My Kickstarter campaign failed and it is all my fault. In fact, I think I made every mistake possible in launching a crowdfunding campaign up to and including the moment half way through the campaign when I decided that I would write my prototyping post about how my campaign failed and what not to do.
Crowdfunding sites have become increasingly?popular in recent years. They are a great way for the individual inventor or a startup venture to raise capital and generate buzz that can drive sales and brand awareness long after the campaign is over. If you do decide that working with Edison Nation to bring your idea to the marketplace is not for you, Kickstarter is a great alternative – just be sure you are ready to invest a good deal of time and resources. However, when done poorly, you end up with a lump of wasted time, a product that likely will never see the light of day, a feeling of rejection and a whole lot of friends that are sick of hearing about your campaign. This is a primer on how crowdfunding works and what not to do, unless you only want four backers and $230 of a $3000 goal.
What is Crowdfunding ?
Crowdfunding is a funding practice for a project or venture where money contributions are raised from a group of people. While it?s often difficult to find a few investors with a lot of money to fund a new product, it may be easy to find hundreds or even thousands of people to invest small amounts of money to get a project off the ground. Several crowdfunding platforms exist such as Indiegogo and Kickstarter as a way to connect project initiators (those with a project they are looking to get funded) and individuals or group who support the idea. Crowdfunding platforms are open to many?types of projects including films, inventions, events, philanthropic initiatives and more.
Project initiators can structure their campaigns to offer rewards to the people that pledge money. These can be almost anything but are usually a website mention, the product they are seeking funding for or even an?all inclusive vacation packages for those that contribute large amounts. Each crowdfunding site has different terms, but usually the campaign is only given the money if they reach their?funding goal.
My failed Kickstarter project was an R/C car kit. In addition to working at Edison Nation, I have a small R/C car parts business on the side with my friend Brian Watson called Vectorworks RC. I have been racing R/C cars since 1993 and it has stuck with me ever since. I met Brian when I worked for a NASCAR team and gave him the bug too. For about a year, we made upgrade parts for other manufacturers? cars. However, I decided that I wanted to make a full car kit. I looked at some existing car designs and I saw an opportunity to make a better car by making it more aerodynamic. We started designing it in June of 2014 and after a couple of iterations the Kickstarter for the Vectorworks Hornet campaign went live just before Thanksgiving.
Mistake #1: The product was not as good as I thought.
I am decent R/C driver, but not great. To help with the development of the car, I enlisted a professional R/C driver, Dana Bailes, to help me out. (Yes there is such a thing as a pro R/C car driver.) After some testing, we took the car to the U.S. Indoor Championships in Cleveland over the Thanksgiving weekend, and we got killed. The car was over half a second slow on a 9 second lap, and in a class of 16 cars we finished 13th. The concept and the execution were just not good enough, but the campaign may have still worked if I had gotten the next steps right.
Mistake #2: The video did not add any value
My video was ok, but not great. To make the video, I had my friend, Rob Harris, help me out. He is a guerilla videographer and an expert in motorsports marketing. He did the initial cut of the video, and I thought it was great, but I did not appear in it once. Crowdfunding videos almost always have the inventor or project lead as a central focus. Just days before launch we decided to shoot a few additional segments of me talking and spliced them into the video. Boom, done. However, my segments were awful. I did nothing to convince the audience that I was either an expert in the field or a good person to give money too. I did not smile once except for a little smirk at the very end. I have been on camera plenty, including Everyday Edisons, but I blew it this time.
Mistake #3: I couldn?t secure any news coverage.
I already have an R/C brand so I am familiar with all of the forums and blogs that release news about new products. I also used to write for the biggest R/C car magazine, R/C Car Action, and I thought it would be a slam dunk for them to run a piece on the car. I did not contact any of my 5-10 media outlets before the launch of the campaign, assuming they would all run the story. Only one of them did.
As it turns out, most of the R/C car sites only publish news about products in production. The outlets were either confused about the concept of Kickstarter or uninterested in running a story of a product that was only theoretically going to be produced. Even my friends at R/C Car Action told me they would be happy to run the story once the car got made. It was frustrating to get the reject notices while time was ticking down on my campaign. I did not have my media outlets prepped for the project and it killed my chances of being successfully funded.
Mistake #4: The product was too niche.
My product was too niche to be successful on a crowdfunding site. Most successful product-based campaigns are for products with mass-market appeal such as watches, coolers, video games and 3D printers. R/C cars can be broad audience products, but not mine.
Only a certain percentage of the population would purchase an R/C car, and of that percentage, maybe 5-10% of R/C car enthusiasts actually race R/C cars. Of those that percentage, only 1-5% run the class of car that I designed, and I was trying to drive them to an unfamiliar platform to buy a car that only theoretically exists. The market potential becomes vanishingly small very quickly, and It was unlikely to ever be a good fit for crowdfunding.
The Good News
It may seem like I am being hard on myself, but in a way, my failed Kickstarter campaign helped me. If I hadn?t gone with a Kickstarter campaign, I might?have invested a few thousand bucks to have?100 kits made and then tried to sell them. With Kickstarter, I was able to test the interest of my product without having a tangible product.
When it tanked, at least I was not sitting on a ton of excess product inventory. I was able to kill that product and move on to the next idea that may be better than this car was ever going to be. It also got me to go through the crowdfunding process first hand so I can better understand the effort it takes to get a campaign launched. Hopefully, sharing my mistakes will help you to assess whether or not Kickstarter is a viable option for your idea as well as potential pitfalls to avoid in order to be successful.