The Printer-and-Cartridges Model: HP's Gillette Moment

You're about to read how HP discovered that the Razor-Blades model could be really a thing for them and changed our relationship with printers forever. This is one chapter from "Subscriptocracy" - my book exploring the subscription revolution. Read 60% here, then subscribe for the full chapter + 2 bonus chapters + insider insights on the subscription economy.

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Let’s Talk About Razors

He literally had the name of a king.

In 1881, the star of our story was 36 years old. Something happened then that changed his life. He landed a job as a traveling salesman for the Baltimore Seal Company. Even more significant than the job itself was the friendship he formed with the founder of that company, William Painter.

Painter was a restless inventor. Over time, he registered 85 patents of the most unique kind. One was for an ejector seat for train passengers; another, a machine to detect counterfeit bills. While these inventions were certainly noteworthy, Painter hired our hero to sell a different invention—something seemingly far simpler yet ingenious. It was something timeless, still thriving today: the crown cork. The same cap we still use today on beer bottles, among other things. This little invention made Painter the owner of an empire that survives to this day and is part of the prestigious Fortune 500 list.

Neither Painter nor our star could have foreseen how far this invention would go. But what they did know was that they liked each other. Over time, their friendship grew stronger, and our hero would often join Mr. Painter at his home for various gatherings. They were alike in one key way: both wanted to solve problems and make money doing it. During one of those evenings, Painter turned to his protégé, someone he’d already recognized as having entrepreneurial ambitions, and said:

“You’re always thinking about inventing something. Why don’t you try to create something like the crown cap—something that, once used, is thrown away? With every new customer you sell another cap to, you build a constant stream of income.”

The young man took that advice to heart. Inventing something disposable made sense.

Let’s fast-forward to 1895, over a century before Amazon would captivate the world. Today, Amazon amazes us with its massive catalog, but what seems revolutionary now wasn’t new at all.

It certainly wasn’t new to Aaron Montgomery Ward, who, years earlier, had created a retail giant pioneering the mail-order catalog business. Ward realized that people living in rural areas wanted the same products sold in big cities, but they could only get them through intermediaries who limited access and drove up prices.

What did he do? He cut out the middlemen. He launched a mailorder business offering an endless variety of products that rural customers could pick up at the nearest train station. With $1,600 and two partners, he published his first catalog in 1872. The project was a total success.

The catalog grew—from 32 pages in 1874 to a thousand pages by 1896—along with a captivated clientele who dubbed it the “wish book.” Businesses of all kinds paid to advertise and include their products in the catalog. By 1904, Ward was mailing out three million catalogs and entering into a fierce rivalry with another retail giant of the time. You might recognize the name: Sears.

But back in 1895, the Montgomery Ward & Co. catalog was an institution. Among its 624 pages—featuring over 25,000 products—there was a section dedicated to razors. All the models were nearly identical, with little innovation in a product segment that discouraged shaving at home. Keeping a razor in good condition was difficult. Razors needed to be honed (sharpened) using a leather strop and a whetstone. This made the process cumbersome, so most people opted to visit a barber for a shave.

There were exceptions, though. The Star Safety Razor was a worthy predecessor to modern razors. Patented in April 1887—though sold earlier —, it introduced disposable blades. The razor itself cost $1.50, and each blade cost $1. Unfortunately, this concept didn’t eliminate the need to hone and sharpen blades, but it was a step closer to bringing at-home shaving to the masses.

This was still a problem.

And a problem is often an opportunity in disguise.

This is where our hero enters the scene. “One particular morning,” he recalled, “as I started to shave, I found my razor dull, and it was not only dull, it was beyond the point of stropping and it needed honing, for which it must be taken to a barber or cutler.” It was at that moment, with the razor in his hands and his eyes fixed on it, that his invention was born.

That same morning, he left a note for his wife, Alanta. It read:

“I’ve got it. Our fortune is made.”

That young man, as I mentioned earlier, had the name of a king.

His name was King.

King Camp Gillette.

Gillette would go on to file not one, but two patents granted on November 15, 1904, detailing the functionality of his disposable-blade razor. His concept solved the problems of products like the Star Safety Razor, which was halfway between a razor and a modern blade. While the Star’s blades were reusable, sharpening them was difficult for non-experts.

Gillette’s design was revolutionary: the razor was much lighter and featured a mechanism to hold a thin blade rigidly in place. Production costs were significantly lower, moving from costly forged steel razors to ultrathin steel blades. What Gillette achieved wasn’t just revolutionizing the world of shaving—it was creating an entirely new business model.

This model, known as the razor-and-blades model, is based on selling a product at a loss (or break-even) that requires a consumable component to generate profit. The goal is to create a steady, reliable income stream by locking the consumer into a proprietary platform or tool for an extended period.

Though this model has become economically famous, not everyone agrees it’s valid. Randal C. Picker, a law professor at the University of Chicago, published an extensive essay in 2010 on The Razor-and-Blades Myth(s) explaining the history of King Gillette’s invention.

According to Picker, the model is theoretically flawed. If you make money on the blades, why not let someone else manufacture the razor, so you don’t incur losses? In fact, the base product—the razor—should be priced higher, not the consumables. “The razor-and-blade strategy doesn’t make much sense unless you can effectively lock in the relationship between the razor (the platform) and the blades (the aftermarket),” he argued.

Gillette managed to do this because his patents gave him that privilege. But Picker’s analysis suggests otherwise. The razor cost $5—a small fortune at the time, roughly a third of a worker’s weekly wage— which doesn’t align with the original philosophy of this economic model.The razors should have been much cheaper under this model. It seems Mr. Gillette wanted to profit from both the blades and the razors.

The patents eventually expired, but surprisingly, this didn’t jeopardize his idea. In fact, it did the opposite. Competition forced Gillette to change his pricing philosophy: at first, he preferred selling expensive razors with fewer blades. Only when his patents expired and competitors emerged did he begin selling cheaper razors with more blades.

What Gillette may have feared—the expiration of his patents— turned out to be what cemented his razor as a market icon.

A century later, someone took this razor-and-blades concept and applied it to a completely different business:

Inkjet printers.

A Revolution Called the HP DeskJet

The world was a very different place in the late 1980s, especially for those who wanted to print something on paper. At the time, dotmatrix printers dominated the market—slow, noisy machines that produced documents of dismal quality.

Efforts to change this were already underway. Among them was HP, which, after four years of development, introduced the HP 2680A in December 1980. This departmental laser printer—designed for office use and multiple users—made a grand debut. It was, however, enormous, comparable in size to a departmental photocopier. On the upside, it was fast, capable of printing 45 pages per minute.

Its price was just as massive: $108,500. Understandably, this steep cost deterred potential buyers, and HP didn’t sell a single unit in the first two months. It finally made its first sale in the third month. Sales improved slightly after that, but this first product was far from a commercial success, with only about 1,200 units sold by the time HP retired it.

The world stuck with dot-matrix printers a while longer.

Still, this was only the beginning of what would become a cornerstone division for HP. In 1984, the LaserJet era began, finally bringing laser printing technology to everyday users, albeit at a significant cost—$3,495 at launch.

But the real revolution wasn’t in laser technology. That same year, HP launched a printer even more important to this story: the HP ThinkJet. BYTE magazine reviewed it in its April 1984 issue with a humorous tone:

“If you’ve been looking for a dot-matrix printer that costs less than $500 and doesn’t sound like an extremely painful visit to the dentist, the HP 2225, to be marketed as Thinkjet, may well be for you. The first thing you’ll notice about this new ink-jet printer from Hewlett-Packard is that it’s amazingly quiet.”

And it was. If you’ve ever used a dot-matrix printer, you’ll understand the dental analogy. That technology was loud, and users who switched to these new printers were amazed by their near-silent operation. In noise terms, it was like moving from a combustion engine car to an electric one —an unmistakable sign that times were changing.

As groundbreaking as that was, the true revolution arrived with color inkjet printing. In 1987, HP released the PaintJet, a limited model with clunky technology that still achieved notable success. By 1988, HP launched its first monochrome DeskJet. From then on, the path was clear: the next step had to be a versatile color printer.

That model took some time to arrive, but in October 1991, HP unveiled the DeskJet 500C. Its successor, the DeskJet 550C in 1992, became HP’s first printer to use two cartridges: one for true black—no more mixing colors to simulate black—and another for color.

And then, eureka.

The Curse of Cartridges

Inkjet printers quickly became a runaway success. They were more affordable than most laser printers and had one decisive advantage: they could print in color—a fantastic feature for printing photos. For those seeking high-quality results, inkjet printers quickly became the go-to option, especially because of their compatibility with photo paper. While color laser printers—more expensive—were excellent for many tasks, they didn’t support photo paper, which only boosted the appeal of inkjet technology.

Manufacturers soon realized the goldmine they had on their hands and adopted the model that had worked for King Gillette: sell the printer at a near-giveaway price and make the real money from ink cartridges. When the original cartridges ran out—often sooner than expected—buying replacements was nearly as expensive as buying a new printer.

The idea was genius for an industry that saw its revenues soar. The problem was that imitators soon emerged. Third-party cartridge manufacturers offered perfectly acceptable and much more affordable alternatives, leading to a bizarre situation.

Printer manufacturers went to great lengths to block users from accessing these third-party cartridges. They introduced measures like embedding chips in their cartridges to verify their authenticity once inserted into the printer.

Some third-party manufacturers fought back. In a famous 2003 case, a company called Static Control reverse-engineered the chips created by Lexmark for this purpose. Lexmark sued, and although the initial ruling favored Lexmark, a subsequent legal process found that the company was abusing laws—specifically the controversial Digital Millennium Copyright Act (DMCA)—to engage in anti-competitive practices. This was a win for third-party manufacturers, establishing a legal precedent for their right to compete.

The absurdity didn’t stop there. Epson was accused—with solid evidence—of misleading users into thinking their cartridges were empty when they still had 25% of their ink remaining. The normally reserved Dutch Consumer Organization took an unusually strong stance, urging its 650,000 members: “Don’t buy Epson cartridges.”

HP wasn’t innocent, either. Their printers came with cartridges included, but in some models, those cartridges were only half-filled. Manufacturers employed other tricks, like requiring users to “calibrate” the printer before printing anything—a process that wasted significant amounts of ink.

Frustrated users—those with technical know-how, determination, and free time—sought solutions. If HP used chips to block third-party cartridges, they would create “anti-chips” to bypass HP’s DRM. This led to a cat-and-mouse game, with manufacturers setting up obstacles and users finding ways around them.

The absurdity extended to other brands. In 2020, Canon instructed its customers to hack their own laser printers because pandemic-induced supply chain issues had left them without chips for replacement toner. The manufacturer was effectively hacking itself.

This trend of restricting replacements spread to other products as well. Dymo label printers integrated DRM not only into their machines but also into the label paper they used. Naturally, hackers found ways to bypass these restrictions. Similar tactics appeared with Da Vinci 3D printers, “smart” cat cages, and more. In each case, counter-chips soon followed.

HP took things even further in March 2016. Owners of its inkjet printers received a “security update” that seemed harmless enough. But sixmonths later, it was revealed to be a ticking time bomb. In September of that year, the printers began rejecting any cartridge that wasn’t from HP. Despite the backlash, HP repeated the same maneuver a year later.

The battle was heating up, and third-party cartridge manufacturers increasingly had strong legal arguments in their favor. But HP had an ace up its sleeve.

"Want to know what happened next? We'll talk about Instant Ink and the Era of Subscription-Based Ink, and also add epilogues with coffee and the return of Mr. Gillette to the story. Subscribe to read the complete this chapter + get one more free chapters from Subscriptocracy."

And remember: the book will be 30% OFF on Black Friday! Stay tuned!