Dear Daughter (XIII)

Greetings from Norway! I hope you're enjoying life in Paris. I look forward to visiting you soon. We miss you here in Norway. The vibe is a little different with you gone. There is a little less energy around the dinner table, but your siblings get more attention. Over the past two weeks, we have watched Master Chef Junior before they go to bed, and it has been great fun. We always compete on who we believe will have to leave the show (so far, I am winning).

The new iPhone (few new things I really want, but I need an upgrade) was released just yesterday, and I'll be getting mine in about a week. If you're interested, you're welcome to have my old one (though it's a bit worn out since I never use a case or screen protector).

I haven't always been an Apple fan. From 2000 until 2020, I was all about Samsung and Lenovo (PC), and I really loved their products. I switched to Apple because I enjoy working outdoors. I find that being in inspiring surroundings helps me get shit done. To work outside, especially in the sun, for extended periods, you need a computer with a really bright screen (high Nits). The new MacBooks are far superior in that dimension, so I switched.

Even before I liked Apple products, I loved their commercials - especially this one (it still gives me goosebumps every time I hear it): “Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

In business and life, too many people fear standing out and having differing opinions. You will find that people would rather be wrong but agree with the majority than stand alone and be right.

I created a little framework for you, to explain my thinking. If people agree with you and you're wrong, then you're all wrong, and no real value can be created.

If people agree with you and you're right, some value can be found, but only a little since many will follow the same conviction.

Now, let's move into more exciting territory “when most people disagree with you.” If you find yourself disagreeing with the majority, it's crucial to challenge your assumptions, as you're more likely to be wrong. One of my favorite life rules comes into play: “Have strong convictions, loosely held." This means that you need to take a stance on issues based on the best information you have, argue your case, but also remain flexible - willing to change your opinion if presented with better arguments. So if you end up being wrong - no big deal - move on.

However, if you're right when others believe you're wrong, this is the sweet spot for a contrarian. It’s a place where you can create tremendous value in both business and life - if you're brave enough to take that path.

Now back to business

Despite the setback in retail, I've decided to press forward and launch the product on both our website and Amazon. The design is nearing completion, and we've resolved many of the key functional challenges, such as how to lock in and release the scent. I can't reveal too much just yet, as I'll be consulting with lawyers this week about potential patent applications.

The next hurdle is finding the right manufacturer. Selecting the appropriate factory is crucial for success and to avoid disaster. The first decision is where to manufacture.

• Producing in Norway - Local production has several advantages. It allows for easier follow-up, minimizes communication issues, and saves transport time and costs. However, the tooling is often twice as expensive, and if manual labor is required, costs can skyrocket quickly. I've manufactured in Norway before and made a somewhat controversial decision. The product was a premium electronic device that required high-quality packaging, which we sourced from China. It could be shipped flat on a single pallet, but assembling each package took about three minutes. With an hourly wage of 250 NOK, this worked out to 12.5 NOK per product. In China, the cost was only 2.5 NOK per assembled package. Factoring in a markup of 6x from factory to consumer, the price difference for the end customer would be 60 NOK, pushing the product price from 1,995 NOK to 2,055 NOK. To save those three minutes per unit, we ultimately chose to ship fully assembled packaging, filled with nothing but air, from China in containers.
• Producing in Taiwan - Taiwan is renowned for high-quality manufacturing. I've had great experiences sourcing from there, particularly when producing millions of ice cleats. Some startups and competitors opted for cheaper products from China, but when the temperature dropped below zero, the rubber in their products became stiff and brittle, leading to breakages.
• Producing in China - ?Most of my past production has been in either Taiwan or China. Chinese manufacturers are highly professional, with impressive efficiency and relatively low tooling costs. The main drawbacks are longer shipping times, higher transport costs, and a few other considerations to keep in mind: "A yes is not always a yes" - to avoid losing face, you can often hear "Yes," even though they mean "no" or "we have no idea." Spoken English may still be challenging, but written English is excellent. When you receive a price, their margin is between their cost and the price you pay. Increasing that margin is their priority, and they can do it either by racing the price or lowering their cost. I have seen many samples of them lowering their cost in production batches 3 and 4 by using cheaper raw materials. You need to put in checks and balances to avoid this.

I ended up going with 2 producers. One is for the scent and pads, and the other is for the device itself. The main producer is a guy I love working with called Terry. Whenever I wake up there are a few mails from him in my inbox. In the next letter I will give you a glimpse into the negotiation.

With all my love and support

Dad

P.S. Doing something small or big requires more or less the same energy. I met a friend yesterday. He is going after a 3/10 opportunity with 8/10 energy. If you have options, always go for the biggest and most important challenges. They are the ones worth solving, and getting others on board on a more exciting mission can be easier.

P.P.S. In the first week of a new job, you should find a papercut problem and clean it up voluntarily. A papercut problem is irritating and has not been fixed. This is a cool little hack that will help you get noticed.