Don’t crowd fund hardware (until you’ve read this at least)
People who fund hardware campaigns often have poor experiences, especially around delivery.
We read so many posts on how to run successful campaigns. How to raise more money, increase awareness and leverage your existing social capital. But what’s missing is advice that actually tackles the problems contributors experience.
Taking money in advance is based on trust. You haven’t earned that trust, it’s being gently lent to you on the basis of your video, the claims you make on your campaign page and how well connected you are with your audience.
You gradually earn and validate trust with each subsequent interaction and growing evidence that you actually do what you say you’re going to do.
So we present to you, good fan of hardware crowd funding, the grand list of things to obsess over before you launch your campaign.
- The thing is late. Delayed by months. Or the timescales are just so long that you forgot you ordered it. One day you get a note from the postal service saying they tried to deliver a package and you wonder what it is and whether it’s worth picking up. Or maybe it was a gift, which didn’t arrive in time.
- You don’t receive the thing at all. You didn’t know if they were near enough being ready for you to update your new address when you thought about it that one time. You probably wouldn’t have known how to change your address with them anyway.
- It arrives but it doesn’t do what it promised. It was too early on for them to be sure about the technology and they needed the money to carry on working on it. It’s about 5% as good as you thought and you spent $200 on it.
Building hardware and software is hard
No one sets out to run a bad campaign. And when you’re building things that don’t exist yet, you don’t have solid experience to base estimates on. The longer the time scale the harder it is to be accurate. And yet you don’t want to put people off.
“It’s $200 and it might be a couple of years before you get it and there’s a good chance the whole thing could fail, so we’ll let you know.”
Things happen. Unexpected difficulties. Giving bad news to your customers is never fun. But worse than this, after some awkward emails where you’ve slowly stopped mentioning timescales you might be feeling embarrassed or just plain depressed and so stop communicating altogether.
Or maybe the build is going really well. But you’re so flat out busy that your focus isn’t really on what someone goes through from where they first hear about you, to excitedly contributing, to slowly forgetting about you.
They don’t think to ask and you certainly don’t want to spam them with progress updates that will remind them how long it was since they ordered the thing. One day, a mysterious package arrives for them in the post to a work address they used to use for deliveries which they left some months ago.
We’re a small team running a campaign right now on indiegogo. It’s for eye examinations from your phone and it has a hardware component with an app. We’re also a social enterprise and want to share what we’ve done.
Do the hard work up front
- Talk to three experienced manufacturers who have made similar things, in the same field. You can also find manufacturing experts through Linkedin and pay them for advice for an hour. Some will do this on top of their normal jobs (listen to this podcast of William Channer interviewing Mike Del Ponte on ‘How to Ship a Physical Product’). Compare estimates and timelines, ask about likely problems. Let potential contributors know you’ve done this.
- Talk to three other crowd fund campaigners who have done something similar in terms of hardware or complexity. Ask about predicted and actual timelines, what went wrong, things they wished they had known or would have done differently. Offer lunches, coffee, free perks, whatever you have to thank them for their time.
- Don’t start a crowd fund campaign until you’ve done 1 and 2 and added in redundancy; another 30% to 50% of the estimated time or more. You know things will come up that you haven’t anticipated and how great if you can deliver it earlier.
- Campaign pages, updates and comments are all still visible for previous campaigns on most crowd fund platforms. Find those closest to you and get to know all the questions, doubts people had and problems that came up. Think about how you can pre-empt these.
- Be honest about what stage you are at in the process with potential contributors. Early prototype? Late prototype? To what extent is it proven? What’s the hardest bit about what you’re doing? Are you working on the design or are you ready to set up tooling? You can add more detail in blog posts and link to them from your campaign page for people who want to know more.
- Make sure you’ve personally had the experience of contributing to campaigns on your platform of choice. We also set up a pretend campaign to get familiar with how the platform works and used it early on to test out big changes that we were nervous about (it’s for a dinosaur birthday cake, it hasn’t been funded).
Test your content with potential contributors
You’ve been staring at the text, images and video content for your campaign page so long, you won’t have any idea of whether your message is clear.
We tested the campaign page with potential contributors that we didn’t know, so they wouldn’t be nice about it. We explored what they understood, what questions and doubts they had. Would they contribute having seen that? Why not? We asked them some things that we hoped we had provided the answer to.
We were mixing too many messages together. It was “flabby”. Too much to think about, people couldn’t remember the main points. We re-wrote the whole thing and focused much more tightly on one main message, which was about donating a device to low income regions. We chose to use different channels for the more niche messages around buying one for yourself as a medic or becoming a distributor.
Have a plan and time fully set aside
It’s a phenomenal amount of work. There are different phases we’ll need to keep people updated about: during the campaign, near the end, industrial design stages, problem solving and more as we move closer to delivery.
We’ll have someone working on this for the next 12 months or more. As a non profit that means time away from fund raising, even if the help were to be voluntary.
For non profits it could be more efficient to spend that time seeking out large donations from a small number of organisations instead, unless you have a good additional reason to crowd fund.
We’ve opted to outsource as much as we can to experts and our specialist manufacturing partner. This includes certification, refunds, guarantees, exchanges, post and packing. Don’t forget the additional post and packing costs if you’re doing special delivery across a range of countries.
We avoided any time-consuming physical perks so that we can focus all our efforts on manufacture of the main product and good communication.
Finding early adopters and first responders
Here’s what is and isn’t working for us.
- Direct emails and calls to our personal networks and anyone we’ve met in the last two years are driving most of the contributions. We were fortunate to have some large donations from organisations planned in advance and that helped us gain momentum in the first few days.
- We’ve been featured on the BBC, in the Financial Times, Mashable, Wired and regional news networks in the UK and Italy. We’ve had thousands of mentions on Twitter and Facebook and lots of referral click throughs. Almost none of that has had any direct impact that we can track.
- Some contributors have come direct from the indiegogo platform. We were featured on their homepage for a day and had the top spot on health campaigns for a few days. They included us as one of their #GivingTuesday recommendations and we had double the level of contributions on that day.
- We’re working with partners and related non government organisations (NGO’s) and charities that already knew about us, hoping they will feature our campaign in email and newsletters to their customers.
- We’re seeking out niche medical communities: forums, popular blogs, medical student hangouts, online optometrist and ophthalmologist groups. Talking to friends of friends who are doctors and medical students about what else we should be doing.
I wouldn’t recommend doing a crowd fund campaign if you’re just starting out cold. Unless you’re super well connected and/or very persuasive.
Learn and improve as you go
We’re tracking performance and talking to contributors to work out what we can do better. Most of these figures were from Dec 1, 2014 which was 7 days in to the campaign.
- Organic daily run rate: ignoring the big donations we arranged, our mean average daily contribution level is £3,216. And the last 3 days running average daily contribution level is £1,400. We multiply the daily figure by number of days remaining and add the current contribution level to get a projected total for the whole campaign. Then decide (how much to panic) what to do on that basis.
- Visits and conversion by country: We had around 13,000 visits to the campaign page by day 7 and 18,500 visits by day 9. About 1 in every 30 visits to our campaign page results in a contribution. We’re splitting conversion by location of contributors. Worryingly, the campaign page only seems to be working for people in the UK where 8% of visits result in a contribution. For visits from the US only 1% result in a contribution. It might well be because we’re using £ GBP and that’s off-putting. It might be because although we can accept donations from the US, we can’t ship purchases there until the device is FDA approved. We don’t know. We’ve been showing the page to a few people in the US and having them talk out loud about what they notice or read to see if there are any obvious things we can improve.
- Sources: Nearly all our donations come direct rather than from a referral, article or social media. We assume that twitter, facebook and other media coverage all has a combined effect strengthened through repetition. We are using the coverage to update the campaign page with links to articles and details of where we’ve been featured.
- Performance of different perks. We have both buyers and donors and we’re interested in the growth and funding levels from each, and the impact on this from different activities that we do. We can’t track this directly with indiegogo so we’re remembering what activity we’ve done each day and estimating.
- User feedback and research. We’re monitoring comments that we get and adapting the written content to answer questions. Things like ‘will the device be universal across all mobile devices?’ Oops — that wasn’t clear from our campaign page initially. Other questions are around delivery charges for non EU countries and details on logistics from potential distributors.
If you remove a perk and replace it with a new one to improve the text, it re-sets the amount contributed to zero so it then seems unpopular to others. This is a problem as it means we can’t easily add a guides to things like equivalent prices in $ USD.
Your biggest supporters are strangers
In many ways it is the people you don’t know, who found you and donated to you off their own back that are your biggest, most engaged supporters. Not the friends and family you forced to do it or those who have already known about you for months.
What is interesting to these new supporters is not how well your campaign is doing, but the sense of purpose or impact from being part of a cause or by what your product will enable them to do.
Talk about actual benefits that mean something to them, rather than just announcing you’ve hit some milestone, giving random incentives or begging them to spread the word.
Think about encouraging people to do something they’re motivated to do anyway. If they refer someone, can you match that additional contribution with a perk to triple the impact (or benefit received) for that one original contributor?
Know what motivates people to contribute
You can be a better communicator if you’re clear about who your audience is and what their motivations are. One way that we’re able to do this is through different perks. We have:
- buyers who are mostly healthcare workers
- people donating adaptors to clinics in low income regions
- contributors supporting the manufacturing set up
- distributors who will start a new supply chain
A week in and we’re only now thinking in detail about the distinctions and what is important to each group. That means we’re not being as lightening fast as we could be in communicating.
Building trust and connection
Think really hard about why you’re doing this rather than all the other good things you could do with your time. If you do go ahead, be really committed to making it a good experience for people.
We already know all the problems with physical product crowd funding. We know problems come up in manufacturing. We know people move house and forget to tell us and also forget the address they’ve given us.
Let’s do the hard work upfront to make sure that people want to continue funding campaigns for hardware in this way.
Being honest and communicative with contributors means openly acknowledging some of the things that make what you are doing difficult as well as the steps you’ve taken to reduce that risk. Hopefully you have a close enough connection with your contributors to do that. And what good news if it turns out that it was easier than you thought.
Earn the trust.