Alan,
Thanks and good point. I appreciate it. Wait, there was a product that Shopsmith made and stopped making and no longer supports? What a novel concept?
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Alan,
Shopsmith is a mature manufacturing business with significant competition in the marketplace. It is very easy to challenge the wisdom of 25X based on this because it means they would have to capture market share from the competition which is difficult to do in practice. Unless all of you existing customers are going to go crazy with new orders to push Shopsmith to 25X sales?
I didn't say they would, but I suggested they should consider it, if it helps them get to a new and improved platform that significantly increases their market share allowing them to remain a viable company well into the future. Isn't this what we all want, i.e. Shopsmith to continue to survive???
I have some insight into this having gone through several M&A's in the business world and having to deal with private equity buyouts. Saint Nick clearly stated in the interview that he represents private equity interests that have taken over Shopsmith. Their timeline, profit targets, business plan are all secret, but I hypothesized (made an educated guess) based on my experience. I welcome input from any one else here who has M&A and/or private equity dealings to share their knowledge on the matter, especially how you foresee Shopsmith weathering this latest takeover. Also, I posted about this earlier on the thread and the link to the equity listing is at the link below. Earlier this year Saint Nick opened up an equity round for Shopsmith of up to $1M with a minimum buy-in of $10k required. New company is called Shopsmith L.P. Anyone who feels so strongly about Shopsmith's turnaround potential should contact him and invest; only $10k required to be included as an investor. Caveat Emptor.
I guess all of your lumber must be perfectly straight and never bow or twist? You don't have to be working on a beam to need more than a 4" jointer for face jointing. Anyone that only uses a jointer for edge jointing must have some darn near perfect lumber where they live IMHO. Or only work on small woodworking projects that don't need wide and/or long solid stock lumber.dusty wrote: ↑Tue Oct 31, 2023 7:55 am What I do know is that I must re-evaluate my present ability to support my legacy machines. What parts might I be needing in the next couple years? I also know that I do not need and will never own any Shopsmith newer than my 520 and the current gang of SPT (including the 4" jointer). I just have not had the need to joint a beam!!
Just to make sure I am 100% clear here. Alan raised a good point about innovation. Ed and I were just bouncing ideas around on this thread about how a reimagined new headstock or Mark product might look (actually free brainstorm ideas for the new Shopsmith company). The most innovative or highest performance product doesn't always win in the marketplace (many examples of this, but the classic example is VHS vs. Betamax). There is great risk in bringing innovative products to market. Shopsmith's best business plan and direction forward may be to continue as it is and support as many of the original Shopsmith products as they can with relatively nothing new. Be nice if they supported Magna products too.
I have a Sawsmith 2000. Two of them that combined make my Super Sawsmith 4000. I hope Shopsmith can achieve great new sales and bring back this machine. It didn't take off for several reasons largely about the market that also resulted in dropping sales of Model 5XX sales. It's innovative under-table sliding saw feature was an expensive feature, nice to have but it would have been an excellent table saw without it. And offering it as an upgrade to a lower priced starter model might have looked better in the competitive table saw market. I have the version using the Excalibur fence and rails, expensive and no longer made, but it probably influenced the 520 rail system. A new version that has a PowerPro motor in it would be attractive to some maybe, or not, that's what marketing has to figure out. Anything Shopsmith makes has to suit the market or it's pointless to make it.
+∞
Agree completely, which is why I am surprised that private equity investors took on Shopsmith. Not complaining in that I want the company to continue, but I also don't understand their path to 25X sales.bainin wrote: ↑Tue Oct 31, 2023 12:45 pm It will be interesting to watch which way this thing breaks.
From an M+A viewpoint , I'm hard pressed to imagine what assets are sellable aside from inventory. I'd guess the IP is all past 17 yrs now.
Does the factory physically make stuff like way tubes, mechanical support structures or is it more "assembly + alignment" ?
I don't get the sense that there is a deep engineering team inside Shopsmith developing new products, it seems more like a support engineering team to me. Coming up with completely new products would be outside a support engineering teams scope.
I think Dusty is right though..if there are some replacement parts you imagine needing in the next few years , it may be a good time to stock up.
b
Nick is trying to reduce the amount of fabrication done at the factory and have it become much more of an assembly shop. He says many parts finished at the factory can be purchased in their final form instead of requiring time and maintenance of costly machinery.
This remains to be seen. They certainly need a larger and more experienced support engineering team instead of relying on a dwindling number of people who have around long enough to develop an ingrained knowledge of the product. Support now is the result of the low volume sales picture for the company. Its one of the things that has to be addressed to achieve growth. Counting on modern social media for marketing has it's dark side, word of bad support gets around quickly and can stop sales growth in its tracks. The solution is not difficult, but it will be costly if it's not implemented in coordination with a comprehensive growth plan.I don't get the sense that there is a deep engineering team inside Shopsmith developing new products, it seems more like a support engineering team to me. Coming up with completely new products would be outside a support engineering teams scope.
Nick sounds like he's a little more in it than that. He sounds like he's getting hooked on the Shopsmith concept, something we all understand. He doesn't sound like he's in for just three years and out. We have been lucky that Shopsmith has so far escaped the cruel unseen hand of the free marketplace, no one knows what would lie ahead if Nick hadn't taken it on, so I can be happy that we have a few more years of life ahead now.RFGuy wrote: ↑Tue Oct 31, 2023 12:54 pm
Most private equity ventures have an exit timeline, i.e. secure X% profit by a specific date. Whether they have an exit planned or not, they definitely expect a certain % return by a specific date. IF/WHEN they don't meet those targets, then an exit for a loss for taxes is likely the solution.
Ed,edma194 wrote: ↑Tue Oct 31, 2023 1:59 pm Nick is trying to reduce the amount of fabrication done at the factory and have it become much more of an assembly shop. He says many parts finished at the factory can be purchased in their final form instead of requiring time and maintenance of costly machinery.
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As for engineering new products, they don't have to reinvent the Space Shuttle. The engineering to make new tools based on existing ones is not that great and can be outsourced as was done to develop the PowerPro. They do need engineering that can build and test prototypes on the R&D side, and quality control engineering on the back end to maintain the reputation of the product and reduce the support and service costs.
I hope someone will read the following: I will pay for a service contract on my PowerPro components. A machine dependent on two parts that cost $800 and $600 to replace is a risky investment. I'd pay for that as a personal user, and if it was available as part of a general service contract for the entire machine the price of a Shopsmith Mark 7 would be quite reasonable for a commercial operation.
I only have that interview on YT to go by and I got a totally different read on him, but maybe I am reading between the lines too much. We will see.edma194 wrote: ↑Tue Oct 31, 2023 2:23 pm Nick sounds like he's a little more in it than that. He sounds like he's getting hooked on the Shopsmith concept, something we all understand. He doesn't sound like he's in for just three years and out. We have been lucky that Shopsmith has so far escaped the cruel unseen hand of the free marketplace, no one knows what would lie ahead if Nick hadn't taken it on, so I can be happy that we have a few more years of life ahead now.