lessons from our successful kickstarter launch

KICKSTARTER THE FASTEST, CHEAPEST, MOST EFFECTIVE WAY TO LAUNCH YOUR IDEA LESSONS FROM OUR SUCCESFUL KICKSTARTER LAUNCH OF THE IDEABOARD

BY BHUSHAN LELE

OUR EXPERIENCE

“If you have a good idea, Kickstarter gives you your first few hundred customers, social credibility, and money- more efficiently than any single sales/marketing channel out there”.

Kickstarter Other Marke7ng Channels

Ge=ng the first few hundred customers

We spent $800 total crea7ng our video, and buying a nice camera to take photos.

We have spent $3,000 in adver7sing, only to get a few hundred dollars in business from it. Costs more money and 7me figuring out what marke7ng and sales channels are working.

Social credibility 30% of our backers have offered reviews.

5% of our backers have offered reviews.

Money Gives you money. And you’re doing business with other people’s money (via pre-‐sales).

Costs money. And you are limited to the money you have in your bank.

•  No website is going to put you in business. •  View Kickstarter as a new marke7ng/sales channel, that is

perfect to launch your idea/business.

•  You s7ll need to make good business decisions.

DOES KICKSTARTER SUCCESS MEAN YOU HAVE A BUSINESS?

NO

•  You can get business help from mentors once you have the momentum of a successful Kickstarter campaign.

•  Mentors can help you liYle at the “I want to do something” phase.

•  They can help you a lot when you come to them with some sales, capital, and market feedback.

•  So it’s not just a launch pad for your idea, but it’s a launch pad for becoming an entrepreneur.

THAT SUCKS I WANTED TO HEAR YES

WELL THEN…

•  You can get business help from mentors once you have the momentum of a successful Kickstarter campaign.

•  Mentors can help you liYle at the “I want to do something” phase.

•  They can help you a lot when you come to them with some sales, capital, and market feedback.

•  So it’s not just a launch pad for your idea, but it’s a launch pad for becoming an entrepreneur.

THAT SUCKS I WANTED TO HEAR YES

WELL THEN…

IS THAT BETTER?

PLANNING THE LAUNCH

DECISIONS DECISIONS

•  Prototyping •  Sourcing •  Manufacturing

•  Crea7ng Traffic

•  Campaign Setup

•  Post Kickstarter •  Campaign Management

•  Building Your Tribe

FIRST A QUICK PRIMER

•  Each project creator develops a story, a video, and rewards to offer their backers.

•  You then submit to Kickstarter for approval, and can launch any7me ader your project is approved.

•  Kickstarter follows the all or nothing funding principle –  The project creator will come up with a funding goal and a funding

deadline

–  Once your project is launched there is no changing your goal or funding deadline

•  Of course you can raise more than your goal!

•  If you do not reach your goal, your Kickstarter backers will not be charged for their “pledge” amount.

Source: hYp://www.kickstarter.com/help/faq/kickstarter%20basics?ref=nav

•  Where to get the prototype made from?

–  Op4on 1: You •  If you are doing it, make sure it looks good. Kickstarter is big on aesthe7cs.

•  We first hacked the ini7al concept using material from Michaels Art Store.

–  Op4on 2: At a local factory or any factory in the world •  If you know enough about what you want the product to look like, many factories can provide drawings for you to see. This has the added benefit of knowing exactly what your produc7on cost will be, which will be important to see pledge amounts on Kickstarter.

–  Op4on 3: Hire freelancers on sites such as Elance.com to help you through prototyping phase.

•  You can get design drawings, produc7on drawings (to give you accurate manufacturing cost for your product), and prototypes made.

PROTOTYPING

See what guidelines your category has: hYp://www.kickstarter.com/help/guidelines

WHERE TO SOURCE FROM

Even though you don’t need to manufacture your product yet, you should be aware of some basic differences between your choices.

Lead 7me Capital needs Product cost

U.S. factory

My own workshop

China factory

…CONTD

These are Generali7es. But this held through for us.


U.S. factory middle

My own workshop

fastest

China factory slowest


U.S. factory middle middle

My own workshop

fastest least

China factory slowest most

China generally requires large orders.

Shipping from China takes about 45 days, tying up your capital.

…CONTD


U.S. factory middle middle -‐-‐

My own workshop

fastest least -‐-‐

China factory slowest most lowest

Even though lowest cost country, you may need the most capital.

…CONTD

SOURCING/MANUFACTURING INTERNATIONALLY •  Alibaba.com is a great site to find interna7onal manufacturers

–  Just like business in U.S., simply correspond through emails, Skype etc.

•  Choosing the right manufacturer

–  Generally choose a region of the country that is used to expor7ng goods •  For China, the Guandong province is a great region. It’s easy to get to (near Hong Kong), they follow Western business prac7ces more, and their English is decent. Alibaba.com allows you to filter according to region.

–  You can judge their quality based on the sample they give you.

…CONTD

•  Working with the manufacturer

–  You can hire a broker in China that can do a site inspec7on, quality inspec7on, and help you with coordina7on. Brokerage fees are about 2-‐3% of the order you place. We did this and it worked well.

–  Down payment is required for them to start order produc7on. Our down payment was 30%.

•  China requires a decent sized minimum order, India and other countries may produce smaller order quan77es.

•  Delivery es7mates will be given by manufacturer. Remember to add 45 days to ship from Asia.

CREATING TRAFFIC - BASICS

•  Kickstarter relies on you for bringing your own traffic.

•  Process looks like this: –  The more traffic you bring from external sources, the more page views

and backers you get.

–  Kickstarter recognizes this as a “good” project and displays your project higher on their site. This in turn brings you more traffic.

–  Kickstarter gives you extra visibility within the first 24-‐48 hours of your campaign going live, and also during the last 48 hours of your campaign. Bringing in external traffic during the start and end of your campaign will prolong the extra visibility Kickstarter gives you.

–  Rule of thumb: Bring in traffic that equals about 30% of your funding goal, within two days of your project going live.

* Kickstarter gets about 1 million unique visits per month

…CONTD

•  Start promo7ng your idea 45 days before your campaign starts

–  Create an online home that you will use to explain your project and get verbal commitments. You can use your Kickstarter project page in preview mode, Facebook page, on your own independent site.

–  Kickstarter restricts certain promo7on ac7vi7es such as contests and giveaways while your project is live. But you can do this since you are star7ng 45 days earlier.

CREATING TRAFFIC - HOW TO •  Email Bloggers

–  Find Blogger categories that are relevant to you product. •  For us it was produc7vity, innova7on, design.

–  Small Bloggers with less than 15,000 unique monthly visitors are recep7ve, Medium Bloggers with 20,000 to 60,000 visitors usually want money to write, Large Bloggers usually don’t have the 7me and cover broader editorial topics. You can find out website traffic numbers by signing up to a free account with compete.com

–  You can ask for them to write a product review (but you have to send them product if product is simple), or write a guest post for them, or do a giveaway of your product.

–  You also get the side benefit of ge=ng usage insight if you can send a sample product to the Bloggers. See what one blogger did with her Ideaboard: hYp://bit.ly/M1Qzc7

…CONTD

•  Email Media Publica4ons

–  Process is similar to above. You email them or most of them have contact forms.

–  This is more hit or miss. Best thing is to have a network of writers whose work you follow and keep in touch with before hand.

•  Enter contests –  Enter contests beforehand-‐ which are good at crea7ng exposure and

traffic. Then take the entrants and park them in your pre-‐Kickstarter home.

Example: The Nesl Project , and the contest they entered.

…CONTD •  Get local exposure

–  Organize an event and add value in some way. It doesn’t have to be direct. They may not all be interested in your product, but maybe they are also interested in doing a Kickstarter. You have to figure out the best way, but fact is you will get some backers simply because they are local (remember backers are not as much consumers of your product as supporters of them). They might not shell out $20 plus, but if 20-‐30 people commit to pledging even one dollar, that gives momentum.

•  Social Media

–  U7lize social media to find people who would be poten7al backers

–  Get them to spread the word

CAMPAIGN SETUP •  Funding level should be determined with this in mind:

–  What will allow you to take your next lifestyle step?

•  You probably have a job. So how much money will allow you to commit to working nights, or weekends?

–  How much quan7ty do you need to produce to buy the product at a reasonable price, so that people are willing to pledge for it on Kickstarter.

–  And remember, you should be able to bring in 30% of the funds through your own network.

•  Campaign length

–  Kickstarter allows 1 to 60 days (and recommends around 30 days).

–  Depends on how long you need to promote.

…CONTD •  Create rewards that move people to act

–  You’re crea7ve right? Your backers expect crea7ve 7tles and descrip7ons to the rewards. Backers want to be moved; remember they are not just consumers of your idea, but supporters of it as well.

–  Our project is a bad/good example of emo7ve rewards. Our first campaign lacked this, while the reward 7tles for our second campaign was volunteered to us by one of our backers! See how crea7ve they are-‐ hYp://kck.st/Pn7UMj

•  Create a story that resonates (video, about your project)

–  Don’t be blinded by your inven7on. I was. Portable Whiteboard vs. freedom it gives you.

•  Set your product delivery date (es4mated reward delivery date)

POST- KICKSTARTER

WHY IS CAMPAIGN MANAGEMENT POST-KICKSTARTER?

AND IT NEEDS A QUOTE TO MAKE IT OFFICIAL…

“During campaign management, you can do so many things to help turn your product into a viable business, that you really need to think ahead when managing your campaign”

CAMPAIGN MANAGEMENT

Goal #1: Turn your idea into a viable product

–  Iterate your product features as you see paYerns • We found that the Mini Ideaboard appealed to more people than our original board size, so we sped up the development of the Mini Ideaboard. The Mini accounted for 70% of funds raised.

• We learned that template sheets would add more value to our product, and make the inven7on more understandable and approachable-‐ very important for online sales.

…CONTD Goal #2: Find the narrow market segments rich with early-‐

adopters, that makes your marke7ng viable (scalable).

–  Find your segments

•  We learned that our product was widely applicable, from psychologists to soldiers, but our product/market fit was preYy narrow to reach the early adopters efficiently.

•  If I generally target coders, about 5 out of 1,000 coders would be early adopters and want to buy, and I’ll run out of money finding these 5 people.

•  If I have a beYer understanding of the different segments within the coding world, for example that about 100 out of 1,000 Agile developers would want our product, then I will actually have a posi7ve ROI on my marke7ng, and can scale this.

…CONTD

– Messaging to Segments

•  Remember, your backers on Kickstarter are just as much your supporters as they are consumers of your product.

•  Be very responsive to them. Thank them in 7me. Ask them open ended ques7ons on what they like about the product, and how they plan to use it.

•  Our response rate on backers engaging with us is over 65% on Kickstarter, and is under 10% of Amazon. The quality and details of our Kickstarter conversa7ons are also much beYer.

•  So understand the language of each customer segment. And use it to market to each segment post-‐Kickstarter.

BUILDING YOUR TRIBE

•  Goal #3: Find and keep in touch with your tribe members

–  Make deals and offer them exclusive specials

–  Get them to spread the word

You will have 3 types of backers:

•  Some of your backers will simply act as a consumer, as if they bought your product at a retail store such as Target.

•  Some of your backers might secretly really like your product, but they won’t interact with you.

•  And then some backers are actually going to make it easier for you to build your business-‐ also know as your “Tribe”.

BUILDING YOUR TRIBE Iden7fy who is in your tribe, and get them to help you:

–  Tribe members will welcome your interac7ons, will give you insight into the product’s usage, send you more customers, and write reviews for you-‐ they will help build your business.

–  Keep in touch with them, give them special deals, make them very happy.

–  We iden7fied our tribe, by first asking them how they would use the product. And then asking them to provide us with text/video reviews. The backers who par7cipated in this were seen as our tribe, and in return, we are providing them with early delivery of the product (we are actually air shipping their product from China, subsequently losing money on each of these sales). From our tribe members, we will be ge=ng about 15 video reviews, and about 30 text reviews. Think about the mileage we can get from this for SEO and Amazon sales. See our Amazon reviews here: hYp://amzn.to/VrB9pk

POST KICKSTARTER

What’s your sales goal?

–  If each of our customers repeat purchase, they will spend about $100 in one year.

–  So, to be a $100,000 in sales company, we need about 3 new customers per day. To be a $500,000 in sales company, we need about 13 new customers per day.

–  At this stage, get a few successful entrepreneurs to be your mentors. They have gone through this already. They will give you great advice.

Will the market size of your single product get you there?

–  It’s tough to know this answer especially because your product is innova7ve.

–  Find your market segments that are rich with early adopters. Remember, 40% of people in the group you target should be disappointed if your product didn’t exist. As you find these market segments, you will have a beYer handle on the market size, and whether or not you can get X new customers per day.

–  We decided it might be possible to get 13 new customers a day for the Mini and Original Ideaboard, but…

FROM A PRODUCT TO A COMPANY: EVALUATE

POST KICKSTARTER

Could you consider adding more products/product variants?

•  Adding the Mini Ideaboard expanded our market by 2.5 7mes.

–  More people were willing to carry it in their work bag, than hand carry a larger porxolio.

–  We had very few female buyers for the larger ideaboard, while there are many female buyers for the Mini Ideaboard.

•  You get mul7ple shots at goal.

–  Taking mul7ple shots at goal is especially helpful for businesses with durable products, since repeat purchases are less.

–  As our example showed, a slight varia7on can produce great results. There is no way of knowing what will s7ck, so try a couple varia7ons.

–  Appeals to more segments so your market size increases.

–  At a tac7cal level, it costs 7me and money to bring in traffic. You might as well have mul7ple products so you have more opportuni7es for a sale.

FROM A PRODUCT TO A COMPANY: EVALUATE

Your marke7ng goal is two-‐fold:

–  Cul7vate your tribe. Keep in touch with them. Get them to spread the word.

–  Find you product/market fit-‐ those market segments rich with early adopters. If you don’t, you will have to work five 7mes as hard, and spend five 7mes the money.

•  Internet makes it efficient to target narrow segments via landing pages and CPC ads etc.

POST KICKSTARTER FROM A PRODUCT TO A COMPANY: MARKETING

Selling through retailers vs. selling online

•  Selling to retailers

–  Pros: Make more money quicker. You don’t have to convince 10,000 people to buy your product, just top 10 retail buyers.

–  Cons: Margins are less. You will need more capital to execute larger order. You are dependent on the retailer to saying yes to you each year. You may have to guarantee sales (buybacks, charge backs).

•  Selling through online channels

–  Pros: You create your own distribu7on channel, so you don’t dependent on anyone for sales. You can sell other products through the pipeline. Margins are higher because there is no middleman. It is efficient to target narrow segments. You have more control over your brand.

–  Cons: Slower to get sales. It costs money and 7me to learn what channels work and what don’t work.

POST KICKSTARTER FROM A PRODUCT TO A COMPANY: MARKETING

•  Internet Marke7ng Pointers

–  The details are important in internet marke7ng

–  If you haven’t done it before, expect to spend 7me learning, and expect to spend 7me and money making mistakes.

–  Internet marke7ng is filled with coaches/consultants with great sales pitches. Be wary.

•  Different ways I am learning Internet Marke7ng

–  Read “Get Rich Click”, to get a great prac7cal overview on the different internet marke7ng/sales channels. WriYen by Author Marc Ostrofsky, who started and owns several websites…he walks the talk.

–  I place ads on Elance, with open ended 7tles such as “I need to get more sales on Amazon”. I hire them to do the job, and learn at the same 7me.

–  Mentor who has done online business is invaluable here. Will help you cut down on the mistakes you make-‐ saving you 7me and money.

POINTERS AND RESOURCES

ADDITIONAL RESOURCES

Kickstarter school: hYp://www.kickstarter.com/help/school/defining_your_project

Feel free to email me at [email protected] with any ques7ons you may have.

Bhushan Lele

linkedin.com/in/bhushanlele

twiYer.com/bhushan_lele

END THANK YOU

lessons from our successful kickstarter launch

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