Beyond the obvious need to raise cash, crowdfunding solves a variety of issues for a young company with an idea and a dream. Whether figuring out who the customer is or what the marketing message should be, companies can get answers from campaigns on Kickstarter, Indiegogo and elsewhere.
This week, founders and reps for five Seattle-area companies shared their insight about successful campaigns they have waged in recent times during a Founders Series event on crowdfunding and outdoor products hosted by b8ta at Seattle’s University Village.
Founded in 2015, b8ta is a retail-as-as-service model in which brands pay to place their product in a brick-and-mortar location, and then get back 100 percent of the sales. Co-founder William Mintun moderated Thursday night’s panel discussion.
Below are some of the key points shared by those on the panel.
Marc Barros, founder of Moment, raised $3 million for mobile photography accessories.
“As an entrepreneur you just try to find stuff your passionate about, start with it, start something simple that hopefully keeps going. We’ve used Kickstarter as the platform every time. Two reasons: Creative community — they’ve had avid photography projects. So if you’re crowdfunding just look for ‘Who’s the customer?’ and ‘Where do they spend time?’ We also crowdfund everything because it’s very cheap actually to design something, it’s very expensive to make it. It’s very easy to convince yourself that what you’re working on everybody wants. Until you’ve actually asked your friends to give you 50 bucks, you have no f—ing idea if they’re going to buy it. We try to launch products as fast as we can and figure out if people will pay us. If they’ll pay us, then we should work on it, if they won’t then we shut it down. We’ve just been lucky that the four projects we’ve put up there have done OK.”
“The hardest part is to figure out who your customer is. It actually forces you to think about the messaging and what works. It’s hard early on to figure out how to explain it, what words people use, and what resonates. And so I find that’s one of the biggest benefits [of crowdfunding] it makes you in a sense launch a product before you’re ready to launch a product so you just learn a ton. By the time it actually comes out you know how to message it and market it.”
“Try to beat your goal number on day one, it makes a huge difference. Set your goal low — don’t be courageous and put a big number.”
Mina Yoo, founder of Heroclip, raised more than $325,000 for carabiner/hook tool.
“I decided to turn to crowdfunding mainly for market validation. My friends were like, ‘Yeah, it’s awesome,’ but I wanted to see if people would pay money for it and our first crowdfunding campaign went really really well.”
“We have done three crowdfunding campaigns and the first one was three years ago and things have changed a lot. When we launched three years ago I was doing it all by myself, I had like five Twitter followers, no Facebook, nothing and we raised $80,000, which looking back was kind of a miracle.”
“This time we raised $170,000 and we had six or seven people working on it and we just had to work so much harder. First we were on Kickstarter and the second and third time we did Indiegogo mainly because they would give me their cell phone numbers and I’d be texting them saying, ‘You need to put us in the Team Favorites!’ You really have to hustle … it’s just so crowded right now and there are so many companies with piles and piles of cash they can throw into paid ads. … I’m gonna be one of those people one day.”
Nikolai Paloni and Jensen Brehm, founders of Ombraz, raised $167,000 for armless sunglasses.
“We wanted to crowdfund Ombraz because Jensen invented these in college through a MacGyver fix and had been developing them for a while and enough people had asked about Ombraz over the last six years that we knew that we could get a big community around us and support the crowdfunding efforts. We had a good story to tell and product that solved a lot of key problems that everyone faces with sunglasses. It proved to be successful and we were able to retain ownership in our company and get off the ground.”
“We chose Indiegogo because one of our main pillars of Ombraz is to be a carbon-negative company, meaning we sequester more carbon than we emit to produce our product, and Kickstarter doesn’t let you donate any funds that you raise to a charity.”
“We had 1,500 people invest in this product that’s not out there yet, and we’re still developing our brand, and they keep us in check almost. We’re testing out how to communicate, how dicey can we be with our marketing, and you have these people messaging you, ‘I don’t think that’s working’ or ‘That was awesome, keep doing that.’ So that’s been really valuable for us, we didn’t know that was going to happen. They’re personally invested, they’re there with you, they’re seeing every move because they’ve put $80 down for a pair of sunglasses … that we still haven’t given them yet.”
Anya Miller, director of brand & creative strategy, Duct Tape Then Beer, raised more than $215,000 for Bears Ears Education Center.
“Every year we do a pro-bono (or two) project that we just all feel really passionate about in the office. Last year that project happened to be centered around the Bears Ears National Monument [designated by President Obama and gutted by President Trump]. The reason we picked Kickstarter and the reason we ran it almost as an agency for [Friends of Cedar Mesa] was just because of the creative community that exists around Kickstarter and the platform, people are used to going there to look for solutions to problems. And I think we were hearing from the community that they were really angry and really frustrated about the administration’s actions and they wanted something other than ranting online to be able to do; they wanted a positive action. That’s one thing that crowdfunding really offers is solutions to problems that people have.”
“The actual campaign itself is just like the tip of the iceberg and all of the work that goes into it is like this huge mass below the surface of the water, and even before you’re speaking with your customer or who you hope you’re solving a need for you’re actually reaching out to people that can help your campaign be successful.”
Peregrine Church and Xack Fischer, founders of Rainworks, raised over $53,000 for water-activated street art.
“We decided to go for Kickstarter because, one, we had already gone viral and we knew we had a lot of attention that we could use to actually find the crowd and, two, we didn’t want to be beholden to any investors and keep control so that we could do what we want with our own company. Now we are a sustainable business and have been for the past three or four years.”