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Promising Kickstarter game runs out of money, programmers, steam
Promising Kickstarter game runs out of money, programmers, steam
October 19, 2012 | By Mike Rose

October 19, 2012 | By Mike Rose
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    60 comments
More: Console/PC, Business/Marketing



A group of ex-Cryptic Studios veterans has shown what can happen when a Kickstarter project turns sour, as it has run out of money, programmers and options.

Rick Dakan, project leader on Mob Rules' successfully-funded Haunts: The Manse Macabre, took to Kickstarter to explain that there are no longer any programmers working on the game, and that work on the title has halted.

Although Dakan was not able to say whether he will definitely be picking up work again on the title, he noted that talks are currently underway with Blue Mammoth Games, who may potentially help the project through the completion.

Talking to Forbes, Dakan explained that his team had burned the Kickstarter pledge money away quickly, spending around $5,500 a month, and that his handling of the staff on the game had been naive.

Blue Mammoth's Matt Woomer added that talks with Dakan are currently in the evaluation phase, and that "It would be a shame for it to not be released."

However, he added that it was a lot of work to take on, and that Blue Mammoth "are a small studio with lots of irons in the fire already."

As for the money already invested in the game, Dakan says that all of the Kickstarter money has already been spent, but that he is willing to refund any backers who want to withdraw their support out of his own pocket. "We will get it finished," he adds, "but that's not what I asked you to sign up for and it's not what you gave us money for."


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Comments


Thom Q
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Too bad for them. The way Rick Dakan is handling it though, explaining and not dodging responsibility, is solid. I hope he gets the chance to finish the game, and that not too many backers will ask for their money back.

Joe McGinn
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Suggestion: Kickstarter should include a clause that if not delivered by a certain date, the code and assets go public domain. Someone would finish it, meaning less wasted/dead projects for creators, and the backers more sure of getting something.

TC Weidner
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could be a fun game, I hope someone comes in and helps them finish this.

David Canela
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I backed that project. I wish them all the best and that they find a way to turn it around or at least mitigate and control the damage. Not just for their sake, but that of fellow future kickstarters!

Rachel Presser
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This is why strong financial management and foresight (ie, budgeted burn rates) are so dire for crowdfunded games. But I concur that Dakan is handling the situation very well-- the prime thing in Kickstarters is how well you treat your backers.

Jesse Crafts-Finch
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I wouldn't be offering a refund from my own pocket. I think the view of Kickstarter from the games perspective is that it's a way to pre-order games, and it's not. It's a way to fund ventures you would like to see succeed, but with very few guarantees.

Maria Jayne
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I think it's capitalizing on the "pre-order" mentality, people aren't donating to a kickstarter project, they're buying a game. As soon as you believe you are buying something that's a minefield of expectation.

Morgan Ramsay
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Preorders, like gift cards, do not guarantee that any of the companies in the supply chain that are expected to fulfill them will be around long enough to do so (e.g., GAME Australia.) You are no more safe from mismanagement or fraud when you preorder direct or through a retailer. In those exceptional cases though, you may be provided recourse as an unsecured creditor through bankruptcy proceedings; however, you would recover only a fraction of your loss, if even that, after the claims of secured creditors have been addressed.

Nate Anonymous
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@Morgan depending on the preorder, there is a big difference. Many retailers will only charge your credit card the full amount AFTER the preorder has shipped/is available for pickup/ready for donwload. Some will charge before the item ships, but it is usually a small 10% or less. Same with a publisher download service like, say, Origin. This caps the amount lost because although secured collect before unsecured creditors, secured cannot collect money that was never collected by the company to begin with.

So your losses are much less than if you funded/preordered through Kickstarter where you could face 100% loss of your donation/prepurchase.

But if people are really donating funds on Kickstarter with the view that it's just like a preorder, they have a lot to learn about how businesses work. Most small businesses fail in the first three years, which is about the same amount of time required to take a game from concept to development. Why should gaming be different than any other type of industry?

A cynical view of developers and kickstarter would see some in the development community taking advantage of its most naive and passionate fans to induce them in taking terrible bets. They get no share of the potential profit if the venture succeeds and a high chance of receiving nothing. I think the onus is on the developer to explain that a Kickstarter contribution is a donation, not a preorder.

There will be many, many, many more of these types of stories in the years to come.

Morgan Ramsay
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@Nate: Distributors typically charge for preorders immediately, especially preorders for digital products. Policies may differ, however. Barnes & Noble charges for digital preorders at checkout. Valve calls preorders "prepurchases" to make its policy clear. Amazon only charges when the product is "shipped." At the end of the day, when the transaction takes place has no bearing on the fact that Kickstarter is a platform for generating preorders.

Nate Anonymous
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@Morgan: based on the power of Google, I believe you are incorrect.

Amazon: charge when they ship

Best Buy: Amount held as a pre-authorization (would probably go back to customer if BB went bankrupt)

Steam: Immediate charge

Origin: around 10% ($5 charges are common, then charge the rest when they ship)

Gamestop: Charged when they ship

B&N: Your information is false. It charges when it ships: https://www.barnesandnoble.com/help/cds2.asp?pid=26974. You are confusing an authorization hold to verify availability of funds with an actual charge.

And the elephant in the room is that pre-orders are typically purchased using a credit card. Many credit cards have buyer protection that would refund the amount charged if the item was not shipped as agreed. I believe this is imposed by federal law. This protection is notably NOT available for a Kickstarter project.

So, as I said the majority of retailers or "distributors" only charge when they ship or charge a nominal amount. Sometimes they ask the cc company to hold the amount as a preauthorization but these holds typically drop off after 7 days. In those circumstances, it is possible that the company could do another hold, but that would have to be continuous and at any time the customer could withdraw the retailer's authorization (if say, they heard the company was having problems). Regardless, the customer would most likely NOT be charged if the item never ships.

The major exception is Steam, but even for those purchases the buyer may have credit card protections to refund their payment. Those same protections would not be available for a Kickstarter project gone wrong. Plus, what's more likely -- Steam goes bankrupt and the purchasing entity decides to poison the brand by stiffing its anticipated customer base or a pie-in-the-sky Kickstarter project can't make the transition from clip art to a working product?

Kickstarters as a donation mechanism for the welfare of private endeavors are fine between consenting and fully informed adults. Kickstarters as a pre-order mechanism are a sucker's bet and shame on any companies that suggest otherwise to grab some easy cash.

Morgan Ramsay
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@Nate: BN states their policy quite clearly, "Your credit card is charged only at the time we ship the product. The only exception to this is digital pre-orders such as NOOK Books, NOOK Magazines, NOOK Newspapers and NOOK Apps—for these items, the credit card account is charged immediately."

Lars Doucet
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On projects like these, it's really hard when the project leader isn't also a programmer. That way, in the worst case you can always buckle down and slowly finish the project yourself, even if you have to resort to placeholder content assets. If the programmers leave, there's absolutely no way to move forward.

Kenneth Blaney
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I don't know if it is better to turn out a game that looks like crap than to just not deliver a game at all. People who backed it might understand when a project flops, whereas they could be resentful of a poor project that was finished just to satisfy a contract.

Lars Doucet
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All I'm saying is that without programmers, you don't even have the *option* of finishing, regardless of whether it's a good idea.

Kenneth Blaney
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Fair enough. You'd have to retool a significant amount of the game (like turn it into a board game) to still get it out.

Raymond Grier
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@Kenneth If you're poor and have been relying on the project for your livelihood you may have to release crap just to avoid bankruptcy. It's unfortunate but true.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Mac Senour
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They asked for $25,000... so a game like this in 5 months? From nothing? Good lessons learned I'd say.

Sean Francis-Lyon
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"We’ve spent $42,500 on development so far and just need another $20,000 to see us through to completion"

WILLIAM TAYLOR
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@Sean That quote is one of the more puzzling elements for me. You would think that after putting up their own money and seeing how far it got them, they'd have a solid understanding of what it would take to finish. Apparently they had absolutely no clue whatsoever.

Marvin Papin
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Finally, we reach that situation. First fail, and nothing oblige the team to give money back but i'm totally respectful towards its decision to refund, kickstarter is a good way to launch new independent teams and it would be bad to see that ends now. I hope future failures will behave like that.

As said just above, 25000 is low, very low...

Andrew Grapsas
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"Let's program this game in Go!"

Yeah... that's when you know it's never going to ship and isn't serious.

TC Weidner
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yeah Google is just a silly lil tiny company, why would anyone think of using a language they are building.

Oh brother..

Jane Castle
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This game would not have shipped if it had been programmed in C++, C# or for that matter Basic. The issue is poor planning and being naive when it came to the financing, which is all too common in the game industry.

The choice of language means nothing. Mine Craft was programmed in Java so I guess that project wasn't serious either....

Jeffrey Crenshaw
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I don't see how being a large search and advertising company says anything about said company's ability to design a language good for making games.

The choice of language dictates the learning curve, how easy it is to find programmers with knowledge of the language, performance capabilities, what libraries are available to reduce the boilerplate you must implement, and what platforms you can release on and how easy it is to port to other platforms. I'm not going to make a value call on their decision to use Go as I don't know their team's skillset or goals, but the choice of language does not mean "nothing".

Fredrik Liliegren
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So here comes the inevitable backlash to this great new way of funding games. I see this just being the tip of the iceberg that will sink this funding model quickly. We are talking a $25,000 game here, so the cost to finish it might be another 25K. Now lets move on to one of the games that raised Millions, with no alternative funding (aka publisher), what happens if they suddenly burn all their cash, then it might be another 500K to finish it or more. People wont be so quick to refund out of their own pockets then. And i am certain those guys will have to go to a publisher to ask for the rest which is not the end of the world but not the new world order as this type of funding has been pitched to be. I will watch and see what happens closely.

Ian Uniacke
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I'd be concerned the other could happen also, in that people end up ponying up a lot more cash then they wanted to due to mass loss aversion bias.

Judy Tyrer
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For VCs investing in projects, the expected fail rate is 80%. Why would kickstarter be expected to be any different? If you look at the budget and think "they're nuts, you can't do that for $25K" then you don't invest.

I think what we'll see over the next year is that the kickstarter investors will become more educated and learn to choose more wisely. People looking at this as pre-ordering a game may well decide to go elsewhere, but as they leave hopefully more savvy investors will take their place. I'm all for that.

Alex Leighton
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Yeah, it was only a matter of time.. Interesting to see what happens next.

Aaron San Filippo
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I think a little bit of perspective is important. So, one game successfully got funded, and then failed spectacularly. How many more crowdfunded games have already shipped, but failed to elicit a "Look! This proves that crowdfunding can work!" response from anyone?

Since I couldn't find an answer to that question, I started a list here:

http://crowdfundedship.tumblr.com/

Submissions are welcome.

E Zachary Knight
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FTL is my first pick. They had a successful crowdfunding campaign and recently had a very successful launch.

Aaron San Filippo
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Zachary, would you mind submitting that? Just a link to the crowdfunding page and the game's homepage would be awesome.

Rachel Presser
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Unemployment Quest. It shipped shortly after the campaign was successfully funded, though it got some backlash for being too short and using RPG Maker defaults considering that it made 1000% of its goal.

Edmar Mendizabal
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Since our days developing Desert Combat on our own we've always been very community focused, though it was challenging to maintain the same level of connection on subsequent projects with publishers. Now that we're independent, crowdfunding has helped us to connect with fans old and new on a different level.

As a new virtual studio/publisher, 2Dawn.com raised $38K for Ravaged marketing support on Kickstarter...but just as important was the help backers/fans provided through design feedback, beta testing, and grassroots publicity for this new vehiclular FPS franchise. Backers with relevant skills volunteered to help because they liked we were doing something different with vehicles and the FPS genre and our CM even started as a fanatic fan (he is from Denmark ;) Fans even created our awesome launch trailers with gameplay footage from our beta (which is impressive as it was an actual beta). Ravaged would definitely not be what it is today without them and though we have a great fan base from our other multiplayer FPS titles, Kickstarter helped us connect with more of them and in different ways.

We launched Ravaged and a demo this week on Steam as well as Origin and other digital distributors. We're fortunate to be the first Kickstarter project to be accepted on Origin and we're happy to help devs that have any questions on the process...seriously, just hit us up. Any success is because of dedication and hard work from the team, great partners, and most importantly our fans - who will always be involved in the how and why of what we do as well as the what, by helping with the roadmap for regular Ravaged updates. We're actually really enjoying putting the finishing touches on their rewards now...and though only a small part of our funding came from Kickstarter, I feel we have the Kickstarter community to thank for everything.

Jeremy Reaban
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I backed this for $5.

As I've said elsewhere, I think a big part of the problem is that after the KS was over, about a month into development, they scrapped the single player focus of the game (saying it wasn't fun) and made it more multiplayer focused, which evidently proved too much for them to do.

As near as I can tell, they had the original game design's engine, were designing levels for it, etc, they just shifted gears with it, instead of pressing on and letting the backers decide if the resulting game was "fun" enough or not.

WILLIAM TAYLOR
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Everyone hates suits and businessmen but shit like this is exactly why you need suits and businessmen.

Jane Castle
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Good planning\scheduling and doing some form of common sense analysis on how much money you will need to finish the game is not reserved to just suits and business men.

Rachel Presser
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Or, accountants who are gaming nerds and understand both sides of the fence. *raises hand*

TC Weidner
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what? an accountant and suit would of just siphoned off more money off the top while bringing nothing to the table. This game has missed its projected ship date because they switched from a single player approach to a multi player approach late in the design process. The two coders left for personal and possibly other reasons. This was not a money issue per se.

This is far from vaporware, and I would not be surprised to see this out by next Halloween.

Suits would of not helped here, they rarely help anywhere.

Kenneth Blaney
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TC, although I agree with you about "suits" which is used exclusively as a pejorative, it is entirely false that there was nothing that could be done to save the project.

Someone who could watch the money, establish better milestones, reduce waste by keeping people on task, make the hard call to cut a feature here and there, or pitch for further investments could have saved the project.

The point William is making here is that although these guys are the "bad guys" in most companies, they can go a long way towards keeping the lights on.

Jeffrey Crenshaw
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The problem with suits and businessmen is that often they are great at making money -- for themselves, remainder of the company be damned. I am expecting/hoping for a new breed of more ethical CEOs to change the negative image that "suits" have frankly earned for themselves over the decades, but a large part of the allure of kickstarter for both developers and fans is the ability to escape the creative stagnation/poor wages+working conditions that the suit-driven AAA sector has set up. I would agree with William that an accountant on the team that views his coworkers as teammates instead of "human resources" would be great, but we have to be careful to prevent the rising Koticks of the world from poisoning the new-found well.

TC Weidner
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Kenneth,

these guys have an almost feature complete game, which just needs testing, they did it on 5k a month. Christ an account would charge 5k a month just to put his freakin 2 cents in.

Suits add nothing except their invoice to a project.

Adam Bishop
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I've worked at a developer with lots of suits and seen games that failed to ever see the light of day there too. Making games is hard and sometimes they don't come together.

Judy Tyrer
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Wow you guys must use expensive accountants. Mine only charges for the tax return at the end of the year (and not even close to $60K). All advice is free.

k s
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This is a great example of why in the games industry if you can't implement something yourself your in for trouble. With that said I'm said to see this project in such a state.

David Winchester
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Are you planning on doing a follow up deal with the fan reaction. I think the most important part of this story is how well they took the news, and how supportive they were about the whole thing. I've written a little about it (and linked to your fine article) here: http://caffeineforge.com/2012/10/20/the-manse-macabre-only-mostly
-dead/

Jeffrey Crenshaw
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"he is willing to refund any backers who want to withdraw their support out of his own pocket."

Very admirable.

Alexey Badalov
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I'm not sure this is admirable at all. People should not be treating Kickstarter like a store. Reinforcing the misconception does a disservice to the other developers.

Mike Weldon
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Some of you remind me of my 3-year old, who contradicts everything I say just to be difficult.

TC Weidner
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@Alexey, how is taking personal responsibility not admirable? my god...There is no misconception here, people understand the risk.

Judy Tyrer
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He is behaving ethically without an expectation or requirement of dong so. You cannot fault him for that.

Bob Johnson
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Oh so I thought we were pre-ordering our games through Kickstarter right? Right? lol.

Javier Cabrera
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I can't believe how easily some people ditches the idea of suits. I mean, come on... what, you think the movie business don't have suits going on in every production?

Some of you may had bad experiences with suits in the past (I know I had) but these people are worth every penny in most cases. Yes, some look like they are doing nothing, but that's how they save energy.

**** SUITS ARE NOT EVIL ****

I don't want to make a post out of this comment so I've written a post on my own blog about this based on past experiences with suits and how they can help on your Kickstarter project. I will be adding it on gamasutra later, but you can go ahead and click my profile to give it a read right now.

Aleksander Adamkiewicz
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In the tv/movie industry (where I at least have a lick of experience) suits add nothing.

What makes tv/movie projects work are Assistant Directors.
ADs are not suits, they are usually people with extensive knowledge in the industry and production with their own qualifications in the field.
They are not pencil pushers, nor accountants, they usually come from film-schools themselves.

Unfortunately smalls game studios usually don't bother with an AD and the senior designer takes over that role, which leads to all kinds of trouble because designers don't come trained in the necessary skill-set.
In general in the videogame industry i see the trend that game designers are taking over too many responsibilities they shouldn't have, being an AD is just one of them.

Having someone solely dedicated to watching over project flow and budget is very useful.

Javier Cabrera
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Exactly my point. Someone watching over a project flow and budget, a financial planner.

http://www.cabrerabrothers.com/indielife/kickstarter-haunts-manse
-macabre/

Jeremy Alessi
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The most puzzling thing is why he's offering refunds from his own pocket instead of just finishing the game with his own money? Perhaps he's hoping backers will double down?

Raymond Grier
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Instead of acting like the ship is going down he should just launch a 2nd Kickstarter project. It's been done before, I am considering a follow-up to my failed attempt on Indiegogo and Indiegogo itself says that it is ok to do so.

WILLIAM TAYLOR
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I think they'd basically have to lay out a business plan that includes potential risks and setbacks as well as specific figures taken from actual discussions with contractors for what the manpower and various other aspects will cost.

If the 2nd Kickstarter had the same business forethought as the previous one... I don't know. Fool me once, shame on you; fool me twice, shame on me. I'm not sure how many people would throw money at the "shame on me" option.

Aimee Bailey
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Seems to me that the reason why this didn't work out, is because the project was planned around the idea that all funding should go on paying for running costs. As a lead-developer of a start-up myself I can't understand how people assume that will just work, it's like putting a tenner in the car and hoping it'll get you from Manchester to London.

If I could add anything to the lessons learnt here, it would be that projects like this should be more transparent about what the money will be spent on, because I would find it really difficult knowing what goes into starting up a business, donating to a project where the planners budget is already allocated to keeping the lights on and getting food in.

In our situation we spend money on market research, tools to get the job done, and an appearance at Eurogamer Expo this year to get in front of people. As of running costs we do part-time work and keep ourselves fed without dipping into the precious funding, it's not perfect, but this way if anything goes wrong, it's only us who bears the brunt, and having dependency on our capital, we have the most precious thing of all, time.

Aimee


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