Post
Topic
Board Hardware
Re: [Guide] Dogie's Comprehensive Manufacturer Trustworthiness Guide [February 2015]
by
TheRealSteve
on 27/02/2015, 23:00:23 UTC
This back-and-forth is amusing ( less so for the parties involved, I'm sure - it's getting into B/M levels, and those did get old real fast ), but my BTC0.02:
Can you afford generation 3 without selling 1. preorders, 2. raising millions of $ or 3. using 'investment' orders? Its a simple yes or no.
(numbers added for clarity)

"a simple yes or no" it isn't, as it's technically 3 criteria and thus 3 questions:
1. is quite literally "pre-orders" - i.e. I give you money in exchange for a product which you say you plan on delivering later.  That should fit anybody's definition of pre-orders.

3. is more of a grey area.  That's making it sound like pre-orders, but also like investments.  An investment where the payoff would be actual gear (or mining capacity) instead of, or in addition to, shares / dividends.  The differences with 1. are that the investors are a select group who know - or should reasonably know - that they're not being promised the gear (or capacity), but instead only promised that which is written in whatever contract applies.  E.g. the prospectus or contract could outline what their goals are, what their plan for reaching those goals are, and outline the associated risks and challenges such that if things don't work out and there's no sign of mismanagement.. well, that's investments for you.

2. is the one that's perplexing me the most - since when is the need to raise capital a characteristic of a pre-order?  The ones providing said capital (be it investment, or a loan) aren't actually ordering anything.  They don't much care about what's actually being produced other than if nothing gets produced, they probably won't see any returns / that loan paid back.

Your definition used for the pre-orders scoring is a little more vague, though.
Preorders?
Preorders are extremely bad for the industry and put all the financial risk on the buyer. This criterion does not act as a snapshot, but a longer term (both past and future) "does this company engage in preorders". A company who's business model relies on preorders to fund development and new generations is still considered to utilise preorders even if they intermediately sell some products from stock. Transitional scores may be used when companies have promised the exclusion of preorders but have yet to prove their business model can operate without them.

There's two points of contention I can see there:
A. the 'past and future' is not defined.  The past: If a company took pre-orders 1 year ago, does that still weigh on the scoring now?  If not, what about 2 months?  The future: Should this actually matter?  If a company announces that in 2 months they'll start taking pre-orders, should that weigh on their score now, even if in 1 month they might change their mind and say they won't take pre-orders the next month after all?

B. "prove their business model can operate without them" lies entirely at the whim of what the 'business model' is, and what the exact definition of "them" (pre-orders) is.  Just as an example: BitFury's business model is quite a different one from most of the other manufacturers'.  They also took several investment rounds.  Could they have proved to operate their business model without those investment rounds?  More importantly - if those investment rounds are equivalent to the earlier points 2/3 as it pertains to the "them" in that sentence - did they?

I'm certainly not arguing that you should change scores, but rather to rethink/clarify definitions.

The earlier points 2 and 3, in my humble opinion, have far less to do with pre-orders as most people understand them than with solvency and/or financial health. SP's solvency is probably not in question (unlike, say, BFL's given recent events), but their financial health as it pertains to their next gen development may be (as admitted by SP).  If that were a separate line item, with scores set as applicable, there may still be some argument over whether or not the scoring itself is just, or whether that item in itself is just - but not about whether or not the score actually applies to the item for which it's listed; which seems to be the main argument in the back-and-forth.

tl;dr: Define "pre-order"

As an aside: NDAs suck :)