Business model

[msimon@xxxxxxxxxx (M. Simon)]

>Nonetheless he was saying the last time that I saw him how betrayed
>he felt by the whole electronics industry having lied to him and
>everyone for all these years about the transistor models. Damn it,
>if they don't know they shouldn't just make something up.  I felt
>that many people had missed the true humor in his joke at Forth
>day that no one in the world knew this except for the people in
>that room.  
>(or those who have read http://www.UltraTechnology.com/fsc98.htm
>regarding transitor models)

Why doesn't Chuck publish his findings? Might be able to garner 
some credibility.

>Business flakes like Chuck and I are exactly the problem.  Chuck was 
>questioning if he needed to change his image to be successful in business.  
>Did he need to wear a three piece suit to succeed?  Was it that or retire
>to Montana?  Every time he would say should I do that Min would say
>Oh of course not!  As if he would rather be dead.  What a flake.

Its not image. 

Its completing projects on time and under budget.

I'm a typical hippie flake at work. I set my own time schedules 
and come and go as I please. All my flakiness is forgiven when I 
deliver on time and under budget.

When you announced DYOP prematurely I moved heaven and earth to get you a 
'working' prototype a month after your announcement. Shipable product
the following month. Now admitedly I had a problem getting the 'Humboldt'
unit to you in a timely fashion.  But I believe those problems are 
behind us.

All customers who have ordered to date now have their units.

==============================

>>What we are missing is a working business model.
>
>I will post the various models that I have considered and a very
>brief history of the funding and business model of UT.
>
>When I started I owned 100% of my idea.  I went to Chuck and said
>I would like to work with you and make a custom vlsi chip.  I was
>considering doing it myself in PGA just as you have after studying
>what you have done but I love your idea of going to custom VLSI and
>tweaking it for a new level of custom.

This is the ownership model of business. Very good if you have $$$$$$.

The non-ownership model is better if you have no $$$$$$$$$$.


>I know many people who have started many companies and succeeded
>with some into multi-million dollar enterprises.  I asked their
>advice.

Forget the BIG  DEAL. Its a Chimera.

>I ordered a package to encorporate and sell stock certificates.
>I was ready to do it but everyone advised me that it was not
>the way to go.  Because I was a one man company with no track
>record as a consultant no one would invest anything. I would
>need someone with conventional experience, someone with a
>sucessful business managment track record to get investors.
>
>I asked these people if they were interested in stepping into
>that role and writing their own ticket.  no luck.  I asked
>if they knew of any investors who might be interested and
>they said yes but you would have to give up all control and
>almost all interest and agree to work on what they wanted
>for a long term contract etc and advised me that I wouldn't
>want to do it.

If you give your stuff away you lose all control and all interest.

But you need not become an indentured servant.

If your ideas catch on you will have a name for your self. If not
you are no worse off than you are today.

I have been looking at this for a long, long time.

I have decided to join the Free economy.

>I had enough to get going and make chips but production
>was the problem.  You needed at least $150,000 after development
>to get your price down to $15 per chip.  That means that was
>not enough to compete again FPGA on general purpose stuff let
>alone on things the FPGA were optimized for.  It would need
>more than 10K chips total to fly.  I figured I could pay for
>100 at most myself.   Still a 100*F21 would be way cool.
>
>I went to my family who have money and asked if they were interted
>in investing or loaning money out of planned inheritances.  My
>Mother said that it was not a problem and that I should not worry
>about it.  She was convinced that this project would make me famous
>and wealthy. My father said that he would prefer to give me the
>money for fab runs and production of 10K parts out of my inheritance
>rather than wait to let it be eaten up in taxes before his death.
>He also advised me that I should reject the financing that had
>been offered because I had this adequate back up financing with
>no strings attached.
>
>As the years dragged on even my family lost confidence.

Late product. Over budget.

>As the years dragged on I got stuck in the business model that I
>didn't really want namely I did everything and paid for everything
>and got paid nothing more than occasional bread and water.  

How would giving everthing away cost you any more than you already paid?

> I had to sacrifice and the strain resulted in divorce and bankruptcy.
>But I kept on with F21.  I became an employee of iTV and then
>they bought my contract with Chuck without my being told.  I continued
>to work for them as did Chuck under the conditions of those contracts.

Sounds like slavery to me.

>My mother was dying slowly and the end came very quicly.  After her
>death my step father made it very clear that he had lost most of 
>the inheritance in bad investments and much more in health related
>payments, there was some money there but that he felt it would
>be irresponsible to release it to me because like the other people
>in my family they worried that I would spend it on chips that I
>couldn't eat and that no one else believed in.

We must first create a market for the chips. Then selling them will be easy.

We need more applications and users.

>My father had paid for part of a couple of the fab runs.  It did make
>two runs possibleo but then he became worried that I was working too 
>many hours and never going to ever make any money so the best way to 
>help me was to not return my calls or mail for a year.  When I got
>through to him he advised me to give up the chip thing and get
>a 40 hour a week job where I can retire.

Not till you retire. Just till you learn what businesses want and 
make a few $$$$.

>Then I went through the problems with iTV but at least got some
>chips.  I was nearly homeless now like everyone elese and could
>either go out and find a regular job like everyone else except
>Chuck and a few others I had the option to sell a few F21,
>test the rest myself and maybe make more and more and more.
>Maybe I could find someone would would not say that they
>could not do business with someone who has to work 100 hour 
>work weeks without vacation for years or not have a phone etc.

You attitude doesn't inspire confidence re:business.

Its not the number of hours, what you sacraficed etc. You have
no record of delivering what the customer wanted - on time,
under budget, at a profit. Effort alone, or even results are
not enough.

>Well I made it a couple of months until a Bank computer siezed
>$1000 of working capital when I was really poor.  That describes
>the last three months.  You have all heard this before. I have
>now sold a couple of chips so I have some hope again.
>
>Now my options are:
>
>1 Encorporate and sell stock (profit or non-profit)
>2 Find partners
>3 sell UT w/ or w/o a contract with the
>4 sell a few chips and eventually find the guys who want 10K a week
>5 change professions

 6. Start a marketing campaign. Create a demand. Listen to the customers.

How do you intend to create demand?

>Of course this precludes my having to go to jail for internet fraud.
>Now I sold a couple of chips and if I sell a couple of more I will
>get buy for a while.
>
>I could most likely get buy with Tee shirts and posters it seems
>from all of the enthusiams in the group and in c.l.f recently.
>It was fun telling Chuck about all the flames I let a couple of
>weeks ago on the net.
>
>Now I would love to do #1 on the internet and you know at this
>point I think I could.  I would just post the most recent version
>of the history and business plan (half done) and do the stuff
>to setup a button to sell stock.  

Have you checked with the SEC? You could be looking at another problem.

>If people got it I could do
>more management, and more programming and engineering, and less
>of the stuff (read survival) that takes up most of my time. This
>would be my first choice if I thought it would work.  

Won't work. Not enough FORTHers with the $$$$$$ to help.

$150K - for fab. Plus you need a management team. And they 
likely will want to get paid - sales or no. Another $300K (3 people,
one year). Then offices. Another 50 - 100K. Ad budget. $150K.
Refrence boards $20K (got to give some away to get press).

Probably $1 -$2 million for a real business. Add an extra fab run or three
and there goes another $million.

How in the h... can you raise this kind of $$$$$ with no market?

>My present business model is that I don't own all the currently
>(in my mind) issued stock.  I owe several people stock and have
>already given them working F21d chips.  I owe them the chips
>just as I owe them stock because they have helped me by investing
>their time and support.  I owe everyone in this list, some in
>particular lots of chips for your encouragement.  It has been
>difficult doing the impossible techincally, financially and
>socially (regarding friends and family) and about all the
>encouragement I get is from people in this list.  I consider
>everyone in this list a stockholder, and some close to qualifying
>for more chips F21d chips than I have already given away.  You
>know if I get a job or get some money I can have more made.
>(I just need to find the right fab and have money and ... )
>
>If I felt that people might invest in stock in a documented
>enterprise with a ten year history and record of someone 
>believing in it enought to invest a lot of time and money
>and feel that the terms of the stock offer are such that
>investment is worth a gamble then I could be persuaded to
>setup such a thing.  I would post the associated documents
>and do the proper legal stuff 
>
>The perfect solution of course would be non-profit with Chuck
>and Michael and I as employees and eventually as fellows if
>the thing ever made more money than we need.  I would prefer
>this solution, or #2 as long as we don't have to give the
>reigns to some business type.

The only way to prevent this is to give the stuff away. Then no one can
control it.

Otherwise the business guys ALWAYS get control.

>I could also deal with a for-profit corporation since I
>would be the major stockholder and presumably have some
>real paying job as well.  I would have enough control to
>see that Chuck and Michael were convered if it ever took
>off.  Michael and Chuck are the next largest stockholders
>after me when I issue Ultra Technology stock.

I have given up on profit. I just want to profit my fellow humans.

Guess what? Despite giving away everything I am beginning to turn a profit.

>However either of these represents a huge risk since we all
>know the track record is dismall and the situation is grave.
>The risk is very high and the potential reward is also.

What is the risk to reward ratio.

Businessmen prefer low risk, high reward situations.

Even a low risk, low reward situation is better than a high risk, 
high reward situation.

>I would be thrilled with option #2 as long as they are human.

Fat chance.

>#3 make an offer.
>
>#4 I have been told I will sell one more at least.  I think
>   I should start raising the price.

Wrong direction. Give them away. In boards, working. 

That mention we got in Don Lancasters column cost me a complete
DYOP set. Marketing has its costs. (at leat I paid wholesale :-)

>#5 almost happened last week.  The offer for a vacation and
>the enthusiasm and thought that my honesty on  the internet
>caused suprised me.  I was really really enthused before Humboldt
>Bank siezed all funds and shut me down again, this time
>threatening criminal prosecution if I complained.

A lot ofpeople like you. Whether you can market or not.

>But I had a great vacation and posted a report at my web site with
>links to lots of great artists.  Check it out.
>
>Chuck said the contracts with iTV become invalid if they go out of
>business or default on the terms such as paying a salary to him.  So
>their status in that sense is somewhat uncertain.  The status of

Leeches and vultures.

They don't call it vulture capital for nothing.

Simon
Simon - http://www.tefbbs.com/spacetime/index.htm