Vertical integration is hot — almost as hot, one might say, as disruption. Startups from Casper to Bonobos use the phrase, indicating a “do it yourself” approach that often yields huge growth and low overheads. But what is vertical integration? Is it an in-house design team? Using ecommerce to sell directly to consumers? In a sense, yes.
“But to Harry’s, vertical integration meant owning the entire process soup to nuts,” says Andy Katz-Mayfield, co-founder and co-CEO of the men’s grooming brand. “Including manufacturing.”
Mayfield points east — not to the SoHo shopping district across the street, but to Germany. Three hours south of Frankfurt, the rural town of Eisfeld warrants a mere two sentences on Wikipedia. And yet it’s where Katz-Mayfield and his co-founder Jeff Raider dropped $100M of VC-funded cash in 2013.
“Jeff had found Feintechnik on a European shaving blog — which, yes, do exist,” laughs Katz-Mayfield. “And it was just this incredible manufacturer from the 1920’s, an under-the-radar hero of the shaving community. At first, we only intended to hire them to make razor blades… and then 10 months later we bought the factory.”