#351 – Leveraging Kickstarter and Indiegogo: A Blueprint for Amazon Sellers
In episode 351 of the AM/PM Podcast, Kevin and Khiersten discuss:
- 01:34 – How Did Kevin and Khiersten Met?
- 02:37 – Her Background Before Becoming A Crowdfunding Expert
- 05:32 – What Is It About Kickstarter And Indiegogo?
- 07:08 – Kevin’s Experience With These Crowdfunding Sites
- 10:32 – The State Of Crowdfunding In 2023
- 12:00 – Effective Strategies To Use In Crowdfunding Campaigns
- 18:40 – Diving Into The Numbers
- 26:00 – What If I Don’t Receive The Product I Bought?
- 28:23 – Requirements Before You Can Launch Campaigns In Kickstarter
- 30:38 – What Is A Viable Product For Kickstarter?
- 32:04 – How To Create Crowdfunding Campaigns That Convert?
- 33:42 – “Your Brand Needs A Story” & A Good Example By Khiersten
- 37:43 – Is There A “Honeymoon Period” In Crowdfunding Sites?
- 43:45 – How To Protect Yourself From Product Copycats
- 44:20– How Much Can I Raise From My Kickstarter Campaigns?
- 47:32 – Khiersten’s Marketing Services And Rates
- 50:59 – How To Reach Out To Khiersten
- 52:18 – This Week’s Words Of Advice From Kevin King
Transcript
Kevin King:
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 wanna 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-comm and Amazon sellers, billiondollarsellers.com. Kirsten Ross, welcome to the AM/PM Podcast. It’s great to have you here.
Khiersten:
Kevin, I’m so pumped to be here as well. Love AM/PM Podcast and everything you guys are doing, so
Kevin King:
I appreciate that. I think we’ve known each other. We met a long time ago. It seems like 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?
Khiersten:
I think it was one of Cap Con.
Kevin King:
Okay. Yeah. One of the Cap Cons. 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 do it. Right. And we talked, and I think you gave me some good pointers, but you’re known as the crowdfunding expert out there. I mean, you’ve carved out a niche and specialized in before you started doing it. We’ll backtrack just 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 the Kickstarter expert?
Khiersten:
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 in around the Toronto area for other startups that like 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.
Kevin King:
So were you doing something, you said you were as a consulting company, you just started a consulting company? Did you have a background in in retail or e-commerce or marketing?
Khiersten:
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, like, one thing that was really great about the experience I had was, like out of uni 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 and turn that into a company. 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. So it’s a pretty cool transition into that space.
Kevin King:
And you said you’re based in in Toronto, right? In Canada?
Khiersten:
I am. Yeah.
Kevin King:
Awesome.
Khiersten:
Cold north.
Kevin King:
The cold north. That’s right. I’m down in Austin. So that’s that’s the cold north for me.
Khiersten:
Yeah.
Kevin King:
So when you did this first project and it was a learned by the seat of your pants kind of kind of thing. Yes. Fail hard and then succeed well, so what is it about Kickstarter? I mean, a lot of people have heard this, you know, there’s, there’s some people that come out with a course every once in a while. But launch your product on Kickstarter. If you don’t have any money to launch on Amazon or Walmart or wherever, do it on Kickstarter, approve the concepts. What Kickstarter started, I think around 2011, maybe 2010, 2011. Cause I remember when it first came out, I, I looked at doing some stuff on it, like before I even knew about this whole Amazon game. Yeah. And it was them and Indiegogo were the two. And they still basically are the two, two main ones.
Kevin King:
And there, 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 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 basically, your project was dead. But on Indiegogo, I don’t know if this is still the same back then, You said your goal is 10,000, you raised 8,000, you, they would still pay you the 8,000.
Khiersten:
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’s 10,000, you only raise eight, you still collect the money and kind of move on with that project.
Kevin King:
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, well, 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 in through product halfway through product development. And Kickstarter actually rejected me. They said, you, we won’t take you until you have a physical prototype and actually can show us like pictures of actual, not just the CAD drawings and everything, but actual physical prototype. But Indiegogo said, Hey, no problem. You can come up, you know, right away. And so I ended up going I, 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.
Kevin King:
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. Cuz 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.
Kevin King:
And then I did a lot of like trades with other people who had had campaigns like, we’ll trade your backers for our backers, or, and then I hired some PR company, some ridiculous amount of money that said they could get me in all and gadget 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 outta Utah, but it was like they would fund, they would fund your social media. So they would, they would come in and they would for like 35% of the, of the gross sales. So if you did, you know, 10 grand or a hundred grand, they would take 35,000 as their fee. But they would come in and they would pay for the social media.
Kevin King:
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 up front 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 works. 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 that didn’t work either. So 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, they banned it, but people were just going to Alibaba and finding a product already existed on Alibaba, changing it up a little bit, and then launching it as quote unquote new product on, on Kickstarter.
Kevin King:
And that was, someone’s even taught a course on that at one point. And I think that has pretty much gone away now. It’s been an interesting, interesting deal. But I know I’ve, I’ve, I hear lots of people that have great success on it. Where is the state right now of crowdfunding and in 2023 we’re talking about, my experience was seven, eight years ago. So I really can’t talk about where it’s at now, but you are the one that can talk about that. So where are we at right now?
Khiersten:
Yeah, it’s so interesting as you’re going through the evolution of Kickstarter and Indiegogo, because 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, a hundred percent, 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 most, like, the biggest crowdfunding platform in the world. So one thing, when I say Kickstarter, I’m talking about a blanket statement for crowdfunding like Indiegogo and Kickstarter. So Kickstarter is such a popular platform that it, 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.
Khiersten:
And I actually went public about 18 months ago to say that I don’t recommend Kickstarter for nine outta 10 people anymore. Which is a huge change to go from it being a hundred percent my career to actually actively telling people they should not be doing Kickstarter. But I wanna 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 up votes on Reddit, sort of the more popular you are, the easier you are to find and the more, more product you’re selling with their community.
Khiersten:
But the barrier to entry has become so high on Kickstarter because there’s so many people fighting for attention that you need a, like, 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, a hundred thousand dollars, if you’re starting from zero with no audience, you’re looking at putting in a minimum 30 to $40,000 into that campaign to raise a hundred thousand dollars.
Kevin King:
That’s without an audience. If you don’t have an audience already, no
Khiersten:
Audience, yeah. Literally 30 to 40,000 and you know, 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 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 company needs to put into doing a Kickstarter campaign, then I think that it was really important to, 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.
Khiersten:
You can like 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, existing brands. So if you are already selling on your own website or you already have an email list, going to Kickstarter is not gonna be as up as like 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 still a great platform, but people who are 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.
Kevin King:
That’s good information. And I know one of the tricks on Kickstarter is if, like you said, if you need to raise a hundred thousand, you don’t actually want to put that, I need a hundred thousand. You want to put something much low, 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 trip 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 funded in two hours is already 300% over, 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.
Khiersten:
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, 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 know, 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.
Khiersten:
So if I am a Shopify seller that’s already been selling journals for a while, I’m gonna have like a main customer list and a main email list. But then from that segment and from my marketing, I’m gonna have like a small segment of that list that specifically is interested in the new product. So I would wanna create an a, 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 wanna 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 I immediately. Because a lot of people who learn what 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 gonna 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 gonna be anything really incentivizing that person to buy today.
Khiersten:
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.
Kevin King:
So what, so there’s different levels. You can have 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 gonna be a hundred bucks, the first people get 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, the buyer’s 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 little more it goes or something like that. What’s an ideal, what’s a a 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, what’s some rules of thumbs around those different levels of, of buy-in, of pledges?
Khiersten:
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 gonna make it easier for them to make a buying decision.
Kevin King:
What about, you know there’s some projects that actually raised the money and Kickstarter pays When do, when do they pay after you complete, you know, you, 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, Kickstarter takes a percentage for the credit card fees, and then they take their cut which is roughly, what about 10%? Something like that? 5%, 10%?
Khiersten:
5% and then about three or 4% for credit card processing.
Kevin King:
So 10% roughly total that they’re gonna take out of whatever you raised. Then do they, how quickly do they pay that? Do they send that to you?
Khiersten:
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 any payments. So Kickstarter will essentially, when someone pledges during your project, a pledge means they’re ordering. If someone ordered last week, Kickstarter’s 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.
Kevin King:
Well, they just authorize it. They just do a preauthorization
Khiersten:
Basically.
Kevin King:
Yeah. And some of those preauthorizations, cuz they don’t stay on, they, if someone did it early on, they fall off. So they gotta charge the credit card again. And sometimes maybe Exactly. The credit card doesn’t have a, the balance or whatever to accept the charge.
Khiersten:
Exactly. So when the campaign finishes, assuming it’s successfully funded, Kickstarter mass charges, any backer that has pledged the campaign, there’s always five, six, 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.
Kevin King:
Okay. And then I’ve been a buyer on Kickstarter of campaigns yeah. Of, of several actually. And some of them I never see the product. That’s cool. 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, it’s a scale, it’s a like a it’s a really cool technology. It’s a scale that you stand on and it does a 360 goes 360 degrees around you. It has like a little arm, it goes 360 degrees around you. Yeah. And it determines how much body fat you have and your bone density. And it’s, it’s really, it’s like a, it’s like going to a professional, one of these professional dexascan. Dexascan places where for athletes and stuff use Yeah. And happened.
Kevin King:
It’s really cool. But I would just keep getting, I’m just keep getting updates. Like we’re changing it, we’re working it, we have, and they’ll send pictures of here’s the first 20 units from the the factory coming off the line. We got beta testers. This has been six, seven years and I still don’t have the product. What is the recourse? There is no recourse. I mean, it’s been so long there. I can’t charge it back. I can’t do anything. I just gotta cross my fingers and pray that eventually I’ll get this thing. And it’s as cool as it looks how that seems to happen a lot on Kickstarter. Yes. And 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. And 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.
Khiersten:
Yes. That’s another reason why and I would love to see how Kickstarter in the future is gonna 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.
Kevin King:
How do they have these Kickstarter diehards, they just, they just figure they’re just not gonna get half of what they order? Or is it just bringing in fresh blood when you have your own list that’s maybe’s already trusting you? And then I don’t understand how there’s gotta be a big problem there. How, how Kickstarter maintains being such a big platform.
Khiersten:
Yeah, like when you look at the amount of backers, like, I think the stats were about 20 or 25% of all Kickstarter backers are, they come back and pledge multiple campaigns. I don’t have the stats for a breakdown of like, 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 like 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 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.
Khiersten:
Like 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 they’re, 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, and shop on Kickstarter.
Kevin King:
But so there’s no chart. 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 I get cancer or something and I I I’m sidetracked and I can’t, you know, finish my product, they’re not gonna come. Kickstarter doesn’t come and try to take that money back from me because I didn’t deliver from chargebacks or from whatever.
Khiersten:
No, the one thing that I think that there is a case against the seller is if there’s actual fraud that’s happened, like 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, you know, if backers can organize themselves, I’m sure there is a case in court for that. But as the 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, that’s just kind of it.
Kevin King:
So, okay. So Kickstarter basically has no risk at all. No, it’s the buyer’s take, like you said, the it’s the buyer, the pledges the buyer’s taken all the, taking all the risk.
Khiersten:
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 like there’s secondary risks, but there’s not like direct risks where I can go sue Kickstarter because I didn’t get my journal from five years ago.
Kevin King:
So if I’m thinking about doing Kickstarter because it, you can raise a lot of money really quickly on there. To help your, 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, 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 gonna launch it here just to get the buzz and the marketing and you know, get people sharing it around Facebook and we know we’re gonna make our money selling it later on, on Amazon or our own website or in stores or or whatever. What are some of the things that Kickstarter requires before you can go live? Like you said, you mentioned like a prototype. Are they, do they do like a credit check on you to make sure you’re a valid business? Or what are some, what are some of the basic things that you need to have before they’re gonna like green light you to actually launch?
Khiersten:
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. So like when you submit your project for approval, what that means is you’ve uploaded your, your campaign video, which is like your product commercial and your page, which is like your sales page with all your product information on it with like how you wanna convey it, your production, et cetera. If they look at that page and they’re like, I don’t know, 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 gonna come back to you and ask for proof for that before you’re able to launch on the, 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.
Khiersten:
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 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 wanna operate within the US to launch your company in that you do need to have a bank account in that country like the us. And you do need proof of business and address in the US as well.
Khiersten:
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 US 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.
Kevin King:
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,
Khiersten:
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.
Kevin King:
Okay. And what about you? You talked earlier about your listing, you have a video and stuff on there and you explain the product. What are some of the key components to having a successfully converting listing
Khiersten:
Speak to your customer? So whenever I audit Kickstarter pages cuz 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, 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 wanna focus on the main benefit that your product brings your customer and, 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.
Kevin King:
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, the guys are are in your, your case dragons Den in Canada, they’re saying, no, we’re not gonna invest. And the person just starts, you know, tearing up and saying, oh, I’ve put six years in my life in this and we’ve leveraged our house and trying to give 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, it’s about them. It’s not about they’re using the word we or our technology, our restaurant is considered the best. It’s not about that. It’s about you and them. Yeah. And so that’s, that’s a big, big, a big switch. But people always say your brand needs a story. So they’re like, what, 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 and a little bit of that because people will identify sometimes with that then flip that to actually be about the buyer’s and what problems it’s gonna solve. So let’s,
Khiersten:
Let’s give a like example. There’s a product we launched called the Jamstack, which is
Kevin King:
The Jamstack
Khiersten:
Jamstack. It is a electric guitar amplifier. So 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, and 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 used 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
Kevin King:
That was a really good example. That was a really good example. I want everybody that’s listening to this like 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 she just Khiersten just showed you that is a very, very good example of what most people miss.
Khiersten:
Thank you. Lots of practice over here.
Kevin King:
Good job.
Khiersten:
Yhat’s ultimately cause we can get into the nuance of how long your page should be and what sections should be on the page. But like, honestly, if you can nail the, the story and what’s in it for your customer and be able to relay it in their terms, you are going to be successful.
Kevin King:
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 in some guys in Bangladesh or something and they would go on and like, you know, click on things and look at things and like just try to trick the algorithm down. And they would say, we’ll get you from page six to page, we guarantee to page two or, or something like that. Those things still exist and are they even worth messing with?
Khiersten:
They still exist. I wouldn’t mess with them. Like if you’re gonna mess with any cheap service like that, I think it’s good to get someone to try to share your campaign and Facebook groups and like on Reddit and stuff like that. But anything where you’re trying to like mess with the algorithm with likes and scrolls, like 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
Kevin King:
Like on on on Amazon, that’s people call it the honeymoon period. It’s like the first, this is a debate. First 30 to 45 days your listing goes up. Amazon kind of gives you the benefit of the doubt and they kinda give you a little bit of extra love and you don’t wanna waste that. You mentioned earlier on Kickstarter that you really want to come outta the gate swinging, get those VIP customers to buy right away. What is the, 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, and you need to like send a lot of traffic. What’s the little, the short window that really you’ve 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 and onto the first page or higher up in search results on, on Kickstarter.
Khiersten:
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, There’s two goals that people have. You have your actual goal, which in this case, let’s say I actually need to raise a hundred thousand dollars, but as we mentioned earlier, you’re not gonna set your Kickstarter goal at a hundred thousand because it’s gonna be so hard to hit in the first few hours. So you will put in an artificial goal of say, 10,000. So you’ve 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 a hundred thousand dollars, what you need to do within the first one to two days is hit about 25 to 30% of your real goal of a hundred thousand dollars. So you
Kevin King:
Need to go about two and a half times whatever you put your initial but initial goal, not fake goal, that’s the wrong word for it, but your, your starting goal yeah. Yeah, you be two and a half times that in the first couple days to really have a chance to, to reach in new eyeballs and get exposure to other people on the platform.
Khiersten:
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.
Kevin King:
So if I say I really need a hundred thousand dollars, that’s what I really need to do my project. And I go in and I say, I’m raising 10, I hit that really fast and I use my list and I get to 25,000, 30,000 really fast and just doesn’t take off on, you know, with the, the general crowd cuz it’s so niche or something and I only end up raising 60 grand. Kickstarter is still gonna pay me the 60 grand minus minus about 10% for their fees. So minus six grand minus about 5%, you said five to 7% of the credit cards aren’t gonna go. So I’m gonna get somewhere in the neighborhood of 45 to 50 grand of, of the 60. Then I’m, I’m sitting here and, and I’m like, I still don’t have enough money. I still, you know that’s not just, you know, the factory has a minimum of 3000 units and 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 gotta call my rich uncle, or I go take it to Indiegogo and hopefully I can raise some money over there. What, what do, what do I do?
Khiersten:
So let’s assume that you’ve done your homework before the campaign and you’ve been smart because like, 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. You can’t extend your Kickstarter once it’s finished, but you can go over to Indiegogo and do an InDemand 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
Kevin King:
Indigogo you can leave it up there
Khiersten:
Indefinitely.
Kevin King:
Oh, indefinitely. Right. It can almost be like a little storefront in a way.
Khiersten:
Exactly. Okay.
Kevin King:
But you can’t do that on Kickstarter? No, it has to end. Okay.
Khiersten:
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 2000 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 wanna 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
Kevin King:
If you have actually a new idea and you’ve come up with some cool new, I don’t know, dog ball 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 clean self-cleaning dog bowl and self-cleaning and sanitizing dog bowl. And you put that up on Kickstarter and it does, 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 we can launch this before these guys even come out. That happens a lot. 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 legal legally. Yeah. And you can’t, you can’t stop ’em. So what, what are some strategies around that? If you’re really innovative and got something really cool?
Khiersten:
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 could do. You want to have your trademark filed. Ideally you have it before you launch your product, but you’re right. Like do the, 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 watermark, copyright, et cetera, it’s going to allow you to claim ownership of that and be the, the original. So that’s one thing you wanna do. Don’t like, make sure that you’re far in development as possible. Cause I think like classic example was the fidget spinner where you had, do you remember that campaign where
Kevin King:
I don’t remember the campaign, but I remember being in Yiwu market in 2017 or 2018 and like every freaking stall had a fidget spinner.
Khiersten:
Yeah. So fidget spinner, I don’t know the like 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, like, rode on fidget spinners 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, in theory is one thing, practice is another. But like, that’s one thing you can do, which is like, you wanna 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 when other, like we had an Indiegogo campaign live for these weighted bracelets that we were advertising and like two weeks into our Indiegogo campaign, they came to us and they’re like, yeah, we’re shutting you down because you are copying this other product in Japan.
Khiersten:
And we were like, they’re copying us. So we like, we fixed it, figured it out, but like we had to like pull down this other Japanese crowdfunding campaign that like took all of our assets and was like riding the coattails of our success. So it happens and you just kind of have to like shut them down and just be on top of it. But there’s nothing really you can do to stop people from like stealing your IP and going after it. So
Kevin King:
What’s like the general, do most Kickstarter fund campaigns? You know, if you say the average is 2025 grand or is the average like 50, a hundred grand? And then on what’s, what have you seen the most be raised on Kickstarter? Like into the millions or tens of millions? So what are, what’s like a really crazy one and then what’s kinda more like the norm where it’s a little bit, a little bit more normal?
Khiersten:
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. Like, it’s super hard to do those numbers. So when you look at the crazy unicorn, I think it was 2022 Brandon Sanderson, the fantasy writer, are you familiar with his work? 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.
Khiersten:
He know, 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, it it appeared like, he’s like, Hey guys, I’m really sorry, like, we’ve been quiet. I’ve got some some bad news, big news I gotta share with you tomorrow. So just like, 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 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.
Kevin King:
Wow.
Khiersten:
With his like, sneak attack. And I think that Brandon Sanderson is one of the 1% of people with a rabid fan base 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. So
Kevin King:
What, so launch and scale is your company and what, what do you, how do you guys work? Do you come on and take a percentage? Do you work for a flat fee? How, how what, what do you do to when someone wants to go to crowdfunding? What what’s your, what’s your, what role do you guys play?
Khiersten:
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 either ha 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 rays. 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 like 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.
Kevin King:
Okay. So you’re not just doing crowdfunding, you’re also doing, helping people launch their, their Shopify stores or, or WooCommerce or whatever it may be.
Khiersten:
Exactly. So our specialty right now is helping that brand, like either new seller or Amazon sellers get established by launching and scaling their brand on either Kickstarter or Shopify.
Kevin King:
Okay, cool. And how would people reach out if they wanted to, to learn more about Launch and Scale?
Khiersten:
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 wanting to learn a little more.
Kevin King:
Anything else people should know about crowdfunding that we didn’t haven’t covered?
Khiersten:
Watch my video. Three reasons I think you should stop using Kickstarter in 2023.
Kevin King:
Three reasons why I think you should stop using Kickstarter in 2023. That’s on YouTube.
Khiersten:
It’s on YouTube.
Kevin King:
You could 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 gonna give ’em a lot of ideas to chew on and think about on what they wanna do.
Khiersten:
My pleasure, happy to be here.
Kevin King:
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 wanna 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.
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