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  1. #221
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    This part of the Kickstarter update is entirely plausible

    The industrial park we set up shop in near the port of Los Angeles was sold in July to a new owner with a new property management company, who has raised the rent considerably without offering a new lease agreement.

    The same situation happened to me. Complex was sold and rent was increased 47% and it was 6 months before any of us in the complex who's leases had expired and were on month to month to leases were offered new leases. This has also happened in at least two other complexes I know of locally.(La Habra/Anaheim/Compton)

    Whether this is what actually happened to Swissmak who the h*** knows. But not out of the realm of possibility.

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    Quote Originally Posted by boosted View Post
    Lots of speculation about how well setting up a factory in Taiwan is going to work. I read his statement as code for "We found a manufacturer in Taiwan that is willing to do the majority of production".
    Possible that the manufacturer in Taiwan IS THE INVESTOR.

    Quote Originally Posted by drcoelho View Post
    The key question I have is how deep are his investors pockets. If he's got solid financial backing, he can make this work.
    It's still just a hobby machine. Slim margins without much growth potential.

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    Quote Originally Posted by triumph406 View Post
    This part of the Kickstarter update is entirely plausible

    The industrial park we set up shop in near the port of Los Angeles was sold in July to a new owner with a new property management company, who has raised the rent considerably without offering a new lease agreement.

    The same situation happened to me. Complex was sold and rent was increased 47% and it was 6 months before any of us in the complex who's leases had expired and were on month to month to leases were offered new leases. This has also happened in at least two other complexes I know of locally.(La Habra/Anaheim/Compton)

    Whether this is what actually happened to Swissmak who the h*** knows. But not out of the realm of possibility.
    Plausible, but doesn't tell the whole story.

    Most landlords will charge market rate. If you're getting a steal of deal through a dumb landlord or a sublet, consider that gravy. Reality will set in eventually and you'll pay market rent. Few, if any landlords will charge you significantly above market.

    You can't base future financial predictions on past luck.

  4. #224
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    I think it's much more likely that he sold the design to a 3rd party MTB in Taiwan. I bet the next iteration of the SwissMak only resembles the current version lightly, the new MTB will use proven and existing technologies for making it, like cast iron and dovetail ways, or even linear ways on steel. But I'd think cast iron would be cheaper to manufacture.

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    Quote Originally Posted by triumph406 View Post
    This part of the Kickstarter update is entirely plausible

    The industrial park we set up shop in near the port of Los Angeles was sold in July to a new owner with a new property management company, who has raised the rent considerably without offering a new lease agreement.

    The same situation happened to me. Complex was sold and rent was increased 47% and it was 6 months before any of us in the complex who's leases had expired and were on month to month to leases were offered new leases. This has also happened in at least two other complexes I know of locally.(La Habra/Anaheim/Compton)

    Whether this is what actually happened to Swissmak who the h*** knows. But not out of the realm of possibility.
    Maybe, but I *think* I remember someone saying he (swissmak guy) set up shop in a very pricy area to begin with. He could have moved inland (IIRC) and saved 10-20-30% on rent prices...

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    Quote Originally Posted by Mike1974 View Post
    Maybe, but I *think* I remember someone saying he (swissmak guy) set up shop in a very pricy area to begin with. He could have moved inland (IIRC) and saved 10-20-30% on rent prices...
    Long Beach. He could have gone to Wilmington or San Pedro close by and found cheaper rents, but at some cost to safety and his property. Moving to the IE to get cheaper rent would be one of those last resort decisions.

    If he was in say 1200sqft, then he wouldn't save enough to justify the upheaval to move/commute etc imho

    As traffic has got worse even in the last few years, if you lived near the coast/LA/OC the commute east to the IE (Inland Empire) wasn't difficult, now it is in the morning going there and in the evening coming back. To be viable he'd have to move from Long Beach (or close by assuming that's where he lived) to make it a reasonable commute. A choice I wouldn't make.

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    I really don't understand why this thread has so much traction.

    Why does anyone give a shit about this piece of junk?

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  9. #228
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    Quote Originally Posted by Mike1974 View Post
    Maybe, but I *think* I remember someone saying he (swissmak guy) set up shop in a very pricy area to begin with. He could have moved inland (IIRC) and saved 10-20-30% on rent prices...
    That was me, as I used to live in So Cal. He was paying triple the rent in the port of Long Beach as he could have paid 40-50 miles inland. That is if any of his story is the truth.

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    it's funny this is still going...maybe it'll have a happy ending

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    I’m kind of rooting for the guy, I don’t have a clue if his story is true or not, and either do the majority of the people here. The only people that really should care are the people with money in the deal.

    Here is how I see it: he came here excited about trying to make a made in the USA machine.

    People started giving him advice, some about the machine design and some about the actual production of the machine.

    Many people started ripping his machine design apart- who gives a crap what the parts were for-we should have steered the discussion to making the parts. He could have been making RC car wheels by the thousands- why should it matter?



    There are a lot of smart people here, with years of all types of experience, there are also people whose sole purpose seems to shit on people and stir up crap. How is a newbie here supposed to filter the good advice from the rest. It takes time.




    Sent from my iPhone using Tapatalk Pro

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    I respect him for being an entrepreneur....its really really really really tough starting companies and making them successful...hat's off to him for trying and not giving up already. That being said, I'm also really curious about how the venture ends up....I would have expected it would have crashed and burned by now, but he seems to keep at it....I say, cheer him on if only to find out how the movie ends

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    I haven't logged in on this forum for a while and it looks like this thread has come up multiple times without me seeing it on the list, so I didn't get to respond. I'll try to cover some of the stuff that has been brought up but addressing everything would need a novel.


    Let's start with the major decision to take this to Taiwan. The business failed here in the US, plain and simple, due to our inability to manufacture and ship. I would have been able to finish the machines with the original Kickstarter budget if the trade war hadn't started, but assuming that the trade was was inevitable, it still would have made us struggle to survive even if we had started out a year earlier when aluminum was cheap and there were no tariffs.

    Some of the posts in this thread about our shop are far from the truth, we DID NOT have a luxurious beach-front corporate building with super high rent. Our rent rates were on the lower end of pretty much everywhere else in the region, LA, Orange county, Inland Empire, ect. Actually they were about the same as Colorado and Texas for similar shop properties, so we weren't just flushing money down the drain for a nice place. The shop I picked was the only one in the park with a big AC unit to keep it at 69 degrees (20c) for metrology and process repeatability and parts being free from thermal inaccuracies. The shop being near the harbor would also be a big benefit for shipping, as there are a ton of logistics and shipping companies in the area and at least half our machines would be on a container ship eventually.

    Besides the rent going up with no new lease, the old property owner cut the internet and phone lines from our shop while remodeling, and never fixed it. The electric utility (LADWP) has been billing us at 78 cents per kilowatt hour for the last few months. Increased gang presence, just last week there was a quadruple random shooting, 2 people dead, just down the street from our shop. And before that there were random gun murders nearby multiple times since I set up shop last Fall. I had a close call a while ago as I was leaving the shop late at night, so I'm glad that I'll be out of that area soon.

    I doubt anyone on this forum will disagree with me for saying that Taiwan is a much cheaper place to be, especially for this type of business. There are a ton of machine tool builders all over Taiwan, mainly in the central Taichung region. I toured their factories and foundries when I was there getting the preliminary stuff set up. There are factories, machine shops, anodizers, heat-treaters, and material suppliers everywhere in that region. It might be a "high wage" country in Asia, but most things are a fraction of the cost that they are here in California. I will be involved in getting the new factory set up and running but our staff will be doing the day to day operations and logistics, and I will be checking quality and process reliability and doing R&D and stuff. We will still make the largest and most precise parts in house, but smaller and simpler components that we don't want to dedicate machines to will be made by nearby machine shops.

    Also, I took note that many machinists refuse to buy a solid aluminum SwissMak even if it's fully capable of making parts with tolerances in the 0.001" range. A lot of people have said they're interested but want a larger, cast iron and hardened steel machine with servos on every axis and more powerful spindle motors. We can't really do cast iron or epoxy granite in California at any reasonable cost, but we can can certainly do it in Taiwan. So we'll be showcasing that mid next year and it will not be received with the "that's just a shiny toy" response that some of the production oriented guys give. Of course we will still be making solid aluminum machines as they have major benefits that I listed earlier.


    There are about a dozen people in the investor team, everyone in it has done private equity deals before, all of them already have their own successful businesses around the US. These people bring their own skills and connections to the table, and have taken the time to perform thorough due diligence checks on this investment (and on each other). I get that the forum users here are skeptical of me, the way I have run the business so far, and the product itself. But I believe that having a team of millionaires and deca-millionaires backing this venture will lead to long term success. These are all smart people who have accumulated their wealth by working hard and making good investment decisions over their entire careers, so consider that they are getting into this because they may know something that you don't. The only negative is that there are limited non-disclosure agreements in place so unfortunately I can't always update the Kickstarter backers on the very latest news.

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  16. #233
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    Quote Originally Posted by Generic Default View Post
    <snip>

    <snip>

    But I believe that having a team of millionaires and deca-millionaires backing this venture will lead to long term success.

    These are all smart people who have accumulated their wealth by working hard and making good investment decisions over their entire careers, so consider that they are getting into this because they may know something that you don't.

    The only negative is that there are limited non-disclosure agreements in place so unfortunately I can't always update the Kickstarter backers on the very latest news.



    Quote Originally Posted by Generic Default View Post
    so consider that they are getting into this because they may know something that you don't.
    ^^^ Can you expand on this point (please).

    To me that seems like a spurious argument.

    I would assert that "They" don't know what they are getting into unless they have done something very very similar before.

    I would also argue that the probability of doing something similar before is remote, given the two cofactors of "Kickstarter" + "Machine tool".

    Interesting development (for sure).

    Where do you see yourself 5 years from now with this project ?

    I kinda detect a bit a shift from hands on engineering to businessman (If you know what I mean).

    Is there anything you feel you could have done differently (in hind sight) or do you feel that it was always inevitable for you to start out producing equipment in Taiwan and elsewhere ?

    Ta.

    Eric

  17. #234
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    I read the latest update here and I have more questions than I did before.

    Why do millionaires and deca-millionaires have an interest in your business?

    You are building a machine tool that is neither cheap, nor particularly robust, in a market that is saturated by existing products that already have a proven track record.

    Sure you did the initial sales at $6k, but obviously you know that you lost your backside on that deal.

    So now you're looking at a $12k all aluminum machine which is basically an overgrown Pocket NC, with all the same limitations that the Pocket NC has.

    In reality, you're planning to build a cast iron machine that will start at probably $18k and be $25k in the most commonly ordered configuration, with a toolchanger equipped model being $30k.

    The problem is, you're already at Tormach's doorstep, figuratively and literally.

    The vast majority of people who buck up for those machines are ignorant to the limitations and the negative equity they possess.

    The HAAS toolroom mill started at $20k with no enclosure or toolchanger, fully kitted they were $40k.

    Let's not ignore that you can get Fanuc Robodrills used for similar money, nor some medium range HAAS mills NEW for a little more.

    You're competing with Tormach, Novakon, and other low volume MTBs. They all compete at the low end of the market, but they are established and have a mature sales pipeline and product.

    Where is the return for these investors? What haven't you shared that makes you the Golden Goose?

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  19. #235
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    Quote Originally Posted by Perry Harrington View Post
    I read the latest update here and I have more questions than I did before.

    Why do millionaires and deca-millionaires have an interest in your business?

    You are building a machine tool that is neither cheap, nor particularly robust, in a market that is saturated by existing products that already have a proven track record.

    Sure you did the initial sales at $6k, but obviously you know that you lost your backside on that deal.

    So now you're looking at a $12k all aluminum machine which is basically an overgrown Pocket NC, with all the same limitations that the Pocket NC has.

    In reality, you're planning to build a cast iron machine that will start at probably $18k and be $25k in the most commonly ordered configuration, with a toolchanger equipped model being $30k.

    The problem is, you're already at Tormach's doorstep, figuratively and literally.

    The vast majority of people who buck up for those machines are ignorant to the limitations and the negative equity they possess.

    The HAAS toolroom mill started at $20k with no enclosure or toolchanger, fully kitted they were $40k.

    Let's not ignore that you can get Fanuc Robodrills used for similar money, nor some medium range HAAS mills NEW for a little more.

    You're competing with Tormach, Novakon, and other low volume MTBs. They all compete at the low end of the market, but they are established and have a mature sales pipeline and product.

    Where is the return for these investors? What haven't you shared that makes you the Golden Goose?
    All excellent points. And if I read correctly from GD's update a few posts back. Something seems fishy to me. None of my business of course, but I still don't see how you are moving the whole operation to Taiwan, with your people you said, and are going to do it cheaper there. Are your people just up and leaving the US to live in Taiwan for xx years, going to travel back and forth, have families. I have been there, done that (working in a foreign country) and it plain sucks. AND it is expensive, plane tickets, hotels, food (if you are traveling back and forth)... plus everyone is going to need some type of visa I presume , but not sure how that works in Taiwan. I was going to Indonesia and paying $30 each time for a visa (if I am using that term correctly ), and actually we were reaching our limit of needing to get a different kind of visa because we were going there so much... Still a crapload of logistics that don't add up. Even moving to a different state costs 3-5k depending on how frugal you are, not sure what the costs would be to move to another country for a few years or whatever.... Seems to me you would be better served moving to a lower cost state and hiring operators for $12-20/hr instead of moving overseas...

  20. #236
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    Smoke and mirrors.

    The whole thing could'a been done long ago had the machine werk simply been divied out to others.

    I don't know about alum costs changing at all during this time period.

    Not that I give a Shiite.



    -------------------------

    Think Snow Eh!
    Ox

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  22. #237
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    Ah yeah, once again it was the price of aluminum that went up like $300 per machine which bankrupted the whole operation. Okay.

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    Quote Originally Posted by Mike1974 View Post
    Seems to me you would be better served moving to a lower cost state and hiring operators for $12-20/hr instead of moving overseas...
    He wouldn't even need to leave the state. California has areas far from the big cities that have cheap rent and depressed wages. Go like 100 or so miles inland to 29 Palms. A quick search I found industrial property with a 2,000 square foot metal building on it for $55,000. I would be willing to bet you could find machine operators there with skills and general shop help for $10 an hour. A decent machinist would probably work for $15 an hour.

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    I wonder if the guy is used to lying so much he is starting to believe his own lies?

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    Quote Originally Posted by Dualkit View Post
    He wouldn't even need to leave the state. California has areas far from the big cities that have cheap rent and depressed wages. Go like 100 or so miles inland to 29 Palms. A quick search I found industrial property with a 2,000 square foot metal building on it for $55,000. I be willing to bet you could find machine operators there with skills and general shop help for $10 an hour. A decent machinist would probably work for $15 an hour.
    Even better! This just reinforces my point... How the fu*k is moving the entire operation to Taiwan a ""reasonable"" option when a relatively small change in aluminum pricing derails the whole thing??


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