DJ Models Announcement 01/05/19

[Legend]

1 hour ago, DavidH said:

 

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

 

And a lack of business acumen . Typified by not posting accounts. Ok it was last year, but it’s fairly basic. If you can’t do that what else is not being done properly . If you then interpolate that with entering into contracts, then it seems he has fallen out with various people . Could it be his understanding is different from the other parties to the contract ?There’s the tendency to announce something then chop and change , over promising, lack of communication , PayPal issues . Then of course there’s the latest declaration on IP , complete shambles, what was he thinking of? Very poor judgement . He has enthusiasm in spades but sorry you need more than that to run these schemes.  It’s not just money, although of course that’s very important, especially as some of it is crowdfunded . 

Edited May 6, 2019 by Legend

[The Stationmaster]

1 hour ago, Legend said:

 

And a lack of business acumen . Typified by not posting accounts. Ok it was last year, but it’s fairly basic. If you can’t do that what else is not being done properly . If you then interpolate that with entering into contracts, then it seems he has fallen out with various people . Could it be his understanding is different from the other parties to the contract ?There’s the tendency to announce something then chop and change , over promising, lack of communication , PayPal issues . Then of course there’s the latest declaration on IP , complete shambles, what was he thinking of? Very poor judgement . He has enthusiasm in spades but sorry you need more than that to run these schemes.  It’s not just money, although of course that’s very important, especially as some of it is crowdfunded . 

I do wonder if an awful lot of his (sorry 'others') problems boil down to lack of timely delivery or poor organisation?   It's one thing 'promising' end consumers to shake up the model railway manufacturing business and saying you'll do this and do that but rather different to make promises to customers paying him possibly substantial current fees to deliver their project.  If he has not achieved (or over promised) in that area in the same way as he has not achieved (or over promised) with us the end consumers then one could perhaps understand trade customers seeking a more effective and efficient way of getting what they are paying for.  

 

We will probably never know the real answer to that , especially as others in the model railway business don't go round airing any sort of grievances, or assumed grievances,  in public but retain their professional dignity in a way we can respect.   No more than we'll ever know the other side of the story of the 'locked' tooling and the 'lost' factory  (which still produces model railway items for other UK customers without locking up their tooling etc).  

 

As for this IP business it seems to be a classic case of smoking hole in own foot.  I wouldn't be surprised that those who paid for the CADs, and the factory staff who actually produced them to the end customer's (i.e. commissioner's) requirements, are sitting back having a quiet laugh at yet further self embarassment emerging from DJM along with the crass, and perhaps rather juvenile, timing of his 'announcement' and then its early retraction.   I seriously doubt if anybody who owns the tooling of their models and who paid for the entire process of developing and manufacturing them is going to waste their time and money going to law to prove it.   It is surely up to the claimant, if anybody at all, to prove his contention that what he appears to somehow see as 'his intellectual property' has been used by somebody else.   And from past 'problems' with his short form accounts etc I would be amazed if their invoices and documentation aren't in considerably better order than DJM's.  Which would no doubt be rather useful should someone actually be daft enough to involve the legal trade.

[DY444]

And of course a feature of litigation is that the relative risk reduces in proportion to the depth of your pockets.  The only potential DJM product I was interested in was the Class 74 and once that got binned I stopped following things in detail but I infer from this thread that Mr Jones's pockets are thought to be shallower than most in the industry.      

Edited May 6, 2019 by DY444

[25901]

Here's a good question to air on here now, if somebody scanned say 25262 and come up with a CAD design from it with a view of producing a model from it (any scale) would any IP be for a model of 25262 only. Therefore any other company may make a 25 model as long as they scan another 25 that is not 25262.

 

I shall now find a dark corner to hide in while others throw their teddy bears out of the IP pram

[Hal Nail]

48 minutes ago, The Stationmaster said:

As for this IP business it seems to be a classic case of smoking hole in own foot.

Pediantic mode engaged: the smoke points to recent damage but are we really sure he owns the foot?

 

Hat, coat etc

[adb968008]

18 hours ago, Clearwater said:

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

What would it be that your buying ?

Brand name and Goodwill ?

 

 

 

 

[adb968008]

12 minutes ago, 25901 said:

Here's a good question to air on here now, if somebody scanned say 25262 and come up with a CAD design from it with a view of producing a model from it (any scale) would any IP be for a model of 25262 only. Therefore any other company may make a 25 model as long as they scan another 25 that is not 25262.

 

I shall now find a dark corner to hide in while others throw their teddy bears out of the IP pram

Give 25262 a name and register it as a trade mark.

”Flying Rust Rat” ?

 

sorry,. “The Flying Rust Rat” so the newspapers get it right.

Edited May 6, 2019 by adb968008

[PMP]

1 hour ago, 25901 said:

Here's a good question to air on here now, if somebody scanned say 25262 and come up with a CAD design from it with a view of producing a model from it (any scale) would any IP be for a model of 25262 only. Therefore any other company may make a 25 model as long as they scan another 25 that is not 25262.

 

 

Yes another company can produce 25262. There could be a queue of producers waiting for you to complete your scan, before they had a go to scan the same loco, and then produce their own manufacturing data for the same locomotive. What the next guy in the queue can’t do is to use your data, without your agreement. So, if you leave your drawings and laptop in the back of a London cab, and someone finds them and passes them to the ACME Train Co., ACME can’t use your plans and data to independently make 25262. 

 

Also to consider would be any licensing agreements that might be required with the artefact owner regarding how it’s marketed, and described within that marketing. This is an area where contemporary companies are keen not to have their name/brand associated with poor publicity....

Edited May 6, 2019 by PMP

[Clearwater]

 

1 hour ago, adb968008 said:

What would it be that your buying ?

Brand name and Goodwill ?

 

 

 

 

 

Yup.. not saying it has any value to a buyer - more perceived value to the vendor.  Hence creating the IP is an “asset” he would be selling.  “The factory has the tools, pay them and you can immediately sell more J94s into the uk market” etc.  If I was marketing the business, I’d also point to the pipeline as evidenced by those who’ve signed up to crowd funding for the King, Mogul, APT etc.  Now if I was pricing the business AND I believed there was an eventual profit to be had on those items, I’d apply some prudent timing assumptions and a hefty discount rate and the actual cash accruing in a valuation of the business today may not be substantial.. nonetheless, if I was helping Dave sell, that’s how I’d present it.

 

DJ is undoubtedly a brand - look at this thread.  Again the question is what value do you attribute?  Whilst his releases and posts are not to my taste, his matey tone and lack of acquaintance with the shift key clearly does work.  Question is how does a shrewder business person owning and running the business exploit that skill? And is the hassle of doing that worth it to them relative to other things they can do with their time.

[Clearwater]

Eg

DJ models is an established brand in the UK model rail market. DJM is noted for

*successful delivery of crowdfunded models

*strong relationship with all aspects of the model value chain from Chinese manufacturing facilities to uk retail shops

*strong pipeline of uk outline models across a range of scales with a significant number of crowdfunders signed up backed by substantial cash deposits

*development of innovative award winning designs generally recognised as amongst the strongest in the uk market

*strong following for DJM products on social media plarforms 

 

Having developed the business from scratch in 2014, DJ now believes the time is right to add an additional shareholder to the business to fund the working capital outflow required to deliver the strong pipeline.  A full shareholders agreement is available to bidders reaching the next round of the process and is expected to afford an investor the usual rights associated with such investments.”

 

Edit - needs a few “uniques” sprinkling in etc etc etc

Edited May 6, 2019 by Clearwater
Minor addition

[Chamby]

I can see commissioners tightening up on their contracts in future to make this potential problem just disappear.  So both design IP and tooling will be owned by the commissioner in future.

 

I think in the long run, DJM’s moves here will simply devalue the designers role to that of a paid service provider.

 

End of story...

 

 

[JSpencer]

9 minutes ago, Chamby said:

I can see commissioners tightening up on their contracts in future to make this potential problem just disappear.  So both design IP and tooling will be owned by the commissioner in future.

 

I think in the long run, DJM’s moves here will simply devalue the designers role to that of a paid service provider.

 

End of story...

 

 

 

I'm sure it was already the case. I am sure I saw Kernow saying that the tooling was owned by them in many of their leaflets. Take the Well tank, first batch under Dapol, second batch under DJM. They could hardly move tooling from A to B unless it was already clear that Kernow owned it.  In practice, I'm fairly certain none of these people (DJM and shops concerned) are going to waste time and resources attacking each other.

What might happen is if some other party springs up with former DJ products, without his approval, could be open to attack. If such a party also tried to sell one of Kernow's products from a former DJ label, they would probably end up facing attack from both.

Personally, I would not buy a former DJ product under another label unless it was pretty clear and certain whose ownership it was.

 

[BWsTrains]

Lest we forget, there was an alarm bell back in February 2017 when Hattons announced the "restructuring" of their DJM OO King project after delays to the timeline and some swift competitive action from Hornby, 

This happening some 29 months after the bold claim for the King (inset below) from DJM Dave, made with "BIG BOY" funding in tow.

 

So, in 2014 he had funding and as DavidH reported above was "at 30% of personal capacity" and later at no risk of ".. breaking into anything like a hot sweat".

 

One can only speculate how the King project came off the rails, complacency and underestimating the opposition perhaps? Resources do not appear to have been the issue.

 

Colin

 

 

 

[Chamby]

2 hours ago, JSpencer said:

 

I'm sure it was already the case. I am sure I saw Kernow saying that the tooling was owned by them in many of their leaflets. Take the Well tank, first batch under Dapol, second batch under DJM. They could hardly move tooling from A to B unless it was already clear that Kernow owned it.  In practice, I'm fairly certain none of these people (DJM and shops concerned) are going to waste time and resources attacking each other.

What might happen is if some other party springs up with former DJ products, without his approval, could be open to attack. If such a party also tried to sell one of Kernow's products from a former DJ label, they would probably end up facing attack from both.

Personally, I would not buy a former DJ product under another label unless it was pretty clear and certain whose ownership it was.

 

 

You assume that the tooling and the design IP are the same thing.  Kernow definitely has ownership of the toolings, they declare it on their website... but isn’t DJM now making a separate claim to the IP for the design?  Ownership of the tooling is one thing, but if it infringes a design IP claim, can it be re-used for another production run without the IP owners consent, for which a fee may be demanded?

 

 

 

Edited May 6, 2019 by Chamby
Clarification

[D9020 Nimbus]

3 hours ago, PMP said:

So, if you leave your drawings and laptop in the back of a London cab, and someone finds them and passes them to the ACME Train Co., ACME can’t use your plans and data to independently make 25262. 

 

There really is an ACME company—they "make" (in the same way as Hornby, for example) Italian trains and other European prototypes. Quite a big range.

[Fenman]

22 minutes ago, D9020 Nimbus said:

 

There really is an ACME company—they "make" (in the same way as Hornby, for example) Italian trains and other European prototypes. Quite a big range.

 

There’s also an Acme manufacturing company that, since 1870, has been making whistles. Including the Acme “Thunderer”, which was much-beloved by railway companies. 

 

Paul

[34theletterbetweenB&D]

51 minutes ago, Chamby said:

You assume that the tooling and the design IP are the same thing.  Kernow definitely has ownership of the toolings, they declare it on their website... but isn’t DJM now making a separate claim to the IP for the design?  Ownership of the tooling is one thing, but if it infringes a design IP claim, can it be re-used for another production run without the IP owners consent, for which a fee may be demanded?

Comes down to the contract. What is implied by the term owner are free rights to use the items in which any IP is integrated, for the intended purpose of those items: in this case making parts from which to assemble models.

 

What might be proscribed are activities such as reverse engineering, and possibly transfer of the items to another party to utilise, temporarily or permanently.

[Littlethorpe]

It does make you wonder if there is an opportunity for someone to set up a business in the UK to design & manufacture model railway (and similar) products on a subcontract basis. This would minimise the legal & other issues highlighted in this thread as well as probably reducing delivery lead times. Yes I know it would almost certainly be more expensive but by how much? Jim Ratcliffe are you reading this?

 

Gets shot down in flames.....

[adb968008]

21 minutes ago, Littlethorpe said:

It does make you wonder if there is an opportunity for someone to set up a business in the UK to design & manufacture model railway (and similar) products on a subcontract basis.

Maybe easier and more enticing is to open a company based on privately held shares. Each share is the price of the one model produced by that company, which is paid as a dividend.

 

Edited May 6, 2019 by adb968008

[Great Western]

5 hours ago, Clearwater said:

 

 

Yup.. not saying it has any value to a buyer - more perceived value to the vendor.  Hence creating the IP is an “asset” he would be selling.  “The factory has the tools, pay them and you can immediately sell more J94s into the uk market” etc.  If I was marketing the business, I’d also point to the pipeline as evidenced by those who’ve signed up to crowd funding for the King, Mogul, APT etc.  Now if I was pricing the business AND I believed there was an eventual profit to be had on those items, I’d apply some prudent timing assumptions and a hefty discount rate and the actual cash accruing in a valuation of the business today may not be substantial.. nonetheless, if I was helping Dave sell, that’s how I’d present it.

 

DJ is undoubtedly a brand - look at this thread.  Again the question is what value do you attribute?  Whilst his releases and posts are not to my taste, his matey tone and lack of acquaintance with the shift key clearly does work.  Question is how does a shrewder business person owning and running the business exploit that skill? And is the hassle of doing that worth it to them relative to other things they can do with their time.

 

 

DJM is certainly a brand, but it’s now as toxic as Northern Rock or Lehman Brothers Financial Services - thus worth zero.

[Clearwater]

1 hour ago, Great Western said:

 

 

DJM is certainly a brand, but it’s now as toxic as Northern Rock or Lehman Brothers Financial Services - thus worth zero.

 

Im not 100% sure I agree with that (and it’s a bit of an overstatement to compare the collapse of a multi billion pound entity such as Lehmann or Northern Rock who employed thousands of people with a bloke who turns over a few hundred k a year, at most, trading from his dining room table).  By its very nature, this thread attracts those who disagree/dislike DJ’s practices.  Standing up and defending him here would be brave and I suspect the posters who,typically support Dave view this thread as a bit of a pile-on and have chosen to ignore it.  I agree his statements are ill judged and the approach a carriage short of a rake but I’d wager that if he can move one of his projects forward, there’ll be a raft of people saying “what was the problem, you’re just trying to run Dave down.”    The key with Dave is to harness his evident enthusiasm and manage it with some less idealistic and harder/cooler headed oversight.  It’s not uncommon for the face to market to be a different one to the person who actually manages/runs business. I’m sure we can all think of examples as we can of other sole traders who’ve bitten off more than they can chew and/or,have found the business side of model trains more complex than they first imagined.

Edited May 6, 2019 by Clearwater
Typo

[Roy L S]

52 minutes ago, Clearwater said:

 

  I agree his statements are ill judged and the approach a carriage short of a rake but I’d wager that if he can move one of his projects forward, there’ll be a raft of people saying “what was the problem, you’re just trying to run Dave down.”    

 

I don't think its quite as simple as moving just one project forward.

 

The problem would come (and to be fair at this point it is only speculation that it will) if projects do not proceed for reason of backers pulling out as a result of this unwise episode tipping even some of them below minimum numbers viability wise, and people lose money put in so far. Were that situation to arise I suspect it would be very difficult to bring people on board for future crowd funded projects or for there to be a resurgence in confidence in the brand.

 

Roy

 

 

 

[spikey]

7 hours ago, Clearwater said:

Eg

DJ models is an established brand in the UK model rail market. DJM is noted for

 

... *development of innovative award winning designs generally recognised as amongst the strongest in the uk market

 

Eh?  Are we talking about the same DJM who made the 14XX and the J94? 

[Clearwater]

10 minutes ago, Roy L S said:

 

I don't think its quite as simple as moving just one project forward.

 

The problem would come (and to be fair at this point it is only speculation that it will) if projects do not proceed for reason of backers pulling out as a result of this unwise episode tipping even some of them below minimum numbers viability wise, and people lose money put in so far. Were that situation to arise I suspect it would be very difficult to bring people on board for future crowd funded projects or for there to be a resurgence in confidence in the brand.

 

Roy

 

 

 

Roy

i don’t doubt that and I don’t disagree.  However, as you observe no-one really knows how many he’s got signed up to any of these projects and where the viability point really is.  A few people have posted to say they’ve lost faith but many posting have had no faith in DJM for a while.  I agree its self evident that if you lose too many crowdfunders, then he won’t have the working cap to survive.

 

My point was slightly broader that those who do have faith still may not wish to advertise that fact.  (Btw, I have nothing on preorder as I’ve no interest in N gauge, the APT or electrics).  I don’t think DJM is a total basket case yet although he needs to get serious about delivery and move from having delivered the odd model to a steady and reliable stream.  Of course, that may be beyond him and it may be the case that he’s happy nudging along making enough to live.  I don’t know.  I’ve never met him.  Personally, without seeing some proper numbers on the business (costings, profile of order books etc and getting some third party validation of those figures), I wouldn’t invest.  To be investable, he will need a business plan and workschedule that shows how many models he can deliver and when coupled to the cash flow analysis supporting how those models will be funded.  I don’t think that’s impossible but there’s limited evidence to date that DJ is willing to move from it being a hobby business to one where he becomes a reasonably sized player in the market.  In a way, his business model is not dissimilar to the visibly more successful Rapido. 

 

David

[Clearwater]

6 minutes ago, spikey said:

 

Eh?  Are we talking about the same DJM who made the 14XX and the J94? 

 

I was gently satirising the type of document that is used to sell a business (cf estate agent speak).  I note that Dave’s website lists his awards including a 2012 award for innovation plus other awards... https://djmodels.co.uk/past-models.