WEBVTT

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in this box is the first laptop that i've bought for myself since high school

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you heard me right i've certainly obtained new portable computers since

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2005 through work or my connections as a youtuber but i have gone 16 years now

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without ever feeling compelled to actually buy one for myself until i saw

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the framework laptop i don't remember the last time i saw a device that so

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clearly rejected the trends towards disposable

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non-upgradable non-repairable electronics while still managing to

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maintain the premium feel that we expect from a modern ultrabook i was so

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impressed during my initial impressions that on top of ordering one on the spot

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i publicly offered to invest in the company surprise they called my bluff

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offering me a chance to put up or shut up and i never shut up about sponsors

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like i fix it oh wow what an appropriate sponsor from iphones to nintendo

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switches ifixit has your repair needs covered with their lineup of fix kits

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find out how ifixit can help you repair your devices at the end of this video

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the point of this video is three-fold to disclose my position as a long-term

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investor and framework to explain why i decided to make this unprecedented move

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and to talk about what this means for LTT going forward and as we go along i

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will be building up the bare bones framework laptop that i ordered to my

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exact specifications this is actually my first time opening this i've got my

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packing slip my framework laptop diy edition core i7 1165 g7

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my accessories love the recyclable packaging what's the padding

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oh wow it is it's shredded paper one of the coolest things about the framework

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laptop is that you choose your own i o they come in these little cardboard

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containers and i went with a single usb type a two usb type cs and an HDMI it

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drove me crazy not having one of these when i was daily driving the xps 13 two

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and one i also got totally unsolicited

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this envelope a couple of weeks after my framework laptop arrived so we're not

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only going to be building it we're going to be fixing it because there's an issue with some of the early units

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of course none of this would even be worth talking about if the machine itself wasn't any good it's got

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surprising stiffness for a laptop that is missing a bunch of pieces all

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aluminum construction 2256 by 1504

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display easily swappable bezel you can even change the color if you really want

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to and a surprisingly good keyboard considering that it's like modular

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overall good machine at a fair price but of

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course the laptop isn't the only thing that i bought my preferred shares in the

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company cost me exactly 224

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998. 998.37 and they give me a small but significant

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stake in framework computer inc my investment was part of a seed funding

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round that will hopefully give framework the cash it needs to reinvest in its

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core business by building out its team and designing and stocking new products

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something that we've learned the hard way over the last three years is that supporting a growing physical goods

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business is shockingly expensive let's use lttstore.com as an example our gross

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margins are somewhere in the 60 to 70

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range but that doesn't mean that every time we sell a 30 water bottle we make

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20 out of that gross margin comes business

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overhead like storage and handling fees employee salaries and benefits rent

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insurance consumables customer support shrink platform fees i'm sure i'm

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forgetting some but the point is that our net profit what remains before we

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pay the tax man is in the 30 neighborhood i'm not complaining that's a healthy

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business which is kind of a confusing message how can LTT Store be both

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profitable and expensive to support what

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sinks a fledgling company more often than not is a lack of cash flow not a

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lack of profit margin oh let's open up this computer and talk about how this

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applies to frameworks business i ordered the diy edition so just add your own

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wi-fi SSD RAM and operating system they charge

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1049 for the mid-tier core i7 model that i

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chose and if we wanted to know the actual cost of all of this or the bill

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of materials we would need to add up every single little capacitor and wire

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tedious thankfully we can take some shortcuts the bulk goes to Intel who

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lists the CPU in this unit at 426 us

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dollars in quantities of a thousand most of the major cost contributors like the

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battery keyboard trackpad screen and cooler we can approximate based on the

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street prices of similar replacement parts and for the motherboard a non-tech

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did a wonderful write-up back in 2009 that we're just gonna

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borrow let's say 120 bucks that puts us at 770 us dollars and we haven't

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accounted for the chassis or any of the other odds and ends yet but it's also

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common knowledge that Intel never charges oem's list price for their cpus

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so i'm going to say that the cost of this finished package is somewhere in

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the neighborhood of 800 us dollars that's certainly a lot less than one

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thousand forty nine dollars so good business plan here we go right hold

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on the first run of let's say a thousand

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units of this thing will easily cost north of a million dollars once we

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factor in production setup costs like tooling and molds much of that or

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sometimes all of it needs to be paid up front let's be optimistic though and say

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that on top of fronting the r d to design this thing the founder happens to

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have a million dollars in the bank and that order takes just eight weeks to get

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through production and reach frameworks warehouse now we make another assumption

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that demand is strong and all one thousand units sell out in two weeks

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with a cool quarter million dollars of gross profit damn

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that's a lot of money sort of remember all that pesky business overhead we got

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to deal with that now leaving half if we're lucky 100 grand profit is

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certainly better than a kick in the teeth but if you want to grow your sales

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well you need to take all of that profit and put it back into your second order

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which is going to give you a little over 1100 units you'll get them

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eight weeks from now if you are insanely lucky and in the meantime you have

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absolutely nothing to sell and no money in the bank to pay your staff while they

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twiddle their thumbs waiting for the next shipment so even if my numbers are

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way off and framework is netting twice that let's say 200 a unit on this bare

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bones the best case scenario for them after a year of utterly flawless

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execution is three million dollars in cash that's enough to increase their by

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monthly order from just a thousand to three thousand units but they still

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wouldn't have enough to meet customer demand and keep orders flowing smoothly

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from the factory and they wouldn't have saved a penny to reinvest in facilities

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equipment or r d their competitors would bring new products to market slowing

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demand for this now out of date design and unless they adapt they will

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eventually have nothing but a warehouse full of laptops that nobody wants and an

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empty bank account gg now let's do it

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again but with a big bucket of borrowed cash at eight percent interest

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compounding monthly in this scenario framework now gets to place four

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separate one million dollar orders spaced two weeks apart right out of the

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gate after eight weeks they start to get these orders in generating both the cash

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that they need to restock them and a cool 200 000 in profit every time

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an order sells through a year into this scenario assuming zero sales growth

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which is very unlikely framework has now paid 330 000 in interest which sucks but

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they also low key shipped 26 000 laptops

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and made over four million dollars net party time right

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not quite remember that four million dollar loan whoever lent them that money

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needs something in return or they're gonna start looking for some legs to

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break framework could pay it back but

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that would completely wipe them out so they make a deal how about instead of

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the money we give you guys a chunk of this company and then we can just keep

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using that money to expand our product portfolio the same way we did last time

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we eventually grow so big that we go public and you can sell that portion of

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the company that you bought on the open market for way more than you paid or you

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can just keep it forever if it suits you maybe you just like the stock well now

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instead of a loan it's an investment and

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if all goes according to plan framework grows faster so more customers get super

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cool laptops and the investors get paid back their original money and then some

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everybody wins by the way i need to invest in some RAM and an SSD i bought

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the bare bones one moment please conveniently framework includes the only

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tool that you'll need to assemble the device but i'm sure i fix it's not too

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upset about it because these guys are 100 on the same team and you'll need one

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of these for almost any other laptop it's refreshing not to be treated like i

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can't be trusted with my own hardware and you know what there's going to be

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costs associated with that because people will break them and they will complain but it's worth it to have more

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open devices available for consumers and what's cool is for repair shops they

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have even committed to providing the schematics of the boards if they want to

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do board level repair which is super awesome the labels in each slot indicate

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that it supports up to 32 gig modules but rather than go all the way to the

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limits i've actually just gone with two 8 gig 3200 megahertz modules from

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crucial and for storage it supports up to a single pci express gen 4 m.2 2280

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SSD i decided not to go gen 4 though

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because i'm more concerned with good enough performance and excellent battery

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life so i went with the sk hynex gold p31 SSD now at this point in the video

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we've nailed down that framework clearly needs money so they can build more of

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these things but i haven't explained why they need mine and the truth is they

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don't they actually closed the bulk of this funding round back in q2 and one of

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the other investors was already in line to take the remainder they could have

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accepted that offer but they didn't instead both framework and i decided to

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take a leap of faith and i call it that because both of us are taking some big

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risks here here are their risks in no particular order i could bring my own

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ego into internal discussions and try to have an outsized influence on their

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direction as a company compounding that risk i could take my disagreements

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public or worse suffer some kind of catastrophic fall from grace jung shuang

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style ultimately damaging their brand by association far more than i ever could

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have boosted it the thing is dropping an influencer from your ad campaign pretty

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straightforward affair ousting a shareholder it's a little more complicated meanwhile

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i carry my own bag of risks starting of course with the most obvious one i could

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easily lose my entire investment of nearly a quarter million dollars because

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unlike a loan investments typically carry no personal guarantee or other

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securities if we win we win big if we lose it's tough luck brah and second if

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i pump this company's tires only for them to turn around and abandon their

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open approach to repairability and upgradeability i'm gonna look like a

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complete asshat and finally since we're on the subject of my credibility this

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move creates an enormous conflict of interest anytime i'm covering or

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commenting on any laptop can i really be trusted to speak my mind about a

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competing device when it directly damages the prospects of a company i'm

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financially linked to can i handle being pulled in two directions like this

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i think so but even if that's true a portion of you

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won't believe me and it means that i'm gonna have to clutter up our videos with

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non-entertaining disclaimers disclosing my position all the time so then

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why do it well the bottom line is that i fell in love

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with the vision behind this product the moment i saw it i want a framework in my

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backpack and i want a seat at the front of this crazy ride and as a shareholder

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i get to throw my weight behind framework in ways that you guys might

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not consider believe it or not i have some connections in the tech industry i

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know i know i know crazy right i don't find much time for personal

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relationships these days i mean you all know about my friendship with taryn from

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Corsair actually dell now but he doesn't even work in press relations i talk to

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john from unread on a fairly regular basis but we usually talk shop and the

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same goes for gary key from ASUS who by the way was one of my idols when i was a

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young tech reviewer i'm not a sociopath or anything i've just always believed

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that i have a finite amount of time and if i focus that on making the best

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content i can with my writing team eventually i'll reach the point where

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whether i enjoy schmoozing or not people can't really ignore me anymore and i'm

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hoping to use that to help framework get connected with partners you'd think of

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like AMD a ryzen version is the number

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one request they've received since my original video and ones you might not

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think of like dbrand the co-branding opportunities of working with someone

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like dbrand on a skin drop are huge however prickly their public persona

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might be those robots are absolute genius level mad lads now to be clear

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framework would have sorted this stuff out on their own but in the same way

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that bringing in outside money can accelerate growth i'm just hoping to

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pour a little bit of gasoline on the relationship fire speaking of fires by

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the way please do not light up our support email asking when the LTT

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backpack is coming it is coming confirmed here but not

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until sometime in the mid to distant future the cleanest way to handle this

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is to recuse myself from all decisions

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related to our editorial coverage of notebooks with the size and talent of

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our team that's a legitimate option these days frankly i've had very little

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to do with it for a long time since there's been so little in the space

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that's excited me but my only issue with that is that means i'll be giving up the

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opportunity to talk to you guys about truly incredible machines that i am

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excited about like the ASUS rog flow x13 that i've been daily driving for the

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last few months aside from some yeah we sent you a prototype bugginess i

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absolutely love that thing it is so cool

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so for that reason i'm reluctant to completely butt out when there's still

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going to be stuff that i'm going to think is cool and i'm going to want to talk about what i know for sure is that

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even though i'm not ready to make a firm commitment to covering or not covering

00:14:17.040 --> 00:14:22.000
notebooks in the future i will make a firm commitment to maintain the same

00:14:20.320 --> 00:14:25.199
level of honesty and transparency that you guys have come to expect from me i

00:14:23.680 --> 00:14:30.079
will never say that i like something i don't i won't hold back from anything i

00:14:27.279 --> 00:14:34.160
love and i will keep you guys 100 apprised of the situation my second

00:14:32.000 --> 00:14:38.720
commitment to you is that if framework reneges on the promise they made to me

00:14:36.639 --> 00:14:43.760
my breakup with them will be swift absolute and in public here it is i got

00:14:41.839 --> 00:14:49.040
this in writing from the founder nirav patel we do promise not to up from

00:14:47.120 --> 00:14:52.560
a pro-consumer and pro-environment perspective and you would be fully

00:14:50.480 --> 00:14:56.639
justified in holding us to the fire if we break that promise

00:14:54.160 --> 00:15:00.079
sounds good to me just like our sponsor i fix ifixit thank you ifixit for

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out our link to ifixit down in the video description to get your kit today if you

00:15:36.399 --> 00:15:41.839
guys enjoyed this video maybe go check out my original video on the framework

00:15:40.000 --> 00:15:46.079
laptop where i went into a little bit more depth about who these guys are

00:15:44.160 --> 00:15:50.560
where they came from and how it actually all goes together speaking of which i

00:15:47.600 --> 00:15:54.240
forgot to put my i o in and i forgot to fix my touchpad cable issue because i

00:15:52.160 --> 00:15:58.320
was so busy hosting the video the only reason other companies can't do this and

00:15:56.720 --> 00:16:00.800
framework proved it is because they don't care