#351 – Leveraging Kickstarter and Indiegogo: A Blueprint for Amazon Sellers

#351 - Leveraging Kickstarter and Indiegogo: A Blueprint for Amazon Sellers Speaker 1: Welcome to episode 351 of the AM-PM Podcast. This week, my guest is Khiersten Ross and we're talking about everything crowdfunding. That's right, launching on Kickstarter, Indiegogo, whether you've got a new product idea or your existing product and you just want to expand your audience and expand off of Amazon and create some additional exposure or some additional revenue. We talk about the pros and cons and why you should or maybe you shouldn't actually go to crowdfunding. And don't forget this summer, I'm debuting the Billion Dollar Sellers newsletter. It's 100% free for listeners of this podcast. So be sure to go to BillionDollarSellers.com and put in your email address and name to get on the beta list so you can be one of the first to get this brand new newsletter. It's gonna be chock full of advice and tips and strategies and hacks for e-com and Amazon sellers. BillionDollarSellers.com. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Here's your host, Kevin King. Speaker 1: Khiersten Ross, welcome to the AM-PM Podcast. It's great to have you here. Speaker 2: Kevin, I'm so pumped to be here as well. I love AM-PM and everything you guys are doing, so. Speaker 1: I appreciate that. I think we've known each other, we met a long time ago, it seems, like back, like what, 20, maybe 2016, 2017, something like that? Was it an amazing conference or was it one of Ryan Moran's capitalism? Speaker 2: I think it was one of the CapCon. Speaker 1: Okay. Yeah. One of the CapCons. That's, that's right. I remember you talking back then about Kickstarter and like everybody needs to be looking at Kickstarter. And I'm like, yeah, I tried Indiegogo. I tried Kickstarter. It didn't work for me. Like, well, you're just doing it wrong. You gotta, you gotta do it right. And, and, and we talked and I think you gave me some good pointers, but you're known as the, Crowdfunding experts out there. I mean, that's what you've carved out a niche and specialize in. Before you started doing that, we'll backtrack this a little bit. Before you started doing that, did you have other experience in e-commerce or did you just get into this because you had your own project and you launched it and you kind of were figuring it out? Or what's your background before becoming the Kickstarter expert? Speaker 2: Yeah, fully 100% self-taught. So before, really like 2015 is when I got into crowdfunding. And that was because I was open for projects, trying to figure out my consulting business back at the time. And I ended up meeting the founder of a product that wanted to go crowdfund it. And at the time, I didn't know anything about Kickstarter, Indiegogo. And I was like, well, how hard can this be to launch something online? And that product launch turned into like a huge disaster. And we ended up relaunching that product after it failed. And that second product launch for the same product ended up going viral. We raised like $600,000 in one month. 5,000 customers. And from that, that really started the conversation with a ton of other brands around the Toronto area for other startups that wanted to figure out the Kickstarter thing. So I essentially, from the fluke of one project, quickly learned how to do digital marketing around product launches and created a career for myself doing it over and over and over again. Speaker 1: So were you doing something, you said you're a consulting company, you just started a consulting company or were you doing, did you have a background in retail or e-commerce or marketing? Speaker 2: Yeah, so before crowdfunding I had, the only experience I had online was what I was learning to build my own consulting company. So I was just like, I was very new to the online space back in 2015. But I learned quickly. But before that, one thing that was really great about the experience I had was within university, I actually ran a contracting company. It was a student house painting company. And from that point, that's where I learned how to do marketing and sales. How I learned to start a company from zero and take that to six figures. And I ended up like applying that to help other small businesses start from zero and quickly scale. And so I learned a consulting framework to help small businesses really start from zero, which is why I think when we got into the Kickstarter world, that's literally starting a company. And I was able to take that consulting framework to help people actually take a product What I had to learn at the time in 2015-2016 was digital marketing because my expertise up until that point had really been offline sales and marketing and business development. It's a pretty cool transition into that space. Speaker 1: You said you're based in Toronto, right, in Canada? Speaker 2: I am. Unknown Speaker: The cold north. Speaker 1: The cold north. I'm down in Austin, so that's the cold north for me. Speaker 2: Yeah. Speaker 1: So when you did this first project and it was a learn by the seat of your pants kind of thing. Yeah. Fail hard and then succeed well. So what is it about Kickstarter? I mean, a lot of people have heard this. There's some people that come out with a course every once in a while about launch your product on Kickstarter. If you don't have any money to launch on Amazon or Walmart or wherever, Do it on Kickstarter. Prove the concept. Kickstarter started I think around 2011 maybe? 2010? 2011? Because I remember when it first came out I looked at doing some stuff on it like before I even knew about this whole Amazon game. And it was them and Indiegogo were the two. And they still basically are the two main ones. And there's a big difference between those two. I remember Kickstarter being much more, having more requirements and being a little bit more formal and also having a much bigger audience. And then Indiegogo, a little bit more Wild West. And you know, even if you didn't, like on Kickstarter, if you didn't raise all the money, if you set your goal at 10,000 and you only raised 8,000, then you're basically, your project was dead. But on Indiegogo, I don't know if this is still the same. Back then it was, if you said my goal is 10,000, you raised 8,000, they would still pay you the 8,000. Speaker 2: That is still how Indiegogo does it. So whereas Kickstarter has an all or nothing funding model, like if you only raise eight, but you needed 10, that's a fail. With Indiegogo, before you launch your project, they give you the option for what kind of funding you want. So if you want fixed funding, that's the Kickstarter all or nothing. But if you want flexible funding, it means that if your goal is 10,000, you only raise eight, you still collect the money and kind of move on with that project. Speaker 1: We'll talk about the ins and outs and some of the tips and strategies in just a little bit, but just, I know that I tried to do a deal on Kickstarter for my Apple Watch charging stand back in 2015, I think it was, 2015. And I remember when I submitted it, I was already halfway through product development and Kickstarter actually rejected me. They said, we won't take you until you have a physical prototype. It actually can show us like pictures of actual, not just the CAD drawings and everything, but actually a physical prototype. But Indiegogo said, hey, no problem. You can come up right away. So I ended up going, I tried Kickstarter and it failed. And then I threw it, I think I might have even thrown it at the same time on Indiegogo. I can't remember if I threw it at the same time or if I did it afterwards. And I did a little bit better on Indiegogo, but neither one of them really worked for me. And I was trying everything in the world. One of the things that I realized then is that you can't, unless you get lucky and very lucky, you can't just go to Kickstarter without an audience. Or you've got to either have an audience that you've built up through, and we'll talk about some ways to do that, either through Facebook or through your own email list from something else you've done in the past to actually get this going. Because it's just like on Amazon, there's a honeymoon period. And then I was back then, I didn't have the audience. So I was trying to build something on Facebook and it was going really slow. And then I did a lot of like partnership trades with other people who had campaigns like, we'll trade your backers for our backers. And then I hired some PR company for some ridiculous amount of money that said they could get me in all the big publications and gadgets and all the different things. And that was a mess. And then there was some company, I don't know if they're still around now, I think they're based out of Utah, but it was like, They would fund your social media. So they would come in and they would, for like 35% of the gross sales, so if you did 10 grand, 100 grand, they would take 35,000 as their fee, but they would come in and they would pay for The social media. So they would take your product. If they thought your product could work, they would do some tests, spend, I think I had to pay like three grand or five grand upfront or something like that. And they would take that money and do some tests on Facebook through their system. Like, let's see if this works. And if it works, they're like, okay, this worked. We can scale this. We will scale this for you. We will pay for it. We will manage it and we'll help you go. So, and that didn't, that didn't work either. So it was a, it was a mess. So, and then I remember, Kickstarter came around, there's people that there's, I don't think they do it anymore, I think they banned it, but people were just going to Alibaba and finding a product that already existed on Alibaba, changing it up a little bit, and then launching it as quote unquote new product on Kickstarter. And that was, someone even taught a course on that at one point, and I think that has pretty much gone away now. So it's been an interesting, interesting, Deal. But I know I've heard, I hear lots of people that have great success on it. Speaker 2: Yeah. Speaker 1: Um, it's so what, what, where's the state right now of crowdfunding and in 2023, uh, we're talking about my experience was seven, eight years ago. So, uh, I really can't talk about where it's at now, but you're the one that can talk about that. So where are we at right now? Speaker 2: Yeah. It's so interesting as you're going through the evolution of Kickstarter and Indiegogo, because they've, I mean, what it was in 2008 when it launched to 2011 with the infamous potato salad recipe that went viral to 2015 to Alibaba in 2020. Super interesting. But what is interesting now is that I spent the first, really from 2015 to 2020, 100% like, everyone should do Kickstarter. And as we started to see the, I guess, online space change a little bit from people grabbing products off Alibaba to supply chain problems to Kickstarter's popularity. Kickstarter is the biggest crowdfunding platform in the world. When I say Kickstarter, I'm talking about a blanket statement for crowdfunding like Indiegogo and Kickstarter. Kickstarter is such a popular platform that it got to the point where even today in 2023, there is so much competition for eyes. And Kickstarter, as you mentioned, you alluded to earlier, where you can't really go to Kickstarter without an audience anymore. And I actually went public about 18 months ago to say that I don't recommend Kickstarter for 9 out of 10 people anymore, which is a huge change to go from it being 100% my career to actually actively telling people they should not be doing Kickstarter. But I want to go into why I've made that choice. As of 2023, because Kickstarter is so popular, when you look at what it takes for a new product to do well on Kickstarter, Kickstarter makes their money off of every dollar that you raise on their platform, which means that you need to already have some traction and some success on Kickstarter Before they start to boost you and make you easier to see and start to like go viral on their platform, it's like upvotes on Reddit, sort of. The more popular you are, the easier you are to find and the more products you're selling with their community. But the barrier to entry has become so high on Kickstarter because there's so many people fighting for attention that you need essentially a bigger audience to go into Kickstarter to set yourself up for success. A bigger audience means if you're starting from zero, you're just starting to grow your social media, your email list, the bigger the audience you need, the more money you need to put in to build that audience in marketing before you even go live on Kickstarter. And once you go live on Kickstarter, at that point, you're hoping to go viral so that you can start to make up some of those costs. So when you look at the essentially how much a brand or somebody has to put into doing a Kickstarter campaign to raise six figures, $100,000, if you're starting from zero with no audience, you're looking at putting in a minimum $30,000 to $40,000 into that campaign to raise $100,000. Speaker 1: That's without an audience, if you don't have an audience already. Speaker 2: No audience. Yeah. Literally 30 to 40,000 and a breakdown of where that money goes. That doesn't include inventory. That doesn't include molding. That doesn't include operational costs that you'd need after the campaign to keep going, to pay yourself, invest in more inventory. No, that includes literally your video that you put into the campaign. It includes building your audience. It includes ads during your Kickstarter campaign. And it doesn't even include if you're like hiring a marketing agency or a team to help you actually do this product launch. So when you look at the upfront investment that a company needs to put into doing a Kickstarter campaign, Then I think that it was really important to go public with that information so that business owners can make an informed choice as to whether they actually want to put that into a Kickstarter campaign. Because the difference between like, You have two choices. You can go to Amazon with your product and launch it. You can launch on your own Shopify website. Or you do a big market launch like a Kickstarter campaign. And the people that typically are willing to pay that price are going to be well-funded startups. I'm all about existing brands. So if you are already selling on your own website or you already have an email list, going to Kickstarter is not going to be as upfront of an investment for you because you already have the audience that you need to go into that. So who goes to Kickstarter and who can benefit from Kickstarter? It's just, I think that Kickstarter is still a great platform, I guess a fit to go to Kickstarter and be happy with the yield they get from that is just a narrower playing field in 2023. Speaker 1: That's good information. And I know some of the, one of the tricks on Kickstarter is if, like you said, if you need to raise 100,000, you don't actually want to put that I need 100,000. You want to put something much lower, like put something, we're raising 10,000 or something crazy low. So that way you hopefully, especially if you have your own list, within a matter of hours of launching, if you have your own list, you've hit that goal and it provides social proof. And then that trips the algorithm a little bit on Kickstarter. That actually gets social proof for other people. Like, what am I missing out on here? This thing funded in two hours is already 300% over. This must be a cool thing. What are some other little strategies like that or talk a little bit about that one or some other little strategies like that that people need to think about when they're first getting going? Speaker 2: Yeah, so you alluded really well to it where your Kickstarter campaign is front-loaded. So the amount that you raise is public, meaning, you know, number one, set your goal low so that you hit it quickly. Another thing that I see brands who aren't well-versed in how to do a product launch well, they really don't understand the level of urgency that you need to get those pledges in, like the second after you press live. So another thing you could be doing when you're going in with an audience is you can have You can have two kinds of people on your list. You can have your VIP list, which are those that have specifically opted in to learn more about this product. They're like the diehards. They are ready to buy this product. And then you have just your general list. So if I am a Shopify seller that's already been selling journals for a while, I'm going to have like a main customer list. And a main email list, but then from that segment and from my marketing, I'm going to have like a small segment of that list that specifically is interested in the new product. So I would want to create like a strategy with those VIPs to get them backing early with like, maybe you do something like the first 50 people get a crazy discount or the first 50 people get a free accessory. You want to look at the offer you have to incentivize your list and to incentivize really your audience to take action quickly. And not only doing that with a good offer, but a good story around why you do need them to back immediately. Because a lot of people who learn about Kickstarter is that if you don't educate your audience on like, this is why we need you to act Today, immediately, then they're going to look at your timeframe and say, oh, well, I have a whole month to figure out if I want this product. And there's not going to be anything really incentivizing that person to buy today. So you want to wrap the offer and the story in with the action that you want your audience to take, which is like, buy this as soon as possible. You need that. We need that pledge today so that we can start to get picked up by Kickstarter. Speaker 1: So there's different levels. You can add, I don't know what the maximum is, but you can have different levels of packages, like you said. So like you can say, the first 50 people get it, you know, if your product is going to be a hundred bucks, the first people get it for $59.95 and they get two free accessories worth another $50 or something crazy like that. Even if you just break even on those first 50, just to get the ball rolling, And then you have a next level is, all right, the next from 51 to buyers, 51 to a hundred, you know, maybe the price goes up 10 bucks and they don't get the free accessory or, and it keeps scaling up, you know, the more it goes or something like that. What's an ideal, what's a good, I know it varies by product, but what's a, just a general kind of rule of thumb. You should have three different levels, five different levels, or what's some rules of thumbs around those different levels of buy-in of pledges? Speaker 2: The less, the better. The average that I recommend is four to six with that. Because if you have, say, 12 reward levels, think of the person scrolling through your page getting decision paralysis. They're like, oh no, which one do I want? So if you can limit the number of choices they have, it's going to make it easier for them to make a buying decision. Speaker 1: What about, you know, there's some projects that actually raise the money and Kickstarter pays, when do they pay, after you complete, you know, you set it for 30 days or whatever, and you've raised your, let's say you met your goal or exceeded your goal, and then Kickstarter takes a percentage for the credit card fees and then they take their cut, which is roughly what, about 10%, something like that, five, 10%? Speaker 2: It's 5% and then about 3% or 4% for credit card processing. Speaker 1: So roughly 10% roughly total that they're going to take out of whatever you raised. Then do they, how quickly do they pay that? Do they send that to you? Speaker 2: So how it works is say your campaign ends today. They have a seven day window where they're now chasing any canceled or sorry, any payments. So Kickstarter will essentially, when someone pledges during your project, a pledge means they're ordering. If someone ordered last week, Kickstarter is actually putting a hold in that amount on the card, but they're not actually charging the person's credit card until the campaign finishes. Speaker 1: But they just authorize it. They just do a pre-authorization. Speaker 2: Basically, yeah. Speaker 1: And some of those pre-authorizations, because they don't stay on, if someone did it early on, they fall off, so they got to charge the credit card again, and sometimes maybe the credit card doesn't have the balance or whatever to accept the charge. Speaker 2: Exactly. So when the campaign finishes, assuming it's successfully funded, Kickstarter mass charges any backer that has pledged the campaign. There's always 5, 6, 7% of credit cards that get declined. So Kickstarter has a window of seven days after the campaign to be chasing up those payments. They pay out money in your bank account between 14 and 21 days after the campaign ends. Speaker 1: Okay, and then I've done camp I've been a buyer on Kickstarter of campaigns of Several actually and some of them. I never see the product And I have one right now that I bought in 2017 I still don't have the product They're sending me updates. It's a scale. It's a really cool technology. It's a scale that you stand on and it does a 360, it goes 360 degrees around you. It has like a little arm. It goes 360 degrees around you and it determines how much body fat you have and your bone density. It's like going to one of these professional DEXA scan, D-E-X-A, DEXA scan places for athletes and stuff you use. It's really cool, but I just keep getting updates. We're changing it. We're working it. They'll send pictures of, here's the first 20 units from the factory coming off the line. We get beta testers. This has been six, seven years and I still don't have the product. There is no recourse. It's been so long there. I can't charge it back. I can't do anything. I just got to cross my fingers and pray that eventually I'll get this thing and it's as cool as it looks. That seems to happen a lot on Kickstarter. I would think that Kickstarter, people get in, they have a cool idea. And then they don't realize how long it takes for manufacturing or how long, you know, they're in way over their head. I know there's companies that have popped up to actually help with that process. But that seems to happen a lot. And I would think that would scare a lot of potential backers and pledgers. Speaker 2: Yes. That's another reason why And I would love to see how Kickstarter in the future is going to be mitigating this. Like they're already doing that by you have to apply to get your project on Kickstarter and approved, and you have to prove that you have a prototype. And there's, you know, education out there now to help make sure that people are crowdfunding at the right time in their development. But you're right, you not getting the product or the product being delayed at all is the norm, not the exception with Kickstarter. Speaker 1: How do they have these Kickstarter diehards? They just figure they're just not going to get half of what they order? Or is it just bringing in fresh blood when you have your own list that maybe is already trusting you? I don't understand how there's got to be a big problem there. How Kickstarter maintains being such a big platform? Speaker 2: Yeah, when you look at the amount of backers, I think the stats were about 20 or 25% of all Kickstarter backers, they come back and pledge multiple campaigns. I don't have the stats for a breakdown of people who back more than one campaign, but super backers out there, they either need to get smart with how they shop on Kickstarter to know what to look for in terms of digging into how far along in development this company is before ordering, or they just kind of lose faith and wait until the products are in market with that. But Kickstarter, like just based on me personally knowing a lot of people who have I've backed several projects on Kickstarter. The consensus with them are like, they're just kind of over it and they will only back projects that they know are like almost ready to go or projects where it's an existing brand that already has supply chain figured out launching a new product. Like they're just, they're smarter with it. But I feel that Kickstarter has definitely lost a lot of backer trust because they like legally There's nothing they can do and they're not liable for projects that don't deliver and it's in the fine print all over Kickstarter when you go to make a pledge that you as a backer are taking a risk and there's no guarantee you can get your product. It's just we as backers want to help startups. We like cool products that we can't get anywhere else. And that's really what gets some people to hopefully like keep hope and shop on Kickstarter. Speaker 1: So there's no charge. So if there's so as a seller, if for some reason something goes wrong, you know, I have a cool product and all of a sudden, you know, I get cancer or something and I I'm sidetracked and I can't finish my product. They're not going to come. Kickstarter doesn't come and try to take that money back from me because I didn't deliver from chargebacks or from whatever. Speaker 2: No, the time, the one thing that I think that there is a case against the seller is if there's actual fraud that's happened. Someone makes up a product, they raise a ton of money on Kickstarter and they run away with that money. That is fraud and that could be something if backers can organize themselves, I'm sure there is a case in court for that. But as the project creator on Kickstarter, if you do everything in your power to deliver the product and it's not viable or you can't do it or you die or something like that, that's just kind of it. Speaker 1: Okay. So Kickstarter, there's no, Kickstarter basically has no risk at all. It's the buyers, like you said, it's the buyers, the pledgers, the buyers taking all the risk. Speaker 2: Oh, I do think that Kickstarter's brand takes a risk because if they let anything on and a whole bunch of fraud happens on their platform, consumers lose trust in their ability to shop with that platform. So I think there's secondary risks, but there's not direct risks where I can go sue Kickstarter because I didn't get my journal from five years ago. Speaker 1: So if I'm thinking about doing Kickstarter, because you can raise a lot of money really quickly on there to help your project. And some people I know, they don't even look at it as trying to raise money to fund their project instead of getting You know, a rich uncle to give you the money, they use Kickstarter. Others use it just as a marketing vehicle. They're like, we don't need Kickstarter. You know, we're an established company. We're just going to launch it here just to get the buzz and the marketing and get people sharing it around Facebook. And we know we're going to make our money selling it later on on Amazon or our own website or in stores or whatever. What are some of the things that Kickstarter requires before you can go live? Like you said, you mentioned like a prototype or they Do they do like a credit check on you to make sure you're a valid business or what are some of the basic things that you need to have before they're going to green light you to actually launch? Speaker 2: So you want to have a prototype. Not only that, but they will follow up if they aren't convinced in your ability to produce the product based on you submitting your project for approval. When you submit your project for approval, what that means is you've uploaded your campaign video, which is your product commercial, and your page, which is your sales page with all your product information on it, with how you want to convey it, your production, etc. If they look at that page and they're like, I don't know what these look like renders. I don't know if you actually have manufacturing. We need more information or we need more proof that your product is in fact waterproof. They're going to come back to you and ask for proof for that before you're able to launch on the platform. So in terms of Things that you need. You need to be able to back up that you're not only able to produce your product with a prototype, maybe a purchase order with a manufacturer, but have video and be able to produce proof that your product does what it says you will do. This is especially important if you are making any claims or have any new technology. You need to be able to prove that, not with an animated video, like something on your cell phone where you're like, look, I'm showing this product, do the thing that I say it can do. So your proof stack, I guess, super important. You also need to make sure that you are able to, like you have a registered business in the country that you want to do business in. So Kickstarter has a list of countries it does not operate in. And if you are in one of those countries and you want to operate within the U.S. to launch your company in the U.S. that you do need to have A bank account in that country, like the U.S., and you do need proof of business and address in the U.S. as well. So they don't necessarily do like credit checks as far as I know, but they do verification to prove that you are doing business or will be able to do business and set up in the country that you're allowed to do that. So like typically it's going to be sellers coming into the U.S. I just remember this, make sure that you're not selling something in their prohibited list of items. So like guns, tobacco, things like that. They have a list of substances and product categories that you cannot launch in. Make sure you read those rules, but that's it. Speaker 1: And does the product have to be brand new? Does it have to be like a new invention or a new idea, or can it be just some modification of something that already exists? Speaker 2: Modification on something that already exists. So we mentioned Alibaba earlier. The difference between a product that's okay on Kickstarter versus not is if I source a product on Alibaba and put my logo on it, it's pure white label, private label, whatever, and I launch it on Kickstarter. If someone can get exactly the same thing on Alibaba, it's not allowed. But if I source a product on Alibaba and I make adjustments to it to improve it, maybe it's like a new double-walled thermos that keeps my drinks cold for up to 48 hours and I've like changed the technology or I've changed like some version of it so that it is unique in that moment, that is a viable Kickstarter product. Speaker 1: Okay. And what about, you talked earlier about your listing, you have a video and stuff on there and explain the product. What are some of the key components to having a successfully converting listing? Unknown Speaker: Speak to your customer. Speaker 2: So whenever I audit Kickstarter pages, because I get people a lot that come to me and they're like, hey, I'm live on Kickstarter, but like we're failing. I don't know what's wrong. And I'll take one look at their page and right dead center at the top of the listing, they make the listing and the product about them. Unknown Speaker: Hi, my name is Bethany. We're trying to raise money for blah, blah, blah, so that we can fund this prototype. You can't make the story about you. You need to essentially flip it and treat this like a real product listing. So you want to focus on the main benefit that your product brings your customer and focus on that and make sure that you know who you're speaking to and why people will buy your product. That's like the main mistake I see people make is you are selling a product. You're not selling your story about why people need to fund you. Speaker 1: Yeah, that's what a lot of people, and you see that even on Shark Tank or someone's on Shark Tank and all the guys are, or in your case, Dragon's Den in Canada, they're saying, no, we're not going to invest. And the person just starts, you know, tearing up and saying, oh, I've put six years of my life in this and we've leveraged our house and trying to get this whole sob story. And that's what I see a lot of. A lot of people do is they do it in commercials too. You hear commercials on the radio and they're reading a commercial and it's about them. It's not about you. They're using the word we or our technology or our restaurant is considered the best. It's not about that. It's about you and them. And so that's a big switch. But people always say your brand needs a story. So they're like, what's the story of your brand? So people are always like, how'd you get into this? Or so how do you incorporate a little bit of that personality, a little bit of that, because people will identify sometimes with that, then flip that to actually be about the buyer and what problems it's going to solve. Speaker 2: Let's give an example. There's a product we launched called the JAMstack. Speaker 1: The JAMstack? Speaker 2: JAMstack. It is an electric guitar amplifier. Basically, it's a small Bluetooth speaker that connects to the bottom of your guitar so you can play wherever you want without amps or cables or expensive equipment. And there's two ways to present this product on Kickstarter. We can do the about me, which is, hi guys, my name's Chris. I've developed this really cool thing. We need $50,000 to bring it to market. Please, please help us out. That's like scenario one. Scenario two is, Hey, how would you like to be able to play your electric guitar wherever you want without needing to bring your bulky amps, equipment, et cetera? And all you need is to clip this thing to the bottom of your guitar and go play wherever you want. Right? Hey guys, my name's Chris. As a frustrated electric guitar player, I was tired of lugging around expensive equipment to my friend's house so I can play with them on Fridays. That's why I created the Jamstack to help other guitar players to be able to have freedom to play wherever they want. That's why we brought this product to market. So there's a big shift between those two because one is just like, hey, we really need you to help us versus one is incorporating why this product, like why somebody should, a guitar player should care about this product, what they can do with this product. And we've shared the story. To relate to the consumer where like Chris was a frustrated guitar player and use that as a story to come through like I was frustrated so I designed this thing. It's changed my life. I want you to be a part of this now. Speaker 1: That was a really good example. That was a really good example. I want everybody who's listening to this to rewind and go back and listen to what she just said again, no matter whether you're doing Kickstarter or anything else out there. The way Khiersten just showed you that is a very, very good example of what most people miss. Unknown Speaker: Thank you. Speaker 2: Lots of practice over here. Speaker 1: Good job. Speaker 2: That's ultimately, because we can get into the nuance of how long your page should be and what sections should be on the page, but honestly, if you can nail the story and what's in it for your customer and be able to relay it in their terms, you're going to be successful. Speaker 1: What about when I launched using these, there's, I don't know if they still exist, but when I was playing with it, there were services that would, they would go on and try to mess with the algorithm. They would, you would pay some guys in Bangladesh or something, and they would go on and like, you know, click on things and look at things and like try to trick the algorithms. And they would say, we'll get you from page six to page, we guarantee to page two or something like that. Those things still exist. And are they even worth messing with? Speaker 2: They still exist. I wouldn't mess with them. If you're going to mess with any cheap service like that, I think it's good to get someone to try to share your campaign in Facebook groups and on Reddit and stuff like that. But anything where you're trying to mess with the algorithm with likes and scrolls, a Kickstarter's algorithm doesn't really work that way because they work based on Like, dollars in and percentage raised. So, you need to focus on getting people to your page and generally speaking, like, I think you're throwing out your money by working with, like, those random people that approach you, honestly, so. Speaker 1: Like on Amazon, people call it the honeymoon period. It's like the first, this is a debate, the first 30 to 45 days your listing goes up. Amazon kind of gives you the benefit of the doubt and they kind of give you a little bit of extra love and you don't want to waste that. You mentioned earlier on Kickstarter that you really want to come out of the gate swinging, get those VIP customers to buy right away. What is the window? Is it like two or three days like you just need to or something like that to really juice that algorithm from the time you hit go live? You need to not be screwing around and you need to like send a lot of traffic. What's the little the short window that really makes a you seen make a huge difference for the people you work with and actually helping them As you said, to go viral, which basically means to get pushed up onto the first page or higher up in search results on Kickstarter. Speaker 2: With Kickstarter, it's like hours. It's super short. And when you look at like, okay, well, what should I aim for? With Kickstarter, if you have your, there's two goals that people have. You have your actual goal, which in this case, let's say I actually need to raise $100,000. But as we mentioned earlier, you're not gonna set your Kickstarter goal at 100,000 because it's gonna be so hard to hit in the first few hours. So you will put it in an artificial goal of say 10,000. So you have two goals. One is the Kickstarter goal of $10,000, but then there's what you actually need. So for you to trend to hit $100,000, what you need to do within the first one to two days is hit about 25 to 30% of your real goal of $100,000. Speaker 1: You need to go about two and a half times whatever you put your initial goal, not fake goal, that's the wrong word for it, but your starting goal. Speaker 2: Yeah. Speaker 1: You need about two and a half times that in the first couple of days to really have a chance to reach new eyeballs and get exposure to other people on the platform. Speaker 2: Yeah, that's typically the trend we see where like 25-30% within the first one to two days of what you're actually going for. Otherwise, you know, as the hours pass, that drastically, your chances of hitting that drastically reduce unless you go like viral randomly, which we can't control. Speaker 1: If I say I really need $100,000, that's what I really need to do my project, and I go in and I say I'm raising $10,000. I hit that really fast and I use my list and I get to $25,000, $30,000 really fast. It just doesn't take off with the general crowd because it's so niche or something. I only end up raising $60,000. Kickstarter is still going to pay me the $60,000 minus about 10% for their fees, so minus $6,000 minus about 5% you said, 5% to 7% of the credit cards aren't going to go. So I'm going to get somewhere in the neighborhood of $45,000 to $50,000 of the $60,000. I'm sitting here and I'm like, damn, I still don't have enough money. I still, you know, that's not just, you know, the factory has a minimum of 3,000 units or whatever and I can't, it's not enough money. What can I do? Can I relist the Kickstarter again or extend the date or am I like, I got to call my rich uncle or I go take it to Indiegogo and hopefully I can raise some money over there? What do I do? Speaker 2: So, let's assume that you've done your homework before the campaign and you've been smart. And you're smart. So you in the back of your head have a contingency plan where you know, okay, we've planned for my campaign falling short. So you have a choice to list on, you can't extend your Kickstarter once it's finished, but you can go over to Indiegogo and do an in-demand campaign, which means you're essentially using Indiegogo to do a ongoing pre-order campaign. So that's one thing you can do. You can... Speaker 1: Indiegogo, you can leave it up there indefinitely, right? It can almost be like a little storefront in a way. Speaker 2: Exactly. Speaker 1: Okay. But you can't do that on Kickstarter. It has to end. Okay. Speaker 2: It has to end. You can list on your own website and continue pre-orders, which regardless of how much you raise on Kickstarter, if you're moving ahead with your project, you should be going over to pre-orders immediately. So you keep selling. You might have investors on the back burner that you can take your Kickstarter to and say like, look, we sold 2,000 units. There's obviously traction with this product. We need you to help close the gap with this much funding. Or it's a rich uncle. But the goal is if you are doing a Kickstarter campaign, you want to have financial contingency plans just in case, because what you don't want to happen, and this is why most campaigns do not deliver on time, they fall short of their goal, they had no backup plan, and then they spend six or eight months scrambling to find capital to then start manufacturing. So you don't want to be in that position. Speaker 1: If you have actually a new idea and you've come up with some cool new, I don't know, dog bowl or something and some innovative new dog bowl that's just really, it cleans itself. I don't know. It's something crazy. It cleans itself, self-cleaning dog bowl. Self-cleaning and sanitizing dog bowl and you put that up on Kickstarter and it does well or even if it doesn't do well, there's a lot of manufacturers in China especially that are watching Kickstarter and going, that's a freaking cool idea. Look here, they just showed all these pictures. Let's just reverse engineer this and let's launch this. We can launch this before these guys even come out. That happens a lot. How do you, how do you, I mean, a lot. How do you protect yourself? I mean, I know you can, you can do IP, you can do a patent or provisional patent or design patents and, and that kind of stuff. But those take a year or two years to actually get To get follow through. So someone in China, they know this and there's nothing you can do to stop them until you get that actual patent. I mean, so even though you filed the patent and this is your idea for one to two years, people can knock you off legally and you can't stop them. So what are some strategies around that if you're really innovative and got something really cool? Speaker 2: Yeah, that's a great question. So this, no matter what you do, how protected you are, is going to happen to you. So here are some things you can do. You want to have your trademark filed. Ideally, you have it before you launch your product, but you're right. Do the patent pending and things you can do. Copyright any images that you have that you've put on your crowdfunding page so that, because if a company is going to rip you off, they're pulling your assets, your logo. And if you can do a watermark, copyright, et cetera, it's going to allow you to claim ownership of that and be the original. So that's one thing you want to do. Make sure that you're as far in development as possible. Because I think a classic example was the fidget spinner. Do you remember that campaign? Speaker 1: I don't remember the campaign, but I remember being in an EWU market in 2017 or 2018 and every freaking stall had a fidget spinner. Speaker 2: Yeah, so Fidget Spinner, I don't know the exact details of this, but what happened was they essentially went super viral as a crowdfunding campaign and then China or some other factory beats them to market and sells hundreds of thousands of these things and essentially beat, rode on Fidget Spinner's momentum and beat them to market because they had manufacturing capability. So make sure your window to fulfill product is as short as possible. And because if you can beat people to market and get your product in people's hands faster than anyone else, I know in theory is one thing, practice is another, but like, that's one thing you can do, which is like, you want to be as far along in the process when you're going to a launch like this. Inevitably, though, you will get copied. It's happened to us. We've been live with campaigns. We had an Indiegogo campaign live for these weighted bracelets that we were advertising. Two weeks into our Indiegogo campaign, they came to us and they were like, yeah, we're shutting you down because you're copying this other product in Japan. We were like, They're copying us. So we fixed it, figured it out, but we had to pull down this other Japanese crowdfunding campaign that took all of our assets and was riding the coattails of our success. So it happens, and you just kind of have to shut them down and just be on top of it. But there's nothing really you can do to stop people from stealing your IP and going after it. Speaker 1: What's like the general, do most Kickstarter campaigns, you know, if you say the average is 20, 25 grand, or is the average like 50, 100 grand? And then what have you seen the most be raised on Kickstarter, like into the millions or tens of millions? What's like a really crazy one? And then what's kind of more like the norm where it's a little bit more normal? Speaker 2: What is the, oh man, I actually don't know what the average is. I feel like we should look that up, but I know that the average raise will fall between 10 and 50,000, but we don't hear of those campaigns a lot. So the perception is that you go to Kickstarter to raise six, seven figures, but actually like the seven figure campaign is the 1%. Six figures is a little bit less. It's super hard to do those numbers. When you look at the crazy unicorn, I think it was 2022, Brandon Sanderson, the fantasy writer. Unknown Speaker: Are you familiar with his work? Speaker 2: So he, essentially, great story. He goes dormant during COVID for a couple of years. And he then, he does like a weekly post on his blog. And he put out a post a week before his Kickstarter. He tells no one about this Kickstarter campaign. Nobody but his team knows that he's doing this. He puts up a post, basically, with a video, basically looking like a drug dealer about to confess that he's gone off the rails during COVID. That's what it appeared like. He's like, hey guys, I'm really sorry. We've been quiet. I've got some bad news, big news I got to share with you tomorrow. So just watch my blog. And this guy's like hundreds of thousands of fans. And the next day he releases this video saying, guys, I've lied to you. I've been lying to you for two years. I wrote a book. I'm sorry. I lied. I wrote five books. And we're launching a Kickstarter tomorrow. Surprise. And he blows up the internet and raises $46 million, breaking the Kickstarter record. Speaker 1: Wow. Speaker 2: With his, like, sneak attack. And I think that Brandon Sanderson is one of the 1% of people with a rabid fanbase audience that consistently delivers over a decade that can do something like that. But it was, like, so amazing to see how he just, like, oh, and by the way, haha, new content and buy my books. Speaker 1: So launch and scale is your company. How do you guys work? Do you come on and take a percentage? Do you work for a flat fee? What do you do when someone wants to go to crowdfunding? What role do you guys play? Speaker 2: So we have a couple of ways to work with us. When somebody comes to me and is like, hey, where should I launch my product? And if we think that Kickstarter is viable, then we have marketing services to help either validate your product or completely manage your campaign, including like doing the video creative, social media, advertising, et cetera. And we do a base plus a percentage on the raise. I really like having skin in the game with the client, with the brand that we're working with, which is why we do that base and commission model. If we do a Shopify launch, we end up doing the same sort of thing where it is a base plus a commission. Speaker 1: Okay, so you're not just doing crowdfunding, you're also doing helping people launch their Shopify stores or WooCommerce or whatever it may be. Speaker 2: Exactly. So our specialty right now is helping that brand, like either a new seller or Amazon sellers, get established by launching and scaling their brand on either Kickstarter or Shopify. Speaker 1: Okay, cool. How would people reach out if they wanted to learn more about Launch & Scale? Speaker 2: Yeah, so the main place would be if you go to launchandscale.co. It's not .com, it's .co. It would be the best place, or you can stalk me on YouTube. We have hundreds of videos to help you on the topic, so that could also be a great place if you're wanting to learn a little more. Speaker 1: Anything else people should know about crowdfunding that we haven't covered? Speaker 2: Watch my video, Three Reasons I Think You Should Stop Using Kickstarter in 2023. Three Reasons Why I Think You Should Stop Using Kickstarter in 2023. That's on YouTube? It's on YouTube. Speaker 1: You can just Google that and find it. Khiersten, I really appreciate you coming on today and sharing. This has been very informative. I think a lot of people got quite a bit out of this and it's going to give them a lot of ideas to chew on and think about on what they want to do. Speaker 2: My pleasure. Happy to be here. Speaker 1: Crowdfunding can be a great option for some of us if you want to launch a new brand or maybe even extend your existing brand. Some great information from Khiersten in this episode. I hope you found it valuable. We'll be back again next week with another episode, but before I go, I just want to make sure you have your words of wisdom for this week. In your business, be sure you have no single point of failure, but at the same time, you should not have a single path to success. In your business, don't have a single point of failure and also never rely on a single path for your success. See you next week.