Building the First Industrial Empire in Another World

"Competitor?" Ernest repeated Hollen’s words. He grabbed and inspected the soap.

The moment he picked it up, several things immediately stood out.

The color looked inconsistent.

Some portions appeared darker than others.

The edges were uneven.

The shape itself lacked uniformity.

And when Ernest pressed his thumb lightly against the surface...

The soap felt softer than it should.

Interesting.

Very interesting.

Meanwhile Hollen sat quietly across the desk while watching Ernest examine the competitor’s product.

Ernest brought the soap closer to his nose afterward.

The scent hit him immediately.

Strong.

Far too strong.

It smelled like someone dumped fragrance directly into the mixture without proper balancing.

It smelled pleasant initially.

But after several seconds?

Overwhelming.

Then he scratched a small portion of the soap surface using his fingernail.

Tiny flakes broke away.

Poor curing.

Definitely poor curing.

Finally, Ernest looked up.

"Who made this?"

"It’s a new company, Silver Brook Hygiene Company, they set up just five kilometers away from us, by the river. Their factory looks similar to us."

"Five kilometers away from us? Meaning, two kilometers away from the city. Well that’s a shame, they just lost themselves in logistical cost. And as for their product, it’s very bad. But I wonder how the hell did they construct the same layout as ours?"

"Apparently, they hired the same contractors that built this plant," Hollen sighed. "It’s concerning."

"You don’t have to be concerned. We have the best product in the town and they are the copycats. Well, they barely even copied it properly."

Ernest placed the competitor’s soap back onto the table afterward.

The more he inspected it, the less concerned he became.

Because from an engineering perspective, what he was looking at was not a competitor’s success.

It was a rushed imitation.

And those two things were very different.

"Still, competitors are propping up, it’s only a matter of time before they perfected it, and they’ll take away our investors," Hollen said with a tinge of urgency.

"We control the market share. There’s really no warrant concerning ourselves with our competitor. They just started, stop freaking out, and let me handle this."

"Oh yeah? Handle it? I read in your reports that there were failed batch and equipment breakdowns," Hollen pointed out.

"That’s normal in an operating company. You own a forge. You should know that better than anyone."

Hollen frowned.

"A broken belt is one thing. Losing hundreds of thousands of riels worth of product is another."

Ernest shook his head.

"No, it’s the same thing."

"How?"

"Let me ask you something. During the past year, how many times did your forge replace hammers?"

Hollen paused.

"Several."

"And how many tongs cracked?"

"Quite a few."

"How many furnace bricks needed replacement?"

"Plenty."

Ernest spread his hands.

"Exactly."

"Equipment wears down when it is used. That is not failure. That is operation."

Hollen opened his mouth but Ernest continued.

"And what about rejected products?"

The forge owner immediately became quiet.

Both of them knew the answer.

Not every iron bar produced by the forge met specification.

Sometimes iron cooled too quickly.

Sometimes impurities remained inside the metal.

Sometimes cracks appeared during forging.

Sometimes customers rejected deliveries.

Those products never reached the market.

They were either reworked or scrapped.

Ernest pointed toward the competitor’s soap.

"Did your forge ever produce perfect output?"

Hollen sighed.

"No."

"Neither do we."

Ernest leaned back in his chair.

"The difference between a workshop and a company is not whether mistakes happen."

"It is how quickly you identify them, fix them, and prevent them from happening again."

Then he grabbed the latest production report.

"Last month we produced over one hundred seventy thousand bars of soap."

He tapped the defect report.

"The failed batches represented less than two percent of total output."

"When the worker mixed too much ash solution, we redesigned the measurement charts."

"When the belt snapped, we realigned the pulley system and updated maintenance schedules."

"When the gear assembly wore down faster than expected, we changed inspection intervals."

Ernest smiled slightly.

"Every problem taught us something."

Then he lifted the competitor’s soap once more.

"The question isn’t whether they can copy our soap."

He squeezed the soft bar lightly.

"The question is whether they can build the same systems that allow us to improve every time something goes wrong."

Ernest sighed as he just said a lot to Hollen.

"Okay, this competitor, I thought to sell a product you need licenses and permits, don’t tell me the guildmaster granted them one?" Ernest asked.

"That’s the reason why I’m concerned. They were granted permits and licenses to operate. Meaning if we hesitate from investment they’ll invest in our competitor instead. And as a major shareholder of this company, I recommend you that you follow my directives."

"No," Ernest shook his head. "We are going to take it up to them. What the hell is the Guildmaster doing? He wanted to invest yet allowed a copy to operate? That’s insane..."

In his previous world, if something like this happened, there was a legal way to handle it. Sue the competitor as they would likely be violating patents, trade secrets, industrial designs, trademarks, or intellectual property protections depending on what exactly they copied.

Unfortunately...

This was not his previous world.

And as far as Ernest knew, the Kingdom of Belfast possessed no formal patent system.

No intellectual property office.

No invention registry.

No exclusive manufacturing rights.

Nothing.

Which honestly made sense.

The kingdom’s economy was still built around guilds, merchants, and trade privileges.

Not industrial innovation.

Meaning if someone copied your idea?

They copied it.

Simple as that.

The only real protection came from being better.

Ernest sighed and rubbed his forehead.

"Well, Ernest, the thing is, aside from the copy, there’s something that you need to know about the company?"

"What is it?"

"The soap they are selling is significantly cheaper than ours."

For several seconds, Ernest simply stared at Hollen.

Then he laughed.

Not because the situation was funny.

Because the statement itself revealed something.

A lot of things.

Hollen frowned immediately.

"Why are you laughing?"

"Because that tells me they’re scared."

"What?"

Ernest leaned back in his chair and folded his arms.

"Tell me the price."

Hollen grabbed another report.

"Common soap. Eighty riels."

"Twenty percent lower than ours."

Now Ernest laughed again.

A little louder this time.

This was becoming even better.

"That’s their strategy?"

Hollen looked annoyed.

"They’re undercutting us."

"No."

Ernest shook his head.

"They’re panicking."

The forge owner stared at him.

"What difference does it make?"

"A huge one."

Ernest grabbed a blank sheet of parchment and quickly began writing numbers.

"Let’s think about this logically."

This was one of the most common mistakes made by inexperienced business owners.

They believed lowering prices automatically increased competitiveness.

Sometimes it did.

Most times?

It simply accelerated bankruptcy.

Ernest began writing.

"Let’s assume their raw material costs are similar to ours."

Animal fat.

Ash processing.

Fragrances.

Labor.

Transportation.

Packaging.

Maintenance.

Actually, because they copied the factory design itself, their operating structure probably looked remarkably similar.

Then Ernest pointed at the paper.

"We sell common soap for one hundred riels."

"Yes."

"And we’re profitable."

"Yes."

"Very profitable."

Then Ernest tapped the competitor’s sample.

"They sell at eighty."

Hollen nodded.

"Meaning they earn less."

"Obviously."

"No."

Ernest pointed again.

"You’re missing the point."

Pricing below a market leader only worked under certain conditions.

You needed something.

A lot of something.

Capital.

Massive capital.

The ability to survive losses longer than the other side.

Then Ernest continued.

"If they make soap more efficiently than us, lower pricing makes sense."

"They don’t."

He held up the competitor’s soap.

"This thing practically advertises inefficiency."

Poor curing.

Uneven mixing.

Bad fragrance balance.

Variable quality.

All signs of process problems.

And process problems cost money.

Then Ernest wrote another figure.

"If their production cost is seventy-five riels and they sell at eighty..."

He drew a line.

"They earn five riels."

"That’s still profit."

"Yes."

Ernest nodded.

"Until defects happen."

Then he pointed toward the soap again.

"And defects are definitely happening."

A defective batch could erase weeks of profit if margins were thin enough.

Then came equipment maintenance.

Worker wages.

Transportation.

Guild fees.

Factory financing.

Unexpected breakdowns.

Everything added up.

Then Ernest leaned forward.

"Still, we are not going to get complacent. Let’s go to the guild, let’s settle something."

"What do you mean?" Hollen looked at Ernest as he stood.

"You want investment right? They want in, then there’s something they have to do first."