I hope this update finds you well. It has been some time since our last update about the reboot, and while not everything went as smoothly as we had hoped for, I am happy to share some well-deserved news and exciting forecasts for the upcoming months.
Since the initiation of our ‘six-month reboot plan’ in October 2022, our company has experienced significant progress and growth. I will do my best to provide a concise overview of the key highlights.
First and foremost, I am pleased to report that the results of our reboot have been positive, with continuity and growth.
We have successfully resumed our operations in a fully functional office and are now able to ship our products. All our cloud services are operational, including our entire plugin collection, both commercial and non-commercial.
Our production processes have improved considerably, thanks to the parts inventory acquired during the insolvency and the enhanced chip offerings available in the market. Bigger partners for scaling up production have been qualified, including for production financing.
We have fulfilled the Dwarf Crowdfunding orders for a total of 818 units, with the support of 352 backers who availed themselves of the 150€ voucher solution. There are now 308 units remaining.
In terms of sales, we have successfully reopened key channels in continental Europe and Japan. The MOD Dwarf is now listed with multiple resellers at a consistent price, and we have witnessed steady improvements in our rank and score at Thomann.
We have made significant releases recently that deserve special mention:
- Convolution Engine: We have expanded our selection of high-quality impulse responses (IRs) to include high-resolution cabinets and long reverbs.
- Neural Modeller: In collaboration with AIDA DSP, we have introduced a great sounding neural modeller and soon we will release a wide range of high-quality amp models.
Our AI-related development has been approved for public funding. This not only provides some relief to our finances but also instils confidence in future fundraising endeavours.
While we have achieved notable successes, it is essential to acknowledge that not all went well and challenges still lie ahead.
The musical instruments market continues to suffer from the aftermath of the COVID boom, with retailers grappling with overstocking and excess caution. It will take some time before the situation stabilises.
Despite our efforts, a number of backers remain disgruntled, convinced that our endeavours are a scam. We receive a barrage of anger through emails and social media posts, which has adversely affected our marketing efforts. I will delve deeper into this issue in a separate communication.
Moreover, there are certain areas within our company that require immediate attention and improvement. We acknowledge that the frustration levels, particularly among new users, are still higher than acceptable. We have a long way to go in terms of enhancing our documentation and improving the overall user experience.
While our community remains highly engaged and committed, we have not been successful in harnessing its full potential for content production and active participation. While we have seen some positive outcomes, we believe there is untapped potential that we need to explore further. I will provide additional insights into this topic in a separate discussion.
And last, but not least, despite generating considerable interest from investors, securing additional funding for further growth remains a significant challenge. The current market conditions have made it difficult for potential investors to commit funds. However, we are determined to pursue all avenues and secure the resources necessary to accelerate our growth.
Taking all factors into account, the overall result is still positive. The recent releases have generated a lot of excitement, and we are witnessing steady growth that augurs well for the months ahead.
That being said, certain adjustments are necessary.
Our original reboot plans were designed for a six-month runway, which we have extended to eight months. The revenue generated from our reopened sales channels is now able to fund a significant portion of our operations while we continue negotiating additional funding opportunities.
To ensure our sustainability until the end of the year, we have made the difficult decision to further reduce our team. Cash flow from sales and investment at this point in time is not sufficient to cover all fixed costs and I’m sad that we therefore cannot keep @jesse and @jon on board anymore; thank you both for your valuable contributions over the years! In addition, @friedsilence is pursuing other opportunities to make a living while continuing limited key activities pro bono. In parallel, the founders, shareholders, and community investors are securing the remaining funds, allowing us to maintain our cloud operations, production, support for the MOD Dwarf, and further develop our sales channels through the entire year. Our very limited resources have to be sharply focused on what generates short term sales and attracts investment for a bigger round.
In the coming months, our focus will be on refining the existing features of our platform, particularly the neural modelling technologies that have recently been incorporated. We will not develop any new feature releases during this period as we concentrate on polishing the user experience.
We are steadily growing as an entity and remain committed to acquiring the additional resources required for sustainable growth.
Additionally, I would like to provide updates on the following matters:
1. MOD Dwarf Crowdfunding: To fulfil the outstanding crowdfunded units, we will continue to offer the 150€ voucher solution for the time being. Due to prevailing economic instability, both internally and externally, we still cannot afford to ship these units free of charge. We are pleased to have already shipped over half of the outstanding units using this voucher system. We have curated a selection of plugins for purchase, and we are constantly adding more to maximize the value of the vouchers.
2. Pre-insolvency Vouchers: We have received inquiries regarding the Tier2/Tier3 vouchers offered before the MOD Devices GmbH insolvency. Unfortunately, from an accounting perspective, these pledges and vouchers were considered as written-off credits and debits. As of now, we have not found a feasible solution to reissue these vouchers without significant tax implications. However, we assure you that we remain committed to finding a resolution and will issue them in the future once a suitable method is identified.
3. MOD Duo X / Duo X LE Status: The production of MOD Duo X remains on hold, and we do not have any updates regarding its future shipping. However, we will continue providing O.S. updates, including new features and bug fixes shared across the platform. Please note that we will not be able to develop new device-specific features for the Duo X. Hardware support will be provided on an individual basis.
4. MOD Duo - End of Service: After many successful years, it is time to declare the end of service for the original MOD Duo. Released in 2016, the Duo received thirteen O.S. upgrades during its lifespan, and we are immensely proud of its enduring performance. However, ensuring its continued operation has become increasingly challenging due to the various hardware versions and associated quality assurance requirements. Therefore, the following actions will be implemented:
- MOD OS 1.13 is the last OS version for the Duo. A last update 1.13.2 will be released with the latest bug fixes.
- The MOD Duo will not receive any further O.S. updates.
- We will not be able to execute MOD Duo hardware repairs.
- An upgrade program for MOD Duo owners is in progress, offering a special upgrade price.
5. Expression Pedal: Even though it was not initially part of our reboot plans, we have managed to produce the parts and assemble a sample batch. We have also showcased a sample at SuperBooth, which has generated positive feedback. While the units are being assembled, we are finalising the ControlChain and the Expression Pedal’s firmware before commencing public testing. We are actively exploring production options and striving to align it with pre-sold unit demands. Further details will be provided in the existing dedicated topic.
In conclusion, I am very proud of our accomplishments thus far. Despite encountering some failures during this tumultuous journey, our company is now on a healthy trajectory. Our latest releases have positioned us strongly in the market, and our value propositions have significantly strengthened compared to a year ago.
Thank you all for your unwavering support and dedication. I am personally engaged to improve our community output and thus you shall all see me a lot around here in the next months.
My dearest wishes
Gianfranco Ceccolini, aka The MOD Father