Lessons Learned from Four Crowdfunding Campaigns

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, turnkey product development and crowdfunding marketing agency in the world. We have helped startups raise over 100 million dollars 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.

Roy Morejon:
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.

Roy Morejon:
Now let’s get on with the show.

Roy Morejon:
Welcome to another episode of Art of the Kickstart. Today I am joined again with the one and only, Gareth Everard. Gareth, thank you so much for being on the show today again.

Gareth Everard:
Yeah, thanks for having me back.

Roy Morejon:
So Gareth, you were on the show, episode number 134 back in March of 2016. Obviously a lot has gone on the past three plus years since then. You’ve just finished launching your fourth crowdfunding campaign, so the first one was back in 2014 with the Rockwell Razors and then again with the Model T, and then again with the Rockwell Chrome, and now more recently finishing up a solid campaign for Keyto, that’s raise upwards of over a million dollars.

Roy Morejon:
So let’s start in the past with giving our listeners a little bit more background on yourself. Tell us about the crowdfunding journey that you’ve been on so far, and how all of these crowdfunding projects have come to be.

Gareth Everard:
Yeah, for sure. So way back … like you mentioned, way back in 2014 my co-founder and I in Rockwell were pretty frustrated with kind of the state of the razors at the time, this was kind of when Dollar Shave Club and Harry’s were come out. But tons of guys were still overpaying for razors, and getting ingrown hairs and razor bumps, and still they were throwing out truly thousands of tons of plastic waste every year. So we identified that there was a better way. We redesigned the classic safety razor, and got some patents on this design that eliminates ingrown hairs and razor bumps. Literally used 10 cent razor blades that were fully recyclable, so kind of invented this new kind of safety razor. And we launched a Kickstarter campaign when we were in our senior year of college. That ended up doing $150,000.00 raised. It was quite a process to get everything to market, everything manufactured, manufacturing is never as easy as you think.

Gareth Everard:
But we did manage to do a few other razor designs on a Kickstarter and Indiegogo over the years. So that was the Model T and the Chrome series, like you mentioned. I think Rockwell over the years raised 1.2 or maybe a little more million across a few crowdfunding campaigns. And by the time that this is released, all of those … all of those razors will have been shipped to backers over the last year. So it’s been quite a process, but really proud of what we’ve built in Rockwell over the years.

Roy Morejon:
Yeah, I can’t imagine that many campaigns, that many backers, supporters, all the customer service that goes on now. I know you’ve had some challenges with the Rockwell T, what are some of the things that you’ve encountered, not only with the first razors, but as you evolved that company?

Gareth Everard:
Well there was actually … I mean, we can probably put it in the show notes, there was a great … great, if I do say so myself, there was an article that I wrote for Venture Beat back in the day called How My Kickstarter Blew Up My Life, and that was about the first campaign where we manufactured 2,000 razors … this was for the 2014 campaign, we manufactured 2,000 razors. They weren’t … we had them shipped out, we were really kind of proud of what we’d made, but it ended up that a number of those razors, because we’re really talking about fractions of millimeters making the difference on shave quality, some of them weren’t up to spec and not up to our standards and our backer’s standards, so I actually had to go back to the well. I went several hundred thousand dollars in debt to remake every single razor and ship out a free replacement to all of our backers.

Gareth Everard:
So that was back in … I think we did that second shipment in 2015. And on the back of that came out with our other razor designs, and we really learned that it’s important to do it right the first time. So the Model T has 18 moving parts in that razor, it’s a really novel design, I think we have three or four patents on it at this point. Just because it’s so unique and it did raise over $700,000.00 I believe, so there was a lot of interest. It’s the most pre-ordered razor of all time as far as we can tell. So we wanted to make sure that we did it right. It took a little bit longer than expected to get a razor with 18 moving parts right, but really proud of where we’re at now, and again, by the time this is out, we’ll have … we finished shipping most of them a while ago, but there’s just a few left in some certain finishes and colors that are left outstanding, and excited that those are just about at the door.

Roy Morejon:
So in terms of preparations now over the last five years of becoming a crowdfunding expert, if you will, launching multiple products out there, how long have you spent, or what changes have you made in terms of preparing for crowdfunding campaigns differently now with the knowledge base that you’ve built up over the years?

Gareth Everard:
Well it’s an interesting question. Back in 2014, it’s hard to imagine, but back in the day there weren’t really ads for crowdfunding campaigns, you just kind of threw it out into the ether, and if people were interested maybe you would get mentioned on Reddit, maybe you’d get some press, and that’s kind of campaigns went, quote, unquote, “viral”. This is before the days of pretty regular million dollar campaigns, so back then we did no preparation at all and it was around the time of Model Ts when you guys were really getting your legs under you, and of course there’s some people started figuring out ads for campaigns. So the landscape’s really changed from when I started.

Gareth Everard:
Now we prepare a lot more from having empathy for the customer, that’s what’s number one, first for us. Really understanding what they might be looking for, and using the platform as a place to test ideas, test business models, test what messaging resonates with our customers. So it’s really gone from a place where I think people crowdfund complete ideas, where they’re really, really early in the process, to a platform where you’ve got to be a lot further along, I believe, in the process and you’re not so much testing hey, is this a viable notion? But you’ve got to be much further along, and that’s what we did in Keyto, we were extremely far along in the product development, which is why we were … even for a consumer electronic product, I mean, just last Friday, we’re recording this at the end of April, just this last Friday we finished shipping the 12,000 units to backers. They were all on schedule which is crazy, especially for a consumer electronic, none of them were any more than one month off our original estimate date, and we shipped a lot of them actually early.

Gareth Everard:
So I think that’s really how my ethos has changed around it. It’s gone from where you test an idea to where you test messaging and how you can best serve your customer. But you’ve got to be really rock solid and far along in that product development cycle.

Roy Morejon:
Absolutely, and Gareth, I know as a brand and as an individual you’ve always strived to put your customers first, giving them extra razors, talking to them, really communicating and understanding … the empathy for them. Talk a little bit about your experience now over the last five years of dealing with backers, or supporters. How have you gone about managing their feedback, promoting products, and making sure that you’re delivering the product that you promised them?

Gareth Everard:
Yeah. I think that campaigners who go into campaigns who aren’t prepared for really that intimate relationship you develop with backers, they might think of it as quote, unquote, “dealing with backers”, we really think of it was doing our absolute best to serve them. So we try to get back to everyone within 48 business hours, really quickly, answer comments as soon as possible so that there’s no open questions.

Gareth Everard:
That’s, I think, serving those backers is the absolute most important thing and that’s … anyone going into a campaign should be eyes wide open, that’s going to be first and foremost, because these … you really have an opportunity to develop relationships with people who from day one are going to be your number one spokespeople … anywhere, like in person, on the internet, you have the opportunity to develop some raving fans. So doing any … behaving any other way than serving them as best as possible is just … is just not good planning.

Roy Morejon:
Yeah, and speaking about raving fans, I mean, after each one of these campaigns has ended, what tips would you have for someone that’s launched their campaign, or recently finished their campaign, to continue that conversation with that customer, and continue to grow your business and brand at the same time?

Gareth Everard:
I mean, so in these campaigns you’ll get their email, and you’ve got to make sure that you have their permission to email them, but you do have … if your campaign goes well, you’ll have a pretty substantial email list. So really, we’re in 2019, but email’s still really the best way to keep in touch with those customers. Offering them kind of special early access to the next things that you’re working on. Hopefully if your campaign was successful, you are working on next things. That’s really … look, these people who are on crowdfunding campaigns are there because they like being early, they like the community aspect. And presumably, if they’ve backed you, they’re really interested in what you’re building. So keep them posted on what you’re building next.

Roy Morejon:
So I know you … going through it with the Rockwell campaign, how could a crowdfunding creator avoid ending up in a position where they’re potentially unable to fulfill rewards, or even deliver on time?

Gareth Everard:
Yeah, that’s a really great question. We’re … there’s fortunately, because there have been so many companies that have come out of crowdfunding at this point, there’s a much more mature market for investors who understand that there are ideas that might be early in the process, who are willing to back a company before you go to a crowdfunding platform. So for example, Keyto raised two and a half million dollars from some of Silicon Valley’s best, like we were fortunate to have David Sacks from Craft Ventures was our lead investor in our seed grant, and that actually, that seed grant closed before we even launched our crowdfunding campaign, and a lot of that capital went towards just really confirming the R&D on the ketosis breath analyzer that we created.

Gareth Everard:
So I think that taking advantage of that and understanding that there’s a market for those pre-crowdfunding investments in today’s capital markets, and using that capital to prove out the concept before taking it to crowdfunding will go a long way. So that you’re not left scrambling with trying to prove out the concept with backer’s money. I think that that’s the most dangerous thing, and that’s what’s gotten some of those most famous quote, unquote, “kickstarter fails” into trouble in the past.

Roy Morejon:
So yeah, let’s jump into Keyto. So you guys just put out an update this past week that you guys have shipped up … I think up to 6,000, up to contributor 6,000. So 5,000 units potentially shipped out on time as planned. Let’s talk a little bit about that campaign. How did that idea get started, and what are you doing with that company now?

Gareth Everard:
Yeah, so that’s a great question. So that update was actually before we shipped out another 6,000 units just this past week. So we’re pretty deep into it at this point. We shipped those 12,000 units. Last week was a pretty crazy week at the fulfillment center, as you can imagine.

Gareth Everard:
Next steps for Keyto, now that we’ve got our backers just a fantastic deal, they managed to buy the hardware only with a lifetime premium subscription. For now, given the just insane interest in the product, we’ve been really looking forward to moving over to a subscription model where we have some just incredible software that we built on the back end. So we now have the opportunity to get people the Keyto hardware for free, and let them subscribe to our proprietary software. And that really puts the business onus on us to keep delivering. We’re really excited to move to this new model, and really put us in a position as a business that we can keep improving that app, improving the software, and improving the experience for all of our customers. And of course our earliest backers will be grandfathered into premium software for their lifetime. So really excited about what’s next for Keyto.

Roy Morejon:
So I’m going to jump back a little bit. You had mentioned that you had raised two and a half million in a seed round for Keyto before launching the campaign. Talk to our audience a little bit about that, and how did that potentially affect the valuation of the company going into a campaign?

Gareth Everard:
The valuation in the campaign, it’s a … we did product crowdfunding campaign so the valuation didn’t come into it a whole lot there, but I’m fortunate that some of my co-founders, all of my co-founders really are completely exceptional individuals. Ray and Leanne previously … two of my co-founders, previously sold a company called [Waylos 00:13:24] that they’d taken through Y Combinator, the accelerator, and they sold that company to Weight Watchers. So really relevant experience in this industry.

Gareth Everard:
And then the other co-founder is Dr. Ethan Weiss who’s a very well known cardiologist out of UCSF. He’s on the board of Virta Health which is a quite relevant company in the ketosis, ketogenic diet space. So really just an absolute rock start co-founding crew. We were able to raise money from just investors that I’m still kind of pinching myself to this day. So I think that that … having that pedigree of co-founders certainly helped the valuation. But I’d encourage any first time founders who are coming in to do a crowdfunding campaign, they shouldn’t obsess so much over the valuation. Just … if we’re in this world as entrepreneurs, we’re going to get so many kicks of the can. I always have to remind the young companies I’m angel investing in, don’t worry so much about the valuation on your first company. Just do your best. If you can show that you’re building something and that you’re an intelligent person who’s going to continue building things, you’ll have a ton of kicks of the can.

Roy Morejon:
Absolutely. So what’s the biggest thing that you’ve learned through this whole process of launching multiple crowdfunding campaigns now, Gareth?

Gareth Everard:
The biggest thing specific to crowdfunding?

Roy Morejon:
Sure.

Gareth Everard:
Yeah. I think that the preparation that goes into your campaign is 80% plus of what you need to do. Pay whoever you need to who’s experienced and understands crowdfunding campaigns to make sure that that campaign page, your pre-launch email list, all that stuff is so, so, so much more important than people think. The ads, and all, and PR, all of those are just sort of icing on the cake. But don’t ever forget that the email list, that the hype that you’ve built up before launch day, the old adage still stands, those first 48 hours of the crowdfunding campaign are by far the most important. So you should definitely behave as much, and really at the end of the day that comes down to what’s on the campaign page, including the video, as well as your pre-launch email list, and especially, here’s something I’ve been seeing a lot of, people collection pre-launch emails, but not engaging with those emails. So you could be collecting emails six months in advance, but if the first time that someone who subscribed to your email list six months ago, if the first time they’re hearing from you is saying, “Hey, we launched our campaign, please back us as soon as possible,” that’s not a warm lead anymore. They’ve probably forgotten who you are.

Gareth Everard:
So making sure that in that email list, that you’re collecting people who have expressed interest in backing your campaign, make sure you’re engaging with them. There’s great software out there. I think Mailchimp has automations now, Klaviyo has automations where you can even automate that engagement just to let them know every … shoot them an update every week as you’re ramping up to that campaign. That would be the number one piece of advice I’d have with the software that’s available now.

Roy Morejon:
Yeah, solid advice there, Gareth. I know there are quite a few campaigns that do some pre-campaign marketing but don’t have, let’s say, that drip campaign set up to actually engage the audience and learn more of them, and try and get the feedback from them to potentially make the product better, or understand how to market it to that consumer better so that they do actually back the project on launch or launch day.

Gareth Everard:
Yeah, absolutely, that’s crazy.

Roy Morejon:
So Gareth, what I’m excited about is hearing where are you headed next, man? What’s next after Keyto, or is Keyto the thing right now?

Gareth Everard:
Keyto is absolutely the thing right now. We’re really excited about everything that we’re seeing in Keyto. Definitely doubling down on that. Rockwell’s a great business, I continue to be a co-founder in that business, but a lot of my time is just making sure that we’re serving customers as best as possible in Keyto. We’re already seeing people having tremendous success. I mean, I guess I didn’t introduce the product fully here, but it’s a breath analyzer that you breathe into and it’ll tell you how much fat you’re burning on the ketogenic diet. And essentially, people are using it as a bit of a training tool to optimize their low carb, high fat diet, which there’s plenty of literature out there, and lots of people in the bio hacking and outside the bio hacking space talking about how clearly this is an incredibly healthy diet for people. So we’re already seeing a tremendous number of the 12,000 people in our community having just really inspiring success, and seeing more of that success is everything that’s on my plate right now. Really excited.

Roy Morejon:
Yeah, that’s really inspirational too, I know for our community. So what else should the Art of the Kickstart community know about Gareth?

Gareth Everard:
Oh, not anything right now. Mostly I’m just keeping my head down and building the Keyto marketing and all that good stuff. But I think if you ever want to reach out, if you have questions about crowdfunding, always feel free to reach out, I’m just Gareth@GetKeto.com, or Gareth@RockwellRazors.com. So I’ll just … Roy, I’ll shoot you both those emails for the show notes, but feel free to reach out to me through either of those, and happy to give any advice.

Roy Morejon:
Awesome. Well Gareth, I’m not going to go through the launch round with you because you’ve done it before, but I will ask you a new … the same last question, but maybe you have different insights into this. In terms of what does the future of crowdfunding look like now that you’ve done this four or five times?

Gareth Everard:
I think I’ll bring it back to what I mentioned before, I think that crowdfunding is moving more and more, and I’m heard some rumblings that Indiegogo and Kickstart are even moving their platforms in this direction, to really reward people who are further along in their process. I’d encourage people more and more to not necessarily use crowdfunding as a place to take capital and prove out their concepts, but where they kind of get the initial feedback before doing their full launch.

Gareth Everard:
So for example, what we’ve done in Keyto, is we got to test a lot of messaging, a lot of video content, a lot of written copy and content. And all of it is stuff that we intend, and have delivered to customers already. But really understanding better what they value most. And we essentially now have been able to harness 12,000 beta testers for the entire Keyto program before quote, unquote, “fully launching” what we knew all along we wanted to launch. So now we’ve got 12,000 people who any of them can be like our next big success story, and we’re getting more success stories every day.

Gareth Everard:
I think more people moving to approaching crowdfunding from that perspective and that thinking point, that’ll be just more and more successful for everyone. The backers, the campaigners, investors, everyone.

Roy Morejon:
Absolutely. And that’s what we all want to see, is more successful innovations being brought to market with hopefully a little more due diligence than they may have been six, seven years ago.

Gareth Everard:
Absolutely.

Roy Morejon:
So this has been really awesome, I know our audience is going to love this. Thank you everyone for tuning in. Make sure to check out artofthekickstart.com for the notes, the transcript. Links to everything we talked about today, and Gareth’s email. And of course, thank you to our crowdfunding podcast sponsors, The Gadget Flow and Backerkit.

Roy Morejon:
Gareth, thank you so much for being on the show today, really great to have you on again.

Gareth Everard:
Yeah. Thanks Roy, always my pleasure. Talk soon.

Roy Morejon:
Thanks for tuning into 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 the 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.

Roy Morejon:
Thanks again for tuning in, and we’ll see you again next week.