This article is for anyone who is curious about why and how 8Mode launched its first Kickstarter. It's not a story of how to get rich overnight (we wish!). In our case, the result was a great experience. It was a start of a side business that turned a hobby into something more interesting. It was more work than we thought it would be. Overall, we accomplished what we set out to do and we can't wait to launch our next product.
How We Got Started
No big secret here. We just decided to start. A Kickstarter was something we talked about for years. We got tired of just talking about it.
Instead of talking about ideas, we began talking about how to make something out an idea.
Our thinking about it was like this:
- Anyone can come up with an idea for a product.
- 50% of those ideas are actually good.
- 20% of the people with good ideas have the right motivation or ability
- 2% of those people are crazy enough to try and actually make and sell it
We figured we'd try to be part of that 2% group. We sure wouldn't be successful if we didn't try.
Ok.. so we're going to do it.. which idea should we start with?
We both had a long list of ideas for toys, games and gadgets, but we agreed that we should build a unique product that people want and one that we would both enjoy making. It should also be something we could manage with all of our other responsibilities including our families and a full time job.
One Idea Kept Coming Up On Top
It helps to be observant. In early 2017, we noticed that gas stations started selling fidget spinners directly in front of cash registers. Of course our kids were obsessed these things. At the time, they were fairly basic. Our idea was to make one with a display that told you how fast it was spinning. We were pretty sure that would be popular.
We were surprised to find that there was nothing like it on the market at the time. Some had flashing lights and unusual shapes and materials, but nothing had the POV (persistence of vision) display we envisioned.
We felt like we had something. We had the skills to do it and it would be fun to make. We knew it was only a matter of time before someone else did it, so that motivated us.
We Needed a Plan
We began by outlining the features we wanted and a rough schedule to get it done.
For features, it would have 8 different functions (or modes) like showing speed, spin time, effects, etc. Somehow we came up with 8Mode as our business name. We talked about case design, weight, colors and everything we could think of that would make it a great product.
Our approach was to stick to the idea of a "Minimal Viable Product". We would constantly refine our ideas so the product would be as simple as possible. For example, one of our ideas was to build a Bluetooth smartphone interface. If we had decided to do that, we would probably still be in development. Although it would have been a cool feature, we realized that it was not very realistic for us to do. Maybe next time. Throughout the entire project, it was very hard to not give in to ideas like that (This is where having a great business partner is a big help). We did end up adding some features that our backers came up with, such as the clock mode, but we made sure these things wouldn't put too much strain on our schedule.
The schedule outlined every detail. It helped us estimate that we'd be able to finish everything by August. This resulted in a spreadsheet that included deadlines like complete case design, finish beta firmware, order parts, marketing on Facebook, etc. and the costs (our budget) involved with each step.
It's worth noting that we completed shipping all of our rewards to backers on time in October. The secret was that we gave ourselves 2 months of extra time to get it done. Along the way, we ran into several problems and delays. As it turned out, we needed that extra time, but we met the shipment commitments we made to our backers. That was very important to us.
The idea of planning for "worst case" was also important with finances. In our plan, we detailed how much every step and part would cost and all the materials and tools we needed to buy. We always estimated high. In the end, most things cost less, some cost more, and there were costs we didn't even plan on. In the end, we were well under budget. We used the available cash for extra things like trying some experiments with marketing or buying some tools that would speed up production.
Deciding What We Wanted To Get Out Of It
Making a lot of money was not one of our goals for this one. Sure it would be great, but the goals we talked about were:
- Build a quality product that we can sell
- Make our customers happy
- Have fun doing it
- Begin to establish a great reputation
- Learn about manufacturing
- Learn about social media and marketing
- Start building some infrastructure that we can use for the next one
- At least break even financially
In hindsight, we're really glad that we talked about these goals. Especially with a business partner, you need to agree on what success is and what you're trying to accomplish. If one of us expected to make a million dollars on this thing, one of us would be very disappointed!
Planning How We Would Handle Success or Failure
Not knowing what could happen with your Kickstarter can mess with your mind. You have dreams about it going viral. You wake up in a panic wondering how you'd actually make a million spinners while touring the country doing television interviews. Sounds silly, but when someone can raise over $50,000 for a Bite of Potato Salad, you have to be ready for anything.
We put a lot thought into what the possible outcomes of the Kickstarter could be and how we'd deal with them. The possible outcomes seemed to be:
- It would fail. We would learn and try something else
- We would be successful within our capabilities. We figured we could handle around 1000 units at most
- It would somehow go crazy and we'd be faced with having to make a million spinners for the rest of our shortened lives.
- We would sell more than 2000 spinners. This would force us into outsourcing high volume production which would be very risky and difficult for us to do.
We were concerned about being too successful. Going back to our goals, it's not like we wanted to quit our jobs and make spinners full time. It turned out to be very hard to make just 400 of them. I'm not sure what we would have done if it went crazy. We always had the option to cancel it or limit the number of pledges if we felt it was out of control.
We did a lot of research into other Kickstarters that we felt were similar to ours. That gave us a good sense of what would likely happen with ours.
Prototype Build and Test
Before you launch a Kickstarter, you need to have a prototype - a working physical product. We built a few prototypes and did some testing with various sensors, bearings and 3D printed cases. Part of our plan was to get the design and software -mostly- done before launch. We would complete a final design during and after the Kickstarter. This turned out to be a good plan. We got a lot of excellent ideas and feedback from backers that we included in the final product.
Finances and Establishing a Business
In our case, we decided to establish a company as an LLC. There are other options, but we felt it was the best for us long term.
There were a variety of things we needed to buy including materials for the prototype, a domain name for a website, a 3D printer and so on. Kickstarter doesn't give out advance payments, so Mike and I decided to take a risk with our own personal expenses to help us get started. We didn't risk more than what we would be comfortable losing if the Kickstarter failed. We also figured if it failed, we'd at least end up with some gadgets like 3D printers.
We did good business accounting. We started with WaveApps, which is a free web based accounting system. We uploaded and categorized all of our receipts. The benefit of doing this is that we always knew where the money was going against our budgets. We tracked our personal expenses before we got the big check from Kickstarter. It was helpful with decisions we had to make about if we could afford a new tool or more ads. Finally, at the end of the year, we have what we need to file our taxes.
Getting Ready for Launch
It was harder than we planned to get everything ready. This included getting the product videos and various images together. We did most of it ourselves, but we used some great people from Fiverr to help with some of the graphic design. We put together a basic web site and accounts for Twitter, Facebook, etc. We wrote press releases and had everything ready to go.
The other thing we needed to decide was a dollar amount for the Kickstarter goal. If we picked a goal that's too high and we didn't reach it, the project would be unsuccessful and we would get nothing. If it was too low, then we would't have enough funds to complete the project.
We picked $20,000 based on our project estimates which meant we needed enough backers for around 1000 spinners. Most of the cost in that $20,000 was for the injection mold tooling we thought we needed. (More on that later).
We picked a date and time. We clicked Launch on Kickstarter. Literally within 2 minutes, we started getting pledges!
The first 4 days were amazing. We were tracking towards our goal. We were getting great comments from backers who were excited about the project. We thought we would easily exceed the $20,000 goal!
Then.. pledges began winding down. We entered a long stretch of just a few pledges a day. It just ran out of steam.
We tried everything we could with facebook ads, twitter ads, contacting newspapers, online forums, you name it.
At the end of the 30 day Kickstarter, we only raised $9,912 against our $20,000 goal. It wasn't going to happen.
About midway through the Kickstarter, we realized we probably weren't going to make it. We talked about Plan B. We never gave up fighting for the $20K, but we had a backup plan ready to go.
Plan B - Relaunch
Four days later, we relaunched the Kickstarter, except we did a much lower goal of $2,250 and we ran the campaign over 10 days instead of 30 so we could keep the project on schedule. We were able to do a lower goal because we decided that we would do our own 3D printing for the spinner case rather than outsource injection molding. We sent updates to the backers from our old campaign explaining how we were changing from injection molding to 3D printing. A good percentage of our backers continued backing our new campaign.
In just 7 hours after clicking the launch button, we exceeded our goal! In the end, we raised $7,740. It was awesome! We did it!
This is where the hard work started! Although we had 3 months ahead of us to deliver, there was a lot to do.
- Finalizing the product design
- Completing the development and testing of the software
- Ordering shipping materials
- Writing the instructions
- 3D printing the cases
- Ordering all the parts and electronics
- Building the circuit boards
- Assembling and testing the spinners
- Setting up an account with Backerkit for shipping (Highly recommended. Amazing company)
Keeping Our Backers Up To Date!
We've backed some Kickstarters ourselves. We know what it's like to not know what's going on. We got into conversations with our backers through email and in the comments sections. We published an update every few weeks and answered every question as quickly as we could. This was an easy and fun part of the project. We're not sure why some Kickstarter projects don't do this very well. There were a few things we really wanted to avoid:
- We didn't want anyone to post a comment like "Any updates on shipping?"
- We didn't want to have to explain why the project was delayed.
- We were careful to never commit to something we couldn't do.
As it turned out, someone -did- ask about shipping updates the -day before- we planned an update! Oh well.
You can -feel- how your backers hold you accountable, but if you keep an open and honest dialog going, you can really make some great relationships and get a lot of new ideas. We really wanted to make our backers happy and be very clear about what the product was and any problems we had along the way.
Ready to Ship!
After sending some final test units to friends and getting the thumbs up, we starting shipping at the end of September. It took us a month to finish building all 400 units and get them out the door.
Right away, we starting getting great reviews from our backers. A few backers had problems we took care of right away. Some things got lost or damaged in shipping. A few didn't work right. We made sure that we took care of every backer with any questions or concerns. There's always going to be some problems, but we never forget that our backers trusted us and gave us a chance to be able to build and deliver a product. At the end, we felt profoundly thankful for that.
Was It Worth It?
You bet it was! Not financially really (we did end up making enough money for a nice lunch!), but the experience and what we learned was more than we hoped.