In economics, there are two theories that define the tradeoffs made in any business decision – Opportunity Cost and Sunk Cost. No one knows this better than Ted Ciamillo.
Over the past couple years since we visited him for a factory tour, Ciamillo has poured countless hours and dollars into his Gravitas crank project. With that project now on hold, those irreclaimable resources would be a sunk cost – they’re gone.
With so much focus on it, his bread and butter brake caliper business suffered. Delays. Rejected parts. Too long delays in responding to customers. You name it, and there’ve been online comments to support it. That was the opportunity cost – the business and good will he’s lost while chasing the dream of building the lightest, stiffest crankset known to man.
Since our visit, I’ve spoken with Ted many times and at length about his business. See, I’ve had several businesses before starting Bikerumor and been through my own share of lost opportunities and hard lessons. I can sympathize. I’ve been there. It’s not fun. And in many of our conversations, the stress came through in Ted’s voice. There are few things more painful than watching something you built from the ground up stumble and fall, yet we entrepreneurs are a tough bunch. Sometimes we don’t know when to quit. And sometimes, that perseverance can pay off…