> [Bri] In your vision, do you see a bunch of companies in the
I know I've kidded you about confusion between (my) ITT and (your) ITTT, but
on this point I really am unconvinced. If it isn't profitable for most
companies, why should it magically become profitable for ITTT? Adding in your
comment which I've snipped that you don't expect it to become profitable in
the 1st 50 years, why should the board of directors (and the
stockholders) sign up for 50+ years of losses in the hopes that
the colony will survive and eventually become a good trade partner? I can see
a few isolated cases where there was obvious profit potential, but if so, why
wouldn't ITTT have competition?
I grant you, signing up for unprofitable contracts isn't unknown. The company
I used to work for signed a contract to sell one item below cost to a major
client in hopes of getting on the vendor list (which they did) and selling
them other stuff
to make up the margin (which they didn't). But I can't see
that as a deliberate business plan.
> Where does the breakup start? Something I had in mind would be
Alarish would fit, if you wish.
> [Bri] I would suggest ~2174 as the original colonies get out
Alarish would fit that, too.
In my estimation, it would take about 45 years for the run to become
profitable. This leave 54 years of profit. ITTT takes the LONG term view of
profits. It is this long term investment that scares off the compitition. As
you stated not many stockholders would be willing to invest for 45 years at a
loss or near loss to make profits eventually. ITTT's owner did this because a)
He had a dream of intestellar trade. b) He had the money and investors. c) The
time was right to set the precident for a monopoly (first interstellar
colonies and the nations that would be hard pressed to truely support them due
to wars and such).
d) spin-off technologies and subsideraries were predicted to provide
profits in the short run. e) In gaining contracts for the first colonies, they
would be the most heavily invested in by the founding governments and thus
become profitable before later ones; This made getting the first ones
essential for the scheme to work.
f) ITTT has the resources to field a large number of Q-Ships and escorts
which cuts down on piracy against its ships.
Granted by the time of the Kra'Vak invasion, this process is MUCH less
expensive. ITTT has a good amount of compitition for new markets. Still, ITTTs
reputation for fair prices (as well as failure and fraud from some of its
compeditors) keeps it in the running. ITTT holds patents on the Interstellar
Communication Relays, so they remain profitable (but may face compitition in
the near future as the patents run out). And ITTT is diversifying to further
reduce its risk.
Not every colony signed up with ITTT (mistrusting the 99 year contract). Many
colonies failed due to loss of a cargo run or because a shipping company or
government stopped delivering to thier world (not profitable). Others succeded
without ITTT (NI for example). Most of the ones who succeded had large initial
populations on one or more worlds in a given system (providing more "in house"
resources and less requirement for importation of goods).
Again, the whole purpose of ITTT was to provide a generic shipping fleet for
use in FT games. This way all the freighters could be painted the same paint
scheme without some wise-cracker asking why 2 nation's cargo ships had
the same paint scheme.
---
Brian Bell bkb@beol.net <mailto:bkb@beol.net>
http://members.xoom.com/rlyehable/ft/
ICQ: 12848051 AIM: Rlyehable
---
[quoted original message omitted]
The below is not nagging. Well, okay, it is, but the intent is to ask
questions you might not have asked yourself, so as to get the imagination
working to provide more explanation. (And feel free to ask me the same kind of
questions about the Alarishi Empire, btw).
> In my estimation, it would take about 45 years for the run to
That's good, although not a lot of equity in it.
> b) He had the money and investors.
Investors from where? If we could find such investors right now, we'd have an
orbital city operating.
> c) The time was right to set the precedent for a monopoly
(grin) it's easy to establish a monopoly on an expensive, unprofitable
business, all right.
> d) spin-off technologies and subsidiaries were predicted to
No competition is interested in this?
> e) In gaining contracts for the first colonies, they would be
Also the ones with a higher failure rate and highest per capita expense.
> f) ITTT has the resources to field a large number of Q-Ships
Again, resources from where? I know people who are very, very
successful--eg are making $10M + per year personal income--and
they can afford houses, cars (Bill lost a Rolls Royce
once--couldn't remember which house he left it at), helicopters,
private planes etc. I can see, possibly, a couple of (small,
old) freighters. But warships, even small ones, take a whole
other level of cash flow to buy. Either he's got to be an incredible salesman
to get investors, or he's got to have absolutely stunning personal income.
My research books on the stock market aren't conveniently to hand at the
moment, but let's say we have a (conservative) 10% return annually from a
mutual fund (my 401K fund had 2 years of
36% annual growth but that's much better than average--however,
strategies are available which should provide 18-20% annual
growth long term). Put $1000 into ITTT in one portfolio, and another $1000
into a S&P500 index mutual fund or something similar. Let's check it at 45
years (when ITTT first starts being profitable).
At 45 years, your mutual fund stands at $72,890. ITTT has to
somehow make that much--not in gross sales, not in gross profit,
but in net profit--to be even. ITTT can't gouge the colonies
all that badly to make a high rate of return, because if they do, someone is
going to offer a competing service at much lower rates and the colony will
either deal with smugglers or decide your contract is no longer valid for one
pretext or another. Not every colony, perhaps, but enough to hit your margin
even worse than it was before. If you invest in patrol ships to intercept
smugglers, remember to deduct the cost (plus interest and operating expenses)
from your profits.
Now, I can see it happening if you get a tax _credit_ for your
investment--if on April 15 I'd had a choice of sending $926 to
the IRS or to ITTT, you'd have cashed the check by now. But a tax deduction
wouldn't be sufficient to make up for the opportunity cost.
> Again, the whole purpose of ITTT was to provide a generic
Now _that_ is a good reason.