For what it's worth, some friends of mine shot a video and composed music for SPIN magazine/InnerPartySystem a while back, remaking the classic Lebowski scene. If anyone ever needed to remake anything, they're amazing...

Seriously, major congratulations to the DP team and everyone who supported this company so far in advance. I ordered a Tesla in 2005, and waited three years for delivery of a car the majority of people said I would never see. Now I've got #26 and the company...well it's doing fine. It takes the support of folks like you to make dreams like this happen!

Does anyone here know what those rotisseries are they they use at DP? Pre-fab or custom? I'd like one of those...

Honestly, I'm looking forward to having this game for so many reasons...a perfect theme. It's hard to believe only 300 will be made. I think demand for a second run will change that.

It's hard to keep silent when I see these sorts of things happen. However, as an investor who funds companies, sometimes companies that manufacture hardware, I feel I should point something out.

A fair majority of the time, there are problems with quality from contract manufacturers. In fact, it's a major risk of hardware, which is why so few investors get behind it. As a matter of course, we expect QA issues in our companies as a rule, and have to bake time into both re-engineering as well as potential backup CMs in order to ensure quality production.

When you're on a razor thin budget, this is massively complex. If you're new to the manufacturing world, it's difficult to measure quality in real-time, and you end up being subject to the whims of the CM. Leverage doesn't exist. This makes it easy for CMs to be difficult or deliver sub-standard results, and the buyer can't do much to resolve these issues. There are entire industries around manufacturing being created to help eliminate some of this friction for small run production, but it's in the early stages.

It really doesn't matter if both sides of this problem think they are right; Maybe it is a question of interpretation of the contract, who knows. The bottom line is that the company who we're supporting here, DP, has one path forward and always has; Deliver you a quality product. Anything less than that would be a disaster. Therefore, of course, DP is going to to everything they can to do that, including move on to another manufacturer.

When Kickstarter emerged, at first, venture capitalists were thinking that a successful campaign may be an indicator of future market success. Very quickly that myth was dispelled, because few successful campaigns ship product. What's worse, those campaigns were often plagued with spotty communication, and as a result, the venture backed startups only use Kickstarter as a marketing machine now. Communities are super hard to manage when you're learning in real-time.

My advice here is to be as forgiving as you can to DP. You guys may slam me for coming to their defense, but as someone who pre-ordered as well, I'm inclined to wait as long as it takes to get a quality product.

You say what you believe. You've got nothing to gain by setting too high expectations, except massive disappointment. "Under promise and over-deliver." You're right though, if they had known there were problems, transparency generally works to your favor here.

Moving on is hard, but ultimately, that's what DP has to do at this point.

...and I should add, of course, if you CM delivers something you think is below spec, you must not pay, period. If your CM thinks it's in spec, then they think you're holding out on payment. Anyway, this is speculation, but I see this all the time.

I'm not. I'm saying DP did.

The "You" is royal, meaning "one" as in DP. Sorry.

I'm confusing A. F. Not you're fault.

The Dude Abides.

It's my understanding that ARA manufactures the custom electronics for the games, maybe just the main boards or some subset. DP subcontracts components to different (appropriate) contract manufacturers where they need to.

There is some kind of dispute, and it's ultimately led to a slipping in real-time while DP goes and finds another CM... which I should add is the only possible choice.

There is one pinball machine company, possibly two, that is producing games at scale in the states; Stern and JJP. There are CMs like CGC that have some experience as well.

Everyone has pros/cons. Ultimately what I would hope so is working with someone who has produced games at scale, ideally not just a boutique operation, and certainly not one that just was founded months ago and never has released a title.

As someone who has started and operated a bunch of companies, I see this model as having a couple inherent challenges up front. (This isn't in any way to disparage DP, I'm a huge fan and remain a preorder for as long as it takes.)

First, the market size is never high enough (even Stern) to attract investors who normally are interested in a future exit (such as venture capital). The total revenue/addressable market is not high enough to model out the multiples needed from this group. (It's not that there isn't huge profits to be made, just VC types want businesses that show a path to $100M's in revenue.)

Second, it doesn't attract lenders/banking because, as is the case with many manufacturing business plans, the asset to liability ratio isn't good enough for this banking climate. This wasn't true 30 years ago, but unfortunately has been since the 90's.

Therefore, there are only two ways to build a sustainable, medium-sized pinball business organically:

1) Have a benefactor who is willing to wait years to take a percentage of profits. This would come from someone with strategic interest or hobby interest with a large pocketbook. I know people who fit this concept but it's exceedingly rare. This can include a large media company or corporate interest who is willing to lose money for some intangible benefit (i.e. a movie studio).

2) Pre-orders, which in theory funds the build. This business model is fairly recent in history, so there isn't a lot of data about how to de-risk it. Kickstarter popularized it but there are only a few real scaled up success stories (possibly Tesla).

I think option 1) is ideal because you can build product you product in stealth and ship immediately upon release, which for this community, is less engaging but probably best. Option 2) is fine but the capital required to build the business is far too high for what we've seen these pinball companies charging. I've modeled it, and from what I can see, the price point would need to go up by 50-100% to build a boutique business, or the volume would need to be at Stern level to get to scale. Crossing the chasm is super difficult.

I can't blame companies for choosing option 2 because it's super hard to raise capital. My best guess is that if chose either 1) or 2), you still need about 3-4 years to get to breakeven.

Growing a business slowly, or organically (the terminology I hear the most often), implies growing your business from the margins, or profits, of your existing sales. It requires that you sell a product first. Spooky has done that, and while it's tough and razor thin at the margin level, they can choose to only build product with the cash flow they already have. It's actually the way most longer-term successful business grow. However, it requires a FIRST product. Getting your first product manufactured an out the door is the challenge which those two options demonstrate.

People use the term "bootstrapping" as an example of how to build a business like this. Bootstrapping is another word for self-funding. It implies that you, personally, absorb the cost of the initial product development, manufacture and distribution. You can do this if you have the cash in the bank. This really fits into option 1), as it requires that you are willing to float the company until you hit breakeven.

All of these are viable options! My only point here is to illustrate that we need (as a community) to do two things: 1) Have the patience to expect very long manufacture cycles and breakeven models. 2) Be willing to pay more for a machine to fund that gap for the pre-order businesses.

I can't really comment on American Pinball, but I do think it's possible to start a manufacturing business first. However, generally, you should have someone in your company that has done this precise type of manufacturing, at scale, before. Product development is an entirely different beast; Optimizing a manufacturing business is a specialty, and you can't read about it in books and expect to succeed. I would hope that anyone who wants to try this in pinball hires people either who have done it at scale (at Williams or Stern) or from a similar business.

My experience is different. I've started venture backed companies, I've also taken them over, for most of my career. I've also seen board dysfunction and what that can lead to. The bottom line is that for most company structures, who owns the majority of shares is irrelevant to operations of the company except in "downside scenarios." By that I mean, unless the company is going through a massive takeover or coud d'etat where the board is being forced to change over to enable a deal of some kind, that ownership doesn't buy you much.

Instead, board composition and voting rights is relevant because they can hire or fire the CEO. In the strictest sense, yes, you work for the board as the CEO, but to be successful every board knows they have to let the CEO operate. If the CEO executes against expectations (even in small companies), the board almost always empowers them.

Most successful startups have sold more that 50% of their company by the time they exit or go public. It's the nature of the beast. When your company does not have the revenue or cash reserves to succeed, your one asset you have is your equity, so it's a rational deal to sell it to achieve the goals you want.

The key is to make sure that the governance of the board is set up in a way that encourages alignment of goals. If ARAs goals and DPs goals are not aligned (which, it seems, they should be, since both make money if machines are created and sold), then sure, it may not make sense to sell part of your company to them.

My opinion here is that they should do this deal, but they should ensure there is some sane way the company is structured so it's not arbitrary on how a management team would be replaced, if it is even possible.

I recently played @genex's machine again in San Francisco, and I'm reminded why I pre-ordered and why I'm willing to wait. The game is super fun.

Side note: When the DP folks say new orders are necessary to fill pre-orders, I read that as new orders will provide float to help get the pre-orders built, not that they will ship first. I'm not sure where you're getting that idea, maybe I missed something.

Ok I see where there is some ambiguity from Pinball News:

"Asked if they will pick up with delivery of machine number 56, Jaap said they don’t have the money to just build all the pre-orders with no income, so they will need to build some new-order machines which will help fund the production of the pre-orders."

No mention of shipping order here, right? Only problem is with traditional media training: "Answer the question you want to answer instead of the question they ask you."

From a business perspective, I understand taking orders to create some cash flow if you have a model that can take you to breakeven with a certain number of sales. However, the idea that it makes any difference to handle the queue out of order doesn't make any logical sense to me. So I understand the literal words "new orders will have to be built before old," but the logic escapes me.

That's why my read on it was that they felt bad about taking money now for additional machines, but they saw no choice, despite knowing it frustrates the pre-orders that the total number of machines built will increase. I may be wrong, but the numbers and logic part of my brain thinks that's what he meant.

Anyway, I'm in the "I am satisfied to eventually get my machine" camp, so I won't beat a dead horse.

That makes a lot sense. It raises the pros/cons of transparency. Like you say, not ideal and not fair, but maybe there is no way around it.

If it were me, and it were my company (I've been CEO a number of times), I'd probably tell my team to step out and find other contract work for a while until cash flow started up again. You can't burn capital without income, so until they got their company back in a positive direction, I'd probably pause code production.

It would be different if there were recurring revenue, of course.

I should say, "if cash flow started up again." They can sell TBLs with the code where it is, then add to it.

I'm curious about this, owning both W/B and Sterns. IMHO, the playing feel has been mostly regarding mechs (such as flippers, coil strength choices, etc.) vs. other factors. What do you feel is lacking in the gameplay feel exactly? Responsiveness? Solidity of game parts? Sounds or vibrations? I'm just curious what you think from an electronics manufacturer would have changed to make a different feel.

On BoP 2.0, trophies are only awarded if you have registered your profile at the beginning of the game. Holding down the right flipper, etc. Maybe TBL is similar?