[bpizzi]

To stick to this comment only:

> How do you fix this company?

I'll take a shot : you don't, the free market does it for you (ie. the company isn't going to last long, or the plant get shut down if part of a group). It's the VC/Angels money that allows such theoretical stories to be actually applied to startups.

[ardy42]

>> Then you go out behind the factory and see a massive mountain of furniture stacked up to the sky. The factory workers have been building furniture every day for years. > People all agree that it is good furniture, maybe the best there is. Nobody ever buys any of it. It's not sold in any stores. No hotels buy it. No businesses buy it. Lots of people are lined up as far as you can see to pick furniture out of the pile for free.

>> How do you fix this company?

> I'll take a shot : you don't, the free market does it for you (ie. the company isn't going to last long, or the plant get shut down if part of a group).

That's a pretty lazy, ideological answer. They're giving away their product for free and there's no mention of a sales team in the whole story. Before you get all enthused with "creative destruction," someone could try laying off some of the useless employees and actually selling their product first. Destruction shouldn't be the first solution, it should be the last.

[bpizzi]

No, it's neither a lazy nor ideological answer. It's a very pragmatic answer.

If you're the head of a plant where nothing produced is sold for a price that cover your expanses, then no, sorry, the system [0] will soon have your company closed down, depending on your amount of emergency cash. And if you're part of a group then you are in for a very rough time with the group's C[E/O/F]Os, and odds are that this will ends up with the plant being shut down (machines/peoples may be rebased at other plants).

> Nobody ever buys any of it. It's not sold in any stores. No hotels buy it. No businesses buy it. Lots of people are lined up as far as you can see to pick furniture out of the pile for free.

This is something that can't realistically happen for a furniture plant. You can't pile up furniture up to the sky without paying your wood suppliers.

[0] suppliers, banks, state - what I maybe shouldn't have called "free market" in order to avoid epidermic reactions

[isoskeles]

If someone asks you to fix something (or to do anything for that matter), and you are playing their game, then you should try in good faith.

It seems like you are saying you'd give up because it's pointless anyway. Maybe it is pointless (maybe Evernote has too much debt they can never repay), but if someone were paying you to fix a problem in this hypothetical scenario, giving up shouldn't be an acceptable response.

[justin_vanw]

> This is something that can't realistically happen for a furniture plant. You can't pile up furniture up to the sky without paying your wood suppliers.

Have you ever seen $300MM worth of wood? I specifically said the owner had pumped a huge amount of money in the company.

[bpizzi]

> Have you ever seen $300MM worth of wood?

Well, I'm not sure about wood, indeed, but I guess specials species can cost a lot. But I definitely saw $300MM of metal in a single stocking rack, not even speaking in terms of machines and buildings.

> I specifically said the owner had pumped a huge amount of money in the company.

Yes, I read that but I put it apart a bit too quickly, apologies. I would love to be pointed to real cases where huge amount of cash were invested in finished-good producing plants with no sales whatsoever. Off the top of my head I can think that Tesla's industrial activity can come close to the description for the investment story, however they do sell - their problem is more of meeting the production target.

I've seen with my eyes plants coming out of nowhere [0] with banks backed cash, but they definitely had customers commands already passed.

[0] https://translate.google.com/translate?sl=auto&tl=en&js=y&pr...

[justin_vanw]

So Evernote spent that much and they didn't even make any furniture, so their wood costs were very very low. Zero even. They still spent that much money?

[oblio]

Not related to startups, but: the free market's distorted. Google, Apple, Facebook & co. are quite competitive today.

But they are also sitting on war-chests worth multiples of their yearly incomes (or at least a big chunk of 1 yearly income) and they are close to monopolies in some of their markets.

Even if they'd break down this badly, they'd be around for decades. Heck, IBM is still around :)

[bpizzi]

GAFA's are somewhat specials. I was very precisely answering to a very well written story about a plant producing furniture.

As a matter of fact, if you were Ikea's CEO with a rather important war-chest (however not at the level of Apple assuredly), you would never let "live" one of your plant if all it's finished goods were given for free because nobody would want to buy it.