What are the crowdfunding mistakes, which you should avoid? -Kiddo’s case
Building your own hardware is not the easiest process. It requires being patient, well-prepared and able to give it 120% of your time. Last year we ran a crowdfunding campaign of one of our products — Kiddo and here is what we have learned.
We started to think about it in August 2014. The whole idea was to protect children and provide them with a more efficient way to stay safe during trips with their parents or their teachers. We wanted to build something which wouldn’t limit anybody but would provide a reliable service which assures parents that their children are safe.
How to pack this piece of advanced technology?
We wanted to design a bracelet which people would like to wear. Its design had to be timeless and unisex. Bracelets can be worn by kids, parents or other guardians and they have to fit them and make them feel comfortable. As you can see, it wasn’t the easiest job to do. Eventually, the design has to convince our future customers that they want to wear and use Kiddo.
Next, we prepared our whole communication strategy about Kiddo. We contacted influencers in Poland, Europe and around the world. We prepared all needed media for our campaign and created an explainer video about Kiddo. That’s how the whole period of building Kiddo looked like:
Then our campaign didn’t meet the goal.
It wasn’t the easiest situation. We received a lot of positive feedback about Kiddo before the campaign and that’s what made us start to think that when we were preparing for the campaign, we made several mistakes.
We have wrongly set and calculated shipping costs and Indiegogo does not allow for an easy change
Kiddo isn’t dedicated only for the Polish market. We wanted to sell it globally and ship it around the world. Here is where shipping costs grow dramatically. For example, when we want to take maximum care of the quality of each bracelet and assemble it in Poland and then ship it to the USA — shipping is extremely costly. That’s why we firstly set quite high shipping costs. Then our backers informed us, that we should change it. Here is another problem which occurred during the process — Indiegogo does not allow you to easily change shipping cost, you have to set a new perk and hide the old ones. Obviously, when you want to make people trust you, you need to have everything well-prepared. That’s why we consider this point as our fault, but it would be nice to see that Indiegogo would extend settings of the shipping price in the future. Maybe adding options like “normal shipping” and “international” would allow start-ups to better adjust prices of the shipping.
Our goal was not realistic
This was the moment, which opened our eyes and made us consider crowdfunding in a completely new way. Building a product from scratch requires a big amount of money. In Kiddo’s case, we needed to pay for the preparation of the prototype. We had to develop the system and the mobile app, then produce the whole thing, pass the process of certification and pay for the logistics. That’s why we set our goal for $650,000 because we didn’t want to go bankrupt or to make a low-quality product, which won’t meet our customers’ expectations. We needed money to develop Kiddo and that’s why we decided to crowdfund the idea. Well, we didn’t exactly understand what is the reason why companies start their campaigns nowadays. People are no longer interested in buying products which will be shipped in 6 to 9 months. Today, consumers consider Kickstarter or Indiegogo as a normal shop like Amazon, but with ‘weirder’, more modern and surprising products than usually.
In the past, it seemed natural to pay for a product, wait until the whole process of production ends and then receive it. However, when some users don’t get what they funded, they tend to prefer spending their money on some short-term deals, which have bigger possibilities to succeed. That’s how the era of campaigns with low goals started. You should use a crowdfunding campaign as a way to meet your new clients and that’s what we hadn’t known before. You should.
Kits were quite expensive
Designing a completely new device, which will participate in the creation of the vision of the future of wearables isn’t easy. It usually requires a lot of cash and it automatically makes the price of the final device higher. So when we were planning our pricing strategy we find a compromise between the whole finance strategy and a number of devices which we would like to produce at this stage. As you may guess, this old approach is not working because of the reasons mentioned above.
In conclusion
Kiddo’s campaign was a tough and valuable lesson for us. We have not only improved our project and our approach to it but also learned about the “backstage” of crowdfunding world. Kiddo isn’t dead and will be developed in the future. This failure helped us to be more pragmatic about our project and have a more reliable approach to the whole start-up world. So after all, it was worth it and we hope that this short piece would help you to avoid our mistakes!
Do you want read more about crowdfunding?
Read: The Problem of today’s Hardware Crowdfunding — Pebble, Skully and Coolest Cooler case
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