Artfully Played
/Modern educators stress the value of the sciences; reality underscores the need for the arts.
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Vladimir was a scientist; he was an engineer, and he had an idea. He thought it was genius; it would, in his mind, make him a fortune. His father, laughed; he said it was a “pipe dream." "If you wish to be rich, you should follow a different path,” he said pontifically. “Scientists don’t get rich; they become famous. Business majors get rich,” he explained to a dipondent son. Vladimir believed his analytical mind could cope with any challenge and proceeded with his dream. He spent his entire life’s savings to develop a prototype of a watch no one wanted. Still convinced of its potential he sought financial assistance.
“How many of them have you sold?”
“One,” Vladimir mumbled with head bowed,
“Do you know the person who bought it?”
“Still looking at his shoes he answered softly, “Yeah, it was my father.”
“Did your father offer any advice regarding the marketing and sales fo your watches?”
Vladimir was not comfortable with the questioning by the financier. “Yeah, he told me to stop chasing dreams as a scientist, and pursue a career in the arts,... I play the piano, and he thought there was more potential doing that.” The expression on the financier’s face exasperated Vladimir.
“Perhaps I should go.”Vladimir wasn’t sure why he thought this person could or would help him. He questioned his decision to follow his mother’s advice; she said this banker helped her sell her short stories to a magazine publisher. But watches were different than short stories.
When the banker said, “I can help you,”: Vladimir who was partially out of his chair, froze in the awkward position, and then collapsed back into the seat.
“You can?”
“Are you willing to share if I guarantee the sale of 500 watches?”
Five hundred, Vladimir thought. He quickly considered the offer, Five hundred watches selling for$ 175 each would result in a total of $ 87,500. Considering the cost to manufacture the watches was $ 85 per watch his profit would be $ 45,000.
“What percent of the profit do you want to complete this agreement?”
“One hundred would be great,” the banker answered with a smile, but if you cover the expense for manufacturing I will settle for 25%.”
Again Vladimir considered the mathematics. If he paid for all of the manufacturing his cost would be $ 42,500. That would be t$ 10,625 more than if he paid 75%.
He considered the 12 % interest rate they had discussed early in the conversation. Manufacturing cost of $42,500 would place an additional expense of $5,100 against his profit resulting in an income of $28,650 ...a worthy amount for selling 500 watches.
“You realize,” the financier paused being certain Vladimir was listening before he continued. “We are only speaking hypothetically. Since I am guaranteeing the sale of 500 watches, I am technically financing this venture 100%. That being the case let me build some collateral into the deal. If I can sell more than 500 watches, would you permit me to retain all of the additional monies?”
Vladimir considered this an agreeable condition; he still was guaranteed $28,650.
“As a final act of good faith I would expect you to finance the manufacture of additional watches, is that also agreeable? “ Considering the discussion was still theoretical, Vladimir agreed.
When all the papers had been signed the financier began his portion of the agreement while Vladimir ordered the manufacture of 500 watches. Within a month 500 watches were sold and the financier told Vladimir it was time to order the manufacture of 500 more watches.
While paying for the additional manufacturing Vladimir realized he relinquished his share of additional profits, yet retained responsibility for future availability of the watches. His realization reminded him of his father’s criticism; knowledge in the artless world of theoretical sciences was no competition for the art of negotiation.
By Robert L. Scarry
From: United States
Twitter: usnavy1990bob
Facebook URL: https//www.facebook.com/robert.scarry.3