8 ms·
RIP RPi. I thought the whole idea was to produce boards, priced near cost, for educational/inspirational purposes? ie to give today's kids the same kind of int
by jacknews 5y ago
RIP RPi.
I thought the whole idea was to produce boards, priced near cost, for educational/inspirational purposes? ie to give today's kids the same kind of intro to computers (you have to program it) as kids enjoyed with the home computers of the 80's.
The profit motive inherent to a public company does not seem compatible with that mission.
- paulgb 5y agoAs an RPi fan and user I agree with the concern, but as a small consolation I'd also point out that the companies making those computers in the 80s were also profit-motivated.
- gchadwick 5y agoI think we need to wait for further details. RPi has been structure as a for profit company owned by the charity for a long time. This IPO may result in a huge amount of money for that charity. It also doesn't say how much of a stake their selling. The charity may retain the majority share and so continue to have control along with a vast capital reserve to continue doing what they're doing plus a lot more.
- mytailorisrich 5y agoThe for-profit company has been raising money from investors in order to finance growth. I'm sure that an IPO would result in the charity getting cash but the aim does not seem to be that. Now, the good thing is of course that the accounts of the foundation are public [1]. I am not impressed that only about 10% of their income goes to "charitable activities". [1] https://register-of-charities.charitycommission.gov.uk/charity-details/?regid=1129409&subid=0 https://register-of-charities.charitycommission.gov.uk/chari...
- cinntaile 5y agoUnder expenditures it has raising funds as 90% of the cost. Raising funds for what?
- my123 5y agoCost of production/R&D of the Raspberry Pis.
- cinntaile 5y agoThat makes sense I guess. The rest going to charity is pretty good then.
- mytailorisrich 5y agoMy understanding is that this is what Rapsberry Pi Trading Ltd does.
- my123 5y agoThe accounts as shown by that side are consolidated, and include the trading subsidiary.
- mywittyname 5y ago10% of their income is likely the majority of their profits, which are probably in the neighborhood of 10-15%.
- mytailorisrich 5y agoA charity does not make any profit. The point being that, approximately, for every £10 that they get through donations or any other source, £9 goes to costs and £1 to actual charitable activities. Personally I would not donate to such a charity.
- SirSourdough 5y agoHow does the fact that RPi produces a physical product factor into this? If I contribute money to a charity that distributes that money directly to people in need, then I expect a high portion of that money to go to charity, but I don’t know that that is a fair expectation when most people “donate” to RPi by buying a low margin physical product. It’s not a pure charitable contribution to buy a Pi. But maybe I don’t understand how the costs are broken out between the foundation and RPi Trading.
- gchadwick 5y ago> for every £10 that they get through donations or any other source, £9 goes to costs From the accounts I linked they received a bit over £3.5m in donations that year (they're listed in two different places one around £400k the other around £3.1m I don't know why they're accounted differently), spending £7.8m on charitable activities that same year. So in a sense they're managing to double their donations via their profitable trading to generate money for charitable activity spending.
- gchadwick 5y agoIf you spend a few minutes digging into the accounts (https://static.raspberrypi.org/files/about/RaspberryPiFoundationReport2020.pdf https://static.raspberrypi.org/files/about/RaspberryPiFounda...) this appears to have a reasonable explanation. The other 90% gets classed as 'fund-raising', what is actually is is money going into raspberry pi trading. rpi trading made a profit of around £10m which goes back as income into the charity and has mostly been spent on charitable activities. I'm not an accountant and don't have time to go over the details to check but it appears that the charity gets all sales income. This then goes to the trading arm to pay for its expenses, leaving a profit which goes straight back to the charity. The majority of which is being spent on their charitable activities, which moderate sums presumably being kept back to aid reserve building. Trading exists to make the charity money, money the charity then spends on its charitable aims.
- mytailorisrich 5y agoYour explanation does not make sense. If the commercial subsidiary is here to make them money then it should appear under "income", not "expenditure", and it probably does just not explicitly in that pie chart (it's probably under 'other' or 'other trading activities'). Expenditure is what the charity spends its money on, that is, costs (offices, personel, fund-raising activities, etc) and charitable activities. Anyone donating to a charity wants as much money as possible going to charitable activities. We could look at another charity to compare. Off the top of my head, a famous one I know is Crisis (homeless charity) [1]: Record shows 50%+ of income spent on charitable activities, which does make Raspberry Pi Foundation's numbers look quite unimpressive. [1] https://register-of-charities.charitycommission.gov.uk/charity-search/-/charity-details/3974328 https://register-of-charities.charitycommission.gov.uk/chari...
- gchadwick 5y agoThe explanation comes from the accounts I linked to which give more details than the pie chart. > If the trading arm is there to make them money then it should appear under "income", not "expenditure" It does see page 15 (PDF page 17), the foundation lists an income of £71,436,388 from 'Other trading activities', if you follow the note (3) it clarifies that this is entirely from rpi trading. A bunch of money then goes on to expenditure to cover the trading arm's costs. Which are indeed substantial as it's an engineering organization with lots of production to pay for along with staff salaries and other R&D costs, these are broken down in note 6, page 28 (PDF page 30). The profit the trading arm makes then comes back to the foundation which is shown in note 5, page 27 (PDF page 29) as 'other income' So yes it is a little complex, you've got the flow of revenue coming into the foundation, out to trading then back in again but it doesn't look like there's any untoward going on. Simply the charity is taking the strategy of running a profit making company to fund its charitable activities.
- missedthecue 5y agoAs if companies aren't profit/growth motivated prior to floating their shares...?
- deleted 5y ago[deleted]
- cmeacham98 5y agoI'm not sure how it is over in the UK, but here in the US publicly traded companies are expected to always do whatever makes their shareholders money. Investors can even sue companies if they believe the company is acting against their financial interests. Companies have some leeway in how to interpret this goal, but publicly traded companies will only ever do the "right thing" if it is a net positive (or at least neutral) for their shareholders. Owners of privately owned companies, on the other hand, can choose to do things they believe are good, even if it will be a net negative after factoring in the potential good PR.
- 0des 5y agoHow do we stop this cycle where it's a (well-deserved) reluctant goodbye every time a company we like seeks to go public and IPO? It's like the writing's on the wall and we already know what's going to happen.. We're in a segment of time where companies are so over-valued by VC that when they go public they have no choice but to engage in egregious practices to maintain the stock price. It often alienates the customers/users/supporters that got them there. Is this the inevitable outcome in all cases or is this a symptom of a flaw in our model?
- devmor 5y ago>It's like the writing's on the wall and we already know what's going to happen.. Because it is, and you explained exactly why: >We're in a segment of time where companies are so over-valued by VC that when they go public they have no choice but to engage in egregious practices to maintain the stock price. It often alienates the customers/users/supporters that got them there.
- notreallyserio 5y agoIt's the inevitable outcome of enough cases that we should celebrate those that don't take this route. I'm thinking of orgs like Debian here, but there are many others for whom profit is not a or the sole motivator.
- solarkraft 5y agoSome business person probably read this post and thought "Hmm, Debian ...".
- brighton36 5y agoImo, it's a flaw in our model. If 'fighting them' failed, then, we should join them. Here, that would mean participation in the ipo, in the style of gamestop. Push the p/e ratio to something completely absurd. Maybe it'll fail as a result. (Thus begetting a libre office, response to an open office initiative.)
- 0des 5y ago
- robomartin 5y ago> The profit motive inherent to a public company does not seem compatible with that mission. You cannot have any kind of a company without profit. Period. I am not sure where the vilification of profit comes from (not addressing you in particular but rather the general concept), its just silly. Companies have layers upon layers of costs in their financial equation. Employees and ongoing operational expenses being the easiest to understand. If you operate without profit, the company dies. The simplest visual for this might be that if no-profit means zero dollars in the bank account at the end of the year. After all, "no profit" or operation "near cost" would result in exactly this kind of a situation. Which would, in turn, kill the enterprise almost instantly. If you want a company to produce and evolve products (any kind, physical or otherwise), it must be profitable. Without profit there is no innovation or longevity. At best you get a slow painful death. In addition to this, the pandemic has to have taught everyone the other dimension of the necessity of profit. When things go wrong --for whatever reason, pandemic, economic downturn, market shifts, etc.-- a business must have sufficient financial backing, reserves and strength to navigate the storm and survive. Without this they would have to instantly lay off massive numbers of employees, shut down operations, cancel leases and contracts, etc. In short, if you (plural, not addressing the poster I am responding to) care a company --whether it is cause driven or just a good product company-- you have to care about them making a profit or watch them evaporate. Here's a challenge for anyone who does not believe this: Provide the names of ten companies of non-trivial scale who have operated with zero or near zero profit for, say, 25 years, without external donations or other financial inputs to make-up for the lack of profit. Just ten companies. If I am wrong, it should not be too hard to present such a list. Hint: Even charities have to operate at a profit. Without this they would not have people, offices, marketing and the means to perform their stated charitable objectives.
- ceejayoz 5y ago> Provide the names of ten companies of non-trivial scale who have operated with zero or near zero profit for, say, 25 years, without external donations or other financial inputs to make-up for the lack of profit. Most restaurants. Many did, indeed, "instantly lay off massive numbers of employees, shut down operations, cancel leases and contracts, etc." during the pandemic as a result. Amazon made basically no profit for two decades, as a fairly notable example. Every penny earned got plowed back into the business. Lots of revenue, lots of expenses, no profit. It wasn't until recently they turned the profit spigot on. https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-... Uber didn't make its first profitable quarter for a decade. https://www.reuters.com/technology/uber-posts-first-small-adjusted-profit-ridership-rises-delivery-gets-more-2021-11-04/ https://www.reuters.com/technology/uber-posts-first-small-ad... I think you're mixing up profits with revenue. A charity that brings in $1M and spends $1M has no profit, but they can (theoretically) remain a going concern indefinitely at that rate.
- dmead 5y agoyea but it turned into a machine that nerds by when they wanna automate something stupid.
- hvgk 5y agoRPi has always been a Broadcom alumni pet project with commercial interest. I am not surprised. As for the same intro to computers as the 1980s, you can give kids a trash PC and monitor running Linux for less than a whole RPi setup these days and that probably has a better e-waste and environmental outcome too. Oh and the HDMI connector won’t suddenly fall off or the SD card go awry. The mission of the raspberry pi foundation is to leverage the rose tinted glasses of the past to push a marketing ideology that overlaps with the maker ideology. Everyone can build a business from marketing and label it as “for the greater good” with such tags as affordable computing tied to it. Prior to marketing fronts like this existing, there was already significant interest in parties doing stuff like we did in the 80s. Everyone I knew had a PC with a parallel port with some random junk hanging off it. Some really weird people still had Amigas held together with tape. I was programming PIC microcontrollers off a cranky old Pentium 90 I found in a skip outside work.
- ignoramous 5y ago> I thought the whole idea was to produce boards, priced near cost, for educational/inspirational purposes? That's BBC Micro: https://microbit.org/ https://microbit.org/
- IshKebab 5y agoThis sounds like the same thing Mozilla does. There's a non-profit foundation that owns the commercial subsidiary. Otherwise it's difficult for them to do commercial deals that benefit the foundation (like the one with Google which basically gives them all their income).
- MarcScott 5y agoThat was the original idea. However, as well as producing a board that was great for education and hobbyists, it turned out it was great for a whole range of applications, and the bulk orders started coming in from companies all over the world. The Foundation is funded on the sales of Raspberry Pi hardware, government contracts and charitable donations. More sales directly benefit the charity. This allows us to: - Run the world's largest network of coding clubs for children, for free. - Produce educational resources for schools and clubs all over the world, for free. - Conduct research into CS pedagogy. - Provide Pi 400s and monitors to disadvantaged learners in England. - Support educators all over the world with free physical and digital publications. I know nothing about an IPO of RPTL, other than what I've read in the media, but I can guarantee you that RPF will continue to be a non-profit charity, and continue with it's mission.
- phkahler 5y ago>> I know nothing about an IPO of RPTL, other than what I've read in the media, but I can guarantee you that RPF will continue to be a non-profit charity, and continue with it's mission. Call me cynical, but you are absolutely clueless. Once shareholders are involved (especially public) the management will be changed. This lovely piece appeared about a week ago here on HN: https://reactionwheel.net/2021/11/your-boards-of-directors-is-probably-going-to-fire-you.html https://reactionwheel.net/2021/11/your-boards-of-directors-i... The RPi founders will be sacked in favor of profits. All those charitable things done for free will be stopped. The $35 Pi - nobody will mind if we raise that to $50. All sorts of things will change. Maybe not immediately, but they will change. The profit motive goes directly against the notion of a "non-profit" organization. Shareholders want ROI. End of story, end of Pi as we know it.
- solarkraft 5y agoI know of very few cases in which privatization of something publicly run has benefitted the public. The argument "oh but the capital will allow all kinds of investments that will decrease the price in the long run" almost never holds up. Maybe it does in RPI's case, their innovation was supply chain based, after all. But my personal expectation, since a for profit company's interest is to extract as much profit add possible, is that RPI boards will move upmarket and become the premium option with an ecosystem advantage. Their position to do this is already quite good, they're basically already there. But the increased prices will also mean that companies operating on lower margins will become stronger - the Pine64s of the world. That's the "bad case". The "good case" would be that they'll operate with low margins and compensate with scale and keep the educational stuff as marketing expenses. But that's hard to imagine. I'm somewhat okay with either. Luckily the competition in the segment is healthy nowadays.
- behringer 5y agoThis is the end of RPi. I wonder what's coming next though!
- megous 5y ago> I thought the whole idea was to produce boards, priced near cost, for educational/inspirational purposes? I think it's quite clear this is not the case. They have plenty of clearly business oriented board designs like these: https://www.raspberrypi.com/products/compute-module-4/?variant=raspberry-pi-cm4001000 https://www.raspberrypi.com/products/compute-module-4/?varia... Teach the kids Raspberry Pi and then they'll know Raspberry Pi and hopefully push to use it in their jobs 10 years later or whatever. Maybe that's the idea (too)?
- gertrunde 5y agoAs mentioned in the article itself, the RPi Foundation is the charity at the root of the organisation, and RPi Trading is a wholly owned subsidiary of that charity. I have no links whatsoever to any RPi organisation of any sort, so this is purely guesswork, but I could imagine that operations have grown to the point where they are interfering with (or at least a distraction from) their original educational mission. Perhaps this move is to offload that distraction and allow them to re-focus on the original idea? Why must it be assumed that this is a greedy move that works against their mission?
- crossroadsguy 5y agoRPi is easily and affordably available everywhere. Even in my country and their models get released here real fast. I am not sure, I can only hope; but I would really love them to be a Frame.work competitor with their established logistics and reach. Possibly cheaper as well. Maybe not as high end. Because it might be years before something like Framework reaches places like my country (if they don’t go bust by then)