PowerUp: Crowdfunding as a practice ground for the larger market
An interview with the team behind PowerUp, the latest Indiegogo success.
If there is one thing that we are always short of in this modern era, that thing is charge. How often do you find yourself beyond frustrated because your phone or laptop is dying at the most inopportune moment? PowerUp, created by Homey — a new standalone charging station, is an elegant solution to this very twenty-first-century problem.
Sleek and simple, this little gadget is the perfect on-the-go accessory that has recently been the center of a supremely successful crowdfunding effort. With just a few days left to go in their campaign, the Homey team has managed to raise over $336,968 — that’s 1348% of their initial funding goal — with the support of more than three thousand backers. Those are some intimidating numbers if we ever saw them.
With the hope of gaining some insights into the source of their success, we asked the Homey team a few questions about their experience of becoming crowdfunding superstars.
Here’s what we learned…
CROWDFUNDING IS A STAGE FOR PRACTICE
Homey invites users to “Power Up Your Life.” The charging station supports three USB and USB-C devices, and is the only multi-device charger for the new MacBook and MacBook Pro. “There’s a human aspect to our products,” says Hannah Lin, marketing director for Homey, “they’re convenient and easy to use and can really improve everyone’s lives.”
The Homey team is quite small, just four people who met serendipitously in Houston and Silicon Valley. Considering how relatively little manpower they have behind their project, it’s quite impressive that the team has managed to achieve such amazing results with their recent Indiegogo efforts.
Peikai “Hog” Hou, founder of Homey, says that crowdfunding is a really effective opportunity for small companies like his own — “Crowdfunding is a pretty unique platform in that it’s a small marketing platform as well as a product forecasting platform. Its target audience is narrower and more particular.” Moreover, he explains, with crowdfunding it is easier to figure out whether or not you are positioning your product correctly. “We can immediately forecast how optimistic we can be about selling the product in the future. We can also figure out if the product’s retail price is right or not. This is our stage to practice on.”
“Crowdfunding is a pretty unique platform in that it’s a small marketing platform as well as a product forecasting platform. Its target audience is narrower and more particular.”
The Homey team landed on Indiegogo as their crowdfunding platform because they felt that, compared with other major platforms like Kickstarter, it provided more support for entrepreneurs. According to Hou, Indiegogo also promoted their project through the platform’s newsletter which was extremely helpful and led to a lot of attention. If you manage your campaign right and get the attention of the Indiegogo (or Kickstarter) team, you could be in a highly effective crowdfunding spotlight. “We’ve also just really hit it off with the Indiegogo team while collaborating with them,” says Hou.
ONLINE TOOLS & OVERCOMING TRUST ISSUES
When we asked the Homey team about which online tools they used to achieve their crowdfunding success, they explained that Facebook Ads, Mailchimp, and Google Ads were completely integral to their marketing effort. We tried a lot of different channels,” says Christian Knipfer, director of Marketing for Homey, “Facebook, Google, Instagram, and the support of various media outlets,” all played a role in getting the word out about the campaign.
It’s important to be diverse in the tools that you use to promote your project; the more buzz there is about a campaign, the more successful it will be. As you may have guessed, ads require investment, and while this may bite into your initial production budget, it’s worth it in the long run if you have a successful campaign. As they say, it takes money to make money.
While the Homey team was utilizing a variety of online tools to promote their campaign, that is not to say that they did not face some significant challenges. “Whether doing Facebook or Google advertising, the problem we faced is that when people see this is a crowdfunding project, they’re less willing to take the risk,” says Hou. “There’s always the risk of delayed production or not being able to get the product out at all. The question is, how can we get people to trust our product and our team? That’s the biggest challenge.”
How do you overcome the ultimate trust challenge of crowdfunding?
According to Hou, the key is to be really clear about how you position your product. Know what your customers’ doubts really are, be truly honest about those possible weaknesses, and be sure to provide answers to all of those doubts. “You have to have excellent communication with customers, because they represent your market. Their expectations of your team and suggestions for the product are extremely valuable, since they amount to testing out your own capabilities in a small market,” says Hou.
Be really clear about how you position your product. Know what your customers’ doubts really are, be truly honest about those possible weaknesses, and be sure to provide answers to all of those doubts.
What Hou seems to suggest is that crowdfunding offers the perfect opportunity for gauging how your product will fair in the consumer market. But because your campaign naturally lends itself to a period of uncertainty, it’s important to let your customers know that you are not abandoning them at any point. Constant and clear communication is crucial to your crowdfunding success, and can be easily realized through weekly updates and social media posts. As long as people know that you are engaged in continuously improving your product, they will feel comfortable in backing your campaign.
THE TAKEAWAY
Ultimately, your crowdfunding backers are supporting you with money, and therefore it’s important not to let them down. “Taking responsibility is the most important thing,” explains Hou. Crowdfunding is an amazing opportunity to address possible issues with your product, and to better understand the audience who you hope your product will reach. During this period, being an active and communicative marketer is everything.
People always say that crowdfunding is a full-time job. It takes many hours, hard work and a bit of faith too. At the end of the day, if you play your cards right and keep at it, you could achieve superstar success like PowerUp.
