Business Models

Here’s a business model:

I’m a drug dealer. I sell you a crack cocaine pipe complete with a packet of wraps for £220. It’s a good pipe (assuming that such things exist) – burns clean and always hits the spot (OK I’m making this bit up, it’s not exactly an area of first-hand knowledge.)

To make my business plan work the packet of wraps is half high quality crack cocaine and half icing sugar. You come back to me and I’m very happy to sell you another packet of wraps. This time the price is £340, again for half high quality crack and half icing sugar.

This business model is illegal and for a number of very good reasons.

OK here is a completely different business model, nothing at all like the last one:

I am a manufacturer of consumer electronics. To be specific I’m a Korean manufacturer of occasionally explosively good consumer electronics. I sell you a printer complete with a set of toner cartridges for £220. It’s a very good printer – quiet, reliable, lovely output (I’m on safer ground here.)

To make my business plan work I put a little circuit in each toner cartridge so that at 5000 pages it says that it’s empty even if it it’s still half full. You come back to me and I’m very happy to sell you another set of cartridges, this time the price is £340. Again each cartridge is wired to show empty even when it’s still half full.

For reasons I fail to understand this model is legal, certainly in the UK.

There is of course an answer but it feels morally wrong. I just put my perfectly good printer in the bin and buy a new one complete with toner cartridges. I have also found a little chap in China who for £40 will sell me a set of chips for the cartridges. Five minutes with a junior hacksaw and some blu-tack and I can double their life.

Maybe the answer is just to throw the printer away every time the cartridges are empty. Surely it is not sustainable for the manufacturer if everyone just does this. But it doesn’t feel right…

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One Response to Business Models

  1. Duncan says:

    it is what it is though, Andrew. I’d happily pay the man in China rather than keep contributing to the landfill.

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