Crowdfunding takes a lot of planning, whether you’re gearing up for a launch, a ship date or thinking about the next source of funding you’ll pursue. But it’s crucial to be aware of where you stand in the present, too, as those who have shepherded successful campaigns will tell you.
At CES last week, Entrepreneur Associate Editor Lydia Belanger moderated a panel titled “Entrepreneurship 202: Bringing a Product to Life.” The discussion followed the steps of a crowdfunding campaign — everything from drumming up initial interest and backers to factoring in distribution costs and communication strategies during and after the campaign.
Wearable brand Misfit served as a case study of a success story among the group, which also included representatives from supply-chain company Ingram Micro, Procter & Gamble and Indiegogo. In 2015, Fossil Group acquired Misfit for $ 260 million, three years after the Misfit Shine activity tracker raised more than eight times its $ 100,000 Indiegogo funding goal.
Reflecting on the brand’s trajectory, Fossil Group Vice President and General Manager Preston Moxcey shared three tips that many entrepreneurs who launch products on crowdfunding platforms (Misfit included) tend to miss.
1. Don’t reinvent the wheel.
A glaring gap in the market may have been the inspiration for your product’s development, but remember that you’re not launching into a vacuum. Pay attention to what else is out there and working well already.
For instance, in spring 2012 Pebble Technology Corporation had a wildly successful Kickstarter campaign for its E-Paper watch. Later that year, when the Misfit Shine launched on Indiegogo, it piggybacked on Pebble’s momentum with consumers and in the press. The concept of a crowdfunded wearable had already been proven out.
While Pebble raised millions more than Misfit, being in the shadow of Pebble was key to Misfit’s success, Moxcey explained during the panel discussion.
“That’s what great founders and entrepreneurs do,” Moxcey says. “They don’t try to create energy out of nothing. They take advantage of the momentum of what’s around them and they harness it into something unique.”
Speaking of emulating the strategies of other successful crowdfunded companies, Indiegogo’s Manager of Hardware Outreach Sarah Meister emphasizes that Indiegogo has “libraries of examples of campaigns” that entrepreneurs can tap into.
“They represent what we think a successful campaign is, not just funding-wise, but how they represent themselves,” Meister says, adding that Indiegogo is eager to be a resource for prospective campaigners. “We’re more than happy to send over the people who you should be paying attention to, who have done really well.”
Or, seek examples of successful or compelling campaigns on your own, Meister says, and reach out to say, four of those founders and seek their mentorship.
“Most of the campaigners that have launched on Indiegogo are excited to help others, because someone else helped them,” Meister says. “If they don’t respond, reach out to four more.”
2. Don’t make promises too far in advance.
Often, when you go to an Indiegogo page, you’ll see an ambitious timeline with a ship date months in advance. Maybe you’ve been a frustrated backer or just an observer who’s seen budding brands push their ship date back due to unexpected logistical hurdles.
You can try to get all of your distribution ducks in a row up front, but, especially for brands just starting out, unforeseen delays and design changes tend to come about.
“We had a tendency to want to promise a lot of things,” Moxcey says of Misfit’s campaign. For example, in images circulated to backers during the campaign, some lights on the device appeared red, whereas the final product in had white lights. There was a “good engineering reason for this,” Moxcey says, but it is one example of how the natural evolution of product development can be at odds with the impulse to build customer expectations.
“Even today, with our announcements with Fossil Group, we’re not announcing anything that’s going to ship in four to five months,” Moxcey says. While these aren’t crowdfunded products, Moxcey makes the point to emphasize that ship dates announced too far in advance are susceptible to delays. “The only things we’re talking about with consumers now are things that are shipping tomorrow. We’re not talking about products that are going to ship in 2018. We’re talking about products that are going to ship in January.”
If you’ve taken to social media publicly boasting your ship date, but you have some last-minute adjustments or distribution details to figure out, hold off, Meister says. Postpone, then communicate the reason for your decision, rather than shipping before you’re ready and disappointing customers with delivery failures or a faulty product.
3. Don’t belabor an old product.
A third mistake Moxcey cautions against comes into play after your crowdfunding campaign ends. You have to plan ahead even at this stage, which means you can’t dwell on your past success forever.
Smart companies will embark upon a crowdfunding campaign with at least a five-year plan that might include ideas about an exit strategy or future products and timelines for them. Unless your goal is just to sell a set number of units to a core base of backers, you have to think about scaling and what’s next.
“You get the attention, energy, momentum and then it’s crickets for two and a half years,” Moxcey says. “That, to me, is death. You have to have the next thing ready.”
“The successfully funded campaign that just cuts off communication with its backer community keeps me up at night,” Meister adds.
One of the mistakes Misfit made, according to Moxcey, was sending emails about the Misfit Shine for about 18 months until Fossil advised that it was time to stop marketing the product to the 2.3 million people who already owned it. Rather, the company needed to focus on new products to drive new customers.
Another piece of advice Meister shares when it comes to ongoing communication is that it can transcend traditional product updates.
“Even if you don’t have an update about when something’s going to be delivered, did you travel this week? Did you go someplace cool? Did you meet with interesting people who had an impact on you? Maybe write about that,” Meister says. “More and more investors, from what I’m hearing, care about seeing the lifestyle within the brand. And your customers will help you tell your story.”