It’s not common for a company with more than $25 million in financial backing to run a crowdfunding campaign, but in a market where real customer feedback is key, Julep says the approach makes more sense than you might think.
The Seattle-based beauty product startup today launched a new nail polishing tool in a unique way. To test demand, the company is using a $75,000 crowdfunding campaign to see if its customers share any interest in a product that helps women apply nail polish.
“If every company could, they should crowdfund every major innovation because it’s a way to get early, real feedback,” Julep CEO Jane Park told GeekWire. “You’re not just asking a focus group for information — you’re asking people to vote with dollars. It’s a lot more real.”
Its part of Julep’s broader effort to keep a close eye on customer preferences. The company, which has retail salons in addition to an online store, says it’s in constant communication with users through a bevy of channels. For example, a 5,000-member community forum called “Idea Lab” is a place for loyal customers to provide early feedback on product ideas. There’s also input from those in the Maven subscription program, in addition to the thousands of other users voicing their opinions on social media.
Park says this method allows Julep to quickly launch products — more than 300 came out in 2013 alone — and helps the company innovate rapidly while operating more efficiently.
The crowdfunding technique is a first for Julep, which is funded by Andreessen Horowitz, Maveron and others. But Park is clearly excited about it — calling it the “coolest thing we’ve ever done.” After all, listening to customers what Julep preaches, and the campaign is all about that.
“Instead of a big marketing budget, the way we work is to collaborate openly with our community,” Park explained.
The tool, called the Plié Wand, mimics a skinny pen and snaps on top of Julep polish caps. The long handle gives users more control of their strokes, even with a non-dominant hand. The Plié also can twist, pivot and bend on its own, removing the need for excess wrist motion.
“We noticed how hard it is for people to polish with non-dominant hands,” Park explained. “We knew it was something that people were struggling with.”
To develop the product, Julep teamed up with IDEO, the same design firm behind Apple’s first mouse. The two companies worked through more than 200 prototypes before eventually deciding on the final version. During the beginning of the development process, Julep invited some of its loyal California Mavens to come and test out initial designs.
“We just dove in with them and showed them the Day 1 prototypes, which were literally like hot glue, duct tape and lego pieces,” Park said. “That early feedback and the way we collaborated with customers helped us immeasurably.”
Feedback from the crowdfunding campaign should help Julep, too. It will keep Julep from wasting money on a big marketing campaign for a potential dud, while the company won’t need to spend huge amounts of capital on building up inventory. Park explained that Julep has created something resembling a just-in-time production method by crowdfunding.
“The size of our run will depend on how enthusiastic people are about the product,” Park said.
Julep, which tripled its e-commerce revenue in 2013, plans to run similar campaigns with its Idea Lab as a way to introduce and test new products. For now, they’ll see how the crowdfunding strategy plays out and will use the contributions to fund a larger production run for the Plié Wand, if needed.
For Park, crowdfunding seems like a perfect match for how the former Starbucks exec likes to run a company. “I’ve always been a huge fan of collaboration and am morally kind of predisposed toward it,” she said. “I don’t feel like I’m working unless I’m working with someone else. So when you can do something in your business that’s the way you like to live, and you’re doing really cool stuff, that’s the best.”
For more, check out the Plié Wand campaign here.