The Web's Gift to Consumers

The following commentary is from an investment professional with Clear Harbor Asset Management who is a participant in TheStreet's expert contributor program.

NEW YORK (TheStreet) -- No, the video above is not from Saturday Night Live. It's an advertisement for a real start-up company that has raised $1.1 million in funding from some gold-plated names in the venture capital industry, like Kleiner Perkins Caufield & Byers, Forerunner Ventures and Andreessen Horowitz.

It's not on television, but you've probably seen it already because the clip has gone viral on the Internet, racking up nearly 3 million views on Google's (GOOG) YouTube and nearly 12,000 "Likes" on Facebook (at the time of this writing) since it was launched less than a week ago.

I have no idea whether Dollar Shave Club will be successful, but this video interests me as a testament to the democratizing power of the Web and its promise to challenge powerful, entrenched interests and unleash more innovation that can improve our lives and grow our economy. Over a decade ago, the stock market got caught up in a fit of irrational exuberance about how the rise of digital communications was going to change the business landscape. The result for investors back then was painful, but the wild expectations that fueled the tech bubble are, in many cases, still being fulfilled.

In spite of all the advantages that large, blue-chip companies enjoy -- their vast marketing machines and armies of lobbyists in Washington, D.C. -- the Internet is, in many cases, turning into a big headache for them and a boon to their customers. The social nature of the Web gives consumers new ways to scrutinize and criticize the products and services they're receiving from companies and the prices paid for them. New ventures that can offer better alternatives have unprecedented opportunities to harness this to their advantage, challenge market leaders and grab market share.

By offering to ship razors every month to customers for a low price, Dollar Shave Club is using technology to challenge the business models of major consumer products juggernauts, like Gillette, which is owned by Procter & Gamble (PG). For its part, Gillette is widely known as one of Berkshire Hathaway (BRK.A) CEO Warren Buffett's most successful investments, and its powerful brand and lucrative business model have long been viewed as the gold-standard for business people aspiring to build a great company.

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