A year ago, Move38 was coming off of the successes of launching more than 30 games (2/3rds of which were designed by community members) and shipping 100,000 Blinks to a steadily growing community of 6000+ Game System holders. It would be ignorant of me to say that everything was going perfectly, since we had plenty of bumps in the road. Often these were opportunities to learn and grow.
In March of 2022, we Kickstarted the newest series of 6 games for Blinks, the Party Pack expansion. Entering the Kickstarter campaign, we believed we had secured the components necessary to manufacture enough product for a thousand backers and could secure more components based on the relative size of the campaign.
The Kickstarter campaign was a success with more backers “going big” for all of the games on our campaign than ever before. Our Blinks community has now grown to over 7000 members and as a community supported game system, we were excited to not only ship these next games, we also designed and developed the next generation system, to be fully compatible with the existing Blinks. We want the Blinks Game System to be a product that lasts a lifetime and evolves overtime with both hardware and software updating in concert.
In May of 2022, we learned that the components we believed we had secured were sold to another company, so we searched across continents and marketplaces to purchase new ones. Unfortunately, these components, once readily available in the tens or hundreds of thousands, were no longer available. They had lead times grow to more than a year. The supply chain for this specific component was backed up unlike anything in history. Because the component we were in need of was also in demand from the world’s automobile makers, the parts on the open market sky rocketed in price. The lowest quote we could find was a whopping 600% of the original part cost, and we regularly received quotes 5x higher!?!? With these kinds of prices, it was clear that Move38 was not going to have inventory for Holiday 2022.
From the beginning of 2022, we had interest in the Blinks platform from much larger toy and game companies. A number of inventor relations folks as well as founders had followed Move38’s progress with Blinks. We returned to meetings to discuss partnerships.
Additionally, we pitched lots of investors with the goal of raising enough capital to bridge the gap and support the launch of our next product-line. While this was met with interest, it didn’t result in the investment we needed.
In August, we reserved 15,000 units of our long lead time part, the one previously *monopolized* by the auto industry. The part delivery date was March of 2023. We communicated this disappointing delay and the supply chain issues that lead to it to our Kickstarter backers. This is understandably frustrating for our customers, especially first timers which made up more than 50% of our backers. The news was met with a tone consistent from the Blinks community, supportive and understanding.
As CEO, I had already stopped receiving a paycheck, something I had to do more often than I would like to admit. Unfortunately, this time I realized without inventory, sales or investment, I would no longer be able to support the team. I did my best to give our team the appropriate time and runway to find their next jobs and take care of themselves.
By September, I had written letters of recommendation, had difficult conversations, and let a majority of the Move38 team go.
You might be wondering about some of the government programs designed to help small businesses during these particularly challenging times. PPP or the Payroll Protection Program is wonderful in theory, but for us in practice, we never qualified. In 2020, Move38 launched Blinks and it was our best financial year in our history. When the effects of the pandemic reached the supply chain about 2 years later, it brought our income to effectively $0, and the terms for these types of loans were dependent on 2020’s finances.
When applying for longer term loans, it was problematic that a lack of inventory also meant we couldn’t demonstrate recurring income. It is common practice to review the last 3-9 months of monthly revenue.
In October, a couple of companies had expressed eager interest in a merger or acquisition of Move38. While I won’t share these companies names, I can say that I had followed both of them from their starts and have a deep respect for the products they’ve launched and brands they’ve built. One had the means to move forward with the deal, and we proceeded. With our advisors help, we provided all of the documentation required to move forward quickly. We received verbal commitments, written terms, and a closing date.
At this point, Move38 has every reason to believe that we are on track to bring Blinks under a parent company to carry on the Blinks brand and product line while helping us fulfill our Kickstarter promise.
January 2023, a new year. We receive notice from the chip manufacturer that our reserved parts are delayed until the end of August due to slower production of their parts than initially projected. This would push our delivery another 6 months, but also meant that any inventory of the product would be delayed in 2023. We communicated this news to our Kickstarter backers once again, staying the course, and using the time to build a relationship with the chip manufacturer (one that was long overdue).
In February, the acquirer has missed deadlines. They continued to communicate with us regularly, sharing often incomplete pieces(such as partial documents) and saying they are focussed on closing the deal. However, the repeated delays communicated the likely outcome of this deal.
I titled this post, How We Got To A Difficult Place, and by now, it is likely clear that there are many difficult places along this journey. I’ll describe the current place we’re in and what I hope for going forward.
In 2023, I reflected on the 7 years of building a company and how it has affected my ability to be supportive of those closest to me. In recent years, we’ve had multiple situations that put things in perspective. While difficult to articulate, and likely the source of more writing, this lead to a very personal decision. I needed to make sure that I could provide for myself and offer security for my family. I realized that it is difficult to move forward without your feet on the ground. I started to work for a new company in March 2023 while continuing to look for buyers/partners to pick up Blinks and Move38 from where it is.
Move38 has current liabilities that require a new owner to have the resources to bridge the gap and invest in marketing existing Blinks games and/or launching the next generation. Move38 cannot currently pay down any of its liabilities. Most importantly, a sale of the company should result in fulfilling our Kickstarter promise and eventually delivering the games and Blinks that our backers trusted us to bring to life (and their doorsteps).
Blinks is ready for the right company to bring it to the next-level. I have written another post with an abbreviated history of Move38 and Blinks that shows the trajectory and opportunity available for the right person or company. I can be reached at firstname.lastname@example.org for possible leads or interest.