Discussion Forums > Technology
$32 million Crowd Funding for Android/Ubuntu phone
Gh0st93:
--- Quote from: kitamesume on August 13, 2013, 07:59:31 PM ---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.
--- End quote ---
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 ;D 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:
--- Quote from: kitamesume on August 13, 2013, 08:59:48 PM ---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".
--- End quote ---
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.
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