Crowdfunding Tips from Teplo
The following post is from Kazu Kawanobe M’16, founder of Load&Road, LLC, a spring 2016 hatchery business.
Crowdfunding is getting popular for entrepreneurs to raise fund. If you have an awesome idea, you should definitely use it. We developed Teplo, the world 1st smart bottle for tea drinkers, and successfully raised over $73,000 with 1,200 backers on Kickstarter. We would like to share some of tips for crowdfunding.
1. Why crowdfunding?
The most important aspect of crowdfunding is, of course, fundraising. However, there are some other reasons why we use crowdfunding. First, crowdfunding is a really good tool for market validation. Although we believe our product is awesome, one of the biggest challenge for entrepreneur is to know objective opinion for their idea. Crowdfunding campaign is a really good tool to know if your idea is good enough, and the crowdfunding backer community is really collaborative to improve your idea. Also, successful crowdfunding campaign will be really effective customer demand data on future product pitches, and the entrepreneur can spend more time on other important aspects such as vision and business plan.
2. How long and how much do we spend before crowdfunding campaign?
Although it depends on your idea and what you want to make, we spent almost one year and
$10,000 to develop our working prototype and conduct all customer beta test before we launched the crowdfunding campaign. It is difficult to make perfect product before launching a crowdfunding campaign, but it is really important to make prototype and get contact with manufacturers to estimate cost and set funding goal. In fact, we had visited manufacturers overseas before the campaign launch.
3. Which crowdfunding campaign should we use?
Kickstarter and Indiegogo are the two big crowdfunding platform in the U.S. You can use both platforms, but it is really risky to run two campaigns simultaneously because you split your customers into two platforms and it will be difficult to make momentum and increase ranking on the platform. We recommend you to use Kickstarter, just because Kickstarter community is bigger than Indiegogo. We used Kickstarter campaign for initial fund raising, and we started Indiegogo after the Kickstarter campaign as preorder platform.
4. What should we prepare before the campaign?
First, and most importantly, you need to prepare a working prototype. This is not only for cost calculation, but we need to show fully functional prototype to get approved by Kickstarter. This sounds really basic, but spending your time and money on prototype development is really important. Second, we recommend to make high quality video. Video is really important to attract potential backers and a few thousand dollars and a few weeks investment on video is worth it. Also most importantly it is essential that you create a finance document estimate and set a goal that is within reach but also ensures that you have enough cash to last you for sometime.
5. How to attract backers?
It is really important to start promotion as soon as possible. Especially, you should tell your project to as many friends as possible before the campaign launch so that they can support your campaign right after the project launch and make a buzz. Making a buzz results in high ranking and attracts more backers. You should also contact media before the campaign launch so that they can cover your campaign as soon as you start campaign. After you launch the campaign, you might get a lot of messages and comments. Replying to comments and messages ASAP is really important to build trust and attract customers. Also cross promotions with similar products attracts customers to your product.
6. One last thing
Crowdfunding is not an easy job, and it was much tougher than we thought. However, we are sure that the experience you will get from the campaign will helped you to grow and to have more confidence on your business. Also please send a word across at firstname.lastname@example.org if you need any additional help on crowdfunding. Good luck!