BREAKING NEWS: Shopsmith, Inc. Has A New Owner

[RFGuy]

Unfortunately, I was unable to make the 75th event.
While I am hopeful, I am also searching for information regarding Mr. Cupps background, experience, and track-record running businesses.
Has anyone found his resume and background info? I mean, truly hoping this guy isn't a wealth management dude like Gordon Gekko!

Just look for Nicholas Cupps, e.g. LinkedIn has him listed with his career background if you want to see. Looks like he is from Cincinnati so he is somewhat local to Shopsmith.

[Albertt62]

Hopefully he can reverse the obsolescence trend the absence of which was historically a unique major attribute of SS.

There are more than 17 needed old model parts with so many half century old machines still running.

Demand is fer sure teeny tiny, but I think a small inventory can be maintained at a reasonably high selling price.

When ya need it, ya need it. Depending upon scavengers to supply used parts is not IMHO a good business plan.

That always available parts WAS a selling point in the past.

JPG,
If you are ever able to take a factory tour, you’d understand. We think in terms of Amazon these days, with its mile square regional distribution centers in every city. Shopsmith isn’t that at all. Literally 30+ 10ers have been specifically configured to custom mill, and drill raw casings coming from outside suppliers for the headstocks and tables. Most all our special purpose tools are the same story. The warehouse, factory, shipping, and distribution, all run out of the same small space. While we logically think there should be parts laying around for my machine, space, personal, time, money, are a premium for any small company. When you look at any part, how many replacements are ordered in a year? How many does Shopsmith need to order to make it worth while to procure, how long to reconfigure machines, to process those parts, and how long will inventory remain till the next re-order point. Shopsmith, in my opinion has been doing a huge job juggling all these balls to keep the doors open, and lights on. And bottom line, their commitment to the old machines. Try ordering a part for a 1962 Craftsman table saw…
Keep the faith! I think we need to order the parts we can from Shopsmith, recognize we don’t have the whole picture, be patient with them in this Amazon era, and be great full they haven’t gone the way of the buggy wip.

[jpdalton]

Has anyone found his resume and background info? I mean, truly hoping this guy isn't a wealth management dude like Gordon Gekko!

Well, he is a wealth management guy, but I didn’t get the impression he’s of the Gordon Gekko variety… There was no need to schmooze the Anniversary Celebration attendees like he did if the plan is to break up the company.

Here’s his LinkedIn profile for those interested:
https://www.linkedin.com/in/nicholascupps

[cinredman]

Well, he is a wealth management guy, but I didn’t get the impression he’s of the Gordon Gekko variety… There was no need to schmooze the Anniversary Celebration attendees like he did if the plan is to break up the company.

Here’s his LinkedIn profile for those interested:
https://www.linkedin.com/in/nicholascupps

Certainly positive comments from someone who attended the event. Having completed a number of parts pickups at the location, it was always a bit sad to see such a dimly lite warehouse, old non-functional computers and things just in need of clean-up. Thinking to myself, pride comes from not just the product you are making, but the overall working conditions.

[mganthon]

Scott at MyGrowthRings just posted a good interview with Nick as well. It answers a lot of questions you (and I) probably have.

https://www.youtube.com/watch?v=YQXvMML0CcI

[RFGuy]

Scott at MyGrowthRings just posted a good interview with Nick as well. It answers a lot of questions you (and I) probably have.

https://www.youtube.com/watch?v=YQXvMML0CcI

Trying to be optimistic, but honestly I had several concerns while watching this interview. Choosing to not talk about the negatives that I saw in the interview here. On the positive side, one good discussion was around what the PowerPro Gen 2 should have been and it sounds like this may be corrected in a version 3 that is planned. Would like to learn more about the Shopsmith X-6000 that was shown in the Shopsmith museum and why it never came to market (shown in pic below).

P.S. On a pop culture note, the J.J. Abrams diss was unexpected and off the mark (pun intended) IMHO.

ShopsmithMuseum.jpg (292.19 KiB) Viewed 9374 times

[algale]

Scott at MyGrowthRings just posted a good interview with Nick as well. It answers a lot of questions you (and I) probably have.

https://www.youtube.com/watch?v=YQXvMML0CcI

On the positive side, one good discussion was around what the PowerPro Gen 2 should have been and it sounds like this may be corrected in a version 3 that is planned.

It was an interesting interview. He has his heart in the right place. But if I was thinking about buying a PP Gen 2, that interview would have stopped me in my tracks.

[RFGuy]

It was an interesting interview. He has his heart in the right place. But if I was thinking about buying a PP Gen 2, that interview would have stopped me in my tracks.

Alan,

Just curious what parts you found interesting. I certainly could have missed something...it was a long interview to go through. I did like that he acknowledged the PowerPro Gen 2 didn't go far enough and I agree with this and made those comments previously here. Though I had hoped the Gen 2 would have gotten all the way there because it is a notable improvement over Gen 1 in my opinion. I did like this idea of having the touchscreen be perhaps detachable and much larger so that how-to videos and/or reference material could be brought up on it for the Shopsmith newbie as an aid. This combined with the new video content that he promised on the website would be very helpful for new users of a Shopsmith IMHO. For more experienced users like myself, I have a computer in my shop which I use for many things. IF I didn't, just one thing that large tablet on the Gen 3 PP could be used for referencing a cutlist on a project or a drawing or plans, etc. The detachable tablet could be interesting but if it drops then there goes an expensive replacement. Also need to keep it close for shutting the machine down, etc. so not sure how it would work from a safety/legal standpoint, but it is an interesting proposition I believe. Also discussion around getting younger customers, but only in the 40-50 year old range, not 20-30 year old range. Nothing concrete was shared on how they intend to acquire these new customers so for me that was disappointing as Shopsmith owners, like myself, continue to age out and I don't see new ones coming to replace us, but rather embrace the plethora of other brand woodworking tools in the marketplace. I am trying to stay positive and optimistic on this acquisition, so I am trying to keep my comments as neutral and objective as possible...However, I have to say after watching that interview what I was left with is this:

A finance guy just told us that he was forced to leave being a financial advisor for individual investors due to a layoff/restructuring, but then went private with this and his clients came with him. However he tried to pursue this with a penchant for doing acquisition investments (vs. stocks/mutual funds) using client's (individual investor) money and had to abandon this due to the costs involved with managing all of the legal paperwork required for multiple investments and multiple investors. The implication being he is now doing a sole investment/acquisition (private equity) and Shopsmith is this one company for him right now (to avoid gov't paperwork), but with whose money it isn't clear. An acquisition investment strategy has only one goal...an eventual exit strategy, i.e. selling off a more valuable company down the road (or liquidating/spinning off assets). M&A's rarely benefit a companies customers, the employees working there or the end product that is sold. It didn't sound like he really understood the real value of Shopsmith. It sounded like his initial focus is cost cutting on the supply chain and manufacturing side, but don't expect prices to go down but rather up as he sees it as a 12-in-1 tool that he likened to an iPhone. That iPhone/Apple comparison likely means he thinks the product is undervalued in the marketplace and he will likely raise prices more, in my opinion, curtailing sales further, as Apple and its iPhone are top tier in the market. He also thinks down the road Shopsmith can sell into the EU, but I highly doubt he understands the safety/legal challenges of bringing a 70 year old woodworking machine up to date with the requirements in the EU which are more stringent than the US. Rather I suspect he wants to pretend to enter the EU market in hopes of attracting a much larger international woodworking company to acquire Shopsmith and complete the exit strategy his investor(s) need. Truly hope that I am wrong, but that is what I heard. Putting on my oracle hat for a moment, I predict either a sale of Shopsmith to another tool company or a firesale in the next 5 years.

P.S. I standby my analysis above, but if anyone has a more positive take on it, or heard something I missed please share it. Like I said I am wanting to be more positive, but my impression shifted as soon as he dissed J.J. Abrams...

[algale]

It was an interesting interview. He has his heart in the right place. But if I was thinking about buying a PP Gen 2, that interview would have stopped me in my tracks.

Alan,

Just curious what parts you found interesting. I certainly could have missed something...it was a long interview to go through.

Regarding the length of the video: I upped the playback speed to 1.5X to make it tolerable to listen to. I do that with all the My Growth Rings videos because I find the presenter, Scott, talks way too slow and rambles.

Length of the interview aside, I'd say you missed nothing on the business end. A lot of the stuff you wrote about him saying interested me.

The cost of shipping a new Shopsmith to NY ($1000) just blew me away! I assume that's NYC proper. Given the size of the average NYC apartment there probably aren't that many potential customers in NYC. The Shopsmith may take up no more room than a bicycle (debatable but he kept repeating that trope) but that's still too much room in the average NYC apartment. And forget rolling your Shopsmith out of your garage in NYC -- only the 1% own 'em. But I still assume there are at least a few potential Shopsmith customers in NYC and that the $1000 shipping cost is a big deterrent.

He probably does ultimately want to sell the company and make a profit. Nothing wrong with that. But to do that he's going to have to sell more product. As he says in the video, this isn't the kind of company where there are assets he can strip and sell off. The building (and machinery in it) essentially have no value other than to Shopsmith as a going concern. So it's all or nothing. Either he sells more Mark 7s to younger people or the company will die off as its aging customer bases dies off. Can he achieve 25X current sales as he hopes? I hope so, but it is a very ambitious goal. Shopsmith's heyday was at the dawn of the home power woodworking era. There weren't as many competitors. And really none outside the U.S. It is a different world and a different era. I love my Shopsmith and think it is a fantastic tool. But it is an anachronism in a hobby with fewer people.

[RFGuy]

Alan,

Thanks. I appreciate it. Good insights and I appreciate your feedback to help me validate my own opinions and to figure out where I may have led myself astray. Yeah, I also watched most of the video at 1.5x speed. I really like Scott and appreciate that he takes his time to speak; meaning that he forms a clear and concise thought in his head being careful with his words. All of us have differing auditory processing speeds and I find many speakers too slow for my own tastes, so the joy of YT is being able to speed up life where I can. Intending no offense to anyone who speaks (or types) more slowly.

Yeah, the shipping cost was a shock to me as well, but not too surprising considering it is by freight, given the weight, and right now the world is upside down with inflation where it is. Yeah, the apartment, small shop selling point is off the mark (pun) by him I believe. Ultimate small space woodworking is hand tool woodworking which I believe is seeing a resurgence in recent years, so apartment woodworking is more aptly hand tool or small power hand tool driven IMHO. Also not going to attract those customers unless you drop a Mark 7 for sale in the middle of Home Depot, which is where many DIY'ers buy everything. Similarly, garages and shed buildings are rare in the EU for the most part. My understanding is woodworking tends to be professionals mostly in the EU, so rare are the hobby woodworkers or DIY people, though they do certainly exist there. Much greater chance of finding those people in the US. Was also shocked to hear him try to proclaim that the inflation adjusted $350 original (1950's ?) Shopsmith cost means the Mark 7 is underpriced today?!?!?!? Off the mark (pun) again. You also have to look at the rest of the market and I really don't think the current price point supports a growing market share of Shopsmith owners going forward. I think you hit the nail on the head with it being a different world and different era for Shopsmith. Did he really say he hopes to 25x sales? I must have missed that in the interview.

I also love my Shopsmith equipment and enjoy using it, but if I lost it all and had to rebuild my shop tomorrow, I would be looking at other manufacturers to replace everything.

P.S. He did confirm that most/all of Shopsmith's patents have expired. This taken with the fact that no one has tried to offer a competing machine in many, many years really tells you there simply isn't a market opportunity for new machines of this multi-in-one type. Sure this business can support existing customers and do a better job of this, but expecting a huge influx of new-to-Shopsmith customers is misunderstanding the market and woodworking customer preferences IMHO.