Crowdfunding a Fitness Product with Ron Lynch – AOTK 239

Roy Morejon:                    Welcome to Art of the Kickstart, your source for crowdfunding campaign success. I’m your host Roy Morejon, President of Enventys Partners, the top full-service, turn-key product development and crowdfunding marketing agency in the world. We have helped startups raise over $100 million for our clients since 2010. Each week I’ll interview a crowdfunding success story, an inspirational entrepreneur, or a business expert, in order to help you take your startup to the next level with crowdfunding. Art of the Kickstart is honored to be sponsored by BackerKit and the Gadget Flow. BackerKit makes software that crowdfunding project creators use to survey backers, organize data, and manage orders for fulfillment by automating your operations and helping you print and ship faster. The Gadget Flow is a product discovery platform that helps you discover, save, and buy awesome products. It is the ultimate buyer’s guide for luxury gadgets and creative gifts. Now let’s get on with the show.

Roy Morejon:                    Welcome to another edition of Art of the Kickstart. Today I am joined again, once more, with Ron Lynch, CEO, Creative Director of Big Baby Agency and Bonfire Enterprises, with a new product, Rove Gym. Ron, thank you so much for joining us today.

Ron Lynch:                        Thank you Roy, it’s nice to hear from you.

Roy Morejon:                    As always. So we had Ron back on the show way back on episode 211, about 30 episodes ago. He’s here again with another product launch, his third Kickstarter campaign, Rove Gym, currently sitting at over $60,000 in funding. So let’s talk about Rove Gym and crowdfunding in general. Now it seems like you like crowdfunding and product launching there. Why do you think Kickstarter is so good and great for companies looking to launch products this way?

Ron Lynch:                        I think it’s really good for individual entrepreneurs and for companies because it allows you to do so much really solid market testing right up front and get knowledge about both your customer and your product and get people’s reactions. It helps you cultivate your creative, it helps you find offers, and it creates transactions. There’s nothing like somebody really slapping down money for your product to tell you how they feel about it. The other piece is, I think a lot of people are coming into the marketplace with their first product or a new product, and they have a company no one has heard of.

Roy Morejon:                    Yeah, this is definitely it. So I know four, five, six months ago maybe, we helped launch BackStrong, now the campaign, you know, done over half a million dollars in funding for it. We always talk about how important launching and the lead-up to launching a product is. With this campaign, was there anything different that you did to launch and see such good success early on in terms of preparation for the campaign?

Ron Lynch:                        Yeah. We utilized Instagram stories and Instagram and Facebook ahead of the curve this time, very aggressively. So what we did was, I mean I obviously shot a piece, which is about a four-minute-and-40-second piece that would ultimately become the video that’s on Kickstarter. But I took the best 57 seconds out of that and created a highlight reel that had no verbiage in it. It just showed the device and it had graphics. And so it was kind of an exciting short TV commercial, if you will, for the product. And at the end of it, we used a lead funnel ad from Facebook to get people to give us their email address so we could notify them of pre-launch activities and the launch date. And that allowed us to utilize Facebook pixel to deliver I think about 250,000 pixels out there and collect about 3,000 pre-launch emails. So we then had a real audience to advertise to.

Roy Morejon:                    So this product is unique, given the higher price point and the education necessary to get a consumer to buy into a product, not only at the price point but also how it’s going to help them in their life overall in terms of health and wellness. Why do you think this product, given all of those factors, was unique and a good fit for crowdfunding?

Ron Lynch:                        First of all, I think that the product was farther along in its design and its manufacture, that it’s close to deliver. I think there’s been some pretty famous stories of products that have gone on Kickstarter and either have never delivered or had such a long development cycle after their Kickstarter closed that they would have real high customer dissatisfaction. And this product was close enough to actually going into production. They had done a lot of really solid engineering and the prototypes were excellent. So that allows you to create a promise for a customer that you believe that you can fulfill. The photography of the product looks solid. The experience of the product looks solid. Now, in fact, we’re utilizing Kickstarter Live to show people in a real, kind of HSN setting if you will, that the product is solid. So I think that that was critical, was for a product of that price point, and we’re going between $500, $600, and up to $1,000 for this product, which is really high for Kickstarter. People have to have a high degree of confidence that you’re going to follow through and you’re going to be able to deliver.

Roy Morejon:                    What unique challenges has that high price point, if you will, brought into play? And how have you overcome them so far in the campaign?

Ron Lynch:                        I think that the number one thing is, there’s rule makers and rule breakers, and I’m traditionally a rule breaker. A lot of the thorough thinking, and I think it’s good thinking for Kickstarter, is hey, keep your video two to three minutes because that’s about as long as a person’s attention span is for a product. But this product is a gym plus a rower, and there is a piece of exercise physiology that you have to understand in order to want to buy the device. So we got it as short as we could with telling the story, but it was four minutes and 40 seconds long. And oddly, or ironically, I’ve done a lot of infomercials in my day that are half-hour, and a lot of short forms that are one and two minutes. But per minute, one of our most successful television formats, is the five-minute. If you look at advertising spend versus return on investment, a five-minute infomercial is very solid.

Ron Lynch:                        And that proves to be true for things like Rug Doctors. I sold Rug Doctor carpet cleaners for 700 bucks in five minutes, super efficiently. And so because of the dollar value and the explanation required, we had to stretch the time I think. But it doesn’t feel like a stretch. We’re packed full of information, we get out of the spot as fast as you can. But when we get out of it, you’re ready to make a buying decision. So I think that the number one thing when you create length is not how much do you have to say about your product, but how much needs to be heard for the consumer at the other end to make a purchase decision.

Roy Morejon:                    So let’s talk a little bit about deciding on target market and audience. Now obviously you’ve got years of experience on this. Did the initial audience or market that you were targeting during the pre-campaign matchup with those backers that have come in now once the campaign went live?

Ron Lynch:                        Well that’s a really great question and it’s a really great question that’s Kickstarter-specific. Because the Kickstarter audience is a specific type of person. They are younger, they have disposable income, they tend to revolve inside the tech industry or close to the tech industry. They are pocketed primarily in California and New York. There are some things about the audience that may make you, I’m going to say, tweak your creative to suit the crowd.

Ron Lynch:                        I believe ultimately, this product will not be that different when it eventually gets to market and to infomercial, than say a P90X, where it’ll have a very large female consumer base and a male consumer base. And we’ll have probably three or four groups of people rise to the top in the gender populace that will want this device, that are completely different in demographic. Whether they’re fitness people, whether they’re looking to lose weight, or they’re actual athletes or people who consider themselves to be weekend athletes, that are looking for getting a faster trigger to their muscle and true athletic performance out of it. So this creative is specifically focused though at that kind of tech crowd, folks in, that could have this in their office and work out in their office.

Roy Morejon:                    That’s interesting. Customized creative for the crowd, right?

Ron Lynch:                        Mm-hmm (affirmative).

Roy Morejon:                    So what’s been the biggest challenge that you’ve encountered with this campaign this far?

Ron Lynch:                        I surprisingly, I think that the creative itself answered an awful lot of questions. If you don’t mind me just exposing what kind of a mistake that we made, ’cause I think people learn through mistakes, is we had to set up a second company for this company. Because it’s a Canadian company and there’s an American site for the company. And initially we used a Canadian, two bank accounts, two companies, so we used the Canadian bank account and set up on Kickstarter in Canadian. And as we loaded all of the dollar values of our product into Kickstarter and hit launch, it converted all of what we thought were US dollars into Canadian values. Which radically threw off the pricing and we would have been out of business in about a week. So we had to close the campaign and immediately fix that, switch all of the data to the American side of the company, and re-launch the campaign a few days later through the American side of the company in American dollars.

Ron Lynch:                        So, we make mistakes and we learn. And I think that’s an important thing to note about Kickstarter and to just have a process for.

Roy Morejon:                    Absolutely. No, I’m glad you brought that up. Outside of that, any other big surprises on the campaign so far?

Ron Lynch:                        It’s 96% male purchase. I thought it would be heavily male, but I’m not sure that since I’ve done a tool show that I’ve seen, I’ve done a bunch of power tool shows over the years, I’m not sure that I’ve ever seen weight so heavily male in a purchase.

Roy Morejon:                    That is interesting. So what should a company consider before deciding to launch a crowdfunding project for, let’s say, a health or fitness product on their own?

Ron Lynch:                        So I think the keys are: One, do you have an innovation? Does your product have enough margin that you can express a retail price that’s a true retail price that you know you’re going to have to cut substantially down for the Kickstarter audience? So you need to have a 4X, 5X kind of cost of goods to eventual marketplace price. Because that’s not the price you’re going to be testing on Kickstarter. You’re going to be testing the sale price, quote unquote, on Kickstarter. So you need to make sure that you have that margin intact. And then third, is there an actual audience for it? And is there an audience on Kickstarter for the product? There may be products, for instance now I think I would be reticent to put a female-focused fitness product on Kickstarter. I would probably switch to one of the other crowdsourcing forums that tend to have an audience that’s more female, if I had a product that I thought was really weighed towards the female audience. I think that’s one thing I would definitely take a look at.

Ron Lynch:                        So you need to have that margin, you need to understand that that margin is going to be the fuel for your product, and that you have audience. And then tell the story.

Roy Morejon:                    Indeed. All right Ron, this is going to get us into our launch round. You’re familiar with this. I’m gonna rapid-fire five questions at you. You good to go?

Ron Lynch:                        Good. I’ll try and answer them shorter than the last one. Sorry, I’m a little verbose.

Roy Morejon:                    All good. So I always ask this one but let’s see if your answer changes. What inspired you to be an entrepreneur?

Ron Lynch:                        Initially when I was a kid, greed probably inspired me to be an entrepreneur. And once I got over the greed muscle and had that flex out a few times and had it and lost it and had it and lost it, it became more about the actual difference I could make in the world. That we really focus on finding really quality products and bringing them to people and doing things that improve and make the world better.

Roy Morejon:                    So talking about being a kid, who did you look up to when you were a kid?

Ron Lynch:                        Probably, there weren’t a lot of business superstars when I was a kid. ‘Cause I’m 51, I’ll be 52 this year. So they were probably athletes and musicians and probably actors and movie directors. Probably looked up to George Lucas a lot, and Steven Spielberg.

Roy Morejon:                    Nice. What book are you reading right now?

Ron Lynch:                        What book am I? I’m reading like four books at the same time right now.

Roy Morejon:                    How do you do that?

Ron Lynch:                        Maybe it’s ADD but I pick one up and I put one down and I pick one up and I put one down. But I’m actually reading a book on poker, as odd as that sounds. It’s called Poker Wizards. I’m reading my friend Josh Lee’s book called Balance is BS. I read books on religion and philosophy and physics as well. I have a strange, eclectic taste in books. I tend to not read fiction.

Roy Morejon:                    You’re so well-rounded. All right, what’s your favorite way to exercise?

Ron Lynch:                        Probably walking home from the bar.

Roy Morejon:                    There we go. All right Ron, last question, what does the future of crowdfunding look like?

Ron Lynch:                        I think the future of crowdfunding is really interesting and it’s going to grow, in that I think you’re going to find a coalescence of types of crowdfunding platforms for types of things. I think film and creative will kind of coalesce in one of the platforms. And I already see that gaming and actual physical products seems to be coalescing in Kickstarter. The films and TV things don’t do that well there, the creative things that are like intellectual property products. But the gaming stuff and the physical products do really well in Kickstarter. So I think you’re going to see the shops, so to speak, split up into types.

Ron Lynch:                        And I think there will probably at some point be some regulation involved. Because no doubt someone will step forward and will dupe somebody in a painful way. Because the platforms are actually so loose that I imagine that somebody will get stung at some point and there will be some form of regulation put on the industry. ‘Cause it’s kind of the wild west, and I think that it’s operating in kind of a gold rush mentality. And those things tend to get regulated over time. Just like Facebook advertising, right? It was a gold rush for Facebook for 12 years and now they’re kind of taking a look at that and going, “How should this really be working?”

Roy Morejon:                    Here comes the regulation, I know. But no, we do need it, especially with high-profile campaigns like OSSIC X that just kind of went under and left 10,000 backers without their headphones, unfortunately.

Ron Lynch:                        Yep.

Roy Morejon:                    Well Ron, this has been awesome again. This is your chance to give our audience your pitch. Tell them what you’re all about, where people should go and why they should check you out.

Ron Lynch:                        If you want to have a Kickstarter campaign consulted on, put together, written, or shot, you should look at us at bigbabyagency.com. If you already have a consumer good that’s in the marketplace, that’s rising and selling, we also have an investment side of our business that considers consumer goods. And we take those companies from probably $500,000 in sales and we grow them into corporations that we invest in that hopefully do $100 million, and then there’s an exit for everybody. And that’s Bonfire Enterprises, so we have both of those companies. And I’m easily reachable at ron@bigbabyagency.com.

Roy Morejon:                    Awesome. Audience, thanks again for tuning in. Make sure to visit artofthekickstart.com for notes, the transcript, links to everything we talked about today. And of course, thank you to our crowdfunding podcast sponsors, the Gadget Flow and BackerKit. And if you loved this episode as much as I did, make sure to leave us a review on iTunes. Ron, thank you so much for joining us again on Art of the Kickstart.

Ron Lynch:                        Thanks Roy, nice to talk to you. Have a great day.

Roy Morejon:                    Thanks for tuning in to another episode of Art of the Kickstart, the show about building a business, world, and life with crowdfunding. If you’ve enjoyed today’s episode, awesome. Make sure to visit artofthekickstart.com and tell us all about it. There you’ll find additional information about past episodes, our Kickstarter guide to crushing it. And of course if you loved this episode a lot, leave us a review at artofthekickstart.com/iTunes. It helps more inventors, entrepreneurs, and startups find this show and helps us get better guests to help you build a better business. If you need more hands-on crowdfunding strategy advice, please feel free to request a quote on enventyspartners.com. Thanks again for tuning in and we’ll see you again next week.