[ANN] Spondoolies-Tech - carrier grade, data center ready mining rigs

[Collider]

Higher prices for customers or lower profits for spondoolies?

...But most infant business in the same position would make less on the project to get it done, and reinvest the revenue.

This is contradictory.
If you make less, there is less revenue to reinvest.

In this fast paced environment, you need to grow fast to stay competitive.

...If lower profits for them is the only option, then they need to deal with it.  As I mentioned earlier, it wasn't the only option and they made the preorder work.

Most business' with this model would fail.

Prepayment is the only option for them, as they didnt have funding for all pre-orders to be produced ( we are talking about money for ~3 months here).

It would be unwise to settle for lower profits, as spondoolies needs to grow in order to stay competitive.

As long as there is a pre-order market for this sort of product, it would be unwise to not use it to the advantage of your company.

[jimmothy]

This has been debated several times.

Spondoolies ("only") had around $4m in funding (before sp10).

Did they not make any money from the sp10? I'd be surprised if they ended up with less than $10m profit.

Parts for sp30 production batches need to be ordered around 2 months in advance, chips more like 3.

This is a lousy excuse. At $0.1/gh (could be much lower) they would only need $1m for 3 months worth of sp30 chips. (at 500 sp30/month)

Parts and manufacturing costs alone are around $2m per month (assuming 1000 units produced), and chip NRE is typically around $3-5M, which also needs to be gotten back.

Yes but how much of that $2m/month is long lead time parts?

Do you really think NRE is $3-5M?

I don't know exactly what makes up the NRE but I can't imagine a simple die shrink costs a bunch. AM's full custom 40nm cost less than 1m NRE.

Unless you can produce money from thin air, there really is no other option to have customers pre-pay some orders.

How do you explain bitmain,asicminer,bitfury,avalon, and a1 clones which have zero problem selling from stock? The majority of the network is powered by miners bought from stock.

Pre-payment or made-to-order also allows them to estimate their production volume much more accurately.

Yes, the only benefit of preorders is reducing the risk on the company and shifting it to the customers.

To the traditional finance and even venture-capital industry, most things bitcoin related are very-high risk and it is therefore hard to find financing.

But spondoolies is already is fully funded by VC is it not? I remember something about how they have enough funds to cover all batches if they need to.

If you do find financing, the investors will want a very high percentage of the earnings, which would lead to even higher unit prices for customers.

Yes everyone wants to maximize profits. The great thing about selling preorders is that you don't have to compete with what is available when they finally ship.

Do you think spondoolies would have sold sp30s for more than 12K in august had they not been preorders? Of course not.

TL;DR: preorders are BS. Get with the times spondoolies.

[Collider]

Spondoolies is a much jounger company than most competitors, with less funding.
All of those competitors either had high original funding or pre-orders, even Bitfury had preorders at around $1m to help with his NRE ($1m is the typical amount for 55-40nm NRE).

If you want to bitch about pre-orders, please go to the KNC thread and ask them why they had their Neptune pre-ordered while they were sitting on around $17m in profits from their first batches.
Even bitmain had around 3 weeks PREORDER on their recent S3 sales.

The fact that they did sell August preorders is proof that there was a market for it, and it was therefore the right decision to satisfy that demand.


When spondoolies is at the size of these competitors, I am sure that they will also sell units from stock (or with very short leadtime).

Until then, I will not comment on any more of these perpetual pre-payment vs in-stock discussions.

I will however laugh at you from the top of my fortress of sp30s.

[jimmothy]

Spondoolies is a much jounger company than most competitors, with less funding.
All of those competitors either had high original funding or pre-orders, even Bitfury had preorders at around $1m to help with his NRE ($1m is the typical amount for 55-40nm NRE).

Wasn't spondoolies already a company before they began making asics for btc mining?

If you want to bitch about pre-orders, please go to the KNC thread and ask them why they had their Neptune pre-ordered while they were sitting on around $17m in profits from their first batches.

Yes, there is absolutely no excuse for KNC taking preorders especially after they told us how much profit they made from gen1.

[repairguy]

This is contradictory.
If you make less, there is less revenue to reinvest

In this fast paced environment, you need to grow fast to stay competitive.

Most business's don't have the option of preorder.  less profit is the better option vs failure. Lower profit is
still growth.

Prepayment is the only option for them, as they didnt have funding for all pre-orders to be produced ( we are talking about money for ~3 months here).

If the pre orders are paid in advance, how would they not have the funds to produce them?  Do they make them at a loss?

It would be unwise to settle for lower profits, as spondoolies needs to grow in order to stay competitive.

As long as there is a pre-order market for this sort of product, it would be unwise to not use it to the advantage of your company.

It absolutely would be unwise to settle for lower profits, when you have another option.  Most business' don't have that luxury.

Agreed, If customers will pay up front(pre-order) any businessman with a brain will take their money!

[repairguy]

I will however laugh at you from the top of my fortress of sp30s.

When you get them?

[Collider]

When you get them?

July / early August.

And yes, I will only start the laughing once I receive them.

[repairguy]

Yes, there is absolutely no excuse for KNC taking preorders especially after they told us how much profit they made from gen1.

I listed three benifits to preorders above.  The people paid for the preorders.  Sounds like sucess to me.

I think what you intended to say was it was not necessary for them to use pre-orders, but as I have mentioned in numerous ways if a company can sucessfully use that funding strategy, it will generally always work to their advantage.

If you didn't get screwed on a preorder, let the market sort itself.
If you did, well, that was the result of your risk.

As long as people are willing to pay for pre-order, they will always exist.

[repairguy]

When you get them?

July / early August.

And yes, I will only start the laughing once I receive them.

10-4

I hope you get that laugh.  I never hope for people who take risk to lose.

The risk is to high for me. I also do not believe firmly one way or the other in the profitability of their product.

[Collider]

Except the sheep that go back to BFL, they have it coming (although I don´t wish it to them).

[bitgeek]

Yes, there is absolutely no excuse for KNC taking preorders especially after they told us how much profit they made from gen1.

As long as people are willing to pay for pre-order, they will always exist.

This! Don't blame the company for taking pre-orders blame the people for paying. They'd have to think of another way to finance their product like a credit.
What companies like KNC do is simply spit in your face saying: We don't have a prototype yet, but give us the money we'll try to make one. But remember, NO REFUNDS.
And people still pay them. Whatever happens they deserve it.

[RoadStress]

jimmothy you are so steaming today.

Did they not make any money from the sp10? I'd be surprised if they ended up with less than $10m profit.

It seems that both AM staff (aka FC) and AM shareholders (aka jimmothy) like to throw big numbers out there. 100PH/s in 2-3 months, $10m profit out of SP10s and so on. Please break the numbers down for us because I really like to see how you got to that number. How many units do you think they sold in order to get $10m profit out of it?

This is a lousy excuse. At $0.1/gh (could be much lower) they would only need $1m for 3 months worth of sp30 chips. (at 500 sp30/month)

I see that you only quoted the cheapest part aka the chips. What about the rest? PCBs, components, server grade PSUs, cases. They aren't so cheap as the chips and they are not available to buy from stock in large quantities.

Yes but how much of that $2m/month is long lead time parts?

Do you really think NRE is $3-5M?

I don't know exactly what makes up the NRE but I can't imagine a simple die shrink costs a bunch. AM's full custom 40nm cost less than 1m NRE.

I'm betting that server grade PSUs in big numbers aren't so easy to find, or the custom PCBs.

The NRE is at least $3M and while I don't know the numbers I am sure that the NRE cost goes up exponentially for each process node so it seems pretty viable to have a $3M cost for a 28nm mask if you are having $1M fost a 40nm mask. Maybe someone can enlighten us with some proofs, instead of just words.

How do you explain bitmain,asicminer,bitfury,avalon, and a1 clones which have zero problem selling from stock? The majority of the network is powered by miners bought from stock.

Comparing apples with oranges yet again. I think that only Bitmain is a good comparision, the rest aren't. AM had an IPO which means money upfront from people before showing miners, Bitfury sold overexpensive pre-orders for their 400GH/s miners last summer (MetaBank) plus they self mined as soon as it was possible, Avalon had preorders for their B1, B2 and B3 batches and then they had ~$8M in hand for chips pre-orders which were sold to third party before being delivered/refunded to customers and the A1 clones they didn't have to pay for NRE so it was easier for them.

Yes, the only benefit of preorders is reducing the risk on the company and shifting it to the customers.

You think that the company has 0 risk by taking pre-orders?

But spondoolies is already is fully funded by VC is it not? I remember something about how they have enough funds to cover all batches if they need to.

The statement is true, but that would mean sacrificing gen3 NRE costs. Thinking into the future isn't your best skill

[jimmothy]

Did they not make any money from the sp10? I'd be surprised if they ended up with less than $10m profit.

Please break the numbers down for us because I really like to see how you got to that number. How many units do you think they sold in order to get $10m profit out of it?

It's just my guess. Do you really think that they did not make a profit?

My guess is ~5000 sp10s at $2,000 profit each.

This is a lousy excuse. At $0.1/gh (could be much lower) they would only need $1m for 3 months worth of sp30 chips. (at 500 sp30/month)

I see that you only quoted the cheapest part aka the chips. What about the rest? PCBs, components, server grade PSUs, cases. They aren't so cheap as the chips and they are not available to buy from stock in large quantities.

Do you need to buy pcbs, components, and server psus months in advance? I'm sure they are a few other components that have long lead times but I really doubt the majority do.

I'm betting that server grade PSUs in big numbers aren't so easy to find, or the custom PCBs.

How can that be? Server psus are probably one of the most common parts they are using.

The NRE is at least $3M and while I don't know the numbers I am sure that the NRE cost goes up exponentially for each process node so it seems pretty viable to have a $3M cost for a 28nm mask if you are having $1M fost a 40nm mask. Maybe someone can enlighten us with some proofs, instead of just words.

I'd love it if spondoolies would let us know exactly how much they spent on NRE. Doubt it would be nearly as expensive as some expect.

How do you explain bitmain,asicminer,bitfury,avalon, and a1 clones which have zero problem selling from stock? The majority of the network is powered by miners bought from stock.

Comparing apples with oranges yet again. I think that only Bitmain is a good comparision, the rest aren't. AM had an IPO which means money upfront from people before showing miners, Bitfury sold overexpensive pre-orders for their 400GH/s miners last summer (MetaBank) plus they self mined as soon as it was possible, Avalon had preorders for their B1, B2 and B3 batches and then they had ~$8M in hand for chips pre-orders which were sold to third party before being delivered/refunded to customers and the A1 clones they didn't have to pay for NRE so it was easier for them.

The difference is that once those companies were fully funded, they stopped taking preorders (besides KFC/BFL/SPtech).

But spondoolies is already is fully funded by VC is it not? I remember something about how they have enough funds to cover all batches if they need to.

The statement is true, but that would mean sacrificing gen3 NRE costs. Thinking into the future isn't your best skill

So you're basically admitting that they are milking their customers just so they can have their gen3 faster?

Seems legit.

If only AM had taken preorders for their gen3. Sure the specs would have been way off and every customer would have been fucked but they would probably already have gen4 by now.

[Collider]

Spondoolies is not a charity.

They have competitive pricing for their product, and that is it.

If you don´t like their pricing, go buy from some other company, but I doubt you will get the same quality anywhere at the moment.

[jimmothy]

They have competitive pricing for their product, and that is it.

How can you possibly know what the competition will be like in 2 months?

Or are you just completely guessing based on what is currently available?

but I doubt you will get the same quality anywhere at the moment.

I'm curious to know what metric you are using for quality. Does loudness = quality?

[klondike_bar]

but I doubt you will get the same quality anywhere at the moment.

I'm curious to know what metric you are using for quality. Does loudness = quality?

1) the SP30 will be less loud due to 80mm fans
2) the SP1 (and thus the sp30 presumably) is the most compact, high-tech device out there. It reeks of quality from the slim design to the ~1300W-capable PSU to the fact that it weighs almost half as much per GH as any other competitor right now due to the small heatsinks
3) the interface is a snap to use, and the ability to control the clockspeeds, amperage, and fan speed is fantastic
4) the per-chip clockrates and voltage are perfect. Bitfury blew me away when they could control chips seperately, but Spondoolies nailed it i think

[RoadStress]

Do you need to buy pcbs, components, and server psus months in advance? I'm sure they are a few other components that have long lead times but I really doubt the majority do.

As a customer I prefer them to secure the components in advance than to take the risk to buy them from stock when they could be unavailable.

How can that be? Server psus are probably one of the most common parts they are using.

Do you really think you can buy >2k PSU off the shelf with immediate delivery? Why are you underestimating the sales force of the PSU manufacturers?

I'd love it if spondoolies would let us know exactly how much they spent on NRE. Doubt it would be nearly as expensive as some expect.

Many AM shareholders would like some answers to their questions, but it seems that FC is late in delivering them and sometimes he is giving general answers to specific questions.

The difference is that once those companies were fully funded, they stopped taking preorders (besides KFC/BFL/SPtech).

That's why gen3 will have a no pre-order model. "Fully funded" is a subjective term and if you consider it so it doesn't mean it's actually viable.

So you're basically admitting that they are milking their customers just so they can have their gen3 faster?
Seems legit.
If only AM had taken preorders for their gen3. Sure the specs would have been way off and every customer would have been fucked but they would probably already have gen4 by now.

If AM had taken preorders for gen3 they wouldn't have any customer for their gen4. How are those 100PH/s in 2-3 months looking now? How many are deployed by now? I would say a maximum of 10%  

How can you possibly know what the competition will be like in 2 months?

Or are you just completely guessing based on what is currently available?

After more than 1 year in the ASIC scene you should have at least some sort of educated guess. But as previously stated you are very very bad at predicting and acting for the future.

[jimmothy]

Do you need to buy pcbs, components, and server psus months in advance? I'm sure they are a few other components that have long lead times but I really doubt the majority do.

As a customer I prefer them to secure the components in advance than to take the risk to buy them from stock when they could be unavailable.

Why? Did they secure 3 months worth of components for the sp10s?

How can that be? Server psus are probably one of the most common parts they are using.

Do you really think you can buy >2k PSU off the shelf with immediate delivery? Why are you underestimating the sales force of the PSU manufacturers?

I think you are underestimating the production capacity of PSU manufacturers.

How can you possibly know what the competition will be like in 2 months?

Or are you just completely guessing based on what is currently available?

After more than 1 year in the ASIC scene you should have at least some sort of educated guess. But as previously stated you are very very bad at predicting and acting for the future.

Must I find all the absurd predictions you have made?

I remember "I predict the whole miner/system (AM) will be well over 2$/GH".

[philipma1957]

to interject when is gen 3 coming out?  The sp30's are too slow to market preorder puts more risk onto the buyer.  Also btc and bank transfers does the same.  it increase buyers risk while decreasing sellers risk.

I would love to order in stock sp40 at 10 th and 0.3 watts a hash.  with a cc or paypal not btc.

[RoadStress]

Why? Did they secure 3 months worth of components for the sp10s?

I don't know how many months they secured, but I prefer having them secured and paid than to take the risk of not having the components available when needed for various reasons.

I think you are underestimating the production capacity of PSU manufacturers.

I don't think it's very economically viable for the PSU manufacturers to keep thousands or tens of thousands of PSU in their warehouses waiting for big clients to buy them. I think it's more reasonable to sell them in advance or as fast as possible.

Must I find all the absurd predictions you have made?

I remember "I predict the whole miner/system (AM) will be well over 2$/GH".

All? You gave one. Please show me all the absurd predictions that I made.

Also how about you show me the context of that prediction? I think it was before specs were released because the specs definitely change the prediction. Also the market price of the time of the prediction matters and also the time of the actual price announcement matters. So don't be a journalist which pulls things out of context to give things a different meaning.

to interject when is gen 3 coming out?

Winter!