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RodinStar / Startup

My experience with crowd funding

 

 

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“Rodinstar” Post 

of the week!!

 

Are you planning to run a crowd funding campaign? Are you fascinated by how some kickstarter projects are racking up 100s of thousands of dollars? Are you planning to launch a crowdfunding campaign? Any yeses?? Then you will find this article interesting.

My name is Alex. I did a crowdfunding campaign for a simple hardware product called Tangle. If you are having troubles with tangled earphones Tangle is the product you need to get. You will also find Tangle interesting if you are looking for a new marketing tool to engage your customers. Anyway here is the link to the campaign. Yes we did not raise the full amount.

This is how the product looks like.

Looking back I realize that I was so naive and I did not realize a lot of things that needed to go in a crowdfunding campaign. But the good side is .. I know them now, so do you.. if you get to the bottom of the article

We assumed that if we put up an awesome campaign video that showed the value to the customer, people will come flocking to us – Wrong.

The one thing that I think we got right is that we got a pretty decent video pitch about the product. We have been watching kickstarter videos after videos and we thought we nailed it. But this is what we missed. 

1) We had a lousy marketing plan.

We approached news papers and bloggers to cover us after 15 days of starting the campaign. Remember we were thinking that a good video and we are done with marketing ! I had also written a post on therodinhods during the campaign.

I was lucky to have the opportunity to visit the world makerfaire in New York. There is when I understood the concept of early stage marketing for crowdfunding products. There was 2 products that caught my attention. One is DIWire (The campaign is live and the already raised their money) and Smart Jars – There were many awesome projects/ products at the makerfiare, but these products caught my attention because they were pre-kickstarter. They have not launched their campaign yet, but they were aggressively showing their product to the people and telling them that they are launching soon. Infact Smartjars was even giving away samples. I got 2 samples for free. 🙂

What struck me is the benefits of showing your product at makerfaire. 

    • There are lot of people who will see your product working. People do make purchase decisions in fractions of second but a lot of times they make purchase decisions after seeing a product a couple of times. The earlier you get to showing your product to people the better
    • You get feedback on your product. Most importantly you get feedback on your pitch.
    • Media gets to see your product. Just like customers even they take time to decide to write about you. Exception being if you are raised $100,000 in a day… We are talking about strategies to get there

Both these companies had a successful crowdfunding campaign.

2) The psychology of people – part 1

The thing about crowdfunding is that people notice how much % of the campaign you raised. Let me guess – You must have taken a look at my crowdfunding campaign – Tangle and thought “What a looser, He did not succeed in the campaign” or in a more gentle way “Hmm this product did not succeed in its crowdfunding campaign” 😛

We would have done better if we had set our campaign at $1000 instead of $5000. Because then first impression of people would have been “Ohh they had a successful campaign” Its takes a while for people to look at the amount. Pebble watch raised 10 million. we raised $1000 but we would both have had the same first impression 🙂

3) The psychology of people – part 2

As an extension of the earlier point, do not launch your campaign until you have a solid plan to reach 40% of your funding goal in 1 day(Aim for that atleast). The point is that I noticed that even if someone(some stranger who is browsing though kickstarter/indiegogo) is convinced after seeing your video, when he sees that your product has only raise 10% after 15 days, he would think again. At the same time imaging if the same stranger likes your product and sees that its 50% funded in 15 days, just think about difference in thought process. Remember your campaign is successful when you raise money from people who your dont know. This point is the most important point. If you dont know exactly who is going to buy your product on day one to reach 40% of your goal then your campaign is in trouble. This first 40% can be your friends and family but they should be all pumped up and ready on the day of your launch.

4) Keep the money that you want to raise as low as possible.

Particularly if you are doing it for the first time. My thought was there is a lot of people who are raise a ton load of money.. I should be able to do a modest $5000. No!!! Your logic should be as small as possible for you to successfully do it. Look at a campaign of a friend of mine. He asked for $1889 and he raised more than $100,000

Brick pi asked for $1889 but raise more than $100,000

Remember people tend to first think about the success/failure then the % raised and then the magnitude. The magnitude is only relevant to your bottom line. For the customer the %raised is more important.

5) Pitch only one and one value in the campaign.

Notice how we were pitching Makeystreet and Tangle. You will find Makeystreet interesting if you are a hardware hacker and is looking to find parts for your new awesome project/product (set A). You will find Tangle interesting if you have troubles with messy earphones (set B). Our assumption was that the set of people who would be interested in the campaign will be set A union set B. But the people who were interested in the campaign ended up being set A intersection set B, which is an extremely small number of people. Think about it – the reason it is set A intersection set B is because if you are not really interested in one of them, you are like what the hell, these guys looks shady .. This could be a debatable point but I think it makes sense to focus on one value proposition. 

Looking back now, we realize how lousy a marketing campaign we did. We will do it better the next time for sure. Now with this article you should do atleast better than us. Thats the bench mark that we set for you if you are planning to do a crowdfunding campaign.

If you think you are creative and love tinkering with stuff – You need to go to the makerfaire.

Its happening in India !! for the first time in ahmedabad on Jan 4-5. its a really cool event where a lot of hackers and maker come and show their stuff. Lots of robots, cool fashion stuff, 3D printed stuff…. If my words does not convince you I am sure these pictures will – my album from makerfaire New York. 

Some shameless marketing for Tangle 🙂  

That is how Tangle looks in print. Its more awesome in your hands. You can get them from www.getatangle.com.

Here are some examples of some custom Tangles that we made for branding purpose

If you want to use Tangle as a branding tool for your event, drop me a mail at alex@makeystreet.com. 

Would love to hear feedbacks on how we can do better. 

Alex J V 

@alexjv89

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34 Comments

  1. Profile photo of Alok Rodinhood Kejriwal

    awesome share! THANK YOU

  2. Profile photo of asha chaudhry

    i so loved this post alex!!!

    all of your points are so lucid and easy to relate with. you’re bang on with the psychology of people part!!

    my fav points that make total sense – “We would have done better if we had set our campaign at $1000 instead of $5000″

    and coming from advtg:

    “5) Pitch only one and one value in the campaign.”

    i’m gonna remember this post and refer it everytime someone talks about crowdfunding!

    thank you for sharing all of your learnings alex!

  3. Profile photo of asha chaudhry

    alex,

    alok just shared your post across social media – you may wanna respond to some of the comments there 🙂

    fb:

    Divya Rai Very well-written. I wish we had more people sharing their experience with crowd-funding.

  4. Profile photo of Omkar Nisal

    Alex, I had seen Tangle project and loved how you took a simple idea and productised it to solve a common problem. It was like : “Darn! Why didn’t I think of this” moment!

    And now you are sharing your earned wisdom… Nice ! Grateful to you for the same. Best wished for this and more projects.

    Cheers,
    Omkar

  5. Profile photo of Krishna Chandran

    Thanks for the share Alex. I am sure you had learned from your past and moving in high speed towards your successful future. 

  6. Profile photo of Anoop Nair

    Alex

    Very impressive. Something out of the box.

    I went through the video you have posted here -> http://www.indiegogo.com/projects/tangle

    At the end of this video, under credits, I think your alma mater has been misspelled as IIT Macras. I think it must be IIT Madras. Please correct me if I am wrong.

    Thanks and keep up the great work.

  7. Profile photo of Milind Katti

    Awesome product Alex. Many great ideas are simple after you see some one execute it.

    More so thank you for sharing the lessons

    BTW, Ordered 2 Tangles as well.

  8. Profile photo of Darshan Bhambiru

    Congratulations Alex!! 

    Was following your Tangle from the earlier post you had made

    Had also put down a Short note on this one too for Crowdfunding, so it may be useful to anyone looking for some options as well!

    You have set the example, with a Live experience Cheers!!

  9. Profile photo of Nistha Tripathi

    Great, thanks Alex. I have done much research into Kickstarter for my book too and found some helpful tips here –http://www.authormedia.com/how-to-use-kickstarter-to-fund-your-next-book-project/

    That said, my book in oriented towards Indian audience and I was looking for an Indian version of Kickstarter – if anyone knows a good one, do ping me.

    Coming to Tangle, I luv the custom tangles concept but at the end of the day, I personally do not find a need of the product since I don’t use earphones that much. You should definitely target college students though! Good luck.

  10. Profile photo of Alex J V

    Thank you for creating this awesome community ! 🙂 I really enjoy your article with your personal experiance on them. 

  11. Profile photo of Alex J V

    Thank you. I am sure that you would have done the same. 🙂

  12. Profile photo of Alex J V

    Done ! Sorry for the delay.. 

  13. Profile photo of Alex J V

    Thank you 🙂

    I am glad to be of help ! Looking forward to learning from you too… 

  14. Profile photo of Alex J V

    Glad to be of help. 🙂

  15. Profile photo of Alex J V

    Hey Anoop,

    Thank you for your compliments.

    Thank you for pointing out the error. I checked the video again. I cant find the typo that you mentioned. It seems to be spelled right. Maybe it appears to be a typo on small screen??

  16. Profile photo of Alex J V

    Thank you , you are a rockstar ! 🙂 I am sure you will love the tangles. 

  17. Profile photo of Alex J V

    I never noticed that share before.. that is a very detailed report. Interesting .. I also did not know about NCFA.

    Let me also add http://fundlined.com/ to your list of crowdfunding platform.

    From my experience, crowdfunding platforms makes it easy for you to run the campaign but you have to do a ton of marketing. It is not very obvious to first timers that an initiative like spark the rise would have been a massive marketing spend for mahindra.

    Also I totally appreciate the effort you have taken to document such a large report. I am just starting to understand the importance of documentation. 

  18. Profile photo of Alex J V

    Hey Nistha, 

    That link is a really interesting read. I resonate with a lot of the points. I am wondering why the writer mentioned point 6- “Setting the funding goal too low”. That I dont agree with. What I think is that, if the product is of real value to a “random backer” and it is validated (by hitting midway goal) there is no reason why it would exceed the funding goal like crazy. Examples – pebble watch, fit bit and a whole bunch of tech products. Now my opinion should be taken with a pinch of salt because I watch tech products not so much of art/book/drama/film. In those categories the reason why someone is a backer could be totally different. The only possible reason that I can think about is that the backers of the writer was contributing to the project to see author have a successful campaign. A lot of creative campaigns are purely philanthropic. But most of the tech products are straight forward “what do I get in return, how cool is it?” But yeah I could be wrong about this domain. Just my guess.

    Regarding Tangle – totally no problem 🙂 If you ever get addicted to using an earphone you know where to get a Tangle 🙂

  19. Profile photo of Alex J V

    Between you were looking for an Indian version for kickstarter. The link on the comment by Dharshan has a couple of them. 

    Ultimately kickstarter and its competitors are just a platform. You still have to do all the leg work marketing your campaign. Kickstarter has the issue of accepting only amazon payments. If that is a valid constraint for you maybe because your potential backers dont have amazon accounts/credit cards then you should look for other platforms. Otherwise I think you should stick with kickstarter/Indiegogo. The other reason you should go with an Indian crowdfunding platform is if they are helping you substantially with your marketing.

  20. Profile photo of Guna Kakulapati

    Excellent post. However, one suggestion (which you should obviously take with a pinch of salt, since I have never done crowdfunding and I am shamlessly giving gyan here).

    Why do investors fund companies? Because it made financial sense to them. That is they believe can make even more money when the company grows big. 

    Why not the same for crowdfunding? Instead of taking an approach of “crowd funding = selling the product” (eg buy taggles), how about “crowding = you are making an great financial decision here”.

    Here is an approach from that angle: “Each designer taggle has a market price of $5. If you believe in taggle, here is an opportunity to invest.  You can lock the price at $3.5 during this crowdfunding drive. If you are an event organizer or trying to promote a cause or just looking for cool schwag, reserve a taggle now at $3.5. If you reserve 100+ taggles, you can come back at any time and customize it with your image/logo and have it delivered free.”

  21. Profile photo of Rishi

    Alex! This is awesome — both the post and your product. Tangle is so simple, so out-of-the-box, and so awesome! Good luck! 🙂

  22. Profile photo of Nistha Tripathi

    Thanks Alex, how does the payments work on Indiegogo? Can an Indian pay in INR? That is my major concern. 

  23. Profile photo of Alex J V

    the transaction is in USD, but they take care of the conversion. You cant set your currency to INR. For me the problem was that a lot of people in India does not have credit cards. That might be a problem for you. 

  24. Profile photo of Alex J V

    Hey Rishi, 

    Thank you 🙂

  25. Profile photo of asha chaudhry

    alex – i messed the top of your post…

  26. Profile photo of Alex J V

    🙂 Awesome ! Thank you.. 

  27. Profile photo of Alex J V

    Hey Guna,

    That is a great suggestion. One thing I did not understand is why did you differentiate them as crowdfunding and crowding ??

    Most products that go on kickstarter do that strategy. They offer the product at less than the retail price. We did not effectively do that. 

  28. Profile photo of Guna Kakulapati

    Thanks for the response. That was a typo, 🙂  meant “crowdfunding =  you are making an great financial decision here“.

  29. Profile photo of asha chaudhry

  30. Profile photo of Divya Rai

    Thank YOU!

  31. Profile photo of Vikram Kohli

    Thanks for sharing this. Loved reading it

  32. Profile photo of asha chaudhry

    hey happy b’day alex!!!

    have an awesome pausome one and PLEASE update us on your journey! i believe you’ve been doing some exciting stuff (one of karan’s fb posts told me so!!)

    stay in touch and keep writing!

  33. Profile photo of Rohit Kuttappan

    Nice points on customer psychology, but you might want to watch this video to know why your product failed

    <iframe width=”475″ height=”267″ src=”https://www.youtube.com/embed/kHNfcpqebW8″ frameborder=”0″ allowfullscreen></iframe>

  34. Profile photo of Nayanabhiram Deekonda

    Hey Alex, good to learn your experience! I wanted to grab a Tangle the moment I saw it. 

    But it appears your website is not operational :/

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