DJ Models Announcement 01/05/19

[Colin_McLeod]

18 minutes ago, Free At Last said:

For those that drop out Dave could offer those accounts to others to just pay the balance. There may be someone willing to take the risk for 25% or 50% off.

 

Difficult to do that in a fair manner.  You would end up with original crowdfunders paying 100% while someone else gets an APT for 75% or 50%.

 

What he could do is revert to the original price for new orders if he wants to attract new business.

[Phil Mc]

48 minutes ago, Colin_McLeod said:

In addition to asking myself if I still have confidence in Dave to complete the APT, (as pointed out already he has not said that he won't), I also have to ask if I have confidence in the other crowdfunders to continue funding.

The problem as I see it for APT crowdfunders is that even if Dave was to guarantee completion in a reasonable timescale, individual crowdfunders may be reluctant to pay the next 25% in case the others don't causing the project to collapse, then the first and second 25% is lost.

Even if that worked the next hurdle would be whether if we paid the third 25% there is the risk that the project flounders if not everyone does. The same with the final payment.

I have a suggestion that I am happy to put to Dave if it gathers support here and that is as follows:

Dave to ask for the remaining balance (i.e. 75% not 25%) with the following protection in place.

All the money goes into an escrow account and none is released into the project until it is all in. If crowdfunders drop out and don't pay by a specified date then the 75%s can be refunded in full. If sufficient is paid, then it is released for completing the project.

That way we all could put our money in without worrowing about losing it because of drop outs as we would be refunded in such a scenario. We would not worry about lack of funding for the third and fourth quarters as ALL the money required to produce an APT would have been paid.

What are your thoughts?

 

I would imagine there's a lot more people willing to part with £250 every 6 months or so, over a 2 year period than there are one's willing to part with £750 or £1000 all in one go.

 

I'd also think that was the case even before Dave managed to create such a s**tstorm for himself !!

 

Would also suspect he's also managed to screw up lots of people's willingness to partake in any sort of 'pay-up-front' schemes, even if they weren't directly involved in this one.

Which could well stop other potential manufacturers entering the market.

 

Cheers,

Phil.

[adb968008]

14 minutes ago, Colin_McLeod said:

 

Difficult to do that in a fair manner.  You would end up with original crowdfunders paying 100% while someone else gets an APT for 75% or 50%.

 

What he could do is revert to the original price for new orders if he wants to attract new business.

On a normal day yes.

Since 6pm May 1st 2019, it might take a bit more than that to attract orders, for the same reasons people maybe concerned to proceed.

Addressing the issue is what’s required, not a discount.

Edited May 5, 2019 by adb968008

[Colin_McLeod]

6 minutes ago, KDG said:

All sounds like a workable solution. My issue is that customers are having to come up with ideas to run DJM business.  Surely that's not sustainable?

 

I agree.  My only interest would be in obtaining an APT.  If some other company were to produce one I would consider jumping ship depending on price, track record etc.

 

Running DJM's business is not something that would be done free of charge by anyone, customers or otherwise.

[jjb1970]

2 hours ago, chris p bacon said:

 

I think Kernow may disagree,  having had to refund 'crowdfunders' they took quite a hit on fees to refund.

 

Something that tends to be forgotten. Kernow helped DJM get started and ended up losing money to get themselves out of a blind he seems to have walked them into. They did a very honorable thing in looking after their customers but it must have left a very bitter taste. 

[adb968008]

Theres always an opportunity in crisis....

 

As DJ has acquired design rights to his models in CAD form, perhaps he could print them out and sell limited edition, signed framed pictures of them ?

 

if the design registrations were later were cancelled, they could become rare ?

 

 

Edited May 5, 2019 by adb968008

[DavidH]

2 hours ago, chris p bacon said:

 

I think Kernow may disagree,  having had to refund 'crowdfunders' they took quite a hit on fees to refund.

 

My apologies! I was thinking only about the current crowdfunding, and had forgotten that earlier incident.

[jjb1970]

Kernow were pulled in as a sort of money holding honest broker to offer re-assurance to potential purchasers and to help with distribution . Presumably on the back of the relationship that they had with DJM at the time. I suspect that Kernow forced the class 74 issue, realising the reputational and financial risk to themselves, after all the goodwill of their own customers is vital for their long term success. 

Edited May 5, 2019 by jjb1970

[Ravenser]

36 minutes ago, jjb1970 said:

Kernow were pulled in as a sort of money holding honest broker to offer re-assurance to potential purchasers and to help with distribution . Presumably on the back of the relationship that they had with DJM at the time. I suspect that Kernow forced the class 74 issue, realising the reputational and financial risk to themselves, after all the goodwill of their own customers is vital for their long term success. 

 

And now DJM has thanked them for their support by whacking in a legal claim over Kernow's long-term D600 project

 

You couldn't make this stuff up.

[Kris]

6 hours ago, woodenhead said:

there has been discussion in this thread of cancellation of DJM orders what we don't know is actually how many people have cancelled

 

I said I was considering cancelling my preorders in a post on page 7. I have since done so. As these were only expressions of interest I have lost no money and neither has Dave.

On cancelling I explained why I was doing so and did receive a polite email in return from Dave followed by a cancellation confirmation.  - This part was certainly how I would expect a business to be run. 

[wombatofludham]

Page 35 and counting and as others have said, pretty much unanimous in tone.

 

I can't help thinking for the continued wellbeing of Mr Jones if the time has come for him to bite the bitter bullet and sell the company?  Obviously, with no "goodwill" and well publicised problems with tools, and the apparent mixed functionality of the models he has delivered, the price would be heavily discounted but it would at least draw a line under the affair and allow him to move on, perhaps he could write a book about the whole affair instead.

If the company was acquired by some other outfit, it might unblock some of the tooling and cad issues, give another company a head start on reworking the existing models in the range, give retailers more certainty and allow a better business brain to untangle the crowd funding issues.  Perhaps a consortium of retailers could take on the company and re-establish good links with China to become a "third force" to Hornby and Bachmann.

 

Probably the problems Mr Jones seems to be making for himself would put others off acquiring the range but some sort of distress sale would appear to this outside observer of recent events to be probably the only way to salvage the situation and to allow him to move on, bruised and financially worse off but at least free of the pressures and potential long term consequences that will bring.

[Clearwater]

I’d had the same thought as Wombat as to whether DJ was looking to sell the business and this was a way of trying to create some assets.  Arguably there is some value there if his pricing is robust and profit marginals reasonable on his N gauge King and APT.  Per the Stationmaster’s comment on whether shops should invest, the same fundamentals apply as to whether the costing and pricing is robust enough to allow sufficient margin to cover overheads and salary.  As an aside, picking up a comment above, I wouldn’t run that business for £40k a year...

 

also, if you did want to -refund as Colin suggests, and I’m not saying the idea is without merit, you’d still need to understand the timing and cost risks. You’d also want someone independent to say whether milestones had been met prior to the release of funds.  It would not be a good outcome if having put £750 into escrow, you get an ask for a top-up in two years time as the project costs have now gone up...

 

David

[Tricky-CRS]

I would run this business for 40k a year, way more than I currently earn and most of the time fairly easy going. A few trips to China a year would be the hard bit, along with exhibitions, accounts easy if you stay up to date. Then the fun research, design, advertising and sending out orders (oh that bit can be hard).

 

If I had the money and desire I would start my own again or offer to buy DJM out.

[Daniel W]

Having read the announcement and skimmed much of the thread here, I don't really have much else to say on the subject that hasn't already been covered. Dave appears to have become what certain sections of the internet would refer to as a "lolcow", although I do feel sympathy for those who gave him money for crowdfunding in good faith.

 

It does occur to me that were I to start a company manufacturing 00 models I would steer well clear of diesel/electric models (except perhaps shunters) and any mainline steam locomotive designed prior to 1923! However, given the recent fracas over the Terrier, even that last rule isn't foolproof. I can say with 99% certainty that no manufacturer has a Furness Railway "D5" in the works though...

[Anglian]

3 hours ago, Phil Mc said:

Would also suspect he's also managed to screw up lots of people's willingness to partake in any sort of 'pay-up-front' schemes, even if they weren't directly involved in this one.

Which could well stop other potential manufacturers entering the market.

 

Cheers,

Phil.

 

You are quite right – I've never taken part in a Kickstarter and after reading this thread I never will.

[JSpencer]

44 minutes ago, Daniel W said:

Having read the announcement and skimmed much of the thread here, I don't really have much else to say on the subject that hasn't already been covered. Dave appears to have become what certain sections of the internet would refer to as a "lolcow", although I do feel sympathy for those who gave him money for crowdfunding in good faith.

 

It does occur to me that were I to start a company manufacturing 00 models I would steer well clear of diesel/electric models (except perhaps shunters) and any mainline steam locomotive designed prior to 1923! However, given the recent fracas over the Terrier, even that last rule isn't foolproof. I can say with 99% certainty that no manufacturer has a Furness Railway "D5" in the works though...

 

One make is doing very well with their first UK outline loco, a class 55 Deltic diesel.

 

If you enter this market, you really need to be agile and fast. (In fact there is a course called Agile, a way of running a business and projects).

 

If he gets the N gauge king out sharpish, he might salvage the brand yet. Then get the APT out next year and think carefully about those 92s. Of course, if the resources are no longer there, then think carefully how withdrawal can happen. An organised retreat can avoid a Stalingrad like disaster.

 

 

[jjb1970]

7 hours ago, Torper said:

It seems to me that Dave has been shafted somewhere along the line (probably more than once)

 

I am not sure that's the case. Kernow bent over backwards to help DJM in the early days of the company, even lending their name as a "banker" for crowd funded projects to give people more confidence to pay money up front and ended up offering a form of compensation to customers when they decided the class 74 was going nowhere. Hattons were clearly willing to work with DJM as were the Revolution and Irish Rail guys. I suspect all of them would have been happy to continue the relationship all things being equal. Far from them shafting DJM, Kernow lost out directly and both Kernow and Hattons now seem to be being targeted by DJM trying to claim they own the rights for designs done on behalf of them when they were DJM commissioning clients. We have heard a lot about nefarious Chinese factories but nothing from the perspective of the Chinese factories and no evidence to substantiate the claims that the factories have shafted DJM. If the factories are so crooked and willing to screw their clients then why are others still happy to work with them and seemingly enjoy a good working relationship?

[GWR-fan]

Given that the financial future of DJM as a commercial enterprise is possibly going to be embroiled in legal disputes, liquidated or sold off in a firesale do we really think that any sensible person in the current climate would crowd fund another project.  Any ongoing projects that are partially crowdfunded are dependent on participants paying future deposits so they may not be seen as viable assets.  It seems the market legality of the infamous "IP" will possibly be tested in court at some point in the future so in essence what could be perceived as an asset worthy of inclusion in a sale and is there any value in the DJM trademark or goodwill?   Any retailer interest to pursue current projects to completion would be on the retailer's commercial terms and most likely not financially attractive to the company.

 

I feel for Dave as a human being for the outcome as the company was launched with much fanfare and promise.  I also feel for the crowd funders as in the past fifteen years I have lost several thousands of dollars to unscrupulous eBay sellers in the U.S. that manipulated a loophole in the eBay dispute system whereby the time that elapsed for submitting a dispute for non-delivery was less than the time taken to ship goods to Australia using the economy surface shipping option.  Goods would simply not arrive and as the envelope for raising a dispute had elapsed I was unable to recoup my losses.  Fortunately,  that shipping option was deleted many years ago,  but the bad taste of paying in good faith and not receiving what was promised does leave one feeling a little bitter.

[ruggedpeak]

1 hour ago, Anglian said:

 

You are quite right – I've never taken part in a Kickstarter and after reading this thread I never will.

Why? Just because DJM has issues doesn't mean any others won't work. I joined the original Pendolino Kickstarter, and when that didn't quite make it over the line I still committed to over £1000 worth  of Pendo's at the early bird prices. Rewarded with excellent models, along with many others. Had a number of other crowd funded models since, none a problem. Crowd funding isn't the problem.

[Mike Harvey]

1 hour ago, Anglian said:

 

You are quite right – I've never taken part in a Kickstarter and after reading this thread I never will.

 

I pledged to the Kickstarter for Severn Models, which has now grown into a successful etched brass kit provider for mainly scenic items.  I have numerous RevolutioN Trains crowdfunded models and commitment to more. But I decided not to be a contributor to a DJModels crowd-funding venture. There is no comparison between the professional execution of the crowdfunding process and the hit-and-miss DJM approach.

[jjb1970]

I think crowd funding (and most UK crowd funded models are not done via kickstart which is a specific platform) is like any other idea, it can be done well or it can be done badly. Revolution are a good example of crowd funding done well, so the concept can work. Personally I'll admit that I'm not a fan of crowd funding and have never gotten involved, and it'd take something very special to change that, however it'd be unfair to judge crowd funding as a high risk concept based only on one company.

[JSpencer]

1 hour ago, jjb1970 said:

 

I am not sure that's the case. Kernow bent over backwards to help DJM in the early days of the company, even lending their name as a "banker" for crowd funded projects to give people more confidence to pay money up front and ended up offering a form of compensation to customers when they decided the class 74 was going nowhere. Hattons were clearly willing to work with DJM as were the Revolution and Irish Rail guys. I suspect all of them would have been happy to continue the relationship all things being equal. Far from them shafting DJM, Kernow lost out directly and both Kernow and Hattons now seem to be being targeted by DJM trying to claim they own the rights for designs done on behalf of them when they were DJM commissioning clients. We have heard a lot about nefarious Chinese factories but nothing from the perspective of the Chinese factories and no evidence to substantiate the claims that the factories have shafted DJM. If the factories are so crooked and willing to screw their clients then why are others still happy to work with them and seemingly enjoy a good working relationship?

 

I don't think his intention is to get embroiled in legal disputes though that certainly gave me the impression when I first read the announcement. Reading the first part (the hard done by part), I can figure out who he is referring too, but far from having a negative impact on other businesses, it seems to have helped some implied parties with possible extra business. Would any of them waste their time on what has become a serious self inflicted injury? 

The ball is seriously in his court now to get some products out fast (what customers care about most). If he can't then he needs to think through what he can do.

[adb968008]

3 hours ago, jjb1970 said:

 

We have heard a lot about nefarious Chinese factories but nothing from the perspective of the Chinese factories and no evidence to substantiate the claims that the factories have shafted DJM. If the factories are so crooked and willing to screw their clients then why are others still happy to work with them and seemingly enjoy a good working relationship?

We did hear from the Chinese factory in December 2018. It is unprecedented that he chose to do so, and some of us heard his side of the story, on and offline.  He had sound reasons for doing so, but It isn't something that can be published, by those of us who saw it, before he removed it. However the source was validated. Since then its been intrepidation.

 

Edited May 5, 2019 by adb968008

[Chamby]

Having just come to this thread from cold, and scanned most of its 33 pages, it sounds to me like:

 

* DJ possibly took on too much and fell behind on their commitments and expectations.

* Commissioners of the work secured ownership of tooling so we’re able to liaise directly with the Chinese factory to get things moving again.

* DJ feels ‘dumped’ and pursues IP rights for the design as a possible means of regaining leverage over production and/or securing royalties?

 

I only hope it doesn’t cause issues with existing products, such as preventing future production runs using the tooling owned by the commissioners...  Surely it was no coincidence that the pre-planned announcement on 1 May was timed to co-inside with Kernow Guildford’s birthday party...  sour grapes here, perhaps?

 

It does look like DJM’s focus is currently on seeking retribution for past perceived injustices, rather than building a future now.  

 

What a sad state of affairs.

 

 

[DavidH]

7 hours ago, Chamby said:

Having just come to this thread from cold, and scanned most of its 33 pages, it sounds to me like:

 

* DJ possibly took on too much and fell behind on their commitments and expectations.

 

Looking at that, I recall Dave's own words back at the start:
 

Quote

DJMusings

...I am currently running at about 30% personal capacity ( work I can actually do myself) and about 25% factory capacity . This latter should alter soon as I'm not about to 'miss an opportunity', to take more business onboard, ( see what I did there?) as to refuse it in the current announcement fren...

December 6, 2014

 

That was pretty much at the start of the business, after his slew of new model announcements, and we all took his word for it. And then there was this later comment:

 

Quote

N gauge Crowdfunded APT-P (Warley announcement)

...I have ample capacity to do another 6-8 projects at this time without breaking into anything like a hot sweat, and when anyone asks if i want to be asociated with anything so iconic and desired as the Ultimate UK tilting train, and the zenith, quite possibly, of UK design and build trains, then...

November 25, 2017

 

In his own words, capacity wasn't his problem. He stated his problem slightly earlier:

 

Quote

N gauge GWR / BR King class 4-6-0 locomotive

...although i have ample capacity to do so, both in design (it will need a new chassis and some minor alterations, as you don't just shrink down a OO one to N gauge), and tool room / production what i don't have is the cash to do so. So, although i said in my New Years message that i probably would...

February 2, 2017  [emphasis added]

 

I conclude that the problem, as Dave said back in February 2017, seems to be simply money.

Edited May 6, 2019 by DavidH
excess space removed from quotes