A successfully funded project is only half the battle when it comes to crowdfunding. You’ve got the money, now what? There are rewards to be met and a timeline to follow, and, as many of the organizers behind some of Columbus’ most recent successfully funded product campaigns can tell you, generally a whole other set of issues you’ll face that you never expected. No, a funded campaign doesn’t mean you’re rich now, and even the best laid plans and meticulously detailed campaigns can go awry.
Five campaign organizers share their experiences – and give their two cents about what a business is really in for when they turn to crowdfunding.
- – Julie Harr of Blerline Tracing Sticky Notes – Original Goal: $9,000 / Total Raised: $10,048
- – Scott Scherpenberg of Juiceboxx – Original Goal: $25,000 / Total Raised: $31,107
- – Igor Zemskov of Imbue Creative Tool – Original Goal: $8,500 / Total Raised: $48,617
- – Ray Walker of Spoolee – Original Goal: $8,000 / Total Raised: $50,263
- – Chris Hawker of Trident Design – Quickey Original Goal: $4,000 / Quickey Total Raised: $221,529 & Carbon Flyer Original Goal: approximately $56,000 / Carbon Flyer Total Raised: $356,610
Let’s Back Up
There’s a whole lot of work that goes in before “What happens now?”
“Anyone launching a campaign needs to understand the work that goes into it,” Scherpenberg says. “A lot of people think that they can throw an idea up on Kickstarter or Indiegogo and it will just take off. There is so much back-end work.”
Hawker sums it up.
“It doesn’t happen on it’s own, you have to cause it to happen,” he says. “It’s an awesome vehicle for launching a product, but it’s not easy money. It takes a lot of work and a lot of time.”
Hawker and Scherpenberg agree a business should do their homework before getting started.
“Study other campaigns and see what works and what didn’t work,” Hawker says. “If you can’t find a single campaign that was successful for the type of thing you are trying to do, maybe there’s a reason.”
However, a perfectly researched campaign won’t mean anything if nobody sees it.
“Something we learned from the beginning was how important PR is,” Zemskov says. “If you know people with marketing backgrounds, become their best friends because they will be the ones who get your project out in front of people.”
Imbue was posting updates a month before their campaign to build anticipation.
On the flipside, Haar says, “We went with one [a PR firm] about two weeks in with some, but limited results. If we ever do another campaign, we’ll partner up with one before the campaign starts for sure.”
There’s not only the time that goes into creating the campaign, but the time needed during it. Responding to emails and comments, keeping the campaign updated with stretch goals and other milestones, and posting on social media can practically be a full-time job itself.
Ok, now what? A drop in the bucket, then add a month.
A successful crowdfunding campaign is normally just one sliver of a product’s launch. It’s going to take a lot more time and a lot more money than that.
Walker set a modest goal of $8,000 for Spoolee and ended up with just over $50,000. While it blew his expectations away, “The reality of it is that money goes really fast when you’re starting your own business,” he says.
There are the fees most business owners don’t think about – lawyers, tax accountants, filing for trademarks and patents. And, as Walker points out, all these are things that can be a lot more expensive than you expect if you don’t have experience with them.
Even campaigns like the Carbon Flyer which raked in over $350,000 can feel the pinch.
“It’s a drop in the bucket of what it costs to commercialize a product like the Carbon Flyer,” Hawker says.
While campaigns mean momentum and exposure, it’s not unlimited buckets of money.
Time is the other part of the product equation. Crowdfunding takes a cycle that, in the past, would have taken a few years and accelerates it to a few months. Juiceboxx, Imbue, Spoolee and Quickey all experienced delays with their targeted production schedules and each one came with a different lesson about manufacturing.
“Although our team had prior experience manufacturing products, we had never done anything to this scale,” Scherpenberg says. “This was also our first injection molded product, so we experienced some road bumps within the tooling process as well as production process.”
As he describes it, the first time around is really a learning curve when it comes to anything and everything.
A relatively good problem to have, delays can also come when a campaign does even better than expected, like Imbue. The original timeline was outlined for about 100 units, with campaign sales totaling 1,600.
“Once the campaign was finished we realized we would have to push our timeline back based on the amount of units,” Zemskov says.
They also made the decision to manufacture within the country, using local shops as much as possible.
“Since Columbus doesn’t have heavy roots in industrial machinery, it was hard finding a one-stop shop that could do all the manufacturing processes,” Zemskov adds. “Luckily for us we got pointed in the right direction by a friend that works at Idea Foundry, and we ended up using two local shops for the laser cutting, finishing, anodizing and etching process.”
Walker decided to produce Spoolee overseas for now for cost reasons.
“Perfecting the product and finding the right manufacturer half way around the world has proven to be more challenging than originally expected,” he says.
He also emphasizes the importance of understanding the holidays and being culturally sensitive to the production country. Chinese New Year set Spoolee’s timeline back by about a month.
“If you post a timeline for expected delivery, do your best to give yourself more time than you think you’ll need for all of the unexpected delays, then add a month or so,” Walker says.
Overseas manufacturing also proved to be a challenge for Quickey. Hawker says a manufacturer that made great prototypes shipped a 100 percent defective first batch of product, forcing them to start over with a new company. He also noted that when working with a large, overseas manufacturer, you aren’t their only client.
Despite all the issues that can arise, Haar emphasizes the importance of following through – even if it is two months later.
“Follow through on all rewards as that really sets the stage for how you and your company will be perceived in the marketplace,” she says.