This is just a reseller. An overpriced one. "If you're only getting [a] 20, 30 percent price difference, just pick the right [mined] diamond." Gemesys (now "Pure Grown Diamonds") is the US's biggest manufacturer. New Diamond Technology is Russia's biggest manufacturer. Industrial diamonds you buy by the kilo on Alibaba.
There are two main processes for making diamonds - High Pressure High Temperature, and Chemical Vapor Deposition. The first was developed at General Electric in 1955. With a big press, carbon can be squeezed down to diamond. Impurities used to color diamonds made this way, but that problem has been solved and now clear diamonds can be made.[1]
CVD is a process borrowed from the semiconductor industry. The product has very regular crystal structure. This bugs the gem industry, which claims that the best diamonds are the ones which are a perfect crystal with "flawless" crystal structure.
Are there any processes yet that can yield a blade for a kitchen knife? 8-12 inch/20-30 cm, for an affordable price? Due to the high hardness it would be possible to cut the edge very shallow, possibly even with a slight undercut near the blade.
It could retain razor sharpness for days, possibly longer. This enables much sharper knifes at tool life suitable for normal usage.
I'd even settle for a carbide blade, which, while I know one company made one [0], I am unable to find a source for such a knife.
You coat carbon steel with diamond nano particle to give it nice hardness. They already do that on machine tool cutters. Same process also used for TiN or similar hard coating. I think unfavorable production price being the reason for it not being consumer product.
You trade strength for hardness. As hardness increases its ductility decreases becoming more brittle. That super hard blade will shatter like glass if dropped on a hard floor or snap if too much lateral force is applied. Same reason ceramic knives aren't more popular.
I grew up in a machine shop and those little super hard carbide cutter inserts are surprisingly easy to crack or break if you feed too fast. I remember getting cocky on the lathe trying to take a big cut off a 2 inch bar of mild steel; came in too fast and the lip on the bar from hand cutting on the bandsaw caught the edge of the little $25 carbide insert and shattered it like glass.
The thing is, the very edge, i.e., the first about 5 micrometers, possibly up to about 20 micrometers, need to be strong enough.
There are measurements on [0] that show how one can get a steel edge about 50 nm wide, and the same source claims 100nm to be necessary for cutting a free-hanging mustache hair. That "a triangular bevel with a 16 degree included angle is typically too weak to survive shaving a normal-to-heavy beard" [1] leads me to think that this coating is unlikely to reach the required thinness of the edge.
You can buy utility knifes with such coatings, or at least I stumbled upon someone comparing different coatings on utility knifes, including diamond nano particles.
Judging by the low life of such a sharp blade which 'just' cuts hairs, I don't think a coating will reach the target.
And yes, the edge will be prone to shattering, but I never said I'd want to be careless with the knife, or never have to care for it. I just don't want to sharpen it more than once a week. If you look, the video I posted shows them hitting a rope, I assume nylon fibers, which certainly isn't that soft, and instead of shattering it results in an almost complete cut. For your carbide cutter you do have to remember that neither your cutter not the lip/bar was particularly likely to give in much. As long as it won't break if I cut a fish and hit a bone, it's not too brittle. I might need a softer cutting mat, but considering the (lack of) force I'd need, the softness shouldn't be much an an issue.
And the cubic zirconia knifes I have do experience significant wear, judging by how quickly they lost their reasonably-sharp state and are no longer superior to a regularly sharpened (cheap) steel knife.
One would probably need a hard-ish backing, e.g. maybe something like an edge-hardened steel blade, but with the thermal expansion coefficient matched to the diamond edge/insert.
Any resellers that aren't garbage? I've found good ones for other gems over the years, but somehow not for diamonds. I've only found stupid prices for lab grown diamonds.
A Frauenhofer spinoff in Germany makes 120mm .2-2mm CVD wafers. Iirc thery were mentioned recently. They also make curved "wafers" for use as a speaker membrane. Deployed in the new Bugatti. Which is where I'd expect it.
Gemesys used to sell their diamonds directly. I've bought from them years ago. (Like many people I couldn't accept spending money on a potential blood diamond or giving it to a company like DeBeers.) However, their name change signaled a change in business strategy. They no longer sell diamonds to consumers. You can only get their diamonds through resellers now. Even when Gemesys sold their diamonds to consumers, it was only 30% off unless you were willing to buy a yellow diamond. Also like most cars their diamonds weren't made to order; they would have batches available to buy. Not sure if this was due to how they manufactured the diamonds & the economics of it, or just a sales strategy. As for the diamonds themselves, yeah jewelers are unable to tell the difference.
Even if you aren't "financing" it, you're "borrowing" from your future self.
That's $X,000 that you've tied up in something that doesn't actually have the value you paid for it, and even if you did want to sell it, it likely has sentimental value, making it an illiquid asset.
Like the site points out, most people getting married are not in a position to afford that kind of expense. But they do, and they try to make it work, because that's what's "expected".
I financed my fiance's at 0% for 4 years on a "Luxury Credit Card" that a jeweler was offering on a special. In hindsight it freed up a lot of cash, but I found later that going to a private (not retail) jeweler would've saved me about 30%.
Think about it like trying to find someone to paint a portrait or a professional web designer to make you a website. Look for skilled people in the industry and get referrals.
One way is to find someone that teaches Jewelry making at a university and who also does commissions. They will often have skilled students who are looking for commissions as well. I heard jewelry and gem shows are also a great way to buy gems at a reasonable price and meet people in the industry, many jewelers that do commission will be happy to use gems you supply.
Additionally private jewelers advertise themselves on the internet, on flyers at art shows and own store fronts.
There are jewlery designers and designer jewlery fairs. It sounds pretentios but it isn't, because most of the time you get a good deal on a unique item.
I can certainly believe people finance jewelry they can't afford.
The wedding industry, like the funeral industry, really preys on people's emotions to make the hard sell. "If you really love her you'll give her the best" (implying that giving her something inexpensive means you don't really love her.) "You want to show her (and the world) how committed you are to her."
Then because everyone is so highly pressured to spend big then it becomes a societal expectation in a generation.
(I agree it's weird to me too! Personally, I don't even own an engagement ring or a wedding ring - I see them merely as trinkets and I'm just not a jewelry person)
Point number 1 about the De Beers cartel inflating the market is really a big one. Diamonds are not rare. They are released to the market by controlling monopolies to maintain a false market value. Is the cost of a lab-grown diamond really almost as much as a market-controlled, mined diamond in that case?
I like the pitch about Moissanite, and I'll have to check it out for other purposes other than an engagement ring!
The "DeBeers monopoly" is a myth that can't seem to die. They do not have a monopoly and haven't in many years(1) (Anglo American = DeBeers). "Market controlled" is also a myth, as almost all diamonds today are valued through regularly scheduled auctions (2).
Weird, wasn't when I first went to it. Summary was Alrosa (Russia) has 27% share, Anglo American (DeBeers) has 22%, another dozen or so share the next 40%.
Louis Vitton does not have a monopoly on purses. Nevertheless, it's marketing efforts (along with Gucci, and the others) has created the perception that purses are a luxury good.
Ditto with diamonds. DeBeers associated this relatively common gem with luxury.
From that point, the economics are driven by women. A woman does not want a cheap purse. A fiancée does not want a cheap diamond. The quality is irrelevant. What matters is how much the guy sacrificed for her.
You may be right; I'll have to look into it for myself.
I am for free markets, but I had read, and I will need to confirm if this is still true, that diamonds are plentiful, so the raw stock before cutting and them should be cheaper than current market price due to keeping them in stores to maintain an inflated price. Whether that's De Beers acting alone with its market share as you cited, or two or three other companies colluding on this scheme to keep an inflated market value or not, I need to confirm.
One of the articles cited there is an excellent article that Edward Epstein wrote for The Atlantic [0].
It's well written, but that's not the impressive part. The impressive thing is that this "expose" was written in 1982, 36 years ago. As Epstein mentions, diamonds are not "forever", or even particularly robust (they can be burned, crushed, chipped, etc), but the industry seems to age quite well. In the half-lifetime since that article came out, nothing has changed.
From the right sellers, actual lab diamonds are also vastly cheaper than this. I'm not sure if there are consumer sources yet, but the issue certainly isn't on the supply end.
It looks rather like the startup is trying to undercut mined diamond cartel prices, but keep a hefty cut of that markup while the artificial market is still low on competition.
Ironically, De Beers. They've promised a line of lab-grown diamonds this year at $800 for 1 carat, which is the lowest price I've seen. The line is starting with pink, blue, and white.
Colorless is still a pain, though - apparently 1 carat gem-quality colorless is still about $4,300 at market rates.
And I should mention, I don't actually blame anyone for this - capturing some profit before the market reacts is exactly what promotes competition, and as a startup they're taking a nontrivial risk that would be much larger if they simultaneously tried to run at cost. Still, I won't be interested until prices drop a lot further.
Lab diamond are really not that cheaper at gem quality level. While industrial HPHT diamond are dime a dozen, gem quality is difficult to achieve even at lab environment.
Fair point. I had remembered $800 for 1 carat synthetics, which is apparently true for colored diamonds (including pink, which is popular). But colorless looks like its still >$4,000 synthetic, which is hardly cheap.
And for $5 you can get 1 carat CZ. It is softer ( while still more than hard enough ), it is optically closer to diamond than moissanite.
Moissanite is a great stone, but its price follow the same tactic as the diamond industry including ridiculous level of artificial scarcity. The biggest selling point they have over CS is that "surely you are not the kind of man that spend $5 for his fiancée"
My wife's engagement ring is cubic zirconia, it was like $120 (but that was the whole ring, not just the stone). I'm more then happy being the man that got his wife a cubic zirconia ring and a house downpayment... (House is, after all, a bit more useful then a diamond ring)
It means that you can't tell whether it's a "higher grade of Type A" or a "lower grade of type B", because both shine the same, and you can't tell the underlying purity of either nor the type of the stone you are looking at.
Only if you know either the grade or the type (using high-tech instruments) can you infer the other from the observed shine.
From my rudimentary research you can get an optical-quality 1 carat polycrystal disk for $700. Only problem is that it's half a millimeter thick.
CVD diamonds all seem to come in the form of a very thin sheet/disk, so getting something thick enough to use as jewelry may actually approach that price
Checking the prices on their site, I'm not sure where the article's author got his figures from. The price for a spec-identical set of earrings is nearly 7x what I paid six months ago. If you're ever in the market for diamonds, never ever ever go to a retail outfit. If they advertise, stay away. Ask around - someone will always know a private jeweler that works solely on referrals, and it will save you a ton. They also frequently have more personalized service and coverage for what you buy.
I'm sorry but you're vastly overestimating the average person if you think 99% of people even in Western Europe or the US simply have 50k they can afford to put into a high risk startup as an investment. For most that is either a full year or close to it in income. Their friends and family are absolutely quite wealthy if they have this kind of capital to invest.
I think most people have more than 20 people that qualify as friends and or family. So, 99% is hardly need and when you get closer to retirement a risky bet that's not going to break you if it fails can also seem like a good investment.
If it works awesome if not I work another ~3 years.
I am not saying it's a good idea for most people, just it's more possible for a wider range of people than you might think.
While your perspective may be correct for you and others in similar financial/privileged/fortunate situations, the vast majority of America isn't.
I can speak for myself personally, since I have no generalized data, but I have several _close_ friends earning within the top 5% of the nation. Even _they_ would have trouble parting with 50k on a risky investment. They'd _want_ to invest, but that's not an insignificant amount of money to part with for them.
How close are they to retirement age? I ask because income takes time to turn into wealth. I used to think of 1,000$ as a huge amount of money, but given time to build up assets and some relatively modest pay increases and that's no longer the case.
PS: The other thing that happens to most people is eventually their kids move out of the house. That opens up a lot of possibilities even without a pay bump.
Not to nitpick, but if you have 20 friends and family members who are not only able to make a $50,000 high-risk investment, but actually do so, you are probably wealthy.
Many of us in the HN community have wealthy friends. I'd wager that few us of could get 20 of our friends to invest $50K in our startup.
For similar friends & family rounds I've been involved in, you'll have one or two people cut $100 to 500k cheques; a few with $25 to 50k cheques, and then some from $5 to 10k.
What's funny about this attitude is how little the value of your engagement ring matters once the wedding is over, and the dust settles. Maybe in certain social circles, the size/quality of an engagement ring continues to be important, but from my anecdotal experience, no one notices or cares about my wife's engagement ring, unless they are getting married soon.
The traditional purpose is to make a demonstration of your means and seriousness; that purpose is fulfilled the moment your proposal is accepted. It really only matters for a few seconds.
That's a good perspective. I'm not sure how relevant "demonstration of your means" is to modern society but "seriousness" certainly implies that it cost a significant amount. Most counter-arguments I hear object to the cost, without acknowledging that the cost is not created by the artificial scarcity of a diamonds, but rather the proposer's implied seriousness.
I recalled this joke after reading your comment, one guy working in finances asks another guy working in finances:
- How much did you pay for your tie?
- $400 in the store next door.
- They tricked you! Store across the street sells the same tie for $800.
If you are paying 10K for an engagement ring and I can buy the same exact engagement ring for 1K, it is just matter of time when your ring will loose it's "social show off value", because "everyone" will have similar rings.
I think after some time De Beers or a company similar to theirs will find for rich and/or overly emotional people something else very expensive to buy to show their "love".
It is just a social signal "my ring is better than yours" => "my male ape is better than your male ape" => "I am more superior". People are social animals,
social signals are very important for them, they'll always find a way to send social signals: super expensive cars, shiny things, handbags for $5K, golden iPhone for 18K, ... Look at luxury industry, it is booming.
Except that people rarely show off engagement rings once they're married.
It's not about the ring, it's about the expense. The same purpose could be served by just piling up twenty-dollar bills and setting them on fire, and the person with the biggest pile of bills to set on fire would be the highest status. There are cultures historically where stuff like that was common: generally as sacrificial offerings, but same thing really -- if you can afford to sacrifice a horse, in a culture where a horse is really valuable, it means you're really fucking serious about whatever you're doing, or so rich that you can do it casually, one of the two.
And De Beers now say they will sell lab-grown diamonds for 90% less. (https://news.ycombinator.com/item?id=17183603) So either De Beers will make a huge loss on each diamond, or the synthetic diamond startups must be making huge profits?
I think the difference is that De Beers brands those diamonds as lab grown, to be able to differentiate it. That does not seem to happen with these diamonds.
>Morgan Stanley estimates that the capital costs for lab-grown diamonds are negligibly lower than minded [sic] diamonds: $343 per carat vs. $367 per carat for mined.
>Yet, at the wholesale level, they may sell at a 30% to 40% discount to mined stone. This is in part because lab-grown diamond producers are a fragmented, independent channel, while the mined diamond industry is highly consolidated and coordinated, in terms of supply, distribution, marketing and pricing. The labs aren’t just competing with the mined diamond industry, but also with each other for market share.
So costs are around 350 US$ per carat, and they sell retail the ring ".95-carat lab-grown stone" for US$ 4,000, let's say that US$ 500 are for the (white) gold and craftmanship (the ring seems a very simple one).
It would be interesting to understand where the remaining 9/10th of the price go.
>Preventing competition. I'm sure monopolies like this are expensive to maintain.
Preventing how?
There is NO monopoly (at least yet) for lab-grown diamonds, if you use the same calculations for the real diamond, you have 5000-500=4500/370= 12x, which may apply to the De Beers' monopoly (but being a monopoly you have no real alternatives by definition).
The point I was trying to make was more that while I can understand how a monopoly can have and maintain a 12x margin/profit over capital costs, it is hard to justify a 10x one for the "lab-grown" ones.
This startup, which seemingly is only a commercial middle-man, with no particular innovative (as I would expect from a start-up) business (in the sense that buying goods from producers and/or wholesalers and selling them to final customers it is "traditional commerce"), seems like having a lot of overhead.
Ah, I interpreted your question to be about DeBeers.
I imagine diamonds need to maintain some minimum price point in order to sell, after all, they are a luxury good. And a 10x margin is high enough to not raise eyebrows, but low enough to undercut the competition.
If Lamborghini released a $40,000 Mustang competitor, then their brand would suffer. But if the same car retailed for $120,000, then people would accept it.
>I imagine diamonds need to maintain some minimum price point in order to sell, after all, they are a luxury good.
Yep, but only (or however mostly) because of the DeBeers marketing.
> And a 10x margin is high enough to not raise eyebrows, but low enough to undercut the competition.
My eyebrows are raised nonetheless.
We are not talking of technology, design or "brand" such a Mustang or a Lamborghini, we are talking of (almost) RAW materials, not entirely unlike gold or any other "mined" material.
As an example in Napoleon III times, aluminium cutlery was a "luxury" item, because the metal was more valued then gold.
(coincidentally the above article talks in passing-by of diamonds, citing a report thaat is giving completely different valuation of the diamonds market, so maybe the numbers cited are completely off )
I cannot access the Bain report cited, right now, but is dated 2011 and available via Wayback Machine:
Debeers doesn't sell mined diamonds anywhere close to the cost of acquiring them. Their monopolistic cartel behavior has been to secure as many diamonds as possible to control the market so that mined diamonds don't drop in price and become flooded with supply.
Great example of a startup (Ada Diamonds) getting valuable PR/press by piggybacking off of current news/trends. While the meat of the article has been discussed to death here at HN, the marketing success is something other startup founders should take notice of and attempt to emulate.
There was an article a while back on here I believe that talked about how lab grown diamonds, especially coming out of China have reached the point of being almost impossible to distinguish from the real thing. To the point of that the fakes fooled pretty much every human expert that tried to tell the difference, the only way to really tell the difference is using very expensive machinery.
I welcome the flood of diamonds to the market. The only entities scrambling to combat this are the diamond companies who have everything to lose because they can no longer extort people.
I am curious to know if current generation and future still interested in buying expensive items like diamonds, jewelry, watches. Because I notice is, you very rarely sell these when you need money unlike like other assets (like House, stocks).
Wonder if only past generation people are the ones who still interested to buy these and feel like whole price is fall down once people loose interest in materialistic things.
Honestly, this is really up to women to make a change. There is a zillion other beautiful stones out there, but for some reason they are all obsessed with the diamond. They want it at any cost. I'd much prefer to buy something uncommon for the woman I loved, maybe my birthstone?
The article title is clickbait ("This startup" instead of identifying the company name in the headline.) Repeating it in the HN headline exacerbates the problem.
I understand what you're getting at, but I respectfully disagree about this being clickbait.
A clickbait headline would be something like 'He made cheaper diamonds using this one simple trick. Jewelers hate him!', because you'd have to click to find out what that one simple trick is.
This headline seems to be literally true: A startup is making lab-grown diamonds that are 30% cheaper than mined diamonds, and jewelers can't tell the diamonds are lab grown. I think this might actually be the opposite of clickbait, because the headline is a complete summary of the story. You know what happened without needing to click at all. You only need to click if you want to learn more about the why and the how.
"This startup" is clickbait. A non-clickbait title would be "Ada Diamonds is selling lab-grown diamond rings at a 30% discount and jewelers couldn't tell the difference."
The "jewellers can't tell" is BS. Unless you put quotes around the jewellers (as most jewellers are now just importers/re-sellers). As someone who bought lab grown diamonds for some custom made jewellery and had them tested by the best jeweller in town (one of the few true jewellers still remaining) they certainly can tell.
The lab grown diamond passed every test except conductivity. The jeweller found this curious as usually if a stone fails conductivity it also fails, for example, refraction tests. A bit of research on this topic led me to discover that the lab grown diamonds have a slightly higher metal content than natural diamonds which makes them slightly more conductive.
TLDR; A good jeweller with the right equipment can tell.
Glass is a terrible diamond simulant. Even very specialised lead crystal glass has far lower refraction and dispersion than diamond, giving a dull gemstone with little fire. It's also far softer than diamond and quickly becomes dull and scratched with wear.
Synthetic moissanite (silicon carbide) is optically superior to diamond at drastically lower cost. Even to an untrained eye, moissanite has visibly superior brightness and fire. Cubic zirconia is optically comparable to diamond and ludicrously cheap. Moissanite is only marginally softer than diamond and cubic zirconia is comparable in hardness to topaz, emerald and spinel.
This is just a reseller. An overpriced one. "If you're only getting [a] 20, 30 percent price difference, just pick the right [mined] diamond." Gemesys (now "Pure Grown Diamonds") is the US's biggest manufacturer. New Diamond Technology is Russia's biggest manufacturer. Industrial diamonds you buy by the kilo on Alibaba.
There are two main processes for making diamonds - High Pressure High Temperature, and Chemical Vapor Deposition. The first was developed at General Electric in 1955. With a big press, carbon can be squeezed down to diamond. Impurities used to color diamonds made this way, but that problem has been solved and now clear diamonds can be made.[1]
CVD is a process borrowed from the semiconductor industry. The product has very regular crystal structure. This bugs the gem industry, which claims that the best diamonds are the ones which are a perfect crystal with "flawless" crystal structure.
[1] https://www.gia.edu/gems-gemology/fall-2017-observations-hph...
Are there any processes yet that can yield a blade for a kitchen knife? 8-12 inch/20-30 cm, for an affordable price? Due to the high hardness it would be possible to cut the edge very shallow, possibly even with a slight undercut near the blade. It could retain razor sharpness for days, possibly longer. This enables much sharper knifes at tool life suitable for normal usage. I'd even settle for a carbide blade, which, while I know one company made one [0], I am unable to find a source for such a knife.
[0]: This is a publicity stunt, but from what I can tell, this does not need to be faked: https://www.youtube.com/watch?v=IcyluvvEfQo
It would still be very brittle.
You coat carbon steel with diamond nano particle to give it nice hardness. They already do that on machine tool cutters. Same process also used for TiN or similar hard coating. I think unfavorable production price being the reason for it not being consumer product.
You trade strength for hardness. As hardness increases its ductility decreases becoming more brittle. That super hard blade will shatter like glass if dropped on a hard floor or snap if too much lateral force is applied. Same reason ceramic knives aren't more popular.
I grew up in a machine shop and those little super hard carbide cutter inserts are surprisingly easy to crack or break if you feed too fast. I remember getting cocky on the lathe trying to take a big cut off a 2 inch bar of mild steel; came in too fast and the lip on the bar from hand cutting on the bandsaw caught the edge of the little $25 carbide insert and shattered it like glass.
The thing is, the very edge, i.e., the first about 5 micrometers, possibly up to about 20 micrometers, need to be strong enough. There are measurements on [0] that show how one can get a steel edge about 50 nm wide, and the same source claims 100nm to be necessary for cutting a free-hanging mustache hair. That "a triangular bevel with a 16 degree included angle is typically too weak to survive shaving a normal-to-heavy beard" [1] leads me to think that this coating is unlikely to reach the required thinness of the edge.
You can buy utility knifes with such coatings, or at least I stumbled upon someone comparing different coatings on utility knifes, including diamond nano particles.
Judging by the low life of such a sharp blade which 'just' cuts hairs, I don't think a coating will reach the target.
And yes, the edge will be prone to shattering, but I never said I'd want to be careless with the knife, or never have to care for it. I just don't want to sharpen it more than once a week. If you look, the video I posted shows them hitting a rope, I assume nylon fibers, which certainly isn't that soft, and instead of shattering it results in an almost complete cut. For your carbide cutter you do have to remember that neither your cutter not the lip/bar was particularly likely to give in much. As long as it won't break if I cut a fish and hit a bone, it's not too brittle. I might need a softer cutting mat, but considering the (lack of) force I'd need, the softness shouldn't be much an an issue.
And the cubic zirconia knifes I have do experience significant wear, judging by how quickly they lost their reasonably-sharp state and are no longer superior to a regularly sharpened (cheap) steel knife.
One would probably need a hard-ish backing, e.g. maybe something like an edge-hardened steel blade, but with the thermal expansion coefficient matched to the diamond edge/insert.
[0]: https://scienceofsharp.wordpress.com/2014/01/25/quantifying-... [1]: https://scienceofsharp.wordpress.com/2015/03/24/sharp-and-ke...
Any resellers that aren't garbage? I've found good ones for other gems over the years, but somehow not for diamonds. I've only found stupid prices for lab grown diamonds.
A Frauenhofer spinoff in Germany makes 120mm .2-2mm CVD wafers. Iirc thery were mentioned recently. They also make curved "wafers" for use as a speaker membrane. Deployed in the new Bugatti. Which is where I'd expect it.
Gemesys used to sell their diamonds directly. I've bought from them years ago. (Like many people I couldn't accept spending money on a potential blood diamond or giving it to a company like DeBeers.) However, their name change signaled a change in business strategy. They no longer sell diamonds to consumers. You can only get their diamonds through resellers now. Even when Gemesys sold their diamonds to consumers, it was only 30% off unless you were willing to buy a yellow diamond. Also like most cars their diamonds weren't made to order; they would have batches available to buy. Not sure if this was due to how they manufactured the diamonds & the economics of it, or just a sales strategy. As for the diamonds themselves, yeah jewelers are unable to tell the difference.
https://www.puregrowndiamonds.com/store-locator/
I wonder how much Ada Diamonds pays their PR firm for that submarine article
I think it is reasonable to mention here that diamonds suck [0].
[0] http://diamondssuck.com/
via
https://news.ycombinator.com/item?id=12944464
Do people really _borrow_ money to buy engagement rings? That sounds so weird...
Even if you aren't "financing" it, you're "borrowing" from your future self.
That's $X,000 that you've tied up in something that doesn't actually have the value you paid for it, and even if you did want to sell it, it likely has sentimental value, making it an illiquid asset.
Like the site points out, most people getting married are not in a position to afford that kind of expense. But they do, and they try to make it work, because that's what's "expected".
I financed my fiance's at 0% for 4 years on a "Luxury Credit Card" that a jeweler was offering on a special. In hindsight it freed up a lot of cash, but I found later that going to a private (not retail) jeweler would've saved me about 30%.
Where and how would you find a private jeweler?
If TV has taught me anything, some guy has them strapped into a trench coat at your nearest alley.
Think about it like trying to find someone to paint a portrait or a professional web designer to make you a website. Look for skilled people in the industry and get referrals.
One way is to find someone that teaches Jewelry making at a university and who also does commissions. They will often have skilled students who are looking for commissions as well. I heard jewelry and gem shows are also a great way to buy gems at a reasonable price and meet people in the industry, many jewelers that do commission will be happy to use gems you supply.
Additionally private jewelers advertise themselves on the internet, on flyers at art shows and own store fronts.
There are jewlery designers and designer jewlery fairs. It sounds pretentios but it isn't, because most of the time you get a good deal on a unique item.
People in south asia regularly go $50,000 into debt to pay for a lavish wedding, when their annual income might be the equivalent of $14,000.
I can certainly believe people finance jewelry they can't afford.
The wedding industry, like the funeral industry, really preys on people's emotions to make the hard sell. "If you really love her you'll give her the best" (implying that giving her something inexpensive means you don't really love her.) "You want to show her (and the world) how committed you are to her."
Then because everyone is so highly pressured to spend big then it becomes a societal expectation in a generation.
(I agree it's weird to me too! Personally, I don't even own an engagement ring or a wedding ring - I see them merely as trinkets and I'm just not a jewelry person)
People take loan for wedding. Societal stuff
When I was younger it was two months salary. Which was BS.
I swear I've seen "four months salary" somewhere.
Who says poop can't smell worse?
Point number 1 about the De Beers cartel inflating the market is really a big one. Diamonds are not rare. They are released to the market by controlling monopolies to maintain a false market value. Is the cost of a lab-grown diamond really almost as much as a market-controlled, mined diamond in that case?
I like the pitch about Moissanite, and I'll have to check it out for other purposes other than an engagement ring!
The "DeBeers monopoly" is a myth that can't seem to die. They do not have a monopoly and haven't in many years(1) (Anglo American = DeBeers). "Market controlled" is also a myth, as almost all diamonds today are valued through regularly scheduled auctions (2).
(1) https://www.statista.com/statistics/585450/market-share-of-d... (2) https://secure.debeersgroup.com/content/de-beers-auction-sal...
The first source is behind a paywall, no?
Weird, wasn't when I first went to it. Summary was Alrosa (Russia) has 27% share, Anglo American (DeBeers) has 22%, another dozen or so share the next 40%.
Louis Vitton does not have a monopoly on purses. Nevertheless, it's marketing efforts (along with Gucci, and the others) has created the perception that purses are a luxury good.
Ditto with diamonds. DeBeers associated this relatively common gem with luxury.
From that point, the economics are driven by women. A woman does not want a cheap purse. A fiancée does not want a cheap diamond. The quality is irrelevant. What matters is how much the guy sacrificed for her.
Sort of silly and irrational. But, it's true.
You may be right; I'll have to look into it for myself.
I am for free markets, but I had read, and I will need to confirm if this is still true, that diamonds are plentiful, so the raw stock before cutting and them should be cheaper than current market price due to keeping them in stores to maintain an inflated price. Whether that's De Beers acting alone with its market share as you cited, or two or three other companies colluding on this scheme to keep an inflated market value or not, I need to confirm.
One of the articles cited there is an excellent article that Edward Epstein wrote for The Atlantic [0].
It's well written, but that's not the impressive part. The impressive thing is that this "expose" was written in 1982, 36 years ago. As Epstein mentions, diamonds are not "forever", or even particularly robust (they can be burned, crushed, chipped, etc), but the industry seems to age quite well. In the half-lifetime since that article came out, nothing has changed.
[1]: https://www.theatlantic.com/magazine/archive/1982/02/have-yo...
That lovely site needs an endorsement from the author's wife, to sell the deal to anyone who matters.
From their website: A "recommended" 1 carat is ~$5000. Still way too much.
You can get a 1 carat moissanite for ~$400. They shine better, are nearly as hard, and nobody can tell the difference.
From the right sellers, actual lab diamonds are also vastly cheaper than this. I'm not sure if there are consumer sources yet, but the issue certainly isn't on the supply end.
It looks rather like the startup is trying to undercut mined diamond cartel prices, but keep a hefty cut of that markup while the artificial market is still low on competition.
Any ideas for a source for lab diamonds at wholesale price? I see lots of jewelry makers undercutting the mined prices but are still pricey.
Ironically, De Beers. They've promised a line of lab-grown diamonds this year at $800 for 1 carat, which is the lowest price I've seen. The line is starting with pink, blue, and white.
Colorless is still a pain, though - apparently 1 carat gem-quality colorless is still about $4,300 at market rates.
I.e. the mattress in a box business model.
Precisely.
And I should mention, I don't actually blame anyone for this - capturing some profit before the market reacts is exactly what promotes competition, and as a startup they're taking a nontrivial risk that would be much larger if they simultaneously tried to run at cost. Still, I won't be interested until prices drop a lot further.
Lab diamond are really not that cheaper at gem quality level. While industrial HPHT diamond are dime a dozen, gem quality is difficult to achieve even at lab environment.
Fair point. I had remembered $800 for 1 carat synthetics, which is apparently true for colored diamonds (including pink, which is popular). But colorless looks like its still >$4,000 synthetic, which is hardly cheap.
And you can get a fake Louis Vuitton purse too but that’s kind of missing the point.
Moissanite is not a 'fake diamond'. It's Moissanite, and it's nowhere near the same league as cubic zirconia.
If the fake LV is the same quality as the original, that is the point. (Most fakes are lower quality.)
And for $5 you can get 1 carat CZ. It is softer ( while still more than hard enough ), it is optically closer to diamond than moissanite.
Moissanite is a great stone, but its price follow the same tactic as the diamond industry including ridiculous level of artificial scarcity. The biggest selling point they have over CS is that "surely you are not the kind of man that spend $5 for his fiancée"
My wife's engagement ring is cubic zirconia, it was like $120 (but that was the whole ring, not just the stone). I'm more then happy being the man that got his wife a cubic zirconia ring and a house downpayment... (House is, after all, a bit more useful then a diamond ring)
> They shine better [...] and nobody can tell the difference.
I don't know much about gems, but this seems contradictory.
They appear to be a brighter cut than they actually are.
To know the difference you would need to examine one closely. They're pretty much identical on casual inspection, especially mounted in a ring.
It means that you can't tell whether it's a "higher grade of Type A" or a "lower grade of type B", because both shine the same, and you can't tell the underlying purity of either nor the type of the stone you are looking at.
Only if you know either the grade or the type (using high-tech instruments) can you infer the other from the observed shine.
From my rudimentary research you can get an optical-quality 1 carat polycrystal disk for $700. Only problem is that it's half a millimeter thick.
CVD diamonds all seem to come in the form of a very thin sheet/disk, so getting something thick enough to use as jewelry may actually approach that price
I completely agree with this as well. Also look into the alternative stones like ruby, sapphire, amethyst etc.
I've always told people if the girl is concerned about what type of stone you get her then that is a real cause for concern IMO.
Checking the prices on their site, I'm not sure where the article's author got his figures from. The price for a spec-identical set of earrings is nearly 7x what I paid six months ago. If you're ever in the market for diamonds, never ever ever go to a retail outfit. If they advertise, stay away. Ask around - someone will always know a private jeweler that works solely on referrals, and it will save you a ton. They also frequently have more personalized service and coverage for what you buy.
>With less than $1 million raised from friends and family . . .
This seems written for an audience with very wealthy friends and family.
50k from 20 people is 1 million. That's a big investment for most people, but not restricted to the wealthy.
I'm sorry but you're vastly overestimating the average person if you think 99% of people even in Western Europe or the US simply have 50k they can afford to put into a high risk startup as an investment. For most that is either a full year or close to it in income. Their friends and family are absolutely quite wealthy if they have this kind of capital to invest.
I think most people have more than 20 people that qualify as friends and or family. So, 99% is hardly need and when you get closer to retirement a risky bet that's not going to break you if it fails can also seem like a good investment.
If it works awesome if not I work another ~3 years.
I am not saying it's a good idea for most people, just it's more possible for a wider range of people than you might think.
While your perspective may be correct for you and others in similar financial/privileged/fortunate situations, the vast majority of America isn't.
I can speak for myself personally, since I have no generalized data, but I have several _close_ friends earning within the top 5% of the nation. Even _they_ would have trouble parting with 50k on a risky investment. They'd _want_ to invest, but that's not an insignificant amount of money to part with for them.
How close are they to retirement age? I ask because income takes time to turn into wealth. I used to think of 1,000$ as a huge amount of money, but given time to build up assets and some relatively modest pay increases and that's no longer the case.
PS: The other thing that happens to most people is eventually their kids move out of the house. That opens up a lot of possibilities even without a pay bump.
Also people tend to forget that putting money in 10 startups each year is investing. Putting money in 1 startup each 10 years is gambling.
Not to nitpick, but if you have 20 friends and family members who are not only able to make a $50,000 high-risk investment, but actually do so, you are probably wealthy.
Many of us in the HN community have wealthy friends. I'd wager that few us of could get 20 of our friends to invest $50K in our startup.
i have 8 friends
$50K * 0 = 0
> 50k from 20 people
For similar friends & family rounds I've been involved in, you'll have one or two people cut $100 to 500k cheques; a few with $25 to 50k cheques, and then some from $5 to 10k.
Anyone with 100k+ in assets that they can give out with a check is deep into wealthy. If you know people like that you are in wealthy circles.
yep persuade 20 people to drop 2-3 years wages before tax. Easy right?
The majority of Americans can’t come up with $500 in an emergency.
Wish it said: This startup is selling lab-grown meat for 30% less and consumers can't tell.
Hopefully that'll happen soon enough! https://www.nanalyze.com/2017/10/7-startups-lab-grown-meat/
People don't buy prestige items for value, they buy them to show off the fact they can drop x amount on items with no utilitarian value
Only if they're disillusioned. Many people have drunk the koolaid.
What's funny about this attitude is how little the value of your engagement ring matters once the wedding is over, and the dust settles. Maybe in certain social circles, the size/quality of an engagement ring continues to be important, but from my anecdotal experience, no one notices or cares about my wife's engagement ring, unless they are getting married soon.
The traditional purpose is to make a demonstration of your means and seriousness; that purpose is fulfilled the moment your proposal is accepted. It really only matters for a few seconds.
That's a good perspective. I'm not sure how relevant "demonstration of your means" is to modern society but "seriousness" certainly implies that it cost a significant amount. Most counter-arguments I hear object to the cost, without acknowledging that the cost is not created by the artificial scarcity of a diamonds, but rather the proposer's implied seriousness.
Sure. But I'd prefer a $10K donation to the charity of my choice, or to my student loans, or a vacation, or a car.
Mine doesn't even wear her engagement ring anymore. Ironically, it's "too expensive" to wear day-to-day and risk losing, so it never gets worn.
I recalled this joke after reading your comment, one guy working in finances asks another guy working in finances:
- How much did you pay for your tie?
- $400 in the store next door.
- They tricked you! Store across the street sells the same tie for $800.
If you are paying 10K for an engagement ring and I can buy the same exact engagement ring for 1K, it is just matter of time when your ring will loose it's "social show off value", because "everyone" will have similar rings.
I think after some time De Beers or a company similar to theirs will find for rich and/or overly emotional people something else very expensive to buy to show their "love". It is just a social signal "my ring is better than yours" => "my male ape is better than your male ape" => "I am more superior". People are social animals, social signals are very important for them, they'll always find a way to send social signals: super expensive cars, shiny things, handbags for $5K, golden iPhone for 18K, ... Look at luxury industry, it is booming.
Except that people rarely show off engagement rings once they're married.
It's not about the ring, it's about the expense. The same purpose could be served by just piling up twenty-dollar bills and setting them on fire, and the person with the biggest pile of bills to set on fire would be the highest status. There are cultures historically where stuff like that was common: generally as sacrificial offerings, but same thing really -- if you can afford to sacrifice a horse, in a culture where a horse is really valuable, it means you're really fucking serious about whatever you're doing, or so rich that you can do it casually, one of the two.
Sacrificing a horse at least served the purpose of feeding the priests.
> serious about whatever you're doing, or so rich that you can do it casually
or, the common case: bluffing and setting up for a financial and relationship disaster down the road.
And De Beers now say they will sell lab-grown diamonds for 90% less. (https://news.ycombinator.com/item?id=17183603) So either De Beers will make a huge loss on each diamond, or the synthetic diamond startups must be making huge profits?
I think the difference is that De Beers brands those diamonds as lab grown, to be able to differentiate it. That does not seem to happen with these diamonds.
De Beers takes a huge loss b/c they want to devalue lab grown diamonds and keep their monopolisitc margins.
I think that it is well worth underlining contents of the linked to article by Morgan Stanley (2016):
https://www.morganstanley.com/ideas/diamond-market-lab-grown...
>Morgan Stanley estimates that the capital costs for lab-grown diamonds are negligibly lower than minded [sic] diamonds: $343 per carat vs. $367 per carat for mined.
>Yet, at the wholesale level, they may sell at a 30% to 40% discount to mined stone. This is in part because lab-grown diamond producers are a fragmented, independent channel, while the mined diamond industry is highly consolidated and coordinated, in terms of supply, distribution, marketing and pricing. The labs aren’t just competing with the mined diamond industry, but also with each other for market share.
So costs are around 350 US$ per carat, and they sell retail the ring ".95-carat lab-grown stone" for US$ 4,000, let's say that US$ 500 are for the (white) gold and craftmanship (the ring seems a very simple one).
It would be interesting to understand where the remaining 9/10th of the price go.
> It would be interesting to understand where the remaining 9/10th of the price go.
Preventing competition. I'm sure monopolies like this are expensive to maintain.
>Preventing competition. I'm sure monopolies like this are expensive to maintain.
Preventing how?
There is NO monopoly (at least yet) for lab-grown diamonds, if you use the same calculations for the real diamond, you have 5000-500=4500/370= 12x, which may apply to the De Beers' monopoly (but being a monopoly you have no real alternatives by definition).
The point I was trying to make was more that while I can understand how a monopoly can have and maintain a 12x margin/profit over capital costs, it is hard to justify a 10x one for the "lab-grown" ones.
This startup, which seemingly is only a commercial middle-man, with no particular innovative (as I would expect from a start-up) business (in the sense that buying goods from producers and/or wholesalers and selling them to final customers it is "traditional commerce"), seems like having a lot of overhead.
Ah, I interpreted your question to be about DeBeers.
I imagine diamonds need to maintain some minimum price point in order to sell, after all, they are a luxury good. And a 10x margin is high enough to not raise eyebrows, but low enough to undercut the competition.
If Lamborghini released a $40,000 Mustang competitor, then their brand would suffer. But if the same car retailed for $120,000, then people would accept it.
>I imagine diamonds need to maintain some minimum price point in order to sell, after all, they are a luxury good.
Yep, but only (or however mostly) because of the DeBeers marketing.
> And a 10x margin is high enough to not raise eyebrows, but low enough to undercut the competition.
My eyebrows are raised nonetheless.
We are not talking of technology, design or "brand" such a Mustang or a Lamborghini, we are talking of (almost) RAW materials, not entirely unlike gold or any other "mined" material.
As an example in Napoleon III times, aluminium cutlery was a "luxury" item, because the metal was more valued then gold.
Reference:
http://www.todayifoundout.com/index.php/2014/05/aluminium-co...
(coincidentally the above article talks in passing-by of diamonds, citing a report thaat is giving completely different valuation of the diamonds market, so maybe the numbers cited are completely off )
I cannot access the Bain report cited, right now, but is dated 2011 and available via Wayback Machine:
https://web.archive.org/web/20170830050614/http://www.bain.c...
Debeers doesn't sell mined diamonds anywhere close to the cost of acquiring them. Their monopolistic cartel behavior has been to secure as many diamonds as possible to control the market so that mined diamonds don't drop in price and become flooded with supply.
Great example of a startup (Ada Diamonds) getting valuable PR/press by piggybacking off of current news/trends. While the meat of the article has been discussed to death here at HN, the marketing success is something other startup founders should take notice of and attempt to emulate.
You should NOT emulate De Beers. What they've done is illegal in most places, for one. https://en.wikipedia.org/wiki/De_Beers_antitrust_litigation
And I'd love to believe most founders are motivated by value creation, not market manipulation.
I believe gp was suggesting emulating Ada Diamonds, the startup, not DeBeers.
You're right, I'm not sure how ed saw it differently. I was speaking specifically to the startup crowd, looking for creative ways to get press.
My bad! I'm not sure either!
There was an article a while back on here I believe that talked about how lab grown diamonds, especially coming out of China have reached the point of being almost impossible to distinguish from the real thing. To the point of that the fakes fooled pretty much every human expert that tried to tell the difference, the only way to really tell the difference is using very expensive machinery.
I welcome the flood of diamonds to the market. The only entities scrambling to combat this are the diamond companies who have everything to lose because they can no longer extort people.
I am curious to know if current generation and future still interested in buying expensive items like diamonds, jewelry, watches. Because I notice is, you very rarely sell these when you need money unlike like other assets (like House, stocks).
Wonder if only past generation people are the ones who still interested to buy these and feel like whole price is fall down once people loose interest in materialistic things.
Honestly, this is really up to women to make a change. There is a zillion other beautiful stones out there, but for some reason they are all obsessed with the diamond. They want it at any cost. I'd much prefer to buy something uncommon for the woman I loved, maybe my birthstone?
Flagging for clickbait headline
How is this clickbait? It is literally the article title.
The article title is clickbait ("This startup" instead of identifying the company name in the headline.) Repeating it in the HN headline exacerbates the problem.
I understand what you're getting at, but I respectfully disagree about this being clickbait.
A clickbait headline would be something like 'He made cheaper diamonds using this one simple trick. Jewelers hate him!', because you'd have to click to find out what that one simple trick is.
This headline seems to be literally true: A startup is making lab-grown diamonds that are 30% cheaper than mined diamonds, and jewelers can't tell the diamonds are lab grown. I think this might actually be the opposite of clickbait, because the headline is a complete summary of the story. You know what happened without needing to click at all. You only need to click if you want to learn more about the why and the how.
"This startup" is clickbait. A non-clickbait title would be "Ada Diamonds is selling lab-grown diamond rings at a 30% discount and jewelers couldn't tell the difference."
The "jewellers can't tell" is BS. Unless you put quotes around the jewellers (as most jewellers are now just importers/re-sellers). As someone who bought lab grown diamonds for some custom made jewellery and had them tested by the best jeweller in town (one of the few true jewellers still remaining) they certainly can tell.
The lab grown diamond passed every test except conductivity. The jeweller found this curious as usually if a stone fails conductivity it also fails, for example, refraction tests. A bit of research on this topic led me to discover that the lab grown diamonds have a slightly higher metal content than natural diamonds which makes them slightly more conductive.
TLDR; A good jeweller with the right equipment can tell.
Imagine the title didn't have "startup" in it. Reads like a cheap advertisement for a scam.
The whole article seems to be just an ad.
That being said, this topic always generates a lot of discussion.
I don't understand the allure of natural diamonds... I put synthetic oil in my vehicle.
Could they make a pink diamond?
It's all in your head.
Glass look as good for 99,9% less anyway
For real; my mother wears a glass replica of her real stone.
What’s the point of owning the real thing at that point?
Glass is a terrible diamond simulant. Even very specialised lead crystal glass has far lower refraction and dispersion than diamond, giving a dull gemstone with little fire. It's also far softer than diamond and quickly becomes dull and scratched with wear.
Synthetic moissanite (silicon carbide) is optically superior to diamond at drastically lower cost. Even to an untrained eye, moissanite has visibly superior brightness and fire. Cubic zirconia is optically comparable to diamond and ludicrously cheap. Moissanite is only marginally softer than diamond and cubic zirconia is comparable in hardness to topaz, emerald and spinel.
I wonder if a diamond could be fingerprinted and that shared on a blockchain to encode provenance data.