Filtered for capital

08.35, Wednesday 18 Mar 2015


An Investor’s Guide to Hardware Startups. Super good, and long… one bit I’ll pick out:

Production cycles take time, usually 8-12 weeks. And if a company runs out of stock in between two batches, it can’t ship, so it can’t sell. The only way around it is to increase batch size. So instead of 3,000 units, the company needs to produce 15,000 of them at one time. And that takes working capital, which you, as an investor, need to provide in the initial phases.

Working capital, working capital, working capital. Working capital is a terrible use of equity financing.

The best model to take care of working capital is that investors invest into the first batch and immediately help the company get a working capital credit line from a bank. It makes little sense to finance additional batches with equity.

It’s important to get a credit line because growing organically isn’t possible – even if half your sell-in price is margin, you can only afford to grow your batch size at 50% per cycle… and whether it’s credit or re-investing the margin, all that growth incurs risk, because the items aren’t pre-sold.

There are double binds all over the place here. For the first batch, Kickstarter makes sense… but Kickstarter is infinitely more valuable as a buying community, so you cut margins to the bone. Which means there’s no possibility of re-investing for growing future batches. And in any case, growing batches incurs risk, which means your company has internally misaligned interests.

The only way I can see cutting this knot is to have a supply chain which is inside the distribution window: Where it’s possible to receive a cash order and supply it, all before the consumer gets bored and walks away.

The two other problems where physical units are required should be figured out and costed separately: The additional cost and risk to meet the need for immediate gratification; the marketing benefits of seeing and touching items on a shop shelf.


Cory Doctorow explains Ronald Coase.

Ever since I encountered Coase I’ve been seeing everything through a Coase lens.


Organizing is a kind of tax on human activity. For every minute you spend doing stuff, you have to spend a few seconds making sure that you’re not getting ahead or behind or to one side of the other people you’re doing stuff with. The seconds you tithe to an organization is the CoaseCost, the tax on your work that you pay for the fact that we’re human beings and not ants or bees or some other species that manages to all march in unison by sheer instinct.



Labyrinth by Mark Wallinger. Art across the capital.

Wallinger has created 270 individual artworks, one for each station on the network, each one bearing its own unique circular labyrinth, but with a graphic language common to all. Rendered in bold black, white and red graphics, the artworks are produced in vitreous enamel, a material used for signs throughout London Underground, including the Tube’s roundel logo, whose circular nature the labyrinth design also echoes.

The labyrinths are sometimes in ticket halls, sometimes on a platform, sometimes (Euston Square) tucked in the little room by the lift.

I’ve been collecting em on Instagram as I spot them – here they are.

Yesterday I got to 50! 220 to go.


10 extinct jobs.

Lamp lighter.

Lector Who Entertained Factory Workers.

Switchboard Operator.

I have to say, I do feel slightly indignant that I have to dial phone numbers myself. I also feel indignant that I have to sort my recycling. Surely this is the thing that systems should do?

And by systems, I mean organisations that might include people, where the people are paid properly.

The cost shouldn’t be pushed onto me - and you - and everyone else.

So I feel tempted to operate a kind of vanguardism – a refusal to cooperate, and an insistence on acting in a way that forces the system to improve. So: simultaneously insist on recycling being done, but deliberately putting it into the bins mixed so the problem is pushed back onto the system.

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