Product Startup Podcast Episode 091: Test the Market Before Crowdfunding

00:00:00 Kevin Mako: Hello, product innovators. Today we learn from the co-founder of the largest crowdfunding agency in the world on how to ensure a highly successful crowdfunding campaign for your consumer product invention.

00:00:12 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, product developers,

00:00:24 Narrator: manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store sheds.

00:00:32 Narrator: We're taking you step by step to build a functional product and scale your product business. Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses.

00:00:47 Will Ford: Now, on to the show.

00:00:49 Will Ford: Welcome back, everyone.

00:00:50 Kevin Mako: Today, I'm very excited to introduce Will Ford to the show. Will is the co-founder of LaunchBoom, the world's largest crowdfunding agency. He also has built multiple successful companies prior to LaunchBoom. Today, Will is going to share some valuable knowledge and how inventors startups, small manufacturers

00:01:05 Kevin Mako: can use smart testing before launching their product on Kickstarter, Indiegogo, and how to use that testing for both market feedback and product development feedback. You will also talk about the upcoming crowdfunded summit,

00:01:16 Kevin Mako: a completely free online crowdfunding conference with over 20,000 attendees, a conference which I will also be speaking at on October 5th. Now, on to the episode. Will, welcome to the show. Kevin, thanks so much for having me on the show. I'm excited to be here.

00:01:30 Kevin Mako: It's always great to talk with you, folks. We had Mark, one of the other co-founders on the show a few months ago. It's a great topic going over the broadstrokes understanding of what crowdfunding is. And today I'm excited to dig it a bit deeper to understand how to really win when it comes to crowdfunding.

00:01:44 Will Ford: Yeah, crowdfunding hasn't been around that long. Kickstarter Indiegogo, they first opened doors for business back in 2008, 2009. So it's just more than a decade old right now. And I first got involved with crowdfunding back in like 2014, 2015,

00:01:59 Will Ford: before crowdfunding. funding. I'm super entrepreneurial. As you know, I built four companies from the ground up. And I was fortunate to have some big exits along the way. And after I exited my last company, one of my advisors

00:02:12 Will Ford: asked me to help him and a Navy SEAL launch a consumer product. And I asked him if they'd ever heard of Kickstarter, Indie Go Go. And they looked at me like a deer in headlights. Like, what are you

00:02:24 Will Ford: talking about? So I took them through a crowdfunding campaign. You know, we raised a bunch of money. They get the product off the ground. Today, that Navy Steel is done phenomenal with that product and brand.

00:02:34 Will Ford: And going through that first crowdfunding campaign, helping kind of guide them through it, it's really kind of what triggered the bigger idea of LaunchBoom. Because at the time, I was looking

00:02:45 Will Ford: for a launch room to help support us with our launch. And I did a bunch of research. And I was looking for marketing agencies that specialized in crowdfunding. And they didn't exist. There's no one out there doing what we do today. And so the idea of,

00:02:59 Will Ford: from like a macro perspective was, hey, let's do the work and prepare the launch before we go live on Kickstarter, on Indie Go Go. Let's build an audience that's hyper-focused and ready to buy.

00:03:11 Will Ford: So when we launch, we have a LaunchBoom effect. And we control the launch because we know how to set the funding goal and we know exactly what we're going to be able to raise within that first 24-hour

00:03:22 Will Ford: period as soon as we go live. In kind of working through that process and that logic, we've made So many iterations over the years, as Kevin, I'm sure you do on your side with all the prototypes

00:03:32 Will Ford: you're building and creating for your clients. It's been such a fun journey because where we've landed is there's so much value to pre-launch work, to preparation. The real value that we've learned

00:03:43 Will Ford: is helping entrepreneurs, helping project creators save their time and money. And so over the years, we've built a very tight system here at LaunchBoom, where we truly mitigate the financial risk

00:03:57 Kevin Mako: exposure for each and every one of our clients with every new product that they want to launch. I find that really amazing because that was a unique, especially looking back in a 2014 and 15 when you were getting this going, it was a really unique proposition that you had to first

00:04:11 Kevin Mako: test the crowdfunding campaign in a variety of ways. And then, of course, you do your full launch if the test is starting to show good results. So it's a small test and then leverage that for big results in the end. Of course, you've now grown to be by far the biggest crowdfunding agency in

00:04:25 Kevin Mako: the world. So obviously the model works, let alone the fact that you've refined and tweaked it over the years. How is it that you're winning in these campaigns? Let's really understand and break down that test and why that test is so important. What lessons that hardware startups can learn when

00:04:39 Will Ford: they're thinking about crowdfunding as a launch platform for their new product. Yeah, so Kevin, I mean, literally every day, I get calls from entrepreneurs all over the world. Like right now,

00:04:49 Will Ford: we've got clients in over 48 countries worldwide. It's wild because crowdfunding is not just for or Americans. It's literally a global platform, you know, Kickstarter Indiogo. And so everyone calls

00:05:02 Will Ford: with the same question. They'll say, Will, I need to pre-sell a million dollars with my product on Kickstarter or Indiegogo. How long will it take for you to do that? And how much money am I going to make on that type of raise? And I tell everyone the same thing. I'm like, well, first of all, guys,

00:05:18 Will Ford: maybe one-tenth of one percent of all the campaigns ever on Kickstarter or Indie-Go-go have actually made a million or more in pre-sales. Only 1% of all the total campaigns on Kickstarter

00:05:30 Will Ford: Indigo go have actually exceeded $100,000. So I've got to better set their expectations early on. But the truth is crowdfunding is the best way to validate demand faster with

00:05:41 Will Ford: much less risk. So what I tell everyone we work with, I tell them all the same thing. I'm like, hey, listen, I don't even know if crowdfunding or if even launch them is going to be the best

00:05:52 Will Ford: system and strategy for you to launch this product. So give us a couple months to really do the heavy lifting first and figure out who your audiences are what the demand looks like and whether or not credit funding even makes sense and is the best place to launch.

00:06:07 Will Ford: So a lot of them ask me, okay, well, you know, what's the test look like? And so for a much, much smaller cost, we can literally figure out the messaging, the positioning. We can open up the millions of backer audiences in our database.

00:06:21 Will Ford: to help stretch your ad dollars even further to get them more data faster. So they can actually start to understand what features and aspects people like most about their products. Because in some cases, we'll take them through this two-month test.

00:06:35 Will Ford: We'll get more than enough data to understand whether or not it makes sense to go into Kickstarter or at Indiegogo. But for the most part, we get all sorts of incredible feedback through the testing.

00:06:46 Will Ford: And a lot of that feedback in most times, we'll get ideas from them that we never even even thought of. That can actually help you, Kevin,

00:06:54 Kevin Mako: critique and improve that prototype so that now we can hit the market harder and have a much, much stronger outcome and much, much bigger campaign outcome. That feedback is so powerful. What I find amazing, too, is you mentioned that very few,

00:07:09 Kevin Mako: as a percentage, very few of those campaigns hit those six figure and definitely into those seven figure

00:07:14 Will Ford: marks. But by using your platform, test it, you've been able to figure out basically almost 100% success rate of going into an actual full campaign. That's 100% correct. And that's exactly why we

00:07:25 Will Ford: started the test because what I didn't tell you are all the headaches we had in the early years of figuring. I'm sure. Right. So in the early years, my model was different. I'd say, you know what, Kevin? I like you. I like your product. Give me 50 grand. And I'll turn that into

00:07:39 Will Ford: a half million dollars more in pre-sales on Kickstarter on Indiegogo. And you'd say, wow, well, that's awesome. What's the 50 grand for? And I'd say, oh, 25 goes into marketing video production

00:07:50 Will Ford: to create all the assets, 25,000 goes into the advertising budget because you have to have an ad budget to drive the traffic, to drive the conversions. Now, the problem with that model was it was

00:08:00 Will Ford: flawed. It wasn't correct because not every product converts the same way. Every products have different price points, different cost and goods sold, different demand, ads perform different. There's a lot of different variables associated.

00:08:15 Will Ford: And so early on, my model wasn't right. It was flawed. And then what I realized was there was a better way to do this. And there's a much smarter way to really control

00:08:25 Will Ford: and mitigate the financial risk exposure for all the products that we work on. So in like early 2017 is when we created what's called test boom. And test boom is that test program that we run

00:08:38 Will Ford: every single project through as an agency. And the reason we do it is because it's so much smarter. It's the highest and best use of the resources and time that these

00:08:48 Will Ford: entrepreneurs have. And after two months, to your earlier point, we have the data we need to understand, first off, does it make sense to launch on crowdfunding? Secondly, we can actually

00:08:59 Will Ford: now show them, based on the data, how much we can realistically raise, and then how much money we're going to need in advertising to hit those bigger numbers and hit their manufacturing

00:09:09 Will Ford: minimum orders so they can actually manufacture, produce, deliver to those early backers. And at the end of that test, we can show them what the profit margin will be on every unit

00:09:20 Kevin Mako: that moves through the launch room system. So to your point, it does mitigate all the risk, but more importantly, that's why we have 100% success rate at launchment with launching projects because we only launch when we have the data necessary where we know we're going to win.

00:09:34 Kevin Mako: Does that make sense? Oh, that's great. I think there's really two big areas to focus on Here, not only is that test for a crowdfunding campaign showing you the sales.

00:09:44 Kevin Mako: And I love how you can use that test to predict revenues, costs, all these other things, even volume that you expect that you're going to hit based on using those test metrics and trying to scale them up, but on the other side is on the development side, which every

00:09:58 Kevin Mako: business and every product, you have your sales and you have your development. One of the key pieces here is being able to look at it and say, okay, well, we've done this pre-test and we realize maybe two of these features aren't necessary. Or maybe this other thing

00:10:11 Kevin Mako: is really frustrating people. Or maybe there's this other market that we didn't even think about that is more attractive and that it'll yield to a better return on ad spend. So that's a phenomenal tool I find when you're doing these preliminary tests. And we've worked with a number of your clients.

00:10:25 Kevin Mako: I understand it firsthand exactly how it goes. They come back to us and they say, Will and his team just came back to us. And they said, we absolutely don't need, you know, whatever, this LED feature or we don't need to pair it with an app to start, or there's another use case that we didn't even think

00:10:38 Kevin Mako: about. Maybe we should be focusing on that first because the market's demanding it. You're not going to get that data unless you do some form of a test. And I think what's great about what you're talking about here can actually be agnostic across product development. Even if you're

00:10:52 Kevin Mako: not doing LaunchBoom or any kind of crowdfunding campaign, understand the lessons here that Will is talking about. Looking at testing your product, when you've got that prototype, going out

00:11:04 Kevin Mako: with small sample size of people, getting real buyers and real feedback is your most powerful Intel. Obviously, we're a big fan of crowdfunding. I think that's one of the most powerful tools out there, especially right now. It's a great time to be in the hardware business because of this tool.

00:11:19 Kevin Mako: But think about it even beyond that, if you're talking to a distributor that you think you're going to sell to, getting that feedback, which is so critical. We've talked about on this show is really important, both from a sales perspective, but don't

00:11:30 Kevin Mako: forget the other also just as important thing, which is your development perspective.

00:11:34 Will Ford: When you put the two of those together, you can double, triple, quadruple your actual value to the market.

00:11:39 Will Ford: And that's where Will's team can then take it back into full LaunchBoom, which is the full crowdfunding campaign on the platforms and really maximize those sales with a great product that you already know the market has got interested in because you've already tested it. That's right.

00:11:54 Will Ford: Yeah, Kevin. I mean, again, just to keep it basic,

00:11:59 Will Ford: the real value, like all we really care about at LaunchBoom is the test. because once that test is positive, well, first, now we know that crowdfunding is the right way forward. Now we can help better set the expectation for our clients with how much we can

00:12:12 Will Ford: realistically raise, how much money they're going to make per unit. But now we can create better content. So when we go from test boom over to LaunchBoom, now we take on bigger ad budgets.

00:12:23 Will Ford: Now we actually take on bigger marketing budgets. Now we actually create better ads for our advertising system on Facebook and Instagram because we've got all that data from the test. So what that means is now we know who the customers are. We know what demographics to target.

00:12:36 Will Ford: So let's hire those actors or actresses for the video content, for those teaser video ads. Now we go deeper into those audiences with better content. We get better returns on the ad spend that we manage.

00:12:49 Will Ford: And that's another big key here is that at the end of the day, what I've learned and what I know to be true with crowdfunding is it's all about maximizing the return on ad spend. And having the best digital marketing strategy and team behind you.

00:13:02 Will Ford: It's the only way to get those big six and seven figure outcomes that you see through LaunchBoom. And a lot of that work happens before the launch.

00:13:10 Will Ford: You just, it's almost impossible today to take your awesome product, even if it is the coolest product ever, Kevin, and just launch it on Kickstarter Indiegogo and raise 100 grand.

00:13:20 Will Ford: You have to have your audiences built ready to buy before you go live. It's the only way to really maximize the organic reach on those platforms and get those eyeballs.

00:13:32 Will Ford: Because when Kickstarter and Indiegogo see our launches boom and they see all this outside traffic coming in and converting well, they're like, wow, this product's popular. People like this, they start to promote it.

00:13:41 Will Ford: We get higher ranking on their platform, and that opens up massive amounts of organic traffic to tens of millions of people. And we get this even bigger return and this organic lift because of that pre-launch prep work that went into preparing for that launch.

00:13:56 Will Ford: So anyway, I could go on and on for hours about all the pre-launch variables that we look at. But from a high level, I wish I had a LaunchBoom 10 years ago when I was launching my own products.

00:14:08 Will Ford: I wish I could say, hey, Kevin, here's my prototype, here's a small budget. And in two months, tell me whether or not I should put more of my time and resources into this. That's what test boom does. That's what launch room does.

00:14:21 Kevin Mako: And then when we get that data back, sometimes we get really good feedback. back where we can iterate, we can improve that product and then launch a better, much bigger campaign

00:14:31 Kevin Mako: behind it. So just because the test results may come back and they're not as exciting as we want them to be, it doesn't mean that we should give up on the project. It just means that it's an opportunity

00:14:41 Kevin Mako: to improve, iterate and hit the market with a much, much superior opportunity, if that makes sense. Well, and that's a key point, right? And it's what happens if the results aren't great. Of course, the beauty of this method is you're getting not just one or two opinion.

00:14:55 Kevin Mako: pieces of feedback, as you might with a mentor or even one or two potential buyers, if it's wholesale or whatnot, but you're getting dozens, if not hundreds, if not potentially thousands of pieces of feedback and all sorts of data and rationale, both from a marketing

00:15:09 Kevin Mako: and from a user feedback perspective as to what the key elements are that can help you both improve or solve pain points or whatever it might be within those customers.

00:15:20 Kevin Mako: Well, I'm curious, just in terms of, I mean, you've been doing this for ages.

00:15:25 Will Ford: What are some of the best practices if you're new into developing a product, especially if you're new into crowdfunding, what are some tips that you'd give customers to have their best shot, even just to, let's say, come into test boom? What should they be prepared with?

00:15:39 Will Ford: What should they be thinking about potentially ahead of time to really at least have their best shot to go into the test so that ideally the test comes back as good as possible and allows you to pivot and have a great LaunchBoom success if it's not ideal and if it is ideal to double down and go big?

00:15:54 Will Ford: Yeah, that's a really good question. question.

00:15:57 Will Ford: And Kevin, I think that's why I'm so excited to be on the show with you, because you actually help us big time with preparing our clients for LaunchBoom or even the test boom portion. So for us, ideally,

00:16:10 Will Ford: we really want to see our clients come in with like a physical prototype that looks good enough to photograph. It doesn't even have to work because when we're doing the testing, we're using static images. We're doing a photo shoot. We're not using

00:16:24 Will Ford: video yet, right? And that's another way we keep costs lower because doing static ads and static images is so much more affordable versus video production. And then doing like cutting, editing

00:16:35 Will Ford: those videos into teaser video assets. That comes later. That comes during LaunchBoom when we do the ad expansion. So again, I'd say the biggest tip would be like if you're listening to this and you've got that awesome idea and you've drawn it on the napkin, that's awesome. That's the

00:16:49 Will Ford: harder, you know, getting started to the hardest part. Now take that napkin to someone. like Kevin, right? Have Kevin here basically help you turn that into a beautiful cat image,

00:17:00 Will Ford: a CAD drawing, and then figure out how to develop the prototype. And once we have that

00:17:05 Kevin Mako: prototype that looks good enough to photograph, you can start testing at that point. I have done a lot of tests over the years using cat images, CAD drawings, and it's just not as consistent

00:17:17 Kevin Mako: as when we get a physical real prototype in our studio that we can photograph. So I'd say that for me would be like the best tip for being, you know, having LaunchBoom give you the best

00:17:27 Kevin Mako: opportunity to get the best data out of our system is when we have a physical prototype that looks good enough to photograph. Like I said earlier, it doesn't even have to work.

00:17:37 Kevin Mako: And then obviously someone like Kevin here could easily get you that point. Well, I appreciate the kind words there. I mean, we've had dozens and dozens of clients have gone through the crowdfunding avenue. And I think it's so powerful. I'm certain that over

00:17:50 Kevin Mako: the years going forward, it's going to be more and more of our clients. client base, especially as a startup,

00:17:55 Kevin Mako: the entrepreneurs, the inventors that are coming through and doing their design development, prototyping work, getting to production with us, I know that more and more as a percentage every year using crowdfunding as that opportunity. And it's amazing

00:18:08 Kevin Mako: that I really like a launchman's breaking it down where you have the test. Then we can iterate a bit more, fix it up, and then go forward. And one of the beautiful things that we always focus on, right from the onset of design, whether it's going directly to production or whether we're going

00:18:22 Kevin Mako: be doing a crowdfunding campaign to raise money for pre-sales to go to production, having a really well thought out product, both from obviously a feature and function perspective and

00:18:33 Kevin Mako: making it sexy and modern and beautiful and all that. But as well in the early phases from our perspective as a design and engineering firm, we want to know how that thing is going to be built in production. So even from our early sketches, going into CAD, going into that prototype that you

00:18:47 Kevin Mako: mentioned, we have logic at least to carry it forward so that if basically Will's team comes back to us and says, look, this is going to be a big one, we need to get this to production in six months. You don't all of a sudden want to now circle right back to the sketchboard because you've

00:18:59 Kevin Mako: created something impossible on day one. So one of the things that we find really help is get it obviously to where you can in the development process. Will's obviously got great strategy in

00:19:09 Kevin Mako: terms of what level you need to be at. And also making sure that your team, whatever is,

00:19:15 Will Ford: whether you're hiring a firm like ours or whether you're doing it yourself. If you're an industrial designer, an engineer and you're building your product yourself or whatever, whatever it might be,

00:19:23 Will Ford: understand how that, if this thing takes off, you need to have a path to production. Because remember, at the end of the day, in crowdfunding, they are pre-purchasing real units of your product. They are expecting delivered product at the end of the day. And you

00:19:34 Will Ford: really want to ensure that the product is quality. And one other quick tip I would give on that. I said it before on the show, but keep the project, the product itself, I would say, very simple. Keep the features simple, but do them at a very high quality.

00:19:48 Will Ford: I would rather have two great features that are solving that main pain point than five so-so features because you over-extended your budget. Yeah, well-stead. And the other thing that I forgot to mention is that we need to understand manufacturing

00:20:02 Will Ford: cost, cost on good, sold, cogs. And again, we don't have to be like,

00:20:08 Will Ford: it doesn't have to be precise, but we have to have a good understanding of what that's going to look like because a big part of the value with LaunchBoom is we also help figure out the pricing model as to what consumers are

00:20:20 Will Ford: going to be willing to pay for. And that happens during the test as well. So again, it's having a a prototype that looks good enough for us to photograph, but it's also having someone like Kevin here help you better understand what the cost of manufacturing is going to look like. Because another

00:20:35 Kevin Mako: advantage with crowdfunding is if you have a huge crowdfunding campaign, and again, it's a pre-sale. You get all that money up front before you have to place your manufacturing order.

00:20:44 Kevin Mako: So with economies of scale, as you place larger volume orders with your manufacturers,

00:20:51 Kevin Mako: you should potentially be able to get much more aggressive price breaks per unit. And that's another way to add on more margin per unit that you're moving through the crowdfunding system. So again, understanding like price breaks, pricing,

00:21:05 Kevin Mako: it really helps our team at LaunchBoom better set you up for much more success because now we can figure out how to maximize the average order value per unit, how to really make that profit margin as fat as possible so that your

00:21:20 Kevin Mako: business will be more successful long term. I'm glad you brought up manufacturing there, Will, because that is a big part of making sure that your development is at a certain point so that not only can you do it, but you have to remember, we talk about a lot on the show,

00:21:32 Kevin Mako: margins, margins, margins, margins, make sure that you've got the margin baked in because a lot of that will get used for sales and advertising, essentially. Like you said, it's return on ad spend. So it's really important as an inventor, an innovator to think if you're going to produce

00:21:47 Kevin Mako: something, what margins you need to be able to fulfill all these different value add elements along the way so that you ensure that you're profitable in the end, or at least close to it because what you don't want to have is a major cost, you know, mispredict your manufacturing

00:21:59 Kevin Mako: cost and run into a major problem where it's costing you way more than you thought. And another thing, you know, when we talk about simplicity, all of this really helps because the simpler the product is, and especially if it's done at a high quality, the easier it is to actually

00:22:12 Will Ford: predict what that manufacturing cost is going to be down the road. As you can complicate your product, as you add bells and whistles and features, you're exponentially making it more difficult to do those predictions, especially if you're, you know, let's say midway point

00:22:25 Will Ford: through development, you're trying to predict what your manufacturing cost would be so that you can do a test boom. So it's important. Keep it simple, but understand how it's going to work. Make sure obviously it's done in a modern and sexy way. And then that gives some incredible

00:22:36 Will Ford: ammunition to LaunchBoom and the teams there that work with with customers in the product space to do that test, to get that great data. And remember, you could always tweak and modify

00:22:47 Will Ford: something as you move forward with that information. So you don't have to worry about exactly nailing it right at the first launch. You just want to make sure that you've got to be a quality product and you understand those metrics that we talked about. Totally. And just like any business,

00:23:02 Will Ford: like there's other variables as well. But I will share one other tip here. here because I think it's I think it's really important for people to understand, especially anyone listening that's never crowdfunded before,

00:23:14 Will Ford: a huge advantage with crowdfunding versus like e-commerce or,

00:23:18 Will Ford: you know, I'd say Amazon is going to be shipping. So what a lot of people also need to figure out is like what the shipping cost is going to be because there's a really, really good chance that you're going to be shipping to people all over

00:23:33 Will Ford: the world because these backers aren't just coming in from the United States or Canada, but they're coming in from literally worldwide. So figuring out the shipping cost, but what's unique about crowdfunding is that backers are totally comfortable

00:23:46 Will Ford: and cool paying extra for shipping. So what we do is we usually will move forward with a lead offer just to sell the unit for the highest average order value possible.

00:23:56 Kevin Mako: And then once they choose their package, whether it's a bundle or one unit or multiple units, then we actually have shipping auto-populmonary, for them.

00:24:08 Kevin Mako: And what we're usually able to do is make our clients, our campaigners, we're usually able to help them make even more profit on shipping. Because once we figure out the shipping costs, we can actually add margin out of the shipping as well. And that's something I've only ever seen through crowdfunding.

00:24:23 Kevin Mako: Again, on e-commerce, it's totally opposite, right? On e-commerce, people don't want to pay for shipping. So we've got to figure out how to create different marketing, you know, value propositions where the consumer feels like they're getting free shipping because it's absorbed into that

00:24:37 Kevin Mako: average order value of the price on the e-commerce side. So something to really think about is also understanding like your shipping costs, but know that shipping will help you through crowdfunding because you can make marching there too. That's a really

00:24:52 Kevin Mako: good insight. Obviously, you've seen a lot of data over the years on a lot of these campaigns. You're able to identify that. So that's a big tip out there for listeners. It would be hard to find by just Googling that information. So I really appreciate that. And I think one of the big things here to understand that probably comes from that

00:25:05 Kevin Mako: that shipping conversation. The reason people are willing to do that is one of the beauties about crowdfunding

00:25:11 Will Ford: is that people are taking a bit of a risk on your product. It is a new product and they understand that you're going to be ironing through wrinkles in production and there may be shipping delays and you may change certain features as you

00:25:25 Will Ford: are getting more and more feedback from what they bought. It may slightly change or it might slightly modify. But as long as you're keeping those folks updated, you know, understand that they're almost quasi partner in your business. Now, they're not an equity partner. They're simply buying

00:25:39 Will Ford: units, but they are taking a bit of a risk and there's an understood inherent risk as a purchaser on Kickstarter or an e-go-go that you are kind of helping that startup get the ball rolling. So I think

00:25:52 Will Ford: that's probably why you're seeing some of that, some of the math skew there because it's generally in favor of the entrepreneur. These are folks who want the entrepreneur to succeed. They want you to succeed. And that's why they're buying this product in advance, as opposed to just waiting for it to come out and buying it a year later.

00:26:07 Will Ford: Yeah, well, well said, Kevin. Yeah, another way to look at that guys is the reason crowdfunding works is because Kickstarter and Indiegogo, you actually have to apply before they'll approve your product to even be able to even launch on their platform.

00:26:21 Will Ford: The reason they're doing that is they're making sure that that product has never been seen or sold anywhere else before.

00:26:26 Kevin Mako: And that's why the audiences convert so well on Kickstarter and Indiegogo because backers know that they're getting access to the coolest, newest products. they're also going to be getting a huge discount off retail.

00:26:39 Kevin Mako: And they're going to be the first ones to get that product before anyone else. And because of those reasons, they're happy to give you their money today and give you all the time necessary to figure out manufacturing, shipping, delivery.

00:26:53 Kevin Mako: And most of these backers are happy waiting anywhere from six to 12 months for you to have that pre-sale, take their money up front, and then figure out the manufacturing and shipping. and before it even arrives at their doorstep.

00:27:07 Kevin Mako: And as long as you deliver a good experience to that backer, they're also super loyal. So as you come up with new products

00:27:14 Will Ford: and new crowdfunding campaign launches behind that first one, we usually see very large conversions of those first-time backers converting again and again and again. Because as long as you take care of them, they'll keep coming back for more.

00:27:29 Will Ford: Well, well, you're talking about a massive perk there because one of the big things that we've talked about on this show is that if you can prove the fact that you've got sales to real customers and they love your

00:27:40 Will Ford: product, you now become exponentially more valuable as a product business. So looking at that as you're not necessarily a profit-making center. I really advise against looking at your crowdfunding

00:27:51 Will Ford: campaign as a way to make money, but I look at it very heavily as a way not only to build

00:27:56 Kevin Mako: equity value in your company, if you're looking to raise an investment round, venture capital round, series round, C round, whatever it might be afterwards, but also looking at it as, that's a massive springboard to talk to your next potential buyers or your next potential customers.

00:28:11 Will Ford: This is like a tiny fraction of the market. And if you can hit this and get some loyal customers there, then the world's your oyster afterwards. Yeah, Kevin, yeah. I mean, you just nailed it on the head, man. Crowdfunding isn't going to make you rich at all.

00:28:26 Will Ford: But what it will do, it will give you real validation. and it will give you much more leverage to potentially go raise, you know, capital. You can sell equity at a much higher valuation once you get through the reward-based crowdfunding

00:28:40 Will Ford: on Kickstarter on Indiegogo. So what I mean by that is a lot of people come to me all the time and I tell them shoe strap as long as you can. All you need to do, use your credit cards if you have to, but get through that Kickstarter

00:28:53 Will Ford: Indiegogo campaign first to validate demand, to validate that people love your product. and then take that story and then go hit the investors if you want to go accelerate your growth. Absolutely. Even use it in your marketing, right? Tons of companies are doing that now.

00:29:08 Kevin Mako: Here's our successful crowdfunding campaign. Now you should buy our product on Facebook, right? As seen on, almost, right? It's a similar mentality. And there's a lot of other ways to raise capital, you know, beyond Kickstarter and Indigogo.

00:29:21 Kevin Mako: You know, we're having a lot of success right now with clients that go through Kickstarter, Indiegogo. They have that big validation. And then we take them over. to equity crowdfunding platforms like WeFunder and StartEngine.

00:29:33 Kevin Mako: And we actually help them convert their backers from Kickstarter and Indiegogo again.

00:29:39 Kevin Mako: And we turn them into investors over there because once we've produced and delivered a good experience from Kickstarter and Indiegogo, those people are pumped. They're loyal.

00:29:50 Kevin Mako: And then when we hit them up on WeFunder and Start Engine and we say, hey, thank you for your

00:29:54 Will Ford: belief in our business. Thank you for backing our Kickstarter or Indigo. campaign, now we want to give you an opportunity to own a piece of our company and you can own a piece for as little as a couple hundred bucks, those backers convert again.

00:30:10 Will Ford: So again, there's a lot you can do with crowdfunding. And Kevin, honestly, that's another whole other segment that we may want to dive into later. But that's become super exciting as well. Yeah, I'd love to do a segment

00:30:20 Will Ford: just on springboarding off of a crowdfunding campaign. Like how do you really leverage that campaign in your business in many ways? And I love that. Like just looking at at the different investment angles, it's a big deal, but also looking at all the sales channels

00:30:32 Will Ford: and looking at the ways that you can use that crowdfunding campaign to accelerate your next level of sales, whether it's to distributors as you're using that as your kind of golden goose egg as your validation, or even if it's direct to consumer through Shopify, Amazon, whatever

00:30:46 Will Ford: it might be, right? Again, how do you maximize and leverage that? We'll save that topic for another day. I know we're running out of time here, Will, on your schedule there. So how can people

00:30:56 Will Ford: learn more about what's going on. I actually, I really appreciate the invite to speak at the upcoming crowdfunded summit. I think it's your third summit now for crowdfunding. Yeah, no, it is. Yeah, so

00:31:09 Will Ford: anyone listening that may be interested in crowdfunding or even learning more, if you go to LaunchBoom.com, we provide massive amounts of free education. We have blogs, we have webinars,

00:31:22 Will Ford: podcasts like you're listening to right now. There's just a ton of free information on launchroom.com where you can learn a lot more about crowdfunding. But to Kevin's point,

00:31:34 Will Ford: we actually have our third crowdfunded summit. We're getting ready to launch on October 5th. So crowdfunded summit, it's the world's largest crowdfunding

00:31:46 Will Ford: conference. It's a virtual event, not because of the coronavirus or any of that, but because most of our attendees are worldwide. They're coming from all over the world. So it's a really

00:31:58 Will Ford: fun event. You know, it's not unusual to have, you know,

00:32:04 Will Ford: tens of thousands of attendees at these events. So it's a lot of people that are, you know, looking to launch their first product or maybe looking to launch their 100th product or just interested in learning how they can leverage crowdfunding

00:32:15 Will Ford: to be much more successful. So this next summit, it's actually, it's going to be our biggest and best one yet.

00:32:23 Will Ford: We've actually, we've got a very tight group of preferred partners that we've invited into this next summit. October 5th, every hour starting at 9 a.m. Pacific time until 4 p.m. Pacific

00:32:36 Will Ford: time, we're going to have an expert that you really need to listen to to learn about the ins and outs of what you actually need for support for managing a successful crowdfunding campaign.

00:32:47 Will Ford: We're going to have partners like Easy Ship, where you can learn more about shipping and how to really control your cost and make money on your shipping pricing when you're launching your crowdfunding campaigns.

00:32:59 Will Ford: We're going to have IP protection lawyer at this event to teach you how to protect your idea, your business, so someone can't knock it off or steal it from you.

00:33:10 Will Ford: We're going to have Indiegogo as one of our platinum sponsors to give you the ins and outs of how to maximize your launches on their platform. We're going to have, obviously, we're going to have Mako Designs helping

00:33:21 Will Ford: all of our attendees learn how to make better prototypes, better products, and better understand their manufacturing. We're going to have retail experts there. We're going to have equity crowdfunding

00:33:33 Will Ford: partners there. Again, I can go on and on, but it's going to be the biggest, best one we've had yet. This is our third summit that we're hosting on October 5th. So the first day is just going to be

00:33:44 Will Ford: a great full day of valuable content. And it's free attendance. So if you go to crowdfunded summit at dot com. You can sign up for free. You can come in and check it out on the fifth,

00:33:56 Will Ford: learn a ton. So definitely take advantage of that. And then at the end of that first day on October 5th on Tuesday, at 4 p.m. Pacific time, we're going to have a pitch competition

00:34:07 Will Ford: where we're going to be given away hundreds of thousands of dollars to our top five finalists. The last summit we had, we had over a thousand applicants come through the pitch competition

00:34:21 Kevin Mako: funnel and it was a lot of fun. It's a great pitch competition and there's so much value for the people applying to be in the pitch competition. So if you're also listening to this,

00:34:34 Kevin Mako: go to crowdfunded summit.com and you can apply if you have a product idea that you need more funding or you need more support. Please take advantage of the pitch competition application

00:34:44 Kevin Mako: because there is a good chance that you could be chosen. You get to pitch your product in front of

00:34:52 Kevin Mako: We're going to have judges like Indiegogo. We're going to have a judge from Platform88. There are a massive manufacturing outfit out of China.

00:35:02 Will Ford: And again, there's also going to be a lot of cash and prizes being awarded to support those launches. The second day of the conference, October 6, which is a Wednesday,

00:35:12 Will Ford: it's going to be how to launch a product using crowdfunding. And it's going to be a deep dive sync with my internal team here at LaunchBoom from where to start and what it looks like every step of the way. We had that segment as part of our

00:35:26 Will Ford: last summit and it was one of the most attended events, which is why we're bringing it back for this next summit. But again, crowdfunded summit. Kevin, I'm so pumped that you're going to be a part of it. Again, you know, because you added someone to value last time as well. So anyway,

00:35:41 Will Ford: I really enjoyed being with you on your podcast today. And any other questions for me? Yeah, that's phenomenal. Well, really appreciate that you put on that summit. I love the fact that you're so passionate like we are at Mac Design about the education side of the industry because that it helps everybody.

00:35:55 Will Ford: And I must say, I can't wait to listen to the number of the other attendees and the other speakers talk about everything that's going on, both in the product, manufacturing, shipping, IP, as well as getting into everything that your team's talking about in terms

00:36:08 Will Ford: of really nailing it, essentially expanding on everything we talked about today in crowdfunding. I'll put all the links in the show notes here. So if you're listening, just scroll down the page and click to the crowdfunded some it LaunchBoom.com, if you're interested in the services they have to offer.

00:36:23 Will Ford: Will really appreciate having you on the show. Look forward to talking again. Yeah, me too. Thanks, Kevin.

00:36:28 Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big success.

00:36:39 Narrator: This podcast series is brought to you by Mako Design + Invent, the original and leading firm in North America to provide global caliber in-to-in, visit.

00:36:49 Narrator: consumer product development to startups, inventors, and small product business clients. If you're looking for product development help on your invention, head over to Mako-design.com.

00:37:00 Narrator: That's m-a-k-o-design.com for a free consultation from one of Mako-designs for design studios from coast to coast. Thanks for listening and see you next time.