The Next Big Thing You Missed: The Startup That Makes It Easy to Launch Your Own Dollar Shave Club

Cratejoy CTO Alex Morse and CEO Amir Elaguizy (left to right). Cratejoy

Dan Scudder runs a tie-of-the-month business called Root Bizzle.

He and two buddies launched the startup last year. The basic idea is simple: People sign up for the subscription service, and each month, the company sends them a tie that suits their particular tastes. But actually pulling this off was rather complicated. After launching the operation, Scudder and his tiny team were struggling to juggle the many pieces of technology needed to make things work—including a public website, a payment system, a postage system, a shipping and tracking system, a marketing system, an analytics system—and the list goes on. He now admits that none of it quite worked as it should. “We might have even lost a customer or two,” he says.

But then he showed up at a hackathon and ran into Amir Elaguizy. Elaguizy, the CEO of a brand new company called Cratejoy, invited him to use the company’s flagship product, which was still in its testing phase. As it turned out, Cratejoy is in the business of helping the Root Bizzles of the world. It offers a single online tool for building subscription delivery services, like, say, a tie-of-the-month club.

Cratejoy

That might sound like a niche operation. But at the moment, this kind of subscription service is all the rage. Everyone from Birch Box and Dollar Shave Club to Blue Apron is giving it a go. It’s an old idea made new by the internet, and many see it as a better way to bring retail to the world, to make it more automatic while still giving people what they want. Cratejoy, which officially launched its service this month, aims to make life easier for this growing group of businesses.

Today, Root Bizzle handles its entire operation through Cratejoy. Cratejoy runs the website where people signup for the tie service. It handles payments. It sends the confirmation emails to new users. And it notifies the fulfillment center in Canada when each new tie is needed. All that remains for Scudder and his partners to do is to take a tie, put it into a box, and slap on a mailing label.

And he’s not alone. According to Elaguizy, there are already about 200 businesses using the Cratejoy platform, covering everything from a date-planning service for couples (The Fox Society) to baby clothing (A Little Bundle).

For Sucharita Mulpuru, a principal analyst at Forrester Research, there’s reason to skeptical that this market will be as success as some believe it will. “There’s not always a great universe of people who want to buy this stuff on a recurring basis,” she says. Plus, when working with a shorter cycle—like a month—manufacturing costs are higher. With more lead time, Mulpuru says, you can get the margin benefits of getting your product manufactured for cheap, with longer delivery times.

But Cratejoy can at least streamline some of the logistics. And according to Elaguizy, an additional 3,500 businesses are now on a waiting list for Cratejoy’s services. The subscription craze has only just begun.