New from HQ
The latest Blip Central post from the Blipfuture team is a useful summary of what we are, where we are at, and the stakes we are now playing for.
Just to quickly reiterate: (NB I use 'we' in the broadest sense here. I'm not part of the company nor party to its discussions.)
Who we are: We are Blipfuture, a community interest company, attempting to buy the assets of Blipfoto and create a sustainable, self-funding Blipfoto.
Where we are: the minimum target for the funding campaign – through crowdfunding investment and donation pledges – is £180,000. The pledged funding total currently stands at a magnificent £100,000 (00.20 7Jan 2016).
On 5th Jan 936 people had pledged money to the campaign, an average per head commitment of around £100. That number must be getting very close to ONE THOUSAND.
It may seem that there is a long way to go but the funding keeps ticking up (£6,000 on 6th Jan) AND the number of people pledging also keeps rising.
This is a campaign that has had to learn as it has gone along and has faced all sorts of issues – targeting communications, payments hassles, the split between investors and donors and confusion over deadlines. It is not a ‘normal’ funding campaign and mid-stage momentum is really encouraging.
The fact that pledger numbers continue to rise is critical: the future sustainability of the company will depend on committed members and this pledger number is a good indication of commitment. It could also be critical in negotiation with the current owners of Blipfoto.
What are the stakes: there will be an absolutely crunch meeting and negotiation on or around the 11th January 2016 review date set by the current owners of Blipfoto. This will determine whether detailed negotiations for the sale of Blipfoto go ahead or if Blipfoto closes.
Going forward depends on the Blipfoto Directors being confident they can make the company work. And that and the current owners of Blipfoto are confident that the new company will be sutainable to protect their 'upside interests' (see below).
Every penny and every new pledge and new pledger is absolutely critical to the success of this meeting.
In a nutshell
So that’s the situation in a nutshell. Time is very, very short. The clock is ticking faster every day to 11th January.
The Reluctant Leavers
In the rest of this blog I address some issues head on that may be stopping some Blippers from investing.
One surprising and new fact in the latest Blipfuture post is the disparity between those registering on the crowdfunding site (1,600) and those who have pledged (932). Some of this number will be made up of curious non-Blippers but let’s assume that most are members or ex-members of Blipfoto.
I’ve seen a lot of ‘reluctant leaver’ comments in journals, on the Blipfoto Friends Facebook page (1,430 members) and in comments on my blogs. A composite of those comments might go a bit like this,
‘I would pledge but I’ve had it with Blipfoto. I was burned once for life memberships/books. I can’t stand the Polaroid connection. And I’ve feel I’ve been lied to and/or deceived. The ‘old community’ is gone and I don’t like the new website. And why and what are we paying the new owners? Who’s pockets are being lined, who’s palms greased? Much as I love the old girl/fella it’s best to let it die. I’ll find somewhere else (I think). RIP Blip, you poor old thing.’
I’m not surprised there is still a lot of distrust and hurt and resentment in the Blipfoto community. But I find it strange, ironic even, that people are deciding to leave Blipfoto when there is a real possibility to address and change the very issues that are propelling them to leave. So I thought I’d try (given that I am not party to any more data than anyone else outside the new company) to address them briefly here.
1) The money lost
Legally people who lost money lost it to another entity than the current Blipfoto. They lost it to a company called ‘Blipfoto Ltd’ that went into liquidation and has ceased to exist. The Blipfuture line has been: not our business. Talk to the official liquidator.
That is kind of understandable. But doesn’t address the anger at the loss and the fear of chucking good money after bad. Some people have suggested some kind of restitution from Blipfuture but that raises issues of equity: why should I in some measure pay for your past losses? Particularly when the funding situation is looking pretty tight.
And would early life member investors really want a special ‘early investor’ badge? Maybe. After all, the life member subs were critical to getting Blipfoto over one of its earlier funding chokepoints.
I guess it’s a question of how much of the old the new outfit and community takes forward. It’s not easy.
2) Lies and deception?
I’ve dug around more than most in the smouldering wreckage of Blipfoto Ltd and I have come across no lies. But I do think messages got very mixed as the company shifted from a small scale and local/global platform to an investor-driven company going for global, and particularly US, expansion.
I can understand why people felt and feel betrayed. What had started out as a neighbourhood, shared enthusiasm was transformed into a huge ambition. When that ambition floundered – the failure to secure sufficient new users in Jan-March 2015 - the investors pulled the plug and the £1m new investment failed to materialise. And that was that. And it was pretty brutal for all concerned.
And since the new owners picked up the Blipfoto assets in April 2015 the communication has been woeful. Almost non-existent. And justified resentment feeds on a vacuum. An apology and explanation would have been really helped.
Ah Polaroid. It’s clear that the Polaroid licensing agreement (widely seen and still often seen as a ‘take-over’) caused a lot of anger. People did feel betrayed. There seems to have been little consultation – which exposed the fragility of claims that the ‘community’ was sacrosanct – and there was little market testing amongst existing Blipfoto members. When the new platform was launched some people (how many we don’t know) voted with their feet and the Blipfoto airwaves were filled with rancor (not a good way to secure new members).
Since the new owners bought up the Blipfoto assets in March 2015 the Polaroid branding has remained exactly in place. This is maybe not surprising as the two current owners were or are key executives in the two companies that originally bought and continue, in part, to own the remains of the once mighty Polaroid Inc. And they were very much instrumental in turning Polaroid into a licensing platform that monetized the Polaroid brand and distinctive logos.
But this dance with Polaroid (if you want detail it’s here) will come to an absolute end if the buyout is successful. There will be no licensing agreement and the branding will be removed from the Blipfoto site.
Some could ask if it might not be better to rename Blipfoto after acquisition (there’d be months of fun here) because the name has become so associated with Polaroid, a difficult history and a mass of dark emotions.
4) The deal with the current owners: the cash
The proposed acquisition of the Blipfoto assets from the current owners is cast as a mix of cash, non-voting shares and possible long-term payments.
The overall ‘price’ will not be more than the current owners paid for Blipfoto in March 2015 plus for running costs in the interim.
As far as I can see the cash element is unlikely to be over £60,000 and probably slightly less.
It's worth remembering that the Blipfuture documents talk about a 'very significant' part of the £180,000 fundraisiing target being for the running of Blipfoto - start-up costs, the working capital and cash buffer to run the company over the first year (the projected 'loss' for Year 1 and 2 before drawing on the £180k is £105k and the cash buffer is £23k which makes £128k. Leaving only £58k for a cash payment) (see Blipfuture CIC - Financial Projections).
I may be wrong on this but that's what the figures seem to show. It’s well worth taking a look at Blipper David Donnan’s thoughts on purchase versus starting afresh here. He's thought about it a lot.
To reiterate: most (say £122,000) of the minimum funding target of £180,000 is to cover the Blipfuture start-up and Year 1 running costs while providing a cash buffer to stop the company becoming insolvent.
5) The deal with the current owners: the shares and possible payments
But what about the shareholding to go to the new owners? In an ideal world there would be a clean break but that’s not the world we are operating in.
It is possible to argue that the share deal is a sign of the current owner’s
a) flexibility (they are willing to payments other than cash) and;
b) it affords them some protection if Blipfoto went into galactic overdrive and made a ton of money (most unlikely).
It’s called ‘upside protection’. It’s a bit like if you sell something to a friend at what you think is below market value and you have some kind of agreement that if the friend sells the thing for a profit she/he will share it with you.
Except, a Community Interest Company makes it very hard to sell or transfer shares and even if a profit is made any distribution to shareholders has to be agreed by an AGM and is limited by the regulator to 30% of the total profit.
The same goes for those ‘long-term’ payments. They are dependent on making a profit and then having a voting shareholder agreement to distribute part of it rather than reinvest it.
Both these outcomes seem highly unlikely for the foreseeable future.
6) The old community
Communities change. It’s a fact of life. People change. They come and go. But Blipfoto did suffer a particularly stark rupture. First, with the Polaroid licensing relaunch and then the liquidation. A lot of people left (from 6,300 blipping at least once a month in Dec 2014 to 3,698 in November 2015).
To repeat. A lot of people - 2,600 - left. All of a sudden. And in dribs and drabs. And you can still feel the very palpable reverberations of that rupture.
It’s like 40% of a small town suddenly ceasing to exist.
And Blipfoto is like a small town in that the empty houses of the town where once people lived are echoed in the still visible but mute journals of the departed. The silence rings out. Particularly for those who are left and knew them.
7) The website
As for the website and the community and all the other stuff going forward – the grey background, the challenges, the forums, the competitions etc. This is all up for grabs. It will all be ‘in play’ and for the future Blipfuture outfit and community to define and redefine.
The Coldest Part of the Night
It’s true that the coldest part of the night is in the hour before dawn (or more precisely just before and after dawn – something to do with long-wave radiation).
I get why a lot of Blippers and ex-Blippers are feeling cold. And bloody cold. There is a lot of stuff bottled up. And there has been nowhere to say it and be witnessed for saying it. To be heard.
But on the other hand, you wouldn’t want to cut your nose off just to spite your face, would you?
Not now when, improbable though it seems, we the community (in all its different and difficult facets) have the chance to recreate Blipfoto in a way that both harks back to its more intimate past and opens new and exciting future possibilities.
There feels to be something particularly bitter in leaving now. Be sure before you go. For it is hard to return when you part in sadness with thorns in your heart.
£10 quid gives you a stake in the game. A way back in. And a part in an uncertain but beguiling future.