The Future?

50 Year Ago Today, I Graduated High School

This was two weeks after my father's funeral. He had been grooming a relative to run our business. Within a few months, the relative was gone, and relatively speaking, so was our business. Several years later, after almost insurmountable odds, we managed to pay off our creditors, as well as the bank, and launched our own product line, which is when the Darafeev Brand had it's start.

Available Only in California

For the first few years, Darafeev was exclusively Made in California, for Californians. Back then I honestly wondered if anyone out of state would ever consider buying our products. We soon had several showrooms around the country, and still maintain a permanent showroom at the World Trade Center in Dallas, Texas. Today, we are proud to say we are:

Made in Chino NOT China

Many folks know that North Carolina is the furniture capital of the US, and therefore many of them take a furniture buying vacation to NC. A funny story is that one such couple had done this, and on the way home wondered "where is Darafeev actually made?". This led them to our front desk, where they insisted on "talking to someone, anyone!". I, being the guy will will talk to anyone, came up front, and as they told the story, and were tickled to say that here they drove thousands of miles, and the factory that made their stools was only five miles from their home.

Jacuzzi

Most everyone on earth has heard of the famous Jacuzzi Brand. Can you tell me where they are located? I always see truckloads of their spas parked across the street from my office, ready to 'hit the road'. The factory is actually around the corner, in Chino. I promised the then president several years ago to reciprocate factory tours, but I guess we were both too busy.

The Next 50 Years

Not that anybody wonders or cares, but I'll go on record to say what I think I will be doing the next 50 years (or as many as our Creator grants me). Perhaps my family will carry on some of this legacy. I believe that the future belongs to the Makers, and that the trend will be to revisit the days of old, when you actually knew who made your bread, your soap, your kitchen stools, etc. There will most likely never be electric ships, the thought of buying from hostile countries that fund weapons pointed at us, will the considered insane. The day will come where you can make something, sell to your local neighbors, and if shipping allows, on the Internet, directly to the end-users, thereby eliminating layer upon layer of distribution costs. We used to pay an average of $20 commission per chair or stool, so that a furniture rep can walk into a furniture store and persuade the store owner to put a few pieces on display. Today many reps just blitzkrieg dealers with emails and perhaps have a Zoom meeting, because driving to each store does not make economic sense for them. Covid, during the shutdown, changed the rep industry permanently. I've also questioned the sustainability of trade shows and permanent showrooms. Back in the 80's, we paid about $100,000 per year for our High Point showroom, just for the privilege of being a legitimate player in the furniture game. Add to that another $50 to $100 thousand in merchandise, and we even purchased a home on famous Johnson Street, a couple doors from the infamous Stanley House. We had it fully decked out with a pool table, jukebox, and displayed the game room furniture we produced. We also had bunkrooms where our reps stayed. If you've been to market, you know there are no available hotel rooms, rental cars, or places to eat. So we would grill steaks and everyone participated in preparing meals, and inviting clients. Fun days, but with the cost of travel, and the buyers flying in for a day or two, it is impossible to justify the expense. Insanity, if you ask me, especially when a furniture store buyer walked in and asked "how much", then proceeds to say he can buy 3 pieces for that price from his Chinese source. Who needs such abuse?

Death of the Middleman (or MiddlePerson)

I read a report that James Clark, founder of Silicon Graphics, had left to start Mosaic Communications, where he hire a kid from the University of Urbana Il that would allow you to see pictures on the Internet. WOW!, what's the Internet? So I called and the receptionist said he was not in, but would be happy to fax me. In those days the fax was continuous, so after receiving what looked like the Dead Sea Scroll, I could not understand what server and browser software was, or why I would need any of it. Back then, the browser software was $100, and $5,000 for server software, not to mention a web server, that served up bitmap images in about a year, and ran on a 14.4 modem. Well, Mosaic became Netscape, and fast forward to today, most people would be offended for paying even 1 cent for a browser. My question is that with Web3 and blockchain, there will no longer be a need for middlemen like reps and retailers. I can't find a rep to work for 10 or 15 percent, and our $500 chair or stool retails for $1500, and add to that inflation and consumer delaying purchases, even on luxury goods, and you either go the way of buggy whips, or have to reinvent yourself. Yes, factories produce goods by the thousands, which may in fact be the Chinese "one size fits all" mass produced items, but we get orders for 3 custom stools, or 4 game chairs, and it almost feels like we're doing a onesie twosie routine. Beside, wealthy folks are not stupid. Consider even the sales tax; what would they rather pay, 8.5% of $4,500, or 8.5% of $2,000? Someday, all items made (like the ipe pieces above), will be identified with the brand or who made. QR codes will be stamped or lasered onto pieces, and a visitor to a hotel room or Airbnb simply has to scan the code, input number of pieces and their address and credit card (or use their crypto wallet), and the item will ship to them directly.

AI

What happens when Artificial Intelligence is able to make millions of transactions at greatly reduced, OR zero costs? That will cause major disruptions. Just as Uber owns no cars, and Airbnb owns no hotels, I envision a day when factories will no longer sit idle, but will fill up the full 24 hours per day of available time, and will produce for multiple brands. I've offered free production time for my factory, with no takers. That would be like being the only Uber driver on earth. The trend is not to "do it all", and treat your competitors as enemies. The day is coming where we will be making each others products, based on available production time. We make the chairs, you make the tables, and if you're busy, we bid it out, just as Airbnb does with rooms. The market will soon adjust the costs. If there is a single CNC operator who gets a bit greedy and wants to get rich quick, it will spawn new operators who will keep things competitive. Most would say this is way too complex and humanly impossible. True, until some kid develops software or an AI application that allows factories to post available capacity, just as Uber posts available rides, and regionally based.

I Would Drive 2,407 Miles For a Pizza

NOT! Back to the early days of the WWW, Yahoo was one of the first search engines. I remembered typing 'pizza' into the browser window, and back then it showed how many results. Eventually, I remember something like 2 million results. Imagine hailing a cab in New York, and you happen to be in Los Angele? The first result happened to be a pizza shop in New York, and no, they would not offer free delivery to my home or office. This eventually gave way to a more sensible geocentric approach, which we saw in Ebay. They added the element of zip codes and maps, and showed the nearest ones first. Even today, I get frustrated with an app that shows local businesses, but one coffee shop pays a bit extra to show up on top, and they're in Lake Tahoe. I plan to call and ask them if they can deliver one of these days. Once there is a system set in place, where you can plan meals and AI sources all the supplies, and directs Uber drivers who happen to be passing by your home anyway to drop them off, and you save multiple visits to a grocery store, it will be a whole new ballgame.

Bad News

All is not good with AI, because you can literally put words in people's mouth. Just type the text, pick a celebrity, and create an interview of you asking them questions, while you feed them the answers. We are at a point where you probably cannot believe anything that anyone has said. I get a lot of connect requests from beautiful young Asian ladies who just want to be my friend. Sure. If they happen to have followers, and some that follow me, and actually offer a relevant service, I may ask them to text me, which if real, I can follow up with a phone call. I'm quickly becoming disillusioned with the myriad of connect requests that I get, and even ask some if they used AI to generate the requests. For all you know, I could have asked AI to write this piece, or to combine all my posts into a book. That day is coming, and were it not for all my typos, you really don't know if I wrote this in two hours, or if AI generated it in 2 seconds. Unless someone creates a machine that can interact with you in real time, I would suggest that the only way in the foreseeable future to know the truth, is you're going to have to watch live events, participate in live discussions, or text me if you'd like to see when we can talk. 909.306.8622.

Paul Darafeev