One of the most profitable and sustaining business models is the razor and the blade concept. In this model, there exists a synergistic coupling of two compatible products, one dependent upon the other, requiring a capital purchase (the razor) and then the continuing need for necessary consumable products (the blade), which is of course where all the money is.
The key to sustaining this model is the continued reinvention of both the razor and the blade. As consumers, we know this. Yet, because of our need to always have the next new thing, we invariably get sucked into the razor and blade syndrome.
I know this because I just traded in a perfectly good mach 4 razor for a new mach 6 model with a AAA battery in the shaft designed to create a vibrating effect that supposedly gives me a closer, smoother shave for a better look. I need all the help I can get, so I am compelled to move up. I can’t wait to see what attachments they come up with. Anyway, I paid ten bucks for the vibrating razor and twenty bucks for a package of blades, which don’t seem to last much longer. I’ve already had to replace the battery because I forgot to turn it off, so I’ve got all the consumables going.
Manufacturers used to give away the razor to get the blade business — cell phones to sell the minutes and then smart phones for the data. Then companies like Apple realized they could make way nicer razors and sell them for more, partnering up with another company that sells the blades and thus creating a coalition that gives both brand leverage.
I’ve taken on yet another blade dependency with the purchase of my new Apple iPad and corresponding data plan. Originally I signed up for the basic data plan of 250 MB each month for $15, which seemed adequate as I’m a moderate user. The other option was the unlimited data plan for $25. I soon found that I was woefully under capacity as I ran out of data about half way through my allotment period and my 3G access was cut off. I was told I must buy more data. So I went back to check out the unlimited data option and it’s gone. The most I can get is 2 GB per month. The razor companies have oversold the blade capacity and can’t keep up with demand, so it’s rationing. Data has become the new currency.
It’s being gobbled up in massive quantities by big wireless, Internet and media companies: what the geeks are calling Big Data. Google processes 24 petabytes of data each day — a petabyte being the new standard measure of data consumption, equal to one quadrillion bytes or 1,000 terabytes. AT&T, where I’m buying my iPad data, transfers 19 petabytes through its networks daily. Content is also consuming more data, like HD movies with heavy CGI or 3D effects. The movie Avatar took over a petabyte of local storage.
So how big does big data get? And where does it go from here? Well, it’s exabytes, zettabytes and then yottabytes. That should get us all back to the unlimited plan.
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