Re: [TCLUG:11792] [TCLUG] I'd like some opinions on a business

["Shawn T . Amundson" <amundson@eventloop.com>]

Scott,

A few years back myself and a couple of friends started a business
to do just this.  What we learned (quickly) is this:

 * If you can't buy in volume, you can't compete with any moderately
   large corportation in terms of prices.  Buying processors from intel
   alone is problematic at best.  (Rule of thumb - you will pay double.)
   There is a huge barrier to entry.  (You might think you can do it
   cheaper than Penguin or VA, but you haven't added in anything but hardware 
   costs yet.)

 * We couldn't do it part-time at night because we had to do 
   shipping and receiving which almost requires and office and
   definately requires a lot of time.

 * Hardware is flakey.  A good percentage of the hardware you get will
   be bad.  So you need to stock up or tell you customers it may be 
   2-4 weeks before you get them the machine.  (How many people you know
   that want to wait a long time for a $800 machine?)

 * Forget about dual-booting windows machines unless the customer is
   willing to pay a lot more, because the licensing for Windows OEM 
   prevents dual booting.  So you need the full version.  For NT, you 
   can add on a nice additional $350 to the price of your machine.  

 * Advertising is mega-expensive.

 * Being on Red Hat's hardware list will indeed get you some calls and 
   e-mails, but probably not quite enough.

 * We couldn't market anything because we didn't know where to start.
   Putting ads all over magazines probably doesn't get to your core market 
   which is businesses.  

In addition to this, Dell, Gateway, or Compaq will put you out of business 
some day by deciding to sell machines in ads in PC Magazine.

After the first couple of machines we sold, we realized it just wasn't
for us and we gave up.  (We are lazy and did have other jobs at the time.)
About a year later, we formed a corporation and now do software development
full-time.

Lastly, I'd suggest trying to start the business with someone who has
gone through the process of starting a business at least once before.

-Shawn

On Fri, Dec 31, 1999 at 05:55:01PM -0600, Scott wrote:
>      For about a year now I've been pondering the OEM
> business as I'm tired of minimum wage jobs that don't use
> what I know.  Chris Palmer has been listening to me bitch
> about this on #sigfs for quite awhile.  :P  Anyway, he
> suggested I config a few boxes, and post them here to see if
> there is any interest before I dump all my capital into this
> idea.
>      I've priced out three complete machines (minus
> monitors), but I'll only include the key bits to keep this
> relatively short.
> 
> Box 1: A heavy duty server - $5500
> 
> Quad Xeon 400 (512k cache)
> Intel SC450NX mb w/onboard u2w
> 256mb mem
> 36.4 gig u2w IBM
> Antec case w/dual 400w hot swappable
> 
> Box 2: A low-end server - $1100
> 
> Dual Celeron 366
> Abit BP6 board
> 128mb mem
> 9.1 gig u2w IBM
> Adaptec 2930 u2w controller
> Antec case w/300w supply
> 
> Box 3: A low-end workstation - $700
> 
> Single Celeron 366
> Abit ZM6 board
> 128mb mem
> 9.1 gig IDE IBM
> Antec case w/300w supply
> 
>      Obviously these are just examples, I'm just trying to
> find out if the other linux boys & girls think this is a
> viable idea or not.  Comments & suggestions are welcome of
> course.
> 
> Scott
> -- 
> The sweet things don't stick around but the bullshit lasts forever.
>  -Nicole Blackman
> 
> 
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--
Shawn T. Amundson                       amundson@eventloop.com	
Research and Development                http://www.eventloop.com/
EventLoop, Inc.                         http://www.snorfle.net/

"The assumption that the universe looks the same in every
 direction is clearly not true in reality." - Stephen Hawking