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October 23, 2019 | 5-minute read (867 words)
If you’re raising money for your startup via one of the crowdfunding platforms, you can sometimes feel like you’ll never hit your goal. But you can take inspiration from five founders who got their start by crowdfunding. Here are some of their pearls of wisdom that can help drive your success.
1. Palmer Luckey: Oculus Rift
Oculus Rift was acquired by Facebook for $2 billion in 2014, but the firm may not have experienced such a successful exit if it hadn’t raised money via Kickstarter. Founder Palmer Luckey originally posted his project on Kickstarter in 2012 and far exceeded the $250,000 funding goal, ultimately raising over $2.4 million on the platform.
But the funding was only one piece of the puzzle, Luckey found – in actuality, crowdfunding didn’t solve all of the issues that his startup faced, and only got him ready to prepare for an even more challenging part of entrepreneurship.
“Launching pre-orders is relatively easy compared to shipping a product,” Luckey told the Redwood Falls Gazette in 2016. “So it’s not like ‘What a weight off your shoulders!’, when in reality, taking pre-orders is the point where you are finally making an actual, solid commitment to when you’re going to ship, and how much you’re going to ship for, and you can’t stumble between when you do that and when you’re supposed to ship. It’s actually not a weight off of my shoulders at all.”
2. Andrew Thomas: SkyBell
When Andrew Thomas initially decided to raise money for his IoT video doorbell firm SkyBell, he turned to Indiegogo and ended up raising over $600,000. Enough investors were interested in answering their doorbells from their smartphones that they flocked to the product and buzz began to spread, with journalists clamoring to review the products in well-known magazines and websites.
Thomas believes that the free PR was a huge benefit of using crowdfunding to bring in cash for his business, but not the only benefit.
“Crowdfunding is incredibly important because you can raise the money you need without giving up any equity in the company, unlike if you were to raise a seed round of investment from an outside investor,” he told Forbes. “Crowdfunding is both a funding vehicle and a go-to-market. The ability to do both of those things makes it a very powerful option for any founder.”
3. Max Temkin: Cards Against Humanity
If you’ve ever played Cards Against Humanity, you can testify to the creativity that the game relies upon for its booming success. But just a decade ago, the game was just a thought in the minds of eight friends, who decided to use Kickstarter to bring their game to fruition. In 2010, the group launched their crowdfunding campaign, seeking $4,000 over a two-month period, and ended up raising over $15,000.
During its campaign, the company asked for frequent reviews from those who received the product, and made improvements along the way to ensure that it was market-ready by the time it was done fundraising, said co-founder Max Temkin.
Temkin offers the following advice for startups that are aiming to make their marks on the crowdfunding platform. “Be as audacious as possible and make it as excellent as possible,” he told Kickstarter during a case study about his business. “Make it the best possible version it can be … People want you to succeed, they'll believe in your belief.”
4. Jack Pochop: The Floating Record Vertical Turntable
The vinyl record trend shows no signs of slowing, and you might think no new innovations can come out of the category. But The Floating Record Vertical Turntable proved that theory wrong, raising more than $1.5 million on Kickstarter in 2015.
Not only did the campaign bring awareness to the product at the time, but it spurred ongoing interest in the item and helped its staffers make retail connections so it could get into stores like West Elm, said Marketing Director Jack Pochop.
“You would think that you get your 15 minutes and it’s over,” Pochop told the Chicago Tribune. “But it never fails to surprise me how many other outlets I haven’t heard of that reach out to us even two years later to profile it for Christmas or something like that.”
5. Jake Kassan: MVMT
Trendy watch brand MVMT sold to Movado for $300 million last year, marking a stunning exit for its two founders, who were still in their twenties. But back when the company started, it was actually rejected by Kickstarter – not once, but twice. So in 2013, its founders posted the project on Indiegogo, seeking $15,000. The firm far surpassed that goal, bringing in over $219,000 in less than two months.
Co-founder Jake Kassan says the company found that Indigogo had nuances that he hadn’t expected, having been more familiar with Kickstarter’s structure at the time. Future entrepreneurs should be aware of the differences.
“On Kickstarter, you make the most of your money in the first few days, but on Indiegogo, you actually make the most at the end of your campaign, so go for longer campaigns and extend if possible,” he told Yotpo.