mx_tang
11/20/2003, 06:33 AM
Hi Guys,
Mike here. I was taking my weekly long run and thought a bit about FRAG. If you weren't at the past 2-3 meetings, let me just be the first to say that attendance was really low. With everything, you need work and energy to maintain something lest it begins to stagnate to the point of no return. The first few months of FRAG were really great:
1.) It allowed locals an outlet to network with other hobbyists.
2.) Became a source of education within the hobby.
3.) Allowed people to leverage enough buying power to initiate group buys.
4.) Gave locals an opportunity to exchange their corals, equipment, and services.
5.) Complement the DMS meetings.
Those goals were accomplished, but we need to start thinking about how to improve FRAG before it disbands or dissolves into nothing. Originally, the group of people who conceived this FRAG group thought that people should come and go as they please without any membership dues. Unfortunately, one drawback is that the organization is only as wealthy as its contributors (through physical goods, services, or education).
The first few months were a novelty; someplace new where people could come and do the meet and greet. Some people learned or received things(tangible or intangible) while others didn't. Eventually, people stopped coming because 1.) their purpose for coming to FRAG was met and they had no more use to attend, or 2.) their purpose for coming to FRAG wasn't met and decided not to come to future meetings. Either way, that's not a very good way to perpetuate/keep a club alive, and we need an incentive for people to join and attend. By doing this, we're actually strengthening our original goals, which benefit both the group and the individuals at large.
My first proposal is to have a short discussion and presentation at every meeting. We can map out available topics and speakers. Over the course of a year, this only accounts for 24 topics. Of course, we could have more, but this is just an idea. For the last 2 meetings, I've presented calcium reactors and nutrient export. I'm sure I could benefit from others volunteering for a topic of their own choosing and expertise in the field.
Secondly, I want to integrate an auction during each meeting. This will occur during the last 30 minutes, which encourages people to stay for the duration of the meeting. Also, it allows those who are late to still participate in the auction process. Attending members will donate one bag of corals, macroalgae, live sand, equipment, etc. The proceeds will be used to buy pizza and patronize the restaurant where we meet. If you don't have anything to auction, you can donate a nominal amount of money to "buy-into" the auction ($2-5). Again, this money will be used to buy items at the Round Table Pizza and give them business/appreciation for allowing us to meet bi-monthly in their meeting room free of charge. What we will do is give newbies a grace period where they are not required to "buy-into" the auction process for the first two meetings, but still enjoy the free drinks and food if they wish. You can bring as many auction materials as you like, but only one bag will be used 100% to help buy pizza and food, etc. In this way, if we have 20 people, The Round Table Pizza is guaranteed $40 in sales. I figure that's the least we can do to support them. The remaining bags will be auctioned and sellers will receive the majority of this money. A standard 25% will be deducted from each auctioned item to help FRAG with their operational start-up capital for a propagation project. So, let's say you have 11 bags of macro-algae that all sell for $2 each. You will donate one bag to FRAG and 25% of the remaining bags = $5. Altogether, you profit $15 and $7 goes to FRAG. If you don't have anything to auction, we just ask that you donate at least $2 to support the Round Table Pizza. In turn, we'll take whatever money from people attending and buy food with it. Since the auction is at the end, we'll do a head count and figure out how much pizza/food we can buy with the money raised from the auction. Heck, $2 isn't a lot to ask considering that they give us free drinks, which costs at least that much in the first place.
Third, I'd like to start a small co-op between specific local members with the capacity to propagate corals and attend at least half of the FRAG meetings. What we can do is have each member of the co-op propagate a defined species or coral and continually have a batch on hand for future auctions. The first phase of this co-op begins with redundant fragging between the main co-op locals, which allows a back up stock to exist solely for the purpose in the case of a catastrophic event or extenuating circumstances. Over time, after this redundant fragging and propagation is rooted, a "coral bank" will exist for other members to acquire. Not only can people bring anything they want to the auctions, but there will always be a few very nice corals (>$50/frag) in the auction.
Since some of these corals are very rare and may exceed $100/frag, it would not be fair to have the fraggers buy all of these corals out of pocket. Instead, we could generate some startup capital through auctions fees and possibly donations from other group members. If we had 50 active members who donated $10 to the project, then we'd have $500 right there. Then, if we auction $100 worth of livestock/equipment per meeting, that's another $25. Multiply that times 24 meetings and we have $600. Altogether, that's $1100 worth of corals we can buy to propagate. If 10-12 core co-op fraggers buy X dollars of corals with their own funds, then FRAG will match that amount to subsidize the project. Basically, this gives us $2200 to spend on the propagation project for year 1. If we buy corals at $50/each, on average, that's 44 new species we will have in Arizona dedicated to propagation. If we have 10-12 core co-op fraggers, that's only 4 corals each. In return, the co-op fraggers will get the 75% profit from whatever the market price for the specific coral at the auction for helping out the propagation project. However, they are asked to donate at least one piece of each type of coral within a specified amount of time (within 1 year).
Here's how I've thought it out after 5 years (I'm going to throw in 4 additional corals to the existing 44 just to make the numbers nice and even):
year 1
fragger A has coral 1-4
fragger B has coral 5-8
fragger C has coral 6-12
fragger D has coral 13-16
fragger E has coral 17-20
fragger F has coral 21-24
fragger G has coral 25-28
fragger H has coral 29-32
fragger I has coral 33-36
fragger J has coral 37-40
fragger K has coral 41-44
fragger L has coral 45-48
Have A-C frag each of their corals and give them to each other. Do the same for D-F, G-I, and J-L. My projection is that this will take roughly 6 months to one year just to lay down an initial foundation.
Year 2
$600 from auctions and zero from co-op. However, the corals should at least triple in size by now.
Use 100% of this money to buy 12 more corals for co-op.
Total species = 60
Year 3
$600 from auctions and sell 3 frags each of the 48 species from co-op (at 1/2 market value = $3600. FRAG gets 25% of this chunk to reinvest) = $900.
FRAG also gets 100% of each species to donate towards FRAG (at 1/2 market value) = $1200.
Total amount for year 3 = $2700.
Bank $2100 and use $600 to buy 12 more corals for co-op.
Total species = 72
Total money in FRAG account = $2700
Year 4
$600 from auctions and sell 3 frags each of the 60 species from co-op (25% of 1/2 market price) = $1125.
FRAG also gets 100% of each species to donate towards FRAG (at 1/2 market value) = $1500.
Total amount for year 4 = $3225.
Bank $2625 and use $600 to buy 12 more corals for co-op.
Total species = 84.
Total money in FRAG account = $4725
Year 5
$600 from auctions and sell 3 frags each of the 72 species from co-op = $1350.
FRAG also gets 100% of each species to donate towards FRAG (at 1/2 market value) = $1800.
Total amount for year 5 = $3750.
Total amount for year 1-5 = $8475.
We should decide whether 84 species is enough and which species has/have completely flooded the local market.
One course of action is to possibly sell excess corals online to generate more income for FRAG.
I didn't account for depreciation of corals when they flood the market, but I figure roughly 10% per year wouldn't be too far off. Even if these figures depreciate by 50% per year, it wouldn't matter because the model still holds up and generates enough income to maintain a variety of species or continue to collect additional species/year. The only real difference would be how much money the bank account would have in 5 years, since nearly $8500 is quite a bit of money and is really a best case scenario. However, even if we don't have a penny in the FRAG account, we still have spread over 50 species of corals which otherwise would not be readily available to the locals.
Although, if things really get going and if/when FRAG generates enough income, we can actually have a physical entity and hire people to oversee operations, etc. Pondering the future in 5 years is quite a long time from now, but at least it's wishful thinking. Also, the numbers I used were very optimistic. I really doubt someone is going to pay $25 for a coral when it is available online for $50. $15-20 is more realistic, but again, the model will still work, but on a much longer timeline to generate enough income to get a lot of diverse corals into Az. Another sticking point is whether FRAG can generate $100 gross per meeting; That would require ten people to sell ten items @ $10/each. However, I've seen as many as 30 people at FRAG and $10 isn't really a lot to ask for frags and such IMHO. Anyway, this is all just food for thought.
Mike here. I was taking my weekly long run and thought a bit about FRAG. If you weren't at the past 2-3 meetings, let me just be the first to say that attendance was really low. With everything, you need work and energy to maintain something lest it begins to stagnate to the point of no return. The first few months of FRAG were really great:
1.) It allowed locals an outlet to network with other hobbyists.
2.) Became a source of education within the hobby.
3.) Allowed people to leverage enough buying power to initiate group buys.
4.) Gave locals an opportunity to exchange their corals, equipment, and services.
5.) Complement the DMS meetings.
Those goals were accomplished, but we need to start thinking about how to improve FRAG before it disbands or dissolves into nothing. Originally, the group of people who conceived this FRAG group thought that people should come and go as they please without any membership dues. Unfortunately, one drawback is that the organization is only as wealthy as its contributors (through physical goods, services, or education).
The first few months were a novelty; someplace new where people could come and do the meet and greet. Some people learned or received things(tangible or intangible) while others didn't. Eventually, people stopped coming because 1.) their purpose for coming to FRAG was met and they had no more use to attend, or 2.) their purpose for coming to FRAG wasn't met and decided not to come to future meetings. Either way, that's not a very good way to perpetuate/keep a club alive, and we need an incentive for people to join and attend. By doing this, we're actually strengthening our original goals, which benefit both the group and the individuals at large.
My first proposal is to have a short discussion and presentation at every meeting. We can map out available topics and speakers. Over the course of a year, this only accounts for 24 topics. Of course, we could have more, but this is just an idea. For the last 2 meetings, I've presented calcium reactors and nutrient export. I'm sure I could benefit from others volunteering for a topic of their own choosing and expertise in the field.
Secondly, I want to integrate an auction during each meeting. This will occur during the last 30 minutes, which encourages people to stay for the duration of the meeting. Also, it allows those who are late to still participate in the auction process. Attending members will donate one bag of corals, macroalgae, live sand, equipment, etc. The proceeds will be used to buy pizza and patronize the restaurant where we meet. If you don't have anything to auction, you can donate a nominal amount of money to "buy-into" the auction ($2-5). Again, this money will be used to buy items at the Round Table Pizza and give them business/appreciation for allowing us to meet bi-monthly in their meeting room free of charge. What we will do is give newbies a grace period where they are not required to "buy-into" the auction process for the first two meetings, but still enjoy the free drinks and food if they wish. You can bring as many auction materials as you like, but only one bag will be used 100% to help buy pizza and food, etc. In this way, if we have 20 people, The Round Table Pizza is guaranteed $40 in sales. I figure that's the least we can do to support them. The remaining bags will be auctioned and sellers will receive the majority of this money. A standard 25% will be deducted from each auctioned item to help FRAG with their operational start-up capital for a propagation project. So, let's say you have 11 bags of macro-algae that all sell for $2 each. You will donate one bag to FRAG and 25% of the remaining bags = $5. Altogether, you profit $15 and $7 goes to FRAG. If you don't have anything to auction, we just ask that you donate at least $2 to support the Round Table Pizza. In turn, we'll take whatever money from people attending and buy food with it. Since the auction is at the end, we'll do a head count and figure out how much pizza/food we can buy with the money raised from the auction. Heck, $2 isn't a lot to ask considering that they give us free drinks, which costs at least that much in the first place.
Third, I'd like to start a small co-op between specific local members with the capacity to propagate corals and attend at least half of the FRAG meetings. What we can do is have each member of the co-op propagate a defined species or coral and continually have a batch on hand for future auctions. The first phase of this co-op begins with redundant fragging between the main co-op locals, which allows a back up stock to exist solely for the purpose in the case of a catastrophic event or extenuating circumstances. Over time, after this redundant fragging and propagation is rooted, a "coral bank" will exist for other members to acquire. Not only can people bring anything they want to the auctions, but there will always be a few very nice corals (>$50/frag) in the auction.
Since some of these corals are very rare and may exceed $100/frag, it would not be fair to have the fraggers buy all of these corals out of pocket. Instead, we could generate some startup capital through auctions fees and possibly donations from other group members. If we had 50 active members who donated $10 to the project, then we'd have $500 right there. Then, if we auction $100 worth of livestock/equipment per meeting, that's another $25. Multiply that times 24 meetings and we have $600. Altogether, that's $1100 worth of corals we can buy to propagate. If 10-12 core co-op fraggers buy X dollars of corals with their own funds, then FRAG will match that amount to subsidize the project. Basically, this gives us $2200 to spend on the propagation project for year 1. If we buy corals at $50/each, on average, that's 44 new species we will have in Arizona dedicated to propagation. If we have 10-12 core co-op fraggers, that's only 4 corals each. In return, the co-op fraggers will get the 75% profit from whatever the market price for the specific coral at the auction for helping out the propagation project. However, they are asked to donate at least one piece of each type of coral within a specified amount of time (within 1 year).
Here's how I've thought it out after 5 years (I'm going to throw in 4 additional corals to the existing 44 just to make the numbers nice and even):
year 1
fragger A has coral 1-4
fragger B has coral 5-8
fragger C has coral 6-12
fragger D has coral 13-16
fragger E has coral 17-20
fragger F has coral 21-24
fragger G has coral 25-28
fragger H has coral 29-32
fragger I has coral 33-36
fragger J has coral 37-40
fragger K has coral 41-44
fragger L has coral 45-48
Have A-C frag each of their corals and give them to each other. Do the same for D-F, G-I, and J-L. My projection is that this will take roughly 6 months to one year just to lay down an initial foundation.
Year 2
$600 from auctions and zero from co-op. However, the corals should at least triple in size by now.
Use 100% of this money to buy 12 more corals for co-op.
Total species = 60
Year 3
$600 from auctions and sell 3 frags each of the 48 species from co-op (at 1/2 market value = $3600. FRAG gets 25% of this chunk to reinvest) = $900.
FRAG also gets 100% of each species to donate towards FRAG (at 1/2 market value) = $1200.
Total amount for year 3 = $2700.
Bank $2100 and use $600 to buy 12 more corals for co-op.
Total species = 72
Total money in FRAG account = $2700
Year 4
$600 from auctions and sell 3 frags each of the 60 species from co-op (25% of 1/2 market price) = $1125.
FRAG also gets 100% of each species to donate towards FRAG (at 1/2 market value) = $1500.
Total amount for year 4 = $3225.
Bank $2625 and use $600 to buy 12 more corals for co-op.
Total species = 84.
Total money in FRAG account = $4725
Year 5
$600 from auctions and sell 3 frags each of the 72 species from co-op = $1350.
FRAG also gets 100% of each species to donate towards FRAG (at 1/2 market value) = $1800.
Total amount for year 5 = $3750.
Total amount for year 1-5 = $8475.
We should decide whether 84 species is enough and which species has/have completely flooded the local market.
One course of action is to possibly sell excess corals online to generate more income for FRAG.
I didn't account for depreciation of corals when they flood the market, but I figure roughly 10% per year wouldn't be too far off. Even if these figures depreciate by 50% per year, it wouldn't matter because the model still holds up and generates enough income to maintain a variety of species or continue to collect additional species/year. The only real difference would be how much money the bank account would have in 5 years, since nearly $8500 is quite a bit of money and is really a best case scenario. However, even if we don't have a penny in the FRAG account, we still have spread over 50 species of corals which otherwise would not be readily available to the locals.
Although, if things really get going and if/when FRAG generates enough income, we can actually have a physical entity and hire people to oversee operations, etc. Pondering the future in 5 years is quite a long time from now, but at least it's wishful thinking. Also, the numbers I used were very optimistic. I really doubt someone is going to pay $25 for a coral when it is available online for $50. $15-20 is more realistic, but again, the model will still work, but on a much longer timeline to generate enough income to get a lot of diverse corals into Az. Another sticking point is whether FRAG can generate $100 gross per meeting; That would require ten people to sell ten items @ $10/each. However, I've seen as many as 30 people at FRAG and $10 isn't really a lot to ask for frags and such IMHO. Anyway, this is all just food for thought.