THE NEW INDUSTRIALISTS
THE SMELL OF dying unicorns is in the air on a gray February day in downtown Manhattan. The Nasdaq has just fallen to a 15-month low, and e-commerce company Gilt Groupe, once valued at more than a billion dollars, was recently unloaded in a fire sale for $250 million. Jeff Raider, co-founder of online shaving startup Harry’s, is trying to diffuse the jitters permeating his company’s loft space. “Last year was the year of the unicorn,” he says to the room of mostly 20-something employees. “This,” he adds, “is the year of the cockroach.”
Harry’s, Raider argues, is better prepared than most for a future of less magical, and more earthly, stamina. “Times are about to get harder for e-commerce companies,” he says. “But I think it’s helpful to be aware of the fact that we have a real business. We are making real money.” Plus, the 35-year-old reminds them, “we have a factory.”
Behind this fact lies an unlikely story of disruption that pairs blue-collar craftsmanship with a VC-fueled business model. Four thousand miles from the Harry’s loft in SoHo is a sleepy German village called Eisfeld, population 5,600. A three-hour drive from Frankfurt, the hamlet is best known for its medieval castle. But what’s put Eisfeld on the map is Feintechnik, a factory that’s been churning out double-edge razor blades since 1920.
Eisfeld has had it particularly rough since World War II ended, when the Soviets drew the Iron Curtain along its southern boundary, leaving the town trapped on the wrong side of history, and the factory in the hands of East Germany. The new communist regime threw Feintechnik’s founder, charged with being a “brutal, capital-hungry businessman,” into a prison camp. Following unification, the factory was bought by an Italian entrepreneur in 1991. In 2007, it was sold to two European private equity firms. By then, Feintechnik had become the behind-the-scenes razor-blade maker for dozens of mostly European retailers and distributors.
Raider and his Harry’s co-founder, Andy Katz-Mayfield, first heard about Feintechnik in late 2011. At the time, the two MBAs were gearing up
