad boys to the Beatles so to speak.
“America is a very important market and I don’t know if they necessarily like interlopers coming in proclaiming about how cool Britain is. So I kept it territorially ambiguous apart from the fact that the backstory is a British guy in Lowestoft sitting playing cards with his dad, [who held a] king of spades… so king of shaves.”
And what of the wider UK business acumen? “Britain is an amazing creation nation. We’ve got a great skill in bringing and developing products but not necessarily scaling them commercially. Look at Mini, which is being scaled – and fattened up – by BMW. I find it strange that you have marques like Jaguar Land Rover and Aston Martin, with the tech and amazing innovation, but then we singularly fail in the global sale. We sell them and somebody else nails it… all the marques that we once owned and didn’t do very well are blitzing it.”
He points to recent developments in the shaving sector where New York-based internet start-up Harry’s raised $122.5m (£75m) to purchase a 93-year-old razor factory in Germany. “You try to do that here and who would you talk to on the VC/PE side? Not many. They’d say, ‘you’re competing with Gillette and you can’t do it’. To which I’d respond, ‘Shut up and go vertical my son, free up that margin and you can do what you want’.
“If someone said ‘here’s $100m Will, scale it’, I’d know what I’d do now because I’ve got an amazing product. Basically it’s about a genius marketing campaign and nailing a decent global distribution partner. Somebody who isn’t scared of P&G [owner of Gillette]. Someone like Unilever, Philips or Avon. You need to have the distribution points, you need to have the money to say ‘hey, there’s this amazing razor, why not give it a road test? And by the way there’s this amazing ad where there’s this guy sat shaving under water… Just add water.’ When people say it can’t work, I’d say phones used to have buttons, they don’t now.”
The advert he refers to is a 48-second YouTube video produced by advertising mogul Tiger Savage, who King married last year. The video logged over 11,000 views in its first fortnight. With a marketing spend of £2m, compared to King’s estimates of Nivea’s £6m and Gillette’s £10m to £20m, it is this type of viral promotion through social media that King relies on to take on the might of his larger competitors.
“[These days] simply spending on a TV ad won’t necessarily grow your marketing share… The competitive landscape has changed hugely since we launched Azor. You’ve got this massive interconnectedness that you didn’t have five years ago. Now it’s not for brands to tell people what they are or aren’t, it’s for people to tell them. You’re either rated in this world or slated – there’s no middle anymore.”
King was an early convert to dotcom (buying the web address shave.com for £25 in 1995), Facebook, Twitter and eBay. “You’ve got to have a digital dialogue now, not a brand broadcast. That’s why I run our Twitter account personally, get people engaged with the brand and spreading the word. Mobilise the masses to talk about you rather than you talking to them. Brands have lost control of marcom [marketing communications] almost entirely now to the wilds of social media, a socmed [social media] savvy place. Now the consumer is the arbiter of what’s great and what’s not. That’s helped [us] and it will help any owner of any small firm reading this who thinks ‘I can’t do it against the big boys’ . If you’ve got a clever [idea], a little bit of cash and a strategy, you can. If you get the right tone and have the right engagement strategy with people who want to help you, you’ll mobile the masses to help you grow.”
King admits that he feels a responsibility to those working for him and those who have invested in the brand. “They won’t just go on feeding my ego. There comes a time when you put up or shut up. And now it’s time to deliver.”
It was in 2003 that King trademarked the name King of Blades, saying that one day he wanted to make the best razor in the world. Eleven years later he knows that the sales of Hyperglide will truly decide whether that title rings true.