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Silverback Precious Metals

A very strange chapter in my life�

or: how to sell >$4M of a product and still lose money.

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The Beginning (2021)

Hey Jim, do you think we could do something like this?

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The Silver Supply Chain

$31.50 per troy ounce

$31,500

1000oz bar

$33.50 per troy ounce

$335

10oz round

$35.50 per troy ounce

$35.50

1oz coin

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The Problem We Wanted to Solve

  1. Most of the world’s precious silver is stored as 1000oz bars. Processing these into smaller pieces is costly, time-consuming, and requires specialized equipment and facilities. The rate of processing is fixed, but demand isn’t.�
  2. When demand rises quickly, supply can’t keep up, and the price of small denomination pieces (“premium”) skyrockets compared to large pieces.�
  3. The bottleneck is in turning large pieces into small ones so that average consumers can buy them.

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Short-Circuiting Traditional Silver Processing

>$1M USD startup cost

huge facility

​

dozens of employees

slow

not scalable

$500 bandsaw from Harbor Freight

my garage

​

Dave and me

fast

scalable (buy moar bandsaws!)

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Short-Circuiting Traditional Silver Processing

>$1M USD startup cost

huge facility

​

dozens of employees

slow

not scalable

$500 bandsaw from Harbor Freight

my garage

​

Dave and me

fast

scalable (buy moar bandsaws!)

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Moar Partners Moar Better?

  • Engineering
    • Little Jim (me)
      • Pretend engineer
    • Medium Jim (from Reddit)
      • Former Navy fighter pilot
      • Former NH state senator
      • Former Ron Paul campaign chair
      • Aerospace engineering PhD
      • Air Force Academy professor�
  • Production
    • Mike and Alan (Medium Jim’s friends)
      • Owners of machine shop in Maryland
      • “We’ll hire enough people to handle any demand”
    • Keith
      • Foreman of machine shop�
  • Sales, Website, and Branding
    • Jesse
    • Dave

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A Process Emerges

Mike, Alan, and Keith

Maryland Machine Shop

Branding

Advertising

Website

Dave and Jesse

Denver

Australia?

Turkey?

idk…

saw, clean, melt, stamp, polish

process developed by Jims

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A Fly in the Ointment

Keith dies of COVID

Alan and Mike’s machine shop falls apart

Medium Jim decides to stand up his own shop outside of his house in Maryland

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Kinesis Supplies the Bars

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The Fun

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More Fun

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ARK Silver

Medium Jim’s Machine Shop

Kinesis

Private Consumers

Coin Shops

cutting

casting

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Oh wait…

I want to cash out because there’s no more process development, but no one can figure out how much my shares are worth

Despite >$4M in sales, we have no money

Record keeping is inconsistent

Medium Jim has a stroke (although recovers quickly)

We have a lot less silver in stock than our shitty records indicate we should

We don’t have enough information to file taxes

Medium Jim is essentially running the business - we need his help to get the books in order

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As It Stands Now

There is no satisfying resolution to this story

At least three thousand ounces of silver missing

No sales for a year

Never filed taxes (but never made any money soooo…)

Basically defunct

But I learned a lot and got to be a pretend engineer!