More on Vibrating Razors

So, Gillette made its announcement this morning. As I predicted a few postings back, it announced a new razor — or, as it calls it, a “powered wet shaving system for men”. The M3Power combines the three blades of the Mach3 razor with a funky electrical thingie that “delivers gentle pulses to the shaving cartridge that stimulate hair upward and away from the skin, making it dramatically easier to shave more thoroughly than ever before”.

The innovations and “urgent unmet needs” don’t end there, of course. The M3Power includes a host of other tweaks, such as:

  • A new blade coating called “thin uniform telomer”
  • An Indicator(R) Lubrastrip(TM) infused with Vitamin E and Aloe
  • An engineered handle with strategically placed gripping surfaces that enable men to shave confidently and safely at any angle
  • M3Power also is shower-safe, so men can shave wherever they prefer

The fun, however, in competing with commodities is in the economics. And here is what we have: the M3Power includes the refillable razor, two cartridges and a AAA Duracell battery. It retails for approximately $14.99. An M3Power 4-pack of refill cartridges, however, will retail for approximately $10.99; an 8-pack will retail for approximately $20.99. A ten-pack of AAA Duracell batteries is about $5.00.

So, Gillette has managed to turn the razor/blade upgrade game into a razor/blade/battery upgrade, and it went from being $10 to $15 per upgrade. Nice.

Trade as I Say, Not as I trade

Business news network CNBC said yesterday that it would severely limit ownership of individual stocks and bonds among its employees. Other than holding stock in GE itself (the owner of CNBC), CNBC managers and on-air staff are not allowed to own anything, other than mutual funds and such things.

That is a silly overreaction. Like the whole question of analysts touting stocks, is it better if you talk up stocks you own, or ones you don’t? The former makes you look like a self-interested sort with the courage of your convictions; the latter makes you look like a disinterested waffler who doesn’t believe his or her own supposed opinions.

The decision, such as it is, doesn’t apply to all CNBC employees. If you merely apply makeup or hairspray to guests then you’re free and clear to own individual securities, but you will not be allowed to own more. Am I the only one thinking we’ll soon see Joe Kernen with “Go CSCO!” sprayed into his fluffy hair?

Now Conan for NatPost

A few missives back I mentioned that the National Post, for which I write a twice-weekly business column, was being excluded from covering talkshow host Conan O’Brien’s week of broadcasts from Toronto. The paper had apparently been too noisy about the $1 million price tag being paid by Canadian taxpayers to promote tourism using O’Brien.

Well, the story is changing: According to today’s NY Daily News, NBC forced the Toronto organizers to allow the National Post to cover the absurd event again. A huge relief, I’m sure, to the folks at the Post — not.

Anyway, here is a snippet from a note to National Post editor Matthew Fraser from event organizer Peter Soumalias:

“I regret that in my haste to convey to you my feelings that I indicated your access …might in any way be restricted. You will have the same access as all media, as you should.”

Aimless Innovation & Vibrating Razors

Razors are commodities, but that hasn’t stopped Gillette et al., from trying to find ways to extract marginally more money from innovation-hungry consumers. We started down that path in fairly defensible fashion, with Trac II razors that did, demonstrably, shave better than single-bladed razors.

But that innovation merely created an arms race, so to speak. If two blades are better, then how about three blades (Gillette’s Mach3), or even four blades (Schick’s Quattro)? If consumers want and are willing to pay for more blades, then razor providers are happy to provide more blades.

The trouble is, at some point the “just add blades” game becomes a loser. After all, in the limit, to borrow some calculus, as the number of blades increases to infinity — or maybe just to six or seven — the razor’s face becomes all blade. There just isn’t enough room on a razor to keep on adding blades ad infinitum.

Which bring us to the latest news from Gillette. According to a piece in Forbes, the company on Thursday will likely announce a men’s razor with a vibrating handle and maybe even a self-heating blade. Granted, these sound like baffling innovations — what, precisely, does a vibrating handle do for me: give me more tactile feedback while shaving? — but count on Gillette to come up with a magnificently urgent unmet need that is newly met by Gillette’s soon-to-be-announced razor thingie.

Silliness aside, there is some sense here. Both new features require power, and given that you’re dousing the razor with water, power means batteries. Guess what? Gillette owns Duracell. The upshot is that the old marketing saw may finally have to change: It’s no longer that you give away the handle and make your money selling razorblades; now you give away the blade and the handle and then try to make it up on batteries. Isn’t capitalism fun?

Ellison’s Audible at Oracle

I’m trying very hard to make sense of the changes at Oracle Corporation announced today, and here is what I have come up with: Larry Ellison, the company’s founder and largest (26%) shareholder, is no longer the Chairman and CEO; he is now just the CEO. The former CFO, Jeff Henley, is now the Chairman, as well as being the CFO, at least until a successor is named. Safra Katz and Chuck Phillips, a former investment banker and a former equity analyst respectively, are both now the Oracle President.

While it might seem complicated, it is all very simple in diagrammatic form. Here is the full Ellisonian backfield maneuver:

No Conan for NatPost

My friends at the National Post (for whom I write a twice-weekly column) have been banned from media events surrounding over-rated talkshow host Conan O’Brien’s week-long sojourn to Toronto. Their sin? They pointed out that the silly trip, supposedly to goose Toronto’s tourism business, was being paid for by Canadian tax dollars:

“I think there should be a Senate inquiry,” Post chairman David Asper said …. “This guy is backed by public money and he is trying to censor the media. I think it’s utterly ridiculous.”

Private Schools, & The Tuition-Grade Correlation

A letter in today’s Financial Times takes issue with a John Kay column from a week or so ago. In the original column Kay argued that the U.K. needs to follow the U.S. model and give more money to U.K. university students, and less to U.K. universities. The letter today, from geography professor John Agnew of UCLA, makes three points:

  1. Most U.S. universities in the US, irrespective of whether they are called “private” or “public”, receive comparable amounts of funding from private and public sources when research and curriculum-development grants and contracts are included. The nominally private Johns Hopkins University, for example, receives more federal money than any other university in the country.
  2. The relative ranking of private and public universities reflects the age and social networking potential of universities as much as or more than their educational quality. [Private universities are] a prime agent of social inequality in the US, not of social mobility, recruiting overwhelmingly from the children of those who attended them previously. It is the public sector that has provided the leg-up for the less affluent.
  3. Students at the private universities tend to see themselves as consumers who, having paid heavily to attend, want commensurate grades. Their public-sector counterparts are used to taking their lumps. They expect what they think they deserve for the work they have done.

These are all interesting (if arguable) points, and I would be curious what evidence Mr. Agnew would cite to support them. For example, if we are merely playing at ad hoc empiricism, I have taught at both public and non-public schools, and yet I have not seen the evidence of the tuition-grade correlation that he cites.

Start-up Fever, says Kauffman Foundation

The Kauffman Foundation and Babson College say that the number of adults considering creating a start-up rose last year:

The share of adults considering a start-up last year rose to 11.3% from 10.5% in 2002, say researchers at the Ewing Marion Kauffman Foundation in Kansas City, Mo., and Babson College near Boston. They surveyed 9,195 U.S. adults last year. Kauffman could not say whether last year’s gain was statistically significant.

Leaving aside the obvious question of statistical significance, there is another interpretation here, assuming the result stands. The fact that a larger number of people considered starting their own business could easily be a byproduct of the larger than normal number of people abandoning job searches and leaving the work force. It would be unsurprising to find that many of these people thought about starting companies. Most didn’t, of course.

Tipping points, Tourism and the U.S.S. Midway

Will yesteryday’s permanent docking of the U.S.S. Midway aircraft carrier on the San Diego waterfront be the tourism bonanza its promoters hope? Certainly, downtown San Diego is in the middle of a massive rebuilding boom, with everything from condo complexes, to a baseball stadium, to general gentrification.

Supporters are forecasting 400,000 tourists in the ship’s first year on the harbor. At $10 per person, that is, of course, $4,000,000 in gross receipts. Brought down to a more meaningful level of analysis, that means around 1,100 people per day, or about 136 per hour visit the ship. While that might seem low, it is considerably better than any other attraction does in the area, so it would certainly require a gestalt shift — a tipping point, if you will — in the way people think about tourism in downtown San Diego.

So, here is the real question for true-blue supporters: Will the Midway create the tourism tipping point, will it be the consequence of one — or is it all merely wishful thinking?

Interview with Michael (“Moneyball”) Lewis

Writer Michael Lewis (Moneyball, Liar’s Poker) lost $20,000 during the Internet boom, is writing a sequel to Moneyball, and can’t think with suspenders on:

“After 3 1/2 years of marinating in the Internet boom, and saying it was all going to collapse, I finally, once, picked a stock and bought it in December of 1999. It was Exodus, a good name for what then happened. I bought it at $70 and it went to zero. I lost about $20,000.”