RMweb Premium jjb1970 Posted December 10, 2018 RMweb Premium Share Posted December 10, 2018 A warning from the world of audio. The Yarra 3DX sound bar raised its development fundin via crowd funding: http://www.yarra3dx.com/ A very promising technology which received rave reviews. However, you can get a feel for where it's going from this blog post: http://www.realhd-audio.com/?p=6311 Link to post Share on other sites More sharing options...
dpgibbons Posted December 10, 2018 Share Posted December 10, 2018 Industry stats show that only one third of crowdfunding proposals get financed, but once funded about 90% of products get delivered. Link to post Share on other sites More sharing options...
rue_d_etropal Posted December 11, 2018 Share Posted December 11, 2018 Industry stats show that only one third of crowdfunding proposals get financed, but once funded about 90% of products get delivered. I suspect that is far better than other methods of funding. From my experience of helping to start up a local cooperative shop , I know that people run /financed businesses are more likely to succeeed, than others. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted December 11, 2018 Author RMweb Gold Share Posted December 11, 2018 Industry stats show that only one third of crowdfunding proposals get financed, but once funded about 90% of products get delivered. Although I suspect the figures in respect of model railway items in the UK will be rather different because they they vary considerably between the concerns seeking to raise funding/initiate models via that route. I'm open to correction but I think Revolution have progressed to completion 100% of the projects which attracted funding (I don't follow the N gauge scene in detail so might be wrong). Of the DJM products which have received funding only one (possibly a second if it involved a wagon?) has so far delivered while two which were funded/part funded have fallen by the wayside for whatever reason, another has suffered extended delay due to a change of factory, and two others are progressing but are still waiting more crowdfunders. Another concern which kickstarted etched building kits using crowd funding achieved a success rate of 100% completed I believe In some respects it matters what is counted as 'funded' - i.e.does that mean sufficient funds have been committed to get the project underway or does it mean sufficient funds have been committed to get the project completed? Presumably as far as the individual funders are concerned they are more likely to think of a project as 'funded' once they have put money into it because that is exactly what they have done. I think that overall it comes back to many things which have been said previously in this thread in respect of crowdfunding and how it is used and organised. Link to post Share on other sites More sharing options...
RMweb Gold Revolution Ben Posted December 11, 2018 RMweb Gold Share Posted December 11, 2018 Hello Mike, We have so far had to cancel just one project - the Class 21/29 in N, though we never reached the point of actually asking for money - it was clear even at the expressions of interest stage that it wouldn't fly. All the other projects we have offered up have reached sufficient pledges to proceed, and so far we have delivered 6 products in N and 1 in 00, with a further 4 in or very close to production. Cheers Ben A. 5 1 Link to post Share on other sites More sharing options...
dpgibbons Posted December 11, 2018 Share Posted December 11, 2018 (edited) In the stats I quoted, "Funded" means that project pledges had reached the predetermined financing goal, which on most crowdfunding platforms is a prerequisite before money is taken from backers. There are a number of long established model builders who finance projects by taking deposits well in advance - I've been waiting well over a year for one such O Gauge loco to start production - but they rely on their reputation and track record to secure deposits and it's expected that these deposits will be fully refunded if the project does not proceed. Edited December 11, 2018 by dpgibbons Link to post Share on other sites More sharing options...
RMweb Premium jjb1970 Posted December 12, 2018 RMweb Premium Share Posted December 12, 2018 I think as time goes by it is more clear than ever that crowd funding does not alter the fundamentals of running a successful business. Those suppliers who do it well are doing the things you need to do such as managing suppliers and projects, communications, e-commerce and the basic mechanics of managing a business well. Unfortunately crowd funding does make it easier for dreamers to ask for money to fund their ambitions and who seem lacking in the basics of running a business of any sort. As has been said multiple times on this thread it all comes down to trust really, is a crowd funding business one you have confidence in to deliver the goods and manage things effectively? Crowd funding does not alter the basic realities of commerce and running a business. Link to post Share on other sites More sharing options...
dpgibbons Posted December 12, 2018 Share Posted December 12, 2018 (edited) Conventional crowdfunding mostly weeds out the dreamers by requiring the project to be fully funded before money is taken. Taking the stats I quoted above, this requirement boosts the chances of successful project delivery from 30% to 90%. So those crowdfunders in our space who are taking at-risk deposits (and worst still incurring costs) before projects are viable are adding considerable extra risk for their early backers. Edited December 12, 2018 by dpgibbons Link to post Share on other sites More sharing options...
RMweb Premium Legend Posted December 12, 2018 RMweb Premium Share Posted December 12, 2018 I think as time goes by it is more clear than ever that crowd funding does not alter the fundamentals of running a successful business. Those suppliers who do it well are doing the things you need to do such as managing suppliers and projects, communications, e-commerce and the basic mechanics of managing a business well. Unfortunately crowd funding does make it easier for dreamers to ask for money to fund their ambitions and who seem lacking in the basics of running a business of any sort. As has been said multiple times on this thread it all comes down to trust really, is a crowd funding business one you have confidence in to deliver the goods and manage things effectively? Crowd funding does not alter the basic realities of commerce and running a business. Completely agree. There are lots of people who are very enthusiastic about models and want one at all costs . Unfortunately I see crowd funding as a place where that enthusiasm can overtake sound business sense . Not in all cases, but certainly some . I'd hold out the guys from Revolution as best practice . Clearly they do have sound business sense and have delivered. 2 Link to post Share on other sites More sharing options...
grahame Posted December 12, 2018 Share Posted December 12, 2018 Of the DJM products which have received funding only one (possibly a second if it involved a wagon?) has so far delivered while two which were funded/part funded have fallen by the wayside for whatever reason, another has suffered extended delay due to a change of factory, and two others are progressing but are still waiting more crowdfunders. AFAIA in N gauge the only product DJM has so far got to market is the Mermaid wagon which was not crowdfunded. There is another wagon, the Shark brake van, that has been tooled and an EP produced but has not yet gone in to production and that was also not crowdfunded. However, DJM has had and does have a lot of other N gauge projects in various states/stages of development of which some are sort of partially crowdfunded but are not on a commercial crowdfunding platform. It is difficult to keep tabs on them and their progress but these include/have included (including announcements and failed ones): King, Churchward Mogul, Hudswell Clarke ST, J94, class 59, class 17, class 23, class 92, APT, HOU hopper, a bogie flat (can't remember which) and a Road Van. I may have missed some. HTH G Link to post Share on other sites More sharing options...
RMweb Premium jjb1970 Posted December 12, 2018 RMweb Premium Share Posted December 12, 2018 I'd hold out the guys from Revolution as best practice . Clearly they do have sound business sense and have delivered. I think most would agree. There is a saying I like - if you can't get the basics right then there's not much point in trying the difficult stuff. When I look at Revolution they have a functioning web site, know how e-commerce works and communicate with customers. That gives a bit of confidence from the outset, not all companies seem able to manage those basics. Then in terms of delivering they've avoided the classic pitfall of over promising and under delivering. When announcing projects and delivering updates people have confidence that they say what they mean and mean what they say and will deliver. And the quality of product speaks for itself, working with Rapido is a huge boost too as Rapido are the only manufacturer I'd trust to make a great model based only on availability to pre-order. That is especially important for crowd funded projects. In some cases it's hard to figure out whether ideas are serious or just some scatter gun approach that may or may not go anywhere. That means Revolution meet two essential criteria in terms of credibility. They are credible in terms of being able to run a business and be trusted with our money (it's notable that they have pretty free from drama). Secondly, they have established themselves as a company that will deliver exceptionally good products as promised. Put the two together and things work. 2 Link to post Share on other sites More sharing options...
BR(S) Posted March 12, 2019 Share Posted March 12, 2019 Anyone who decides to enter crowdfunding has to be aware of one overarching element: they are taking a risk with their money. There remains an inability for many people to accept this, whether it's crowdfunding or investing in the stock market. When I invest in crowdfunding (and the stock market), I'm aware from the first second that my money is at risk, in the same way that Hornby, Bachmann etc risk their finances in the hope that they can sell the end product (though for me being the crowdfunder, I just want the end product). I weigh up all sorts of factors, which includes whether I'm happy to lose the whole of my investment. When investing, that's why I also put some of my dosh in boring fixed, low-rate accounts, to "spread the risk". My advice to anyone thinking of entering crowdfunding is focus on only one overall factor: that you are now entering a world where YOU take the risk. On that basis, do your research to see to what extent you believe this will be mitigated, but remind yourself that it will always be there. If you don't want to take any risk, just keep hoping that your required item will be produced by someone else who is willing to put their money at stake. 4 Link to post Share on other sites More sharing options...
RMweb Premium jjb1970 Posted May 5, 2019 RMweb Premium Share Posted May 5, 2019 Just bumping this back up given it is quite topical again. 3 Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted May 6, 2019 Author RMweb Gold Share Posted May 6, 2019 On 05/05/2019 at 09:40, jjb1970 said: Just bumping this back up given it is quite topical again. An it looks like the question of 'trust' has come to prominence. 3 Link to post Share on other sites More sharing options...
runs as required Posted May 6, 2019 Share Posted May 6, 2019 Apropos Crowd funding, there was an article in The Observer New Review Tech section on the "Kickstart" site yesterday May 6 that seemed interesting/instructive (on skim reading) Basically the over-riding message was be prepared to lose your stake. There was the usual little boxed case studies on the double page spread that bullet-pointed enormous successes and a corresponding one on disastrous failures. It reminded me of my old dad doing Littlewoods score draw Pools through the first 20 years of my life. I also read a reference to "pledging" - where there is more of a dependence upon Trust - from both the would be innovator and the punters - where nothing gets triggered until a threshold sum is reached. [We are just about to re-open the pub next door as a Community pub having raised £350,000 since last autumn. We had a promise to refund the remainder of contributions if the project failed.] dh 3 Link to post Share on other sites More sharing options...
royaloak Posted May 6, 2019 Share Posted May 6, 2019 On 12/03/2019 at 10:48, BR(S) said: Anyone who decides to enter crowdfunding has to be aware of one overarching element: they are taking a risk with their money. As one of those caught up in the DJM debacle (APT in my case) I could not agree more, I have effectively written the money off as I dont consider it a worthwhile use of my time to go down the legal route especially as there is a good chance of me losing due to the way crowd-funding works, as you mentioned later in your excellent post.. 3 Link to post Share on other sites More sharing options...
runs as required Posted May 6, 2019 Share Posted May 6, 2019 This seems to have been revived because of the viral thread about DJM's posts. It seems to me that it would be ill advised to stake your money on a proposition with a business plan that aims to break into a complex procurement process that has already been found problematic by the leading protagonists. Listening to an IP specialist who works to facilitate innovators he reckons to be a good bet, he stressed that an important part of a project's viability is how it proposes bypassing existing pitfalls. I last had a conversation with DJ before he was 'scooped' by Hornby on the NER T2 (Q6). It did strike me he faced a similar iterarative dependence on Chinese manufacturers that had already threatened Hornby with existential problems. dh 1 Link to post Share on other sites More sharing options...
34theletterbetweenB&D Posted May 6, 2019 Share Posted May 6, 2019 1 hour ago, royaloak said: ... I have effectively written the money off as I dont consider it a worthwhile use of my time to go down the legal route ... In your situation I would chance the cost of a postage stamp by writing formally requesting return of your cash on the grounds of insufficient progress to give any confidence of receiving the product, citing UK consumer law which treats this crowdfunding process in the same way as any distance selling. 2 Link to post Share on other sites More sharing options...
raymw Posted May 9, 2019 Share Posted May 9, 2019 Crowd funding works fine for buyers and sellers, if what is being sold exists already - e.g. a building, work of art, whatever. However if the item for sale does not already exist, then there is a risk that it will never exist. In particular if it is an item that requires significant work before it is completed, and if that work is carried out by sub-contractors on a different continent, then the chances of failure is most likely greater than the chances of success. However, if crowd funding did not exist, then it would be very unlikely that any individual would be prepared to risk a few hundred thousand of their own cash based merely on future customers not putting money up front and only promising to purchase, Unfortunately enthusiasm and knowledge is not enough when you depend on areas outside of your control. 1 Link to post Share on other sites More sharing options...
dpgibbons Posted May 9, 2019 Share Posted May 9, 2019 The majority of crowdfunded projects require significant work and subcontracted manufacturing, but as previously noted Kickstarter projects once funded deliver over 90% of the time. 1 Link to post Share on other sites More sharing options...
raymw Posted May 9, 2019 Share Posted May 9, 2019 Not many kickstarter projects are in the £100,000 range. searching on Kickstarter failure rate throws up many statistics, many of which can be misinterpreted- e.g. only 13% of the failures get refunds. LLC and DJM were not operated along kickstarter lines. I don't think kickstater releases part payments, they only release payments once the required number of subscribers is passed, and so on. In any case It would be rather awkward to comply with this for some projects https://www.kickstarter.com/rules/prototypes?ref=rules Link to post Share on other sites More sharing options...
RMweb Gold Revolution Ben Posted May 9, 2019 RMweb Gold Share Posted May 9, 2019 1 hour ago, raymw said: ...if that work is carried out by sub-contractors on a different continent, then the chances of failure is most likely greater than the chances of success. Link to post Share on other sites More sharing options...
RMweb Gold Revolution Ben Posted May 9, 2019 RMweb Gold Share Posted May 9, 2019 1 hour ago, raymw said: ...if that work is carried out by sub-contractors on a different continent, then the chances of failure is most likely greater than the chances of success. Hi there, I think some caution is needed with blanket statements. There is little or no evidence that the location of the expertise required has any bearing on the outcome. So far Revolution has a 100% success rate on delivering projects for which money has been taken. All were manufactured in China by well-regarded and highly professional partners. We have cancelled a project (Class 21/29 in N) but this was because expressions of interest - an important stage in our process - indicated that taking money would be ill-judged.. cheers Ben A. 7 Link to post Share on other sites More sharing options...
RMweb Gold Joseph_Pestell Posted May 9, 2019 RMweb Gold Share Posted May 9, 2019 58 minutes ago, Ben A said: Hi there, I think some caution is needed with blanket statements. There is little or no evidence that the location of the expertise required has any bearing on the outcome. So far Revolution has a 100% success rate on delivering projects for which money has been taken. All were manufactured in China by well-regarded and highly professional partners. We have cancelled a project (Class 21/29 in N) but this was because expressions of interest - an important stage in our process - indicated that taking money would be ill-judged.. cheers Ben A. So where are my 2 x 321s??? Link to post Share on other sites More sharing options...
RMweb Premium njee20 Posted May 9, 2019 RMweb Premium Share Posted May 9, 2019 In progress, and Ben and Mike have been open about the challenges the project has faced and have provided a recent update on it. 2 Link to post Share on other sites More sharing options...
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