With the estimated purchasing power of the top ten percent of the slums as well as the daily expenses, Cæ had a good estimate of the constraints for the cost of production. Even if he went with the lower end of profit percentages, the cost of production would have to be below the purchasing power of this creamy layer of the Colohen Slums.
Cæ eventually settled for a figure of about three thousand leenars.
"That is a reasonable cost constraint," Mr. Norton nodded. "Now that that is settled, you finally have the basics needed to commence product development. Once the product is developed and we have a quote for the estimated cost of production and necessary inputs, then we can plan out the operations. Once the operational aspect is ironed out, everything else revolving around it, like management, sales, accounting, and marketing, can be fleshed out."
It was only after the product was fully developed and tested could the necessary inputs for the production process be fully known. Specifically, it was important to have absolute clarity about the three primary aspects of manufacturing: Labor, magicapita, and raw materials.
Once each of these variables was fully grasped, then the finer details of the operations, such as inventory, supply chains, scheduling, etc, could be fleshed out with absolute clarity. Nothing could proceed much until the product and production operation were completely finalized.
"Finalizing the product will be the main thing I focus on," Cæ nodded thoughtfully. "Admittedly, this is not something I have much experience in handling. But I suppose I have only two options, don't I?"
Mr. Norton nodded. "You can either develop the product in-house or outsource the R&D process to an external party: a lab or a magitech company."
The choice hung in the air.
Cæ's expression grew complicated. "…There are pros and cons to both."
Mr. Norton nodded. "Indeed. The pros of the in-house development route are that it is far cheaper compared to outsourcing the development to another company. Not only that, you will also have to pay money to either buy the patent or purchase an exclusive, perpetual, worldwide license from a third party. You will have more control over the development and will be able to mold the final product in accordance with your vision of it if you develop it in-house."
Cæ stirred at those words.
Admittedly, this was very attractive to him.
However, he knew that he needed to be practical.
"In turn," Mr. Norton continued. "It is a massive undertaking to burden. On top of that, with imperfect management, product quality could easily plummet. It isn't easy to create a product with no flaws or defects of any kind. Third-party developers have a rigorous mastery over the protocols for prototype development, testing, and other quality control systems."
Cæ heaved a deep breath as he thought of whether he could handle such an ambitious and intimidating goal. If he could, he would be saving on major costs that he would surely incur with outsourcing to the specialists.
"Specialized third-party development companies will essentially be able to guarantee the process that I'm looking to create, right?" Cæ raised an eyebrow.
"I would go as far as to say guarantee," Mr. Norton winced at that question. "But yes, they are professionals in product development and should be able to give you extremely refined blueprints. It depends on which company you hire, of course. But, obviously, the better the company, the more they will charge you."
Cæ's expression shifted with uncertainty and thought.
He loved the idea of creating his own product in-house, but he knew it was extremely ambitious and difficult to achieve. He was attracted to specialists who could provide a quality product but was deterred by the notion of high costs.
He heaved a sigh. "This is not something I can decide at the moment, I will need to do my research and thoroughly evaluate the two options in detail before making a choice. I won't delay my choice for too long, though. We need to complete the product development phase before anything else can proceed."
He glanced at Mr. Norton with a raised eyebrow. "…Now that I think of it, you have a degree in engineering, don't you? Not to mention, your old company also developed its own product, did it not?"
A flustered smile emerged on the man's face as he scratched his head sheepishly. "Yes, but I have very little experience in grounds-up R&D. And for my old company, we ultimately went for the outsourcing route. I can't say I was disappointed. The product we sold was perfectly functional, just as we had intended. Although it certainly did strain our finances."
"Then, you would recommend a specialized third party?" Cæ raised an eyebrow.
"I am certainly leaning towards it," Mr. Norton heaved a sigh. "Frankly, I don't think you will be able to find the necessary magineers with the needed skill and competence to make this project a success. Rather than joining a new start-up, the best go on to work with the top magitech firms in the entire country, and even abroad for more lucrative opportunities in superpowers like the Estroycia Federation."
Cæ grimaced lightly for a moment. "That is true."
The Estroycia Federation was the most powerful superpower on the Gruonia Continent and possessed one of the highest incomes per capita, making it one of the most desirable spots for many of the most successful magineers in Elendir.
"Small businesses generally do not have the capital to engage in this kind of in-house R&D for a brand new business," Mr. Norton continued. "However, I'm not entirely against it since you have obtained a powerful source of funding. That along with standard lines of credit that most businesses use to launch and fund their day-to-day operations, we do have the necessary capital needed to undertake our own product development projects."
Cæ heaved a soft sigh. "I will get back to you after I'm done conducting more research into the topic."
"That's fine, this is something that you should pour a lot of thought into," Mr. Norton smiled friendlily. "Putting that matter aside, I believe we should finalize the business registration as soon as possible. After all…"
His tone veered off hesitantly.
"Of course, I don't intend to leave you hanging," Cæ replied with a nod. "If you are so inclined, then we can register the company under our names immediately. That way we can get the legal requirements and hurdles out of the way."
Every business had to be registered with the government and the tax authority and obtain the necessary permits for whatever business they were aiming to conduct. The sooner the paperwork was taken care of, the better.
Cæ couldn't blame Mr. Norton for being eager to deal with this. The sooner the company was established, the quicker he could quit his old job and immediately start working for their new business.
Especially when he had to give a two-week notice before leaving.
"Of course, I will try to get the capital ahead of time from the school as soon as possible," Cæ informed him with a friendly tone. "After all, I can't have you working at the company without pay, after all. I will also have to file for a business loan immediately after we set the company up."
Mr. Norton nodded. "That is very understandable."
The two men spoke some more about other tangentially related matters before their second meeting finally came to an end.
"It has been a pleasure speaking with you, Mr. Norton," a small smile emerged on Cæ's face. "I look forward to working with you as a business partner."
"Call me Feidin," the short man smiled. "I, too, look forward to working with you. I am deeply grateful to you for giving me this opportunity."
And thus, the two men parted ways after a long and productive meeting.
Cæ fell into thought as he considered the most important of topics that they had discussed extensively.
His mind kept drifting back to the two choices that he had in front of him.
In-house development or outsourced development.
"My product is definitely niche and unusual," he muttered to himself. "It's unlikely that any ordinary magineers would be capable of taking it on."
After all, he had long known that his micro-housing unit would be devoid of magic in and of itself.
"The slums are too poor to afford to a continuous supply of magical energy."
Not to mention, the magigrid running across the entire city from the Colohen Manaplant did not enter the slums. In other words they wouldn't even be able to purchase magical energy even if they did have the money.
"This is probably unheard of for a housing unit."
It was also why conventional civil paradigms simply failed so miserably in the slums. The civil workers responsible for it were entirely unqualified for it in the first place, but their knowledge and skill were also simply irrelevant in an area like the slums.
"I most likely will need the help of magineers who specialize in non-magical products, but…"
How many such magineers existed?
Magical energy was the foundation of all magitechnology in the entire world. Creating something like a housing unit, which usually consumed an abundant amount of magical energy, was a highly niche product. With magical energy flowing across the magigrid under the city, an overwhelming number of magineers have skills and knowledge that were premised on the abundance of magical energy.
This had been the case ever since the Magindustrial Revolution.
"The invention of magical energy made everything magical, but it ended screwing people who didn't have access to this precious magical energy that powers everything under the Sun," he glowered, remembering his magicless childhood in the slums.
Magical energy was not the same as mana.
Mana was pure physicality with no form.
In other words, it was not real or causal. It could not be transmitted through the magigrid by itself. This limitation of the inability to distribute mana was one of the hurdles that had to be overcome at the dawn of the Magindustrial Revolution.
The solution had been remarkably simple.
To give mana an eidos so that it would have both form and physicality, but more specifically, to give it an eidos that would ensure that mana didn't get consumed and expended but, instead, could travel from one location to another without any loss in mana, and then have technology repurpose the mana of magical energy for other purposes.
This invention of magical energy became the foundation of magitechnology and all its applications, but especially housing. Each and every building in the inner city was connected to the magigrid. If he went around trying to commission product development of housing that didn't make use of magitechnology, he suspected that most companies would not be able to help him very much.
That was why Cæ was giving in-house development serious consideration.
His demands were niche, far too niche for companies that operated with magitechnology as a given. It was such a niche that there was a small chance that he wouldn't even be able to commission them for such an odd housing unit.
"It's a shame I can't commission the Elendir Institute of Magic either."
Its labs and staff were only meant for academic and research purposes, they did not accept commissions for any commercial services as an institute.
"Tsk, this is an issue that I will have to resolve by the end of the week, I don't want to delay the progress of my business with indecision, of all things," he resolved himself. "It will essentially boil down to whether I can find somebody that can make in-house development viable. If not…"
His eyes sharpened.
"…I will have to resign myself to the prudence of outsourcing it to the professionals."
Thus, time began ticking away as Cæ found himself at a crossroads where he was forced to choose between.
Life was about to get very hectic for him.