09 June 2009
The invention: An inexpensive shaving blade that replaced the traditional straight-edged razor and transformed shaving razors into a frequent household purchase item. The people behind the invention: King Camp Gillette (1855-1932), inventor of the disposable razor Steven Porter, the machinist who created the first three disposable razors for King Camp Gillette William Emery Nickerson (1853-1930), an expert machine inventor who created the machines necessary for mass production Jacob Heilborn, an industrial promoter who helped Gillette start his company and became a partner Edward J. Stewart, a friend and financial backer of Gillette Henry Sachs, an investor in the Gillette Safety Razor Company John Joyce, an investor in the Gillette Safety Razor Company William Painter (1838-1906), an inventor who inspired Gillette George Gillette, an inventor, King Camp Gillette’s father A Neater Way to Shave In 1895, King Camp Gillette thought of the idea of a disposable razor blade. Gillette spent years drawing different models, and finally Steven Porter, a machinist and Gillette’s associate, created from those drawings the first three disposable razors that worked. Gillette soon founded the Gillette Safety Razor Company, which became the leading seller of disposable razor blades in the United States. George Gillette, King Camp Gillette’s father, had been a newspaper editor, a patent agent, and an inventor. He never invented a very successful product, but he loved to experiment. He encouraged all of his sons to figure out how things work and how to improve on them. King was always inventing something new and had many patents, but he was unsuccessful in turning them into profitable businesses. Gillette worked as a traveling salesperson for Crown Cork and Seal Company.William Painter, one of Gillette’s friends and the inventor of the crown cork, presented Gillette with a formula for making a fortune: Invent something that would constantly need to be replaced. Painter’s crown cork was used to cap beer and soda bottles. It was a tin cap covered with cork, used to form a tight seal over a bottle. Soda and beer companies could use a crown cork only once and needed a steady supply. King took Painter’s advice and began thinking of everyday items that needed to be replaced often. After owning a Star safety razor for some time, King realized that the razor blade had not been improved for a long time. He studied all the razors on the market and found that both the common straight razor and the safety razor featured a heavy V-shaped piece of steel, sharpened on one side. King reasoned that a thin piece of steel sharpened on both sides would create a better shave and could be thrown away once it became dull. The idea of the disposable razor had been born. Gillette made several drawings of disposable razors. He then made a wooden model of the razor to better explain his idea. Gillette’s first attempt to construct a working model was unsuccessful, as the steel was too flimsy. Steven Porter, a Boston machinist, decided to try to make Gillette’s razor from his drawings. He produced three razors, and in the summer of 1899 King was the first man to shave with a disposable razor. Changing Consumer Opinion In the early 1900’s, most people considered a razor to be a oncein- a-lifetime purchase. Many fathers handed down their razors to their sons. Straight razors needed constant and careful attention to keep them sharp. The thought of throwing a razor in the garbage after several uses was contrary to the general public’s idea of a razor. If Gillette’s razor had not provided a much less painful and faster shave, it is unlikely that the disposable would have been a success. Even with its advantages, public opinion against the product was still difficult to overcome. Financing a company to produce the razor proved to be a major obstacle. King did not have the money himself, and potential investors were skeptical. Skepticism arose both because of public perceptions of the product and because of its manufacturing process. Mass production appeared to be impossible, but the disposable razor would never be profitable if produced using the methods used to manufacture its predecessor. William Emery Nickerson, an expert machine inventor, had looked at Gillette’s razor and said it was impossible to create a machine to produce it. He was convinced to reexamine the idea and finally created a machine that would create a workable blade. In the process, Nickerson changed Gillette’s original model. He improved the handle and frame so that it would better support the thin steel blade. In the meantime, Gillette was busy getting his patent assigned to the newly formed American Safety Razor Company, owned by Gillette, Jacob Heilborn, Edward J. Stewart, and Nickerson. Gillette owned considerably more shares than anyone else. Henry Sachs provided additional capital, buying shares from Gillette. The stockholders decided to rename the company the Gillette Safety Razor Company. It soon spent most of its money on machinery and lacked the capital it needed to produce and advertise its product. The only offer the company had received was from a group of New York investors who were willing to give $125,000 in exchange for 51 percent of the company. None of the directors wanted to lose control of the company, so they rejected the offer. John Joyce, a friend of Gillette, rescued the financially insecure new company. He agreed to buy $100,000 worth of bonds from the company for sixty cents on the dollar, purchasing the bonds gradually as the company needed money. He also received an equivalent amount of company stock. After an investment of $30,000, Joyce had the option of backing out. This deal enabled the company to start manufacturing and advertising.Impact The company used $18,000 to perfect the machinery to produce the disposable razor blades and razors. Originally the directors wanted to sell each razor with twenty blades for three dollars. Joyce insisted on a price of five dollars. In 1903, five dollars was about one-third of the average American’s weekly salary, and a highquality straight razor could be purchased for about half that price.The other directors were skeptical, but Joyce threatened to buy up all the razors for three dollars and sell them himself for five dollars. Joyce had the financial backing to make this promise good, so the directors agreed to the higher price. The Gillette Safety Razor Company contracted with Townsend& Hunt for exclusive sales. The contract stated that Townsend & Hunt would buy 50,000 razors with twenty blades each during a period of slightly more than a year and would purchase 100,000 sets per year for the following four years. The first advertisement for the product appeared in System Magazine in early fall of 1903, offering the razors by mail order. By the end of 1903, only fifty-one razors had been sold. Since Gillette and most of the directors of the company were not salaried, Gillette had needed to keep his job as salesman with Crown Cork and Seal. At the end of 1903, he received a promotion that meant relocation from Boston to London. Gillette did not want to go and pleaded with the other directors, but they insisted that the company could not afford to put him on salary. The company decided to reduce the number of blades in a set from twenty to twelve in an effort to increase profits without noticeably raising the cost of a set. Gillette resigned the title of company president and left for England. Shortly thereafter, Townsend & Hunt changed its name to the Gillette Sales Company, and three years later the sales company sold out to the parent company for $300,000. Sales of the new type of razor were increasing rapidly in the United States, and Joyce wanted to sell patent rights to European companies for a small percentage of sales. Gillette thought that that would be a horrible mistake and quickly traveled back to Boston. He had two goals: to stop the sale of patent rights, based on his conviction that the foreign market would eventually be very lucrative, and to become salaried by the company. Gillette accomplished both these goals and soon moved back to Boston. Despite the fact that Joyce and Gillette had been good friends for a long time, their business views often differed. Gillette set up a holding company in an effort to gain back controlling interest in the Gillette Safety Razor Company. He borrowed money and convinced his allies in the company to invest in the holding company, eventually regaining control. He was reinstated as president of the company. One clear disagreement was that Gillette wanted to relocate the company to Newark, New Jersey, and Joyce thought that that would be a waste of money. Gillette authorized company funds to be invested in a Newark site. The idea was later dropped, costing the company a large amount of capital. Gillette was not a very wise businessman and made many costly mistakes. Joyce even accused him of deliberately trying to keep the stock price low so that Gillette could purchase more stock. Joyce eventually bought out Gillette, who retained his title as president but had little say about company business. With Gillette out of a management position, the company became more stable and more profitable. The biggest problem the company faced was that it would soon lose its patent rights. After the patent expired, the company would have competition. The company decided that it could either cut prices (and therefore profits) to compete with the lower-priced disposables that would inevitably enter the market, or it could create a new line of even better razors. The company opted for the latter strategy. Weeks before the patent expired, the Gillette Safety Razor Company introduced a new line of razors. Both World War I and World War II were big boosts to the company, which contracted with the government to supply razors to almost all the troops. This transaction created a huge increase in sales and introduced thousands of young men to the Gillette razor. Many of them continued to use Gillettes after returning from the war. Aside from the shaky start of the company, its worst financial difficulties were during the Great Depression. Most Americans simply could not afford Gillette blades, and many used a blade for an extended time and then resharpened it rather than throwing it away. If it had not been for the company’s foreign markets, the company would not have shown a profit during the Great Depression. Gillette’s obstinancy about not selling patent rights to foreign investors proved to be an excellent decision. The company advertised through sponsoring sporting events, including the World Series. Gillette had many celebrity endorsements from well-known baseball players. Before it became too expensive for one company to sponsor an entire event, Gillette had exclusive advertising during the World Series, various boxing matches, the Kentucky Derby, and football bowl games. Sponsoring these events was costly, but sports spectators were the typical Gillette customers. The Gillette Company created many products that complemented razors and blades, including shaving cream, women’s raincluding women’s cosmetics, writing utensils, deodorant, and wigs. One of the main reasons for obtaining a more diverse product line was that a one-product company is less stable, especially in a volatile market. The Gillette Company had learned that lesson in the Great Depression. Gillette continued to thrive by following the principles the company had used from the start. The majority of Gillette’s profits came from foreign markets, and its employees looked to improve products and find opportunities in other departments as well as their own.