Interview Follow-up: Wealth

Xander Phoena was gracious enough to invite Mynnna and myself onto his show, Crossing Zebras, to talk about industry/market topics post-Odyssey.  It was a really fun interview.  I always feel outclassed by Mynnna since he has access to data, tools, and market makers like I could only believe.  He's been the person I've bounced the weirder market behaviors off of to try and get better intuition as to what is actually happening.

The first official question that Xander posed to us had to do with personal wealth; positing that we're both trillionaires.  I can't speak for Mynnna, but I was rather candid that my value isn't that astronomical, though I am pretty sure my "only 100B net worth" humblebrag will probably be seen as the opposite among a lot of readers.

I should really get some tools to better track ISK like marketsforISK does on his blog or EVE-Fail, but I try to keep my view short rather than try to watch the grandoise trend.  Instead, I keep my eyes on the week-to-week to try and make the best decisions with the tools/data I have to leverage what I have effectively.  And the second truth is I've hit one of those pesky plateaus.

Asset Breakdown

I don't like doing these... I tend to find a lot of stuff that is not being used, but can't be liquidated.  Numbers are a mix of my own accounting and jeveassets reports

• Operating purse: 15B
• JF Project with K162space: 8B liquid + 2 JF's in production.  Actual number needs some verifying
• Bank: 4B
• BPO value: 34B (24B capital BPOs + 7B etc. rest on loan)
• POS value: 2B estimated
• Other industry equipment: 2.5B estimated
• "PVP Main" random assets: 25B

To my younger readers, this looks like a lot, but to my older readers I'll look maybe a little foolish that "that's it?"  Without going into cliches about being 1% or first world problems, the honest truth is that I am still at the point where I can point to several friends/corps/projects and say "yeah, but they are doing x factor more than me".  Again, EVE-Fail recently hit 100B liquid and over 1T net worth.  My friends in Aideron Technologies are on track to sell 1B/day for the whole year.  There are a dozen other friends who can throw down liquid cash in factors 2x or 4x what I can today.  The simple truth is we judge each other against our peers, and I am still middle of the pack against my personal friends.

Plateaus 

The black line is %margin, purple at the bottom is profit per character.  And the red line is what really tells the story here.  Despite the kit and sales lines growing, the profit line is the gentlest slope.  It would be negative if it weren't for active management and growing the buy-ins to try and grab for higher payouts.  Other than the Odyssey blip, the growth in my program has been mostly in costs, not in profits.

The fact is that asset growth is going to plateau periodically.  Usually around the various factors of 10.  "Making 1B easy" is a much lower goal than "making 5B easy".  Having 1B operating purse is much easier than having a 10B purse, which is much easier than a 50B purse.  

Right now, I'm in a slump trying to justify moving from 15B/kit to 20B/kit operating budget.  As the buy in grows: my gross margins shrink, the effort increases, the risk increases, the cycle time increases.  This means each additional billion I push in, the less the return I will see from that added investment.  Frankly, I am still getting the desired return per character I've been accustom to, but I have been growing and growing that buy in pot to match the expected margin.  Today, this is a function of the market as a whole, the summer doldrums make it tough to rake in the ISK, but over the last year, I've been increasingly hard pressed to hit that 30% margin goal.

So What Is the Goal?

The best question after all this humblebragging and frustration on how little good all this liquid cash and industrial horsepower is doing me... why do it?

The first is to have an income strong enough to play without worry.  That means dropping 1B on equipment on a deployment.  That means just grabbing that ship you want to play with.  It's similar to getting that first decent salary job.  No more worrying about that one bill that will totally break you.  I'd like to grow the income to better balance out more PLEX purchasing without balancing those expenditures against the kit buy-in growth... but that's personal accounting more than actual income.  I think I am essentially there.

The second goal is to break through that 1PLEX/char/workweek ceiling.  It's an enormous pain that if I want to break through that number, I have to basically re-factor the entire manufacturing team to ships only.  This gets logistically painful and is incredibly risky.  As I've said over and over, the richest ground in T2 is shrinking, and in T2 ships that land is going to get very sparse unless something drastically changes the T1/T2 ship balance.  Also, if I push for all 8 producers to be full-time ships, that means my production kits will push over 25B and those hauls become FAR too risky/heavy/often to be doing personally.

The third goal is just the same generic space-rich plans almost every player has.  My main still needs the titan books to complete the "gotta train 'em all!" goal.  I'd like to stash my operating budget in cash, just so when the day finally comes when I eat shit to a suicide camp, it doesn't destroy me.  As for being technically rich or hitting any particular number of zeros, I've never had a wallet balance as a goal, and I doubt I techincally will.  If I cross 100B cash though, I think I will be forced to give 90% of it away to the Angel Project

I am entertaining some ideas to diversify and try some new activities.  I have yet to touch T3 and if my estimates are right, I should really get the pieces together for reaction farming.  

Industry/Code Blogs to Follow

Spent August pushing some big projects out the door, and continuing work in trying to earn my place as a premiere industrial/economic commentator.  And to keep it from being too easy, a few blogs have recently come across my feeds to keep me on my toes.

Unforgiven Storm at The Lazy Pilot

Though he's been contributing work for a while, I only recently found this blog thanks to some cross promotion from Poetic Stanziel.  Frankly, all the code I keep talking about, this guy is delivering on.  His recent release of EVE Reactor, a reaction planner/tracker like I had dreamed of last fall, and running his own "Reasonable Things: Industry edition".  

If you're in to some of the more technical work and 3rd party dev stuff like Fuzzwork, K162space, and DRK, I'd definitely add this blog to the watch list.  Furthermore, it looks like he's working on another CSM run.  Seeing as I am weighing my own run for the next CSM, it might be worth getting in touch with all the #devfleet guys to coordinate some sort of Industrial Ticket... like how the WH candidates organize their block.

Varkoh's Finance - Markets - Trading Blog

It's no secret that I'm a pretty bad trader, and though there are some interesting trade blogs (marketsforISK and A Scientist's Life in EVE are my favorites), Varkoh really steps up the game and brings a real life commodity trader's eye and tools to the game.  He currently has a really great speculators guide to the current Caldari Ice Interdiction.  His trader eye is really a cut above a lot of the MMO-trader amateur's.  

He also publishes trader tools, but I haven't had a good chance to really dig into them.  Also, without understanding the real life trading tools/mindset I need to do some more learning.  But Varkoh does a really excellent job walking through the thought process in explaining his results/expectations.

Valkrr's Industrial Journal

Last, but not least, Valkrr's blog is an interesting one.  He shares his dev work and findings rather raw on his blog.  Also, he's a real life friend, actively trolling me to get away from constantly using gdoc as a crutch and make some real code.  Having spent years in big-data processing, he really has a technician's eye for getting down and dirty with the data.  I hope he starts publishing some of his work more publicly, because it's the kind of no-nonsense code I really connect with.

The reason I enjoy his blog is that he's a great counterbalance when I start becoming too elitist jerk about my industrial advice.  He's living the "start from zero" industry program.  He's also a great counterbalance on analyzing data from second angles.  I hope to incorporate some of his work in my own tools as we share back-and-forth.

Eat Your Heart Out Ejyo - Odyssey Moon Resource Report

This is meant as behind-the-scenes for my latest TheMittani.com article: Odyssey Moon Resource Report

As always, I've made most of my data available for private review:

• Material Price Review

I was lucky enough to get an easy to parse database of moon data directly from Blake Armatage at K162space.com.  This made the map section of the article EXTREMELY easy to make, as opposed to a bunch of pavement pounding and guessing.  Unfortunately for you guys, I've been sworn to secrecy on the data source... so I will leave it up to him to post any more of that data.

This turned into a monumental undertaking.  Trying to slice-n-dice data into presentable formats took a ton of time.  Also, trying to understand and then present in a cogent manner the entire scope of these changes, from moon mining to T2 product, was a ton of work.

Map Data

I am still trying to get over my irrational fear of SQL and the datadump.  Though it took some crowbarring, I was able to force the data into a usable format.

By stacking the raw data K162space furnished into one database, I was able to merge that data set with the existing map data to get a table with counts, per system, of each moon resource.  I have included some basic map SQL fu in the code snippet gallery.

I had prodded Mynnna several times to try and check/improve the database I have, since GSF boasts the most complete database of money moons.  Unfortunately, beyond some jibes about certain groups being over reported (Thulium), I wasn't able to get better results.  As such, if you look at the R8 map, there are some pretty wide swaths missing in the data set in the south and the east.  This was an effort of "do the best you can", and having K162space's dataset was a godsend, even if it may not be 100% complete or accurate.

Once it was merged into the form above, it was onto JMP to try and build the charts.  Turns out mapping values to custom coordinates is a massive pain in the ass.  The solution?  Crunch the original table down further.  By expanding the table to include boolean values of if a system included a particular resource type, then using that boolean to trigger writing the X, Y, Z coordinates to each material.  Then with data columns like Cadmium (x), Cadmium (y), Cadmium (z), of either valid coordinates or NULL, I was able to overlay the data into very pretty maps.

Also, pro tip: 2d map coordinates are (X,Z), not (X,Y).  Credit to @AideronRobotics for finding the issue and pointing me at the correct pairing
This is wrong: X,Y R8 report:

Meanwhile, these are right:

Click to embiggen

I had to get somewhat creative with the data points on R16/R64 because they were completely overlaid.  So by making the "background" points large and the "foreground" points small, this allowed for a decent two-level effect that was better than when all the dots were the same size.  Also this allowed for multiple overlaid points in a single system to show up a little better.  In the future, it might be worth adding small offsets for each data point so they don't overlay as badly.

The REAL treat I wanted to do was recreate the hex-grid for regions/constellations or at least add borders using an ESRI map... but I was extremely out of my element on trying to make that.  Perhaps a project for another day.  If I could build an ESRI map, I could build heatmaps by rarity in each location, which would be sweet to have.

Also, those interested in data dump fu, I have included my SQL queries in the site's Code Snippet Gallery.

Graphs, Graphs EVERYWHERE

I learned my lesson last time with historical data.  This time I picked a reasonably arbitrary date (CCP Rise's HAC announcement) and locked in all the data I would need for that period.  Thankfully, that was a good 120d swath to get a picture before any changes were announced and out until all of Odyssey's messyness had subsided.

The topic I tried to include, but could not do so graphically, was Alchemy.  I added alchemy math to my advanced-material data feeds, but trying to include them in the final graphs was extremely cluttered.  Also, since the demand for T2 materials has been waning in the face of T1 hull preferences, no material was properly bottlenecked to really incentivize alchemy as a side path.  So rather than clutter and add another 2 pages to my report with essentially little value, I skirted the topic.

Trying to merge the above with all the other racials was messy and the added data didn't really add a lot of value.  So, though it's a little more convoluted, I think the below was a better use of that image space.

 Also, I found Google Drawings to be my savior in this endeavor.  Though replacing the graphs when that layer needed a change was more trouble than I would have liked, it took minutes to build really solid pictures and combine images, where real image processing like Photoshop or GIMP would be nearly impossible for me.  

Another big problem was the post-patch spike on new resources that didn't exist on patch day went absolutely nuts until supplies had been secured.  As such, I had to do a little graph finagling.

First, on metamaterials, I added a "production cost" dotted line over the first 10d

I did some data masking to try and accurately project the pre-patch cost, so that when it lined up with Odyssey release, it would show a reasonably flat transition.  I think the picture does reasonable justice, even if the intended line up missed my original goal.

It was more problematic on component build graphs.  In this case, though the instantaneous cost on patch-day was insane, the truth is probably no one was building them at that price.  So, I instead made a sliding conversion rate over the first 10d.  

Without conversion:

With conversion:

I know the shapes look pretty similar, but the spike is greatly reduced.  I contemplating cutting the 10d spike period completely, or forcing the axis to chop that data, but I think this is a reasonably fair look at the spike-and-decay how it probably played out among manufacturers.  The other option was to chart market prices on those items in the first 10d, but I didn't think that was a better picture than the manufacturing cost.

In total, I generated something on the order of 20 graphs while working on this project, and used maybe half of them.  Though my spreadsheet fu is strong, it was a lot of work to collate all that data.

Also, I have to give props to the admins over at TheMittani.com, because the recent contributor-side changes made this article 10x easier to transfer over compared to the Burn Jita article I wrote.  There was a bunch of streamlining, and it's almost as easy as writing here in Blogger.

Egg on my Face

Despite quadruple checking my work, seems I let a misprint through on one of my images.

What was printed:

What should have been printed:

And I sparked a real CSM conspiracy within minutes of my reddit posting.  Thankfully, CCP Fozzie was quick to note the error was mine, and I was able to push correct graphs back to the site.

I feel particularly terrible about this flub because I'm already trying to overcome the mass opinion that TheMittani.com is only a propaganda mouthpiece for CFC.  It's frankly the highest/best place I can publish this data and get it into the hands of the players.  The issue should be corrected now, and I will be more diligent about getting second reviews of my data in the future.

What's Next?

I still want to write up something about mining post-Odyssey, but with the recent announcement of CFC Interdiction of Caldari Ice, I think I will need to hold off another 30-40d.  I will see about gathering data so my turn around post event is a little faster than the ~3wks this article took.  At least mineral thoroughfares are much more direct and less convoluted than the entire T2 production sphere.  Also, I am open to more ideas about industry topics that require a deeper review.

I am also hoping to jump on a few smaller topics.  As much as writing these big articles is fun and all, it's a ton of work and I would like to get more articles out.  

Free Time Is (Not) Free

There is a quote from The Mittani that has been bouncing around my skull for the last month about how "HS industrialists will clamor and fight over single-percentage-point margins... and null industry will not exist when it's essentially raw cost + shipping to get it to front lines".  I am paraphrasing, but he's essentially right.  Despite the fact that older players eventually learn the lessons, thoughts like "mined minerals are free" or "free time is free" are pervasive.

In my new corp's recent SOTC, the industrial director expressed the desire to have more POS reaction farms, but was unsure how to achieve that goal.  Doing my duty, I proposed a scheme: tax private POS.  Under the plan, I provided a path that the corp would be entitled to basically the margins it is currently receiving, but could expand that revenue for zero corp-level capital costs.  Furthermore, I built up a working prototype tool to help parse API data so it would be easy to track who owed what.  Unfortunately, the plan was shot down because "Paying industrialists is a slippery slope and incentivizes the wrong behavior".  Furthermore, "because you should want your effort to help the corp grow" altruism should make you want to donate your time/talent/treasure for the good of the team.

If your corp business plan for industry is the above: stop right away.  Here's a better plan that involves less effort, and yields EXACTLY the same margin/member: PLEX for membership.  If you're going to bilk people for their time to achieve your personal goals, with no shared wealth down the line, you're better off just charging membership fees and avoiding all that pesky "revenue generating" that takes time away from "elite PVP".  I get that there's a need for shared effort to achieve goals, but this isn't sharing.  This is like working at Walmart: executives gather 13k/employee in profits above wages paid (largely on the back of welfare subsidies).  If there is a big goal, there is room to share the wealth and still rely on pilots "contributing to the greater good"

Frankly, I operate on a policy: If I can't afford to pay people to do it, I can't afford their help.  In my own work, I've strived to prove that you could pay at least 1 PLEX/mo/char and still have more than enough margin to grow the corp.  If I can generate 3-5 PLEX/mo off one character's work, why is it too much to ask for that endeavor to cover my account fees?  Or directly put ships in my hangar?  If you are going to get rich purely by burning human capital until it burns out, AWOXing or straight out theft/scams are a better path.  If you can't share the wealth getting rich, then you aren't getting rich.

"Bottom up income" has been a marching call for CSM and those who believe that moon incomes are game breaking.  The tools exist to build large scale, bottom up incomes with industry, but it also requires OOG tools and some creativity.  Frankly, what directors seem to want is just a "set knob, recieve money", which more and more I am against.