Let me start by saying I want S!K to succeed. I was an early fan of S!K and purchased a few knives back in 2015. I was an active member of this forum and genuinely like the people here. In one of the first GBU threads that was critical of S!K, I was an aggressive advocate for Guy and S!K. I say all this because I want to make it clear that I am not anti Survive! and have supported S!K in the past.
The Starter Program was meant to be a way for S!K to generate capital to grow the business. It was promoted as a one-time effort and as an alternative to traditional debt or equity financing. Although they did not guarantee any delivery dates, they estimated that the 4.7s would be done before Christmas 2015. (they are still in production) Back in early 2015 when the Starter Program was in full swing, I am pretty sure that neither S!K nor the people buying knives expected things to go this slowly.
Traditionally, a business starts when someone makes an initial investment, creates a product, sells it for a profit, reinvests the money they made, creates more product, sells it for a profit, etc. Time is a VERY important factor in any business plan. If you build a business plan with the assumption that it will take week to build a product, and instead it takes you two months, you will probably eat through your initial investment and have to get more money.
Instead of getting a loan or selling shares, S!K got everyone to pay up front. Assuming that S!K did a detailed business plan, they made assumptions on how long it would take to make knives. Based on the estimated deliver dates provided by S!K back in early 2015, they are taking at least 3x longer than expected to produce knives.
Here is the problem. Time = money. S!K seems to be incapable of producing knives in a timely manner, and is burning through the Starter Program money at a faster than expected rate. They continue to add new models to the lineup, do additional pre-sales on existing models and sell of seconds / ugly betties to raise additional cash, all the while pushing the production of the Starter Program knives further into the future.
S!Ks standard response to concerns about delivery times always conveniently ignores the expansion of their product offering, additional pre-sales and inability to maintain a production schedule, and instead focuses on their commitment to quality. I agree that a commitment to quality is an admirable thing. However, if a company does not maintain a profitable business and meet their production schedule, they will not remain open and quality wont mean a damn thing.
Survive! fans keep saying Guy is a great knife maker. I am sorry, but I disagree. Guy designs nice knives, but he has proven that he is a bad business manager, has difficulty managing a supply chain and manufacturing operation, and is incapable of getting product produced in a timely manner. To put it another way, it looks like Guy designed a business model that wont work, and the knives he has produced were subsidized buy the money paid for the knives that have not been made yet. And he is still responsible for the huge liability of the orders that have yet to be built.
I am writing this now because of the 7/7 email. I find it VERY troubling that S!K is not being forthcoming about lead times when they solicit new business. While I wont go so far as to impugn their integrity, S!K seems to be using intentionally vague and easily misinterpreted language that hides the fact that the most recent round of 7/7 sales will probably not ship before the end of 2017 (and that is a generous estimate imho).
Lets also seriously consider why S!K would offer these knives for sale, at a discount. They have already taken in $100ks worth of sales, the majority of which still have not shipped (and probably wont for YEARS). They have demand for their product and can sell completed units as fast as they can make them. And yet, once again, they are trying to get cash NOW for a product that wont be delivered for at least year. To most experienced business people, this looks like a company that is really strapped for cash. It also points to mismanagement and an unsustainable business model.
I know that this is a long post. But I think it is important to get this information out there. I want to see S!K prosper, but I dont believe they can under the current business model. If S!K has any hope of turing this around, they need make major changes. If they continue down this path, i am convinced they will not be able to fulfill all their commitments.
