$32 million Crowd Funding for Android/Ubuntu phone

[Gh0st93]

lol you're obviously confusing yourself with how a business work.

Thats funny I was thinking the same thing about you It sounds like you want him to pay for it then sell at a loss which would make him poor, Part of rewards of running a good business is making money. And you're blurring the line between canonical and Mr.shuttleworth  His money is not Canonical's money, that would be like asking tim cook to personally fund the building of an iPhone, And canonical does not appear to have the money to make the edge.

[kitamesume]

lol, you clearly don't understand then, you don't even know what "investment" is.

how do you think you form a business? do you make a charity booth asking for money so you can start your business? or do you fork your pocket money so you can start your business?


what are you trying to say? he owns canonical, its his own company, why wouldn't he invest money on his own company? is he retarded?

[Gh0st93]

lol, you clearly don't understand then, you don't even know what "investment" is.

how do you think you form a business? do you make a charity booth asking for money so you can start your business? or do you fork your pocket money so you can start your business?

Honestly I think it is quite unwise to tell someone what they do and do not know. Like I said you not only want him to fund this as an "investment" but then turn around and sell it at a loss that is not an investment you make an investment in hopes of getting more money not blatantly losing it, That would be a form of charity (buying something then just giving it away either for free or at a loss) How you are confusing Mr. shuttleworth's money for Canonical's money Think of it as this if you had $5 million in your personal accounts, etc. And you owned a bike store that had $150,000 in it's accounts with a net worth of $300,000 (which is quite nice seeing as how half your store is liquid assets.) would your store have $5 million as well? OR is that your personal money?

[kitamesume]

wait, so thats why you're misunderstanding things, you view a business as a different person.

*smirk* if you owned a farm that earns money, wouldn't you buy it more fertilizer so it'd earn more money?


to answer your question, yes if you invest the $5M it's asset is now $5.3M

[Gh0st93]

wait, so thats why you're misunderstanding things, you view a business as a different person.

*smirk* if you owned a farm that earns money, wouldn't you buy it more fertilizer so it'd earn more money?

Seriously please stop telling me what I do or do not know or how I view / see things, You have no idea on the subject matter so it would be best if you change the way in which you post as I find it insulting. Ok now that we are done with that the owner of a company or business is completely separate from the actual business / company( for the third time the owners money does equal the business's money. they are separate can an owner fund a business from there personal money yes which is how a lot business get off the ground but a successful business should support itself and make profit after it's expenditures.). And no if I owned a farm that made money I would not spend said profits on more fertilizer unless I had the room to store and use it, Along with the proper equipment to handle the increased load that the extra fertilizer would create and I would also need a demand for more product or viable markets to expand into.

Edit : Don't wanna sound like a dick but that's pretty much my biggest pet peeve. ( the whole you don't know this or that or You are seeing it as this.)

[kitamesume]

you dont even realize that the funds of the business and your pocket money is the same and you own both.
thats why you can't charge embezzlement against a person who owns the business.

edit: think of it this way, when you're starting a business from scratch where is the asset coming from?

[Gh0st93]

you dont even realize that the funds of the business and your pocket money is the same and you own both.
thats why you can't charge embezzlement against a person who owns the business.

Ok I seriously just think you're messing with me now...

[kitamesume]

what?

you "own" the business -> so you "own" its funds -> its your money
then if its your money -> same as your pocket money

[Gh0st93]

what?

you "own" the business -> so you "own" its funds -> its your money
then if its your money -> same as your pocket money

No you really should keep the two separate so that if the company goes under and they seize the company's "Assets" they won't take your money also I.e. you use the same bank accounts, put your money in bonds under it's name, etc. Now if we are talking net worth then yes if memory serves me right (from my business classes) then yes if you are the sole owner of the company you can add it to your net worth, If you do not have sole ownership figure out what percent you own then divide that percent from the company's net worth the answer is what you own of the company.

[kitamesume]

oh so you do understand how business works, so why aren't you understanding how investment works?

PS: business and company are two different terms.

[Gh0st93]

oh so you do understand how business works, so why aren't you understanding how investment works?

PS: business and company are two different terms.

OK so first will work on the business v.s. company thing. then circle back and get that investment thing. Hopefully with out making this to ungodly long....
A company is a group of people whom have stake in one business or multiple businesses, or a business entity with the goal of making a profit (I say this so not to be confused with a  Nonprofit organization, because they.. well there nonprofit.)

A business is an organization that deals with the trading of goods or services for other goods, services, or currency of there choice.

Ok so now onto investments ( this is in terms of finance not economics)
An investment is the purchase of some form of asset i.e. gold, silver, bonds, etc. with the hope that they increase in worth therefore you sell them and collect a profit.

[kitamesume]

actually investment is more understandable as putting money into an asset.

now since we're in tune to this, lets go back to canonical.


canonical is a software company that lacks a platform, they need the phone and their users as a testbed to boost their productivity.
in a sense if shuttleworth were to fund the portion of manufacturing expense its possible to boost success through cutting down the asking price (see buy&sell).
if they were to ditch the phone's sales profit they can further lower the price.

now lets go back to canonical's goal, they needed a testbed to boost their productivity, even if they didn't create profit through the phone's sales they'll boost the business's productivity instead.

edit: no he wont lose money from investing it, the sales from the phone is enough to return his investments.

[Gh0st93]

That is correct But asking him to fully fund that is a bit much Could he? Maybe as we're not sure what he has in liquid assets, But all investments comes with risks and $32million is a lot of risk to ask of someone. but $700 from the "fans, supporters, devs., etc." is a lot easier of a blow (financially) And apparently Mr.Shuttleworth is not willing or unable to bare the risk alone.

[kitamesume]

what risks are you talking about? that no one will buy the phones?

lets make this short, shuttleworth bought the phones to sell it to customers, ala buy and sell.
or in this case, shuttleworth paid a manufacturer for the phone "make me phones", and sell it to customers.

but in this case hes skipping the part where he needs to invest, you could say its a "free profit".

edit: think about it like this, he only needs to put $12M to get it to shrink to $500 each phone, which in turn would make it a hotcake sell.

[Gh0st93]

what risks are you talking about? that no one will buy the phones?

lets make this short, shuttleworth bought the phones to sell it to customers, ala buy and sell.
or in this case, shuttleworth paid a manufacturer for the phone "make me phones", and sell it to customers.

but in this case hes skipping the part where he needs to invest, you could say its a "free profit".

I'm speaking to if they need $32 million to get in profit Territory and he covered that himself in hopes of making a certain dollar figure of profit for himself, (remember investment $32million in for xx million worth of sales netting him xx million profit making this a successful investment) But at the moment there's only $9 million in sales so he would suffer a loss of $23million dollars. That's a lot of cash to just lose

Also Like I said just because he bought this or that or has a net worth of x, Doesn't mean he has the cash to do this.

And this "he's just asking for investors", he's not just asking for money he is selling a good (the phone) but he needs them to buy it before he makes it, so essentially he is selling a promise of good faith ( You give me this money now and later on I will give you this amazing phone.).  Also this "free profit" that's not a thing as far as I know are you saying he's getting investors and then just getting free money with no intent to follow through on orders? That is whats called fraud, there is just loss or profit.

[kitamesume]

40,000 x $800 = $32M

and yes theres a profit margin around 50%, raw material price is roughly $350 plus manufacturing costs.
but i'd consider the raw profit margin as allowance from any other form of anomalies.


i don't see it that way, he wants investors in exchange for the phones, what he gains is his company's growth, in a sense he wants a risk free profit.

"free profit" in a sense that his company nor him did not participate in any of the investment.


edit: also, theres other profits he gained in this project, Edge itself is a form of advertisement, canonical didn't need to shell out anything for this free advertisement.
even if Edge fails it already did its other purpose, to attract investors and participants.

[Gh0st93]

even if Edge fails it already did its other purpose, to attract investors and participants.

Exactly we have now turned full circle back to the initial point, If the Edge happens cool that would be great in basically every sense, If not still great publicity.

[sawakosadako]

If what you're saying is true, I would call him a genius rather than a man who can't bear to take a risk. Just as I would call Steve Jobs and Bill Gates even though they're both a thieves. Beside if we're talking about open source is all about donation (crowd-funding) so I don't see any problem in this.

An article about Ubuntu Edge battery. Damn, I would love to have one of this on my laptop. You could run a laptop up to 20 hours with this.
http://news.stanford.edu/news/2008/january9/nanowire-010908.html

[kitamesume]

the article you linked was from 2007, if it was as practical as they said it would've already been present by now.

[Bob2004]

Kitamesume, as someone who knows a hell of a lot more about business than you clearly do, I feel it is important for me to let you know that you are talking out of your arse, and Gh0st93 is, for the most part, absolutely correct.

Not to mention the fact that, why the hell would he want to pay the $32 million himself? What this crowd funding is paying for is designing and building one, limited-edition, one-off phone, which will be sold at a profit. They have clearly worked things out and judged that they need to sell a given number of units at a given price (originally this was 40,000 at $800) in order for it to make a worthwhile profit, and so they set the goal at $32m (800x40,000).

Now, this is a new untested product, from a small company which doesn't have the assets, infrastructure, skills, or money to be able to design, build, and then market a phone like Samsung, Apple, etc do. Not to mention, the phone's main selling point is a new platform which is, as yet, untested in the market. It's a big risk. So, a crowd-funding drive to see if enough people are willing to buy it for it to make a reasonable profit is a very logical idea. In fact, IMO it's a genius idea, because it also gives them a way of gauging market interest in the Ubuntu mobile platform as a whole which they intend to bring to market in the future anyway, as well as demonstrating to the phone manufacturers and networks who they need to get on board that there is a demand for Ubuntu mobile.

Even if the crowd funding fails, as seems likely, it will still have been a success for the company because it's given them some assurance that they are going to be able to successfully market Ubuntu mobile, it has generated plenty of hype and advertising for it, and it has clearly helped them gain the support they need from manufacturers and phone networks (which is why they've now been able to lower the price). A very good return on the relatively small amount this campaign would have cost to set up.

So, yes. He could pay Canonical $32m if he wanted 40,000 phones to give away as birthday presents or something, but it would be a foolish and unnecessary risk if he wanted to try and sell them.