Innovation Blog

Ounces for Pounds: When Tupperware Meets King Midas

By Shlomo Maital

    Strategy guru Gary Hamel insists that the most powerful locus of innovation is not in products or services, but in business designs and models.   

    Here is an example, taken from BBC’s Business Daily program.

     Ingredients:  Take the current high price of gold (as I write this, the price of gold is $1,092 per ounce).  Add:  the global recession, that has slashed jobs, incomes and wealth.  Merge with:  Tupperware’s famous business model, in which Tupperware plastic kitchenware is sold at neighborhood parties only. 

    Result:  Krista Waddell’s wonderfully-named business, Ounces to Pounds (pounds, meaning, British pounds, £).

    Krista organizes neighborhood parties.  Women bring their gold jewellery to it.  An expert evaluates its weight and quality and offers each woman a price. The price is between 60% and 90% of the market value of the gold content. (Recall that Krista’s company will need to smelt the gold, purify it, and put it into certified gold bullion ingots).   This is higher than woman get in a pawn shop (between 30 – 50 per cent of the market value of its gold content). Moreover, many women are very uncomfortable going into a pawn shop. 

    The average sale at these parties is $150, or  about £90. 

    In the famous legend, King Midas turned everything he touched into gold.  The results were not happy.  Krista Waddell turns gold she touches into profit.  And the results are win-win for all concerned.