Pebble redefines the fine art of business funding
Today was the last day for Pebble’s Kickstarter campaign to raise money for its new Pebble Time model. We covered this when the company launched the fundraising round in January, which aside from doubling the amount of money obtained in the previous round, has established itself as the absolute record for crowdfunding (Pebble’s previous campaign was for many months the record holder).
More than 20 million dollars. Just say that slowly: twen-ty- mil-lion dol-lars. An amount that doesn’t make Pebble the leader in any catetory, after all the smartwatch category is monopolized at the moment by a company that has yet to put its product on the market, but that has prepared the launch of a five-million run that will doubtless prove a success, but that has established Eric Migicovsky as somebody who truly understands how crowdfunding works and how sites like Kickstarter function.
Pebble didn’t really need crowdfunding to bring its second model (or third if you include Pebble Steel, which was the same as the first but in a steel case). Sales of its previous model, which signaled to many other companies that now was the time to enter the smartwatch market, qualified it to obtain distribution agreements with minority chains, as well as positioning it in the market, based on the less is more principle, and at a price that really set it apart from Apple.
But the company opted again for collective financing, and has managed to persuade some 100,000 people to pay up front for their watch. Okay, 100,000 watches is nothing compared to the five million Apple has planned for the coming weeks, but they are sufficient for a small company with limited resources to carve a place for itself in the market. And above all, it shows a use of crowdfunding that, even though in some ways it goes against the norms that Kickstarter’s founders established, validates this kind of project, giving the company an opportunity not just to sell their product but also to generate considerable, and valuable, visibility.
The videos of the first and second Pebble Kickstarter campaign should be studied at every business school on the planet. The way it displayed its product, the chance to see the people behind it, the clarity and simplicity of the approach has persuaded a great many people to put their hands in their pockets and hand over between 160 dollars and up to 250 dollars for a product that has inspired them. This is no mean feat: ask any startup that makes things, and that could serve as a model for projects of all kinds: you don’t need to be a startup, you don’t have to be small or unknown… you just need to have a project that is able to inspire the right number of people and whose success can be built on collective support.
No doubt about it: Eric Migicovsky and Pebble can teach us a great deal. And unless I am very much mistaken, this could well be the beginning of a new approach to crowdfunding that many others are going to follow.
(En español, aquí)
