By Samantha Snabes, re:3D
Originally published on “Zero to Factory”
In effort to prioritize lessons learned based on requests from the community, we’ve decided to share our very biased opinions on crowdfunding Gigabot in 2013 and openGigabot in 2015in this shortlist. Please feel free to share your personal perspective and/or email us at email@example.com!
1. A Working Prototype Says More Than a Professional Video
On countless occasions we’ve watched friends spend considerable resources on making the “perfect” video. However, while you may have been produced shots at the perfect angle, with smooth transitions between frames and without ambient noise, in our experience an awesome video does not ensure a successful campaign. Rather, we’ve found that potential backers are watching your video in order to scrutinize your prototype to deem if it’s worth backing (and if they won’t lose their money).
2. Take Your Timelines and Double (or triple) Them
After busting the delivery timeline on not one, but two Kickstarter campaigns, we consider ourselves experts on how to deliver late. Our humility suggests that despite your education, experience and network, it’s highly likely as a scrappy startup you have not accounted for all of the foreseen & unforeseen variables that could impact your plans. CNN Money recently analyzed the top 50 most successful Kickstarter campaigns and found 84% delivered late(which included funded ventures). Bottom line: accept the learning curve and build some leeway into your timeline.
3. Your Friends & Family Already Love You: Get Out There
As most funding goals require garnering support beyond your peer group, take some time before your campaign launches to identify ways to recruit backing from strangers (and potentially new friends). In our experience your mom & best friend are highly likely to buy a T Shirt, but when it comes to big-ticket rewards for the actual product (in our case Gigabot), on only one occasion we had a Facebook friend connection. Takeaway: Your networks are amazing advocates, but a successful campaign requires reaching outside of the people you already know, and the people they are acquainted with.
4. Money & Time Spent on Pitching Press Could be Better Leveraged
Victims ourselves of countless hours spent spamming media with few to little conversions, we’ve spent a quite a few beers musing with our many friends in Start-Up Chile who have also crowdfunded re: the best use of our time pre & post campaign. Almost 100% of our colleagues wished they had relegated the resources invested in a stellar video and media–centric marketing towards reducing delivery delays, improving their prototype (see above), or launching at a live event (see below).
5. Consider Launching Your Campaign at a Live Event
This suggestion is often our #1 piece of advice to those seeking to crowdfund. Ironically, after spending 60 hrs blasting the media pre-launch, and incessantly during the 48 hours after we went live, it was an article from an interview with TechCrunch during our launch from SXSW that we attribute to hitting our funding goal shortly after closing the first day of our campaign. Live event launches provide a unique opportunity to demo your prototype physically to attendees, who could be a blogger, influencer, or anyone outside of your current network that might pass by and promote you on social media (or better yet, back a reward).
6. Speaking of Rewards: Skip the T Shirts
We should have made this our #1 tip as on two occasions we have been reminded that sending T shirts (or any object requiring sizing) is a terrible idea. The odds of preserving at least 60% margins on apparel after your cost + the typical free shipping are slim. This also likely does not account for packaging and your time emailing with the backers on their size preference. What we wish we had done: ship standard size objects that are personalized (golf towels, USBs, Thermos, etc at a reasonable markup). Better yet, offer virtual benefits (VIP hangouts, recordings, mentions….. anything to improve margins!). We’d also suggest making these prizes limited. The point of your campaign is to drive early product conversions/assess traction & obtain capital to launch your business, which requires a few more dollars than these small rewards & overhead provide.
7. If You Think You’re Underpricing Your Product, You Are
Our advisor Tom Chi likes to remind us how much we underpriced our product in our first campaign, which was kinda crazy….$3500 for a human-scale 3D printer didn’t even begin to cover our capital outlay! As even if you think you are pricing your rewards correctly, you are likely wrong (see below), if you have any doubt your product is underpriced, you should raise it. Selling 10,000 units or hitting $1M over your funding goal is awesome, but only if you can maintain product quality & sustain your team.
8. If You Think You Are Pricing Your Rewards Correctly, You Are Wrong
As evidenced by our multiple post-Kickstarter price hikes, if you are bootstrapping a hardware company it’s highly probable you haven’t accounted for all of your expenditures when calculating a sustainable sales price for your product. Early on we neglected to account for legal expertise (including export compliance), salaries for customer support, and a myriad of other variables. Nowadays we wrestle with paying for a CRM migration (blog to follow), supplementing our staff who have been working on reduced salaries for up to four years, and deducing how to support product development. Our social lean demands we keep the price of Gigabot as a low as possible, but balancing our community requirements against supporting our staff & families necessitates frequent evaluation.
9. Lean Packaging Compromises Your Product & Customer Experience
One of the biggest hidden expenditures that we neglected to consider in 2013 was budgeting for solid instructions & packaging. As a result, these oversights are a badge of pride that our first 100 customers like to advertise at meet-ups. It also cost us a couple of bad reviews & early supporters. How we improved will be shared in another blog, but the importance of thinking through not just your product, but how it will be packed & shipped can not be overstated. We spent thousands of dollars of our limited resources re-sending damaged or improperly packed rewards. We also overpaid for shipping by using box configurations that were not optimized. The cheap materials & free boxes we recycled from the trash of local grocery stores cost us more than an investment of double or triple walled cardboard (recommended). Your packaging & instructions are important. It is the first physical experience your community will have with your product. We were amazed at how many backers posted pictures or videos online of their Gigabot when it arrived. For this reason, we’d also suggest not sending your rewards in recycled Tampon boxes like we did….unless you can benefit from the exposure on Reddit.
10. It’s Not About You
Running a crowdfunding campaign is an incredibly humbling experience; especially once you start attracting support beyond your peers & family (see above). These backers are often wholly responsible for bringing your vision to life. We like to think of our backers are micro-investors in re:3D and they should be treated as such. Ultimately your success depends on their personal experience with your product and whether it adds value to their lives. Your video, write-ups, and campaign page should be more, or even all about the backers, and less about you & your awesome team. Minimize the use of words like “I” or “me” in your marketing materials. Instead utilize “You” and “We”. Your campaign should reflect an invitation to a community who will play an active role your future success as they provide valuable feedback on next steps.
11. Don’t Forget to Enjoy the Ride!
Despite the blunders made in our first two campaigns, my biggest personal regret is not taking time to have fun in the process. Our team has accepted my constant paranoia that something will go wrong or we will disappoint our supporters. However my worrying detracts from appreciating the full experience, and developing a nostalgia for moments where I wished I had really been present. Making a prototype, producing a video, writing copy and developing the visuals for your big idea is a special time. Your campaign will likely include your earliest marketing materials, your first customers, and first feedback from strangers, giving you plenty of milestones to celebrate with your startup!