The cofounders of Harry's, the shaving startup valued at $750 million, explain what most people misunderstand about being co-CEOs
When Harry's cofounders and co-CEOs Andy Katz-Mayfield and Jeff Raider went to the German razor factory Feintechnik in early 2014 after acquiring it for their shaving startup, they introduced themselves to their 420 new employees.
"What? Two CEOs? What does that mean?" Raider said the audience asked.
It didn't matter that Germany has a history of companies like Deutsche Bank and Daimler AG that have had the co-CEO structure; it's rare anywhere in the world, and the concept of two people sharing the role of chief executive isn't readily understood.
Katz-Mayfield told Business Insider that people, German and American alike, often ask how a dual CEO approach can work, assuming that it would result in time wasted constantly reporting to each other or debating every decision. Conversely, the structure has made them more efficient, he said.
Since launching in March 2013, Harry's has acquired well over a million customers, according to the company. It's raised a total of $287.1 million and is valued at $750 million. One of the main reasons that it's been able to grow so quickly is due to the way top duties are split, the cofounders say.
"People underestimate the value of debating major decisions and having a thought partner," Katz-Mayfield said. It is very rare, he said, that one of those debates doesn't yield a productive result.
He explained that he's a linear thinker and Raider is a creative one. As friends who had known each other a few years, they decided during the planning process prior to launch that Katz-Mayfield would be responsible for operations and Raider customer relations. Their roles grew with the company.
Harry's, which has roughly 100 employees in New York and 500 in Germany, has different teams that each report to one of the CEOs, eliminating the risk of employee confusion regarding the hierarchy.
Katz-Mayfield is responsible for the supply chain, finance, research and development, and manufacturing teams and typically spends three to five days each month in Germany while Raider holds down the New York office. Raider is responsible for the technology, customer experience, and marketing teams. Katz-Mayfield is also the CEO of Harry's global holding company, legally making him Raider's boss.
But it's always been a collaboration, and although the partners trust each other's strengths to run their teams, they appreciate having extra insight from a perceived equal.
"Sometimes we get really focused or fixated on something, and it's just helpful to have a cofounder to pull you up," Raider said. For example, there may be an advertising issue he's spent 30 hours thinking about over the course of the week and he'll consult Katz-Mayfield, who has spent an hour thinking about it before reaching his conclusion. "And sometimes that is the spark," Raider said, snapping his fingers, "that yup, you're right."
They know when to defer to the other because "there's just a lot of value alignment, unsaid communications," Katz-Mayfield said. "Like a married couple that can finish each other's sentences."
Raider, as a cofounder of eyeglasses startup Warby Parker, said that he and Katz-Mayfield were initially assured of the potential of the co-CEO model due to seeing how well it has worked there. Warby Parker's two chief executives, Neil Blumenthal and Dave Gilboa, remain Raider's close friends (the latter also being an investor in Harry's), and they've often discussed ways of using the management approach to maximum effect.
Raider said that he understands why outsiders can be skeptical of the arrangement.
"There are, of course, benefits and drawbacks to every model," he said. "For me, the benefits - given the complexity of the business that we're building and the fact that we really do focus on different areas of the business - have far outweighed [the drawbacks]."
"And being the CEO or founder of a company is pretty lonely," Raider added. "Having a partner who's in it with you every day and can share that is really, really helpful and valuable."