TechExec 4: Razor-Blade Strategy, Eisenhower Matrix, and the Gold Rush in Space

(Total read time: 8 minutes)

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Welcome to the 4th edition of TechExec - the newsletter that turbocharges your growth to become a Tech Executive!

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Now to the main content …

As promised, here are this week’s BLTs:

💼 B - a Business concept/theory/story

💝 L - a lifestyle advice

🤖 T - a Tech explainer

💼 B - Razor-Blade Strategy

Razor Blade Strategy is a classic marketing tactic that has been used for years by companies in the shaving industry, hence the name. It is also known as the Bait-and-Hook Strategy, and the Loss Leader Strategy. The idea is simple: sell the razor handle at a low cost or even give it away for free, and then make up for it by charging a premium for the replacement blades. It's a bit like giving someone a free puppy and then charging them an exorbitant amount for the dog food.

The razor blade strategy is not just used in the shaving industry. Some other examples that come to mind include printers and cartridges, Polaroid cameras and films, coffee machines and pods, gaming consoles and titles, and eBook readers and eBooks.

Now, let's talk about the pros and cons of this strategy. On the one hand, it's a great way to get customers hooked on your product. If you give them a free razor handle, you can gently (or forcefully) nudge them to buy your replacement blades, which can lead to repeat business and higher profits. Plus, by selling your blades directly to customers, you can cut out the middleman and keep more of the profits for yourself.

But on the other hand, there are some downsides to this approach. For one thing, customers can quickly become disillusioned with the high cost of replacement blades. They may feel like they've been tricked into buying something that's ultimately not worth the price. This happened to me when I realized Nespresso coffee pods are three times the price of regular coffee on a per-pound basis😲.

Additionally, the razor-blade strategy can be difficult to pull off successfully. You need to have a high-quality product that customers are willing to pay a premium for, and you need to be able to keep up with demand. It also gives an easy talking point to your disruptors, like how Harry’s, the direct-to-customer shaving startup, made high Gillette blade prices the core of their marketing message.

💝 L - Eisenhover Matrix - Urgent vs Important

I have not seen a more stellar resume in my life than that of the 34th US President, Dwight D. Eisenhower. Have a look:

• Five-Star 🌟General ✅

• Supreme Commander 🪖of the Allied Expeditionary Force in WWII ✅

• Supervised Operation Torch (1943) and the Invasion of Normandy (1945) ✅

• Led construction of the Interstate Highway 🛣️System✅

• Created NASA🚀✅

• Signed into law the first major piece of civil rights legislation since the end of the Civil War ✅

• Ended the Korean War⚔️✅

• Added Alaska and Hawaii into the union ✅

• Managed to keep the Cold War from turning hot♨️✅

So how did he find time to do all of that? The answer is ruthless prioritization.

While Eisenhower talked about this in his speeches, it was several years later when Stephen Covey (the author of “The 7 Habits of Highly Effective People”) repackaged Eisenhower's insights into a 2-by-2 framework, now known as the Eisenhower Matrix (also known as the Time Management Matrix and the Urgent-Important Matrix).

This powerful tool helps you categorize your to-do list based on two factors: urgency and importance. Tasks that are both urgent and important should be tackled first, while those that are neither can be put on the back burner. The beauty of the matrix is that it helps you avoid the trap of constantly putting out fires and neglecting important long-term goals. You can finally say goodbye to procrastination and hello to productivity.

🤖 T - Gold Rush in Space

With the earth's resources rapidly depleting and the demand for minerals and rare elements on the rise, the idea of mining asteroids and other celestial bodies seems like a viable solution. The concept of space mining involves extracting precious metals, minerals, and other resources from asteroids, comets, and other celestial bodies that orbit our planet. The potential for space mining is immense, with trillions or even quadrillions of dollars worth of minerals and resources up for grabs. But wait, is this even real? Or just a fantasy? The answer is somewhere in the middle.

Space mining is not just a futuristic concept; it is already being explored by various private companies and space agencies. The process involves identifying potential targets, sending robotic spacecraft to mine the resources, and returning them to earth for processing. The most commonly targeted resources include water, platinum, gold, and rare earth elements. These resources have the potential to revolutionize the way we live and work, from powering our homes and cars to building the next generation of technology.

So what needs to happen to move past the exploration phase? An ecosystem needs to be available comprising of players including those who will

• Obtain the data required to locate valuable resources in space

• Identify the concentrations of material available

• Drill, excavate, extract and purify the minerals

• Provide power, communications and the transportation

• Fund the expeditions

• Come up with legislations and enforce them

While space mining may seem like a lucrative and exciting prospect, it is not without its challenges. Additionally, there are ethical concerns surrounding space mining, as some experts argue that the resources in space should be shared equally among all nations irrespective of their participation in the mining process.

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Gaurav