Contributed by Melanie Adamson, OEN Marketing Committee Volunteer
In a packed house at Backspace during the January OEN PubTalk™ on Crowdfunding, two speakers, Ben Jacobsen from Jacobsen Salt Co. and Casey Hopkins from Elevation Lab, told participants that they had nothing to lose by choosing to raise funding for their projects on Kickstarter. Kickstarter, for both entrepreneurs, was the online crowdfunding platform of choice because it has the largest audience.
Not to be confused with crowdsourcing, crowdfunding is an organized way to pull funding for your company/project from friends, colleagues and general investors without giving up equity in your company. Usually done online, the rewards for the investors are incentives in your product. For example, Jacobsen offered salt, packaging and embroidered hats to his investors after he raised $30,000.
What Hopkins found was that Kickstarter allowed him to raise money to fulfill his first-generation product without maxing out his credit cards. In his case, he raised over $1 MM to manufacture his iPhone charging station. Hopkins advises that hardware companies are more likely to be funded than software companies, and both entrepreneurs said the platform also favors consumer products. One audience member commented that he’s used crowdfunding with companies as a marketing technique to get customer feedback and iterate the product on a mass scale.
More keys to success as told by Jacobsen and Hopkins are to know your story before you start your campaign. Before starting their fund campaign, each entrepreneur created a compelling video to raise visibility to the Kickstarter audience (see the videos created by Elevation Lab and Jacobsen Salt Co. in their 2011 and 2012 campaigns). Jacobsen used video experts to help craft his story, and reached out to local media before the campaign started to raise awareness among media.
Many questions from the audience focused around networking and marketing. It became apparent from the discussion among the speakers that existing networks and proactive media outreached helped to tell the story and raise awareness for both these companies.
Once the money was coming in, that meant Jacobsen and Hopkins needed to fulfill their orders. For Elevation Labs there was a delay in getting shipping because it was hard to scale. “We needed to have some thick skin to manage all the people and the orders,” Casey Hopkins said. Elevation Lab now has more than 12,000 customers in more than 100 countries around the world.
Jacobsen said after raising money for Jacobsen Salt Co., shipping their rewards to investors left them net positive with a product they would have never seen otherwise.
After hearing real stories and experience from the frontlines, the audience was excited about the potential of starting a crowdfunded campaign.