Re:How Casinos Enable Gambling Addicts
by Bartweiss on Thursday November 17, 2016 @01:15PM
(#12979874)
Addictive ones only, basically.
There's two things restraining other businesses from profiting like this.
First, lots are basically fixed-consumption - if you buy a vacuum cleaner, there's effectively no chance of selling you another one next week. Across all your customers, you have an effectively flat purchase rate. So all you can do there is improve margins and reach unserved customers (and maybe pursue planned obsolescence).
Second, most unbounded-consumption businesses have normal distributions of consumption. People who buy string cheese maybe eat an average of five a week, with a low-SD normal distribution around that. So you market your cheese sticks to your prototypical customer to maximize profit.
Any power-law business sells to whales. That means drugs and gambling, but I should also observe that enterprise sales count. If Proctor and Gamble will pay 10,000X as much for your security consulting as a local pizza shop, you're selling to whales.
There's two things restraining other businesses from profiting like this.
First, lots are basically fixed-consumption - if you buy a vacuum cleaner, there's effectively no chance of selling you another one next week. Across all your customers, you have an effectively flat purchase rate. So all you can do there is improve margins and reach unserved customers (and maybe pursue planned obsolescence).
Second, most unbounded-consumption businesses have normal distributions of consumption. People who buy string cheese maybe eat an average of five a week, with a low-SD normal distribution around that. So you market your cheese sticks to your prototypical customer to maximize profit.
Any power-law business sells to whales. That means drugs and gambling, but I should also observe that enterprise sales count. If Proctor and Gamble will pay 10,000X as much for your security consulting as a local pizza shop, you're selling to whales.