6 Things A Successful Crowdfunding Campaign Taught Me.
My first bicycle product was born out of a personal need to inflate a bicycle tire with one hand. I do have two hands, but at the time, only one hand functioned after breaking the bones in my left hand. This rendered using a conventional bicycle pump nearly impossible, and when I started trying to find a one hand solution, nothing of the sort seemed to exist.
And the final product!
After a fair amount of fiddling with a 3D printer, it became obvious that there was the opportunity to build something never before seen in the bicycle industry. Ultimately, that moment of recognition resulted in selling a world class, never before seen product, in over 24 countries. Here’s what crowdfunding the product to success taught me.
1) Choosing the best crowdfunding platform helped with the marketing and funding
The crowdfunding space is exploding with competition. It seems like there’s a new niche crowdfunding site for just about every interest out there. However, the two main players are Kickstarter and Indiegogo.com.
While Kickstarter and Indiegogo are both popular crowdfunding platforms for cycling products, Kickstarter was our choice because of their overall audience reach. Kickstarter allowed us to raise the money we needed for the product tooling, concept validation, and provided a platform to get valuable feedback from customers and backers (a backer is someone who puts up money for a project on a crowdfunding platform without an equity stake but often promised a gift of sorts).
By using Kickstarter, we were able to circumvent the complicated process of raising money from a variety of individual investors. Not only would this have taken a long time, if we had been successful at all, it also would have forced us to give up a large equity stake in our company for a relatively small amount of funding.
Crowdfunding platforms have specific demographics and those demographics have an average price sensitivity. As of 2015, Kickstarter backers backed the most projects that had rewards priced between $20-$40. The TaggioPro Bicycle Pump Head had a suggested price point of $29.00.
2) Putting a dynamic and dynamite team into play
Leveraging my relationships from nearly 10 years in product development helped a great deal with designing, engineering and manufacturing my bicycle pump head product. This is a huge advantage for success but it’s not a requirement. If you do not have these resources at your disposal, then it’s time to pound the pavement and find the right people to add to your team. You will also benefit from knowing people that have experience with development, marketing (hopefully in the desired niche), and logistics.
3) Being prepared to scale operations
Once the Kickstarter campaign was complete, I then faced the challenge of scaling the team and the product development / manufacturing to meet demand. Ignoring the details of these challenges could have resulted in catastrophic disasters. One example was the necessity of continuing product testing and seal reformulation, while simultaneously communicating with, and leading the vendors who were responsible for creating the tooling for the production run. If these efforts had happened in a linear fashion, our product delivery date could have been pushed out by 6 months or more. Scaling the engineering efforts to work concurrently on multiple challenges meant that communication and documentation accuracy was absolutely critical. I did not have managers to handle assigned tasks; it mainly fell on the engineering team. Meanwhile, I was responsible for continuing to ramp up building the business side of things. This included tasks related to pre-sales, logos, trademarks, patents, and sales portals like Amazon, as well as our own e-commerce site hosted through Shopify.
It can get very chaotic handling all of these different aspects and you will need to be strategic with your approach, not simply reactive. A reactive approach does not scale when solving and completing all of the challenges that lie ahead. There are some areas or situations, where the reactive approach is necessary, but typically results from a reactive approach are more similar to a Band-Aid, rather than a long-term solution.
Another example of where scaling became very challenging for us is when the product began to arrive stateside, after being shipped from Taiwan. At the time, I did not have an office space adequate to house and store the product. My wife graciously allowed me to turn our two-bedroom town home into a full-fledged product assembly line, logistics, and order completion facility. I eventually ended up needing to use the neighbors’ garage when our town home no longer had the necessary capacity.
4) Not All Help Is Good Help:
One of the great things about raising money on a popular crowdfunding site is the marketing that comes along with it. If you are lucky enough to score a front-page placement for a week or more on a crowdfunding site, the results can be positively exponential. The down side to high visibility during development is that “help” in all forms will come your way. While this may not sound like a downside, let me explain.
When folks realized that I had raised a significant amount of capital for my product, they then also knew I had the money for their services. High publicity opens the floodgates for all types of vendors to reach out and offer you services ranging from marketing, public relations, product development, and patent services. A lot of these folks run legitimate businesses that can in fact help. However, as I soon discovered, many of them are also a waste of time and money. I do not consider any one of the service providers that I gave money to as scam artists, but rather slick salespeople offering a product or service that wasn’t a good fit for my product. For example, I paid a PR firm to reach out to all of their resources via their copy and script to announce our funding. This was a costly move as the vendor assured me they had a long list of influential thought leaders with popular publications. This was true, but none of those publications cared anything about the category my product was listed in. They sent a PR note to publications like People magazine. Why would People Magazine care anything about a bicycle tire tool? The lesson here was to more carefully vet my vendors for their true value for my product.
5) The Customer Loves A Connection
In a day and age when the customer can feel isolated from the products they are purchasing, going the extra mile for every customer can buy you favors that money cannot. From day one I followed a personal philosophy that I wanted my customers to be treated like I would like to be treated. This meant, and still means, replying to every email and taking the extra time to show gratitude towards the folks that took a chance on purchasing a product from a guy, and a company, they had never heard of.
The outcome of this philosophy helped propel my bike pump product to the forefront on sites like Amazon.com, as well as some major cycling publications. It also helped with the funding for my next product the TaggioPro Stepster. Folks went the extra mile to tell their friends about the product, and how I had consciously worked to address and correct any problems with the product if they had experienced any. Product returns are expensive to the business, especially when selling on Amazon, but nothing is more expensive than ruining a relationship with a customer that you spent so much time trying to develop.
6) Making Friends in High Places Can Pay Off In Spades
Reaching out to major publications like BikeRadar.com and BikeRumor.com early on, helped garner a huge amount of attention to my Kickstarter campaign. Making key connections, and keeping those connections warm until the campaign launched publicly, ensured that not a minute was wasted. This was critical to the product’s success, given I only had 30 days to raise the capital. For several of the publications, reaching out meant calling and emailing a month before the campaign went live. This gave the publication time to digest the content and place it in the queue for publication during our funding round.
The final thought here is that all the tips in the world may help you prepare for your success via crowdfunding but at the end of the day, it’s really about your ability to function outside your comfort zone doing things you have never done. How fast can you learn, adapt to and deploy new skills? because that’s a big part of the hussle.
What did you learn or need to learn? Comment below! 🙂