Lessons from our successful Kickstarter Launch

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Lessons from our successful Kickstarter Launch -by Bhushan Lele. Presented at BarCampTampa 2012.

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Lessons from our successful Kickstarter Launch

  1. 1. KICKSTARTERTHE FASTEST,CHEAPEST, MOSTEFFECTIVE WAY TOLAUNCH YOUR IDEALESSONS  FROM  OUR  SUCCESFUL  KICKSTARTER   BY  BHUSHAN  LELE  LAUNCH  OF  THE  IDEABOARD  
  2. 2. OUR EXPERIENCE“If you have a good Kickstarter   Other  Marke7ng  Channels  idea, Kickstartergives you your firstfew hundred Ge=ng  the  first   We  spent  $800  total   We  have  spent  $3,000  in  adver7sing,  customers, social few  hundred   crea7ng  our  video,  and   only  to  get  a  few  hundred  dollars  in   customers   buying  a  nice  camera   business  from  it.    Costs  more  money  and  credibility, and to  take  photos.       7me  figuring  out  what  marke7ng  and  money- more sales  channels  are  working.      efficiently than anysingle sales/ Social  credibility   30%  of  our  backers   5%  of  our  backers  have  offered  reviews.      marketing channel have  offered  reviews.  out there”. Money   Gives  you  money.    And   Costs  money.    And  you  are  limited  to  the   you’re  doing  business   money  you  have  in  your  bank.       with  other  people’s   money  (via  pre-­‐sales).    
  3. 3. DOES KICKSTARTER SUCCESSMEAN YOU HAVE A BUSINESS?NO  •  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.      
  4. 4. THAT SUCKSI WANTED TO HEAR YESWELL  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.  
  5. 5. THAT SUCKSI WANTED TO HEAR YESWELL  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.  IS  THAT  BETTER?          
  6. 6. PLANNINGTHE LAUNCH
  7. 7. DECISIONS DECISIONS•  Prototyping    •  Sourcing  •  Manufacturing  •  Crea7ng  Traffic  •  Campaign  Setup  •  Post  Kickstarter  •  Campaign  Management  •  Building  Your  Tribe  
  8. 8. 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  
  9. 9. PROTOTYPING •  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.  See  what  guidelines  your  category  has:  hYp://www.kickstarter.com/help/guidelines  
  10. 10. WHERE TO SOURCE FROMEven  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  
  11. 11. …CONTDThese  are  Generali7es.    But  this  held  through  for  us.       Lead  7me   Capital  needs   Product  cost   U.S.  factory   middle   My  own   fastest   workshop   China  factory   slowest  
  12. 12. …CONTD Lead  7me   Capital  needs   Product  cost  U.S.  factory   middle   middle  My  own   fastest   least  workshop  China  factory   slowest   most   China  generally  requires  large  orders.   Shipping  from  China  takes  about  45  days,  tying  up  your  capital.      
  13. 13. …CONTD Lead  7me   Capital  needs   Product  cost  U.S.  factory   middle   middle   -­‐-­‐  My  own   fastest   least   -­‐-­‐  workshop  China  factory   slowest   most   lowest   Even  though  lowest  cost  country,   you  may  need  the  most  capital.    
  14. 14. SOURCING/MANUFACTURINGINTERNATIONALLY•  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.  
  15. 15. …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.      
  16. 16. 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            
  17. 17. …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.          
  18. 18. 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                      
  19. 19. …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.    
  20. 20. …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      
  21. 21. 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.      
  22. 22. …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)  
  23. 23. POST-KICKSTARTER
  24. 24. WHY IS CAMPAIGN MANAGEMENTPOST-KICKSTARTER?AND  IT  NEEDS  A  QUOTE   “During campaign management, youTO  MAKE  IT  OFFICIAL…   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”
  25. 25. CAMPAIGN MANAGEMENTGoal  #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.      
  26. 26. …CONTDGoal  #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.          
  27. 27. …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.      
  28. 28. 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”.  
  29. 29. BUILDING YOUR TRIBEIden7fy  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  
  30. 30. POST KICKSTARTERFROM  A  PRODUCT  TO  A  COMPANY:  EVALUATE  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…          
  31. 31. POST KICKSTARTERFROM  A  PRODUCT  TO  A  COMPANY:  EVALUATE  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.        
  32. 32. POST KICKSTARTERFROM  A  PRODUCT  TO  A  COMPANY:  MARKETING  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.  
  33. 33. POST KICKSTARTERFROM  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.                
  34. 34. POINTERS AND RESOURCES•  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.              
  35. 35. ADDITIONAL RESOURCESKickstarter  school:  hYp://www.kickstarter.com/help/school/defining_your_project  Feel  free  to  email  me  at  bhushanlele1@gmail.com  with  any  ques7ons  you  may  have.  Bhushan  Lele  linkedin.com/in/bhushanlele  twiYer.com/bhushan_lele    
  36. 36. ENDTHANK YOU

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