If you’re a startup launching your first product, or looking for funding for a new product, you’ll want to check out Kickstarter.
MIO Global, who are making the holy grail of strapless, continuous heart rate monitor watches, used Kickstarter to generate its target $100,000 funding for product development.
Kickstarter is “the world’s largest funding platform for creative projects.” On its website, independent product developers present their projects for funding pledges. In return for rewards, anyone can pledge to support a project. Rewards range from free tips to free product, depending on the amount pledged.
Backers’ credit cards are charged only if the project reaches its funding goal within the set deadline. If the targets aren’t met, backers are not charged.
Liz Dickinson, founder of MIO Global, started looking at Kickstarter when Pebble (an e-paper watch for iPhone and Android) got over $10 million in pledges on the site.
This seriously legitimized Kickstarter as a fundraising vehicle for technical projects.
The most appealing aspect of Kickstarter is that you can raise the funds you need to bring your dream to reality without having to give up personal equity.
Kickstarter is also a great way to develop a community around your product — in other words, it’s great for PR.
About Alpha, the Holy Grail of Heart Rate Monitors
Liz has worked in high technology for over 20 years, holds six patents and is the inventor of the world’s first finger sense EKG accurate heart rate watch, MIO.
MIO was revolutionary in the field of heart rate monitors. For people interested in exercising with a heart rate watch, touching the watch was better than having to wear a chest strap.
But athletes wanted more: a heart rate monitor with no chest strap, that was continuous, accurate at high speeds, and didn’t need to be touched.
Liz understood that discovering such a technology would become her company’s ultimate goal. And so, her 11-year journey in search of the “Holy Grail” of heart rate monitor watches began.
Two years ago while visiting Philips Electronics in the Netherlands, Liz saw technology that had the potential to make real her dream of finding the “Holy Grail”. Liz saw substantial promise in their approach and had a great deal of confidence in the research team at Philips. So in a leap of faith she decided to invest.
After a significant personal financial risk and lots of hard work, Liz is near to bringing the Alpha heart rate monitor to market. The business challenge before her was to find the money needed to finish the project.
Goals for the Kickstarter Campaign
Was Kickstarter the right platform for Liz to raise the money she would need to cross the finish line?
To answer this, Liz needed to determine what her capital needs were, and if Kickstarter had the power to attract that amount of money through pledges.
Liz had personally funded Alpha to the prototype stage but still needed another $100K to bring Alpha to market.
The success of the Pebble watch gave Liz comfort that Kickstarter could meet her financial goals.
At the same time, the highly public and social aspect of using Kickstarter to raise pledges allowed her to set other “soft” information goals as well. How would the market react to Alpha? Would men or women buy it? Would pledges (which are essentially correlated to price) slow down as the limited lower pledge categories sold out? Would people pledge $200 to get an Alpha?
Since Kickstarter is such a highly visible way of raising funds, there was a unique opportunity to set some PR goals.
Could Kickstarter buzz be used in a way to help build the Alpha brand and awareness in the target market (athletes) and not just the Kickstarter community?
Don’t expect to launch the project and watch the pledges kick in
A Kickstarter project is a living, breathing thing. It needs to be watched, nurtured, updated, and tweaked regularly. You need to communicate with backers regularly.
Don’t underestimate how time and resource intensive a Kickstarter project is
If a person is uncomfortable putting her/himself out there for the whole world to see and judge, Kickstarter is likely not the right funding vehicle. You’ve got to reply to questions promptly.
Set the right reward levels that meet your goals
One of the biggest challenges is to know how to set the reward levels. If offering product as a reward, it is very important to understand all the cost components, including shipping, and the percentages taken by Amazon Payments as well as Kickstarter.
If pledge levels are too low but the funding goal is met, the sad result will be an obligation to create and deliver product at a loss. If you set low “early bird” pledge levels, they will get snapped up from the feeling of urgency.
Create design and aesthetics that entertain
It’s also very important to create a project that meets the aesthetic sensibility of the Kickstarter audience. When reviewing successful Kickstarter submissions, Liz noticed that design is essential, and the submission must be beautiful as well as informative. Many Kickstarters come to the site simply for entertainment (check out the Alpha video above).
Driving traffic and continued interest is essential
Serious thought needs to be given to driving traffic to your project. Kickstarter’s own traffic will result in a certain number of pledges. However, this may not necessarily be your target audience.
Fortunately, Kickstarter offers social sharing tools that make it easy to spread the word about a project. These include Facebook and Twitter share buttons, as well as an embed code for the project video.
Begin PR efforts well in advance of the Kickstarter launch
When talking with those who had successful campaigns, they all said the same thing: positive mention in a blog was the best way to get pledges. Before launching a Kickstarter campaign, make sure you know who the most influential bloggers are in your space and send them product to review.
The longest mentions are of those where bloggers got prototypes. First reviews should be lined up ready to coincide with the launch of the Kickstarter campaign. Succeeding blog mentions should come out throughout the life of the campaign.
The communication strategy should be totally buttoned down – who sends what to whom, when and with a clear call to action.
Remember to educate the public
Liz found that many people that came to Kickstarter as a result of her push campaign were not at all familiar with the platform or really understand what was expected of them. Part of your communication plan should include educating your market about what Kickstarter is, and how they can use it to support your project.
Keep messages crisp and consistent, use all forms of social media to their maximum
Spread word about the project and push out the message relentlessly. The Kickstarter community will generate the initial project interest in your project – but it is up to the entrepreneur to bring in the external traffic and motivate them to pledge.
It’s also important to keep communicating with people after they’ve placed their pledges. Kickstarter gives project owners a space to publish updates on the campaign and the project, complete with photos. Backers can use the Comments section, which is also a great venue for the project owner to interact with backers.
Usage of the Kickstarter supplied backer communication and statistical analyses tools is vital
It cannot be overly stressed how important it is to completely understand all aspects of the platform itself. Kickstarter provides a Dashboard to continually optimize the campaign; amount of money pledged by referring link, number of video plays and was it watched via Kickstarter or offsite, popularity of various pledge levels and ways to communicate with individual and groups of backers.
Alpha was 30% funded after 3 days on Kickstarter…. and as of publication of this post, it has exceeded its $100K funding goal, just 10 days after campaign launch.