Rebranding a Failed Crowdfunding Campaign, John Lauten – AOTK 224

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. 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 project 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.

Welcome to another edition of Art of the Kickstart. Today, I am joined with John Lauten with Skully Technologies. John, thank you so much for being on the show.

John Lauten:
Hi, Roy. Glad to be here.

Roy Morejon:
All right. Skully Technologies is one of the well-known million-dollar campaigns on Indiegogo. Skully Incorporated raised over 2.5 million dollars on their Indiegogo campaign for an augmented reality motorcycle helmet, ended up folding, leaving its backers kind of high and dry. Now, you guys have taken over, formed a new company, and acquired the crowdfunding legacy, if you will, of the Skully campaign.

I know our audience is really going to be excited to hear the overall story that you guys have gone through, so please tell our audience where this all started and give us some background.

John Lauten:
Very good. Well, of course the audience knows about the record-breaking crowdfunding that Skully Inc. did with Indiegogo. Unfortunately, Skully Inc. was never able to get really past prototype on their product. They didn’t ship the product to the Indiegogo investors, and they also took pre-orders. You may not know this. They took pre-orders on their website up to the day where they folded, leaving a lot of people stranded.

The sad thing is that the enthusiasm and desire to have this product still remains very high. So these people were not only stranded, but they didn’t get what they wanted, which was the Skully smart helmet. So when the investors, the new investors, acquired the assets and patents of the old Skully Inc., they brought on a brand-new management team. Our team comprises of very experienced technologies [inaudible 00:02:47] executives.

We looked at the product and quickly had to deal with this whole issue of the failed crowdfunding campaign, failed meaning that it never shipped product, and also with the pre-orders that were taken. And we looked very closely at the brand value. Using an outside research company, we determined that the Skully name is still red hot and is still a very much desired product out there in the marketplace and, if we were going to bring it back, we decided to keep the Skully name.

However, how would you deal with this negative image that occurred? What we did is we decided to keep the Skully name but, in the process, make it right. We started the Make It Right campaign, which we decided on from the get-go when we launched the company last spring. The Make It Right campaign essentially says we, the new company, Skully Technologies, realize that these unfulfilled orders are out there, and we’re going to make it right with those Skully nation fans by shipping them a helmet. We’re not refunding anything. We’re not obligated to refund anything, but we’re going to make it right because the Skully nation really wants this product, and it’s in all of our best interests for the brand to do so.

Roy Morejon:
Yeah, I agree. Obviously, the helmet had so much technology in it with the rear-view camera, the 180 view, the transparent heads-up display, turn-by-turn navigation. I mean, this was really ground-breaking technology for the motorcycle enthusiasts that are out there, and obviously there was tons and tons of press that came out about the company shutting down. And obviously, you guys acquiring this and doing that Make It Right campaign is awesome.

But obviously, you guys have incorporated a lot of challenges along the way. What are some of those things that you guys have worked to develop and improve the overall Skully brand name and technology?

John Lauten:
The first thing we did is we continued to develop the product to reach a mass-production quality. It sort of shut down at a prototype level, and now we’re going to be ready for mass production this summer. We’re going to offer all the features that the fans wanted from the original Skully that never shipped, and then we’re going to pivot right way to the [inaudible 00:05:04], which will incorporate additional features that state-of-the-art technology allows us to put into the helmet.

Roy Morejon:
On the marketing and the PR side, what’s been the biggest challenge there in terms of dealing with all the downfall from the original company and then taking it over from here?

John Lauten:
One of the first challenges we saw was that the web is full of negative postings related to the old Skully. I mean, some pretty harsh stuff. It’s enough to scare any marketing director from the job. You had to deal with that first, and the right way to deal with it is to start creating your own new good news stories.

The Make It Right campaign worked really well for us because we announced it in early October and received a lot of positive both formal press, peers, and customers applauding that we’re doing this.

Roy Morejon:
How many additional pre-orders did the Skully team take before they shut down after the crowdfunding campaign?

John Lauten:
It’s in the thousands.

Roy Morejon:
So you guys right now are balancing product development with finishing out the Indiegogo campaign as well as all the other pre-orders that were taken in. How are you guys getting prepared for mass production and marketing once you guys actually ship the product to the backers and all of the other orders that need to be fulfilled?

John Lauten:
The good news is we did receive the data of the individual customers which had pre-ordered both on Indiegogo and on the website, so we know who they are. We’ve invited them to register for their helmet, and we’re making it very, very easy to register. We’ll compare to our database and make sure, of course, that we have a matching record, and we go from the register quickly because we’re going to fulfill the free helmets on a first come, first serve basis.

We’re allotting a certain number of helmets each month from the production toward the Make It Right campaign, so it’s essential that they register quickly. The good news is the fans got the message and we received over 1,000 registrations in the first 10 minutes when we went live with the Make It Right campaign.

Roy Morejon:
Yeah. I’m sure people are pretty eager to get their product, right?

John Lauten:
Not only that; the second most common email we were receiving was, “Thank you so much, Skully Technologies. Oh, and by the way, can I order a second one?” So the fans are very much alive, and that was very encouraging to us.

Roy Morejon:
That’s great to see. What tips would you have for someone else looking to develop a tech product like this?

John Lauten:
I think that tech product development is a difficult journey, and I think that crowdfunding is certainly an excellent way to start if you don’t have the pockets or have a parent company or investors. In the case of Skully Technologies, we’re actually owned by a larger conglomerate that is fully funded, so we will not need to use any crowdfunding going forward, but I do believe that that was a good thing to do on behalf of the old Skully when they were starting.

I think that the other challenge you have to keep in mind is that it is, in general terms, a lot more time-consuming and expensive to launch a product than you originally think. I think that that’s why you definitely want to make sure that you don’t over-promise. That would be another thing that I would emphasize. If you’re starting a new product and you’re going crowdfunding, don’t over-promise, and make sure that delivery dates are solid. That’s how we operate.

Roy Morejon:
Absolutely. How can a crowdfunding creator potentially avoid ending up in a position where they’re unable to fulfill their rewards?

John Lauten:
I think that you probably should time your crowdfunding event a little bit later for a little more mature stage where you have a good sense of where you can deliver, or I would recommend not asking for the full price up front. Skully, once again, was very remarkable that way, that the enthusiasts literally put down the full purchase price of the helmet, again, and then become a record Indiegogo campaign at the same time.

I think that would be the two things I recommend, is have a more mature supply-chain schedule before you can launch, and then if you have more doubts, maybe not go for the full 100%.

Roy Morejon:
Interesting. What’s been the biggest surprise since Skully Technologies took over the product and began trying to make things right for their backers?

John Lauten:
I think that the biggest surprise to me was how spot-on we were with the Make It Right campaign and how it resonated very quickly all over the world and the Silicon Valley press. We even had the CEO of Indiegogo request to meet me. He requested to meet me at the CES Show in Las Vegas, and we met and he told us we’re the first company that he’s aware of that has taken an Indiegogo campaign that failed and made it right.

That all was a very big surprise. We received, also, very high praises from peers. For example, [Refrizio 00:10:22] of Amazon sent us a message saying well done. Very affirmative. That part of it was a surprise.

Roy Morejon:
Interesting. Yeah, Slava definitely should have reached out to you. You definitely made him a nice six-figure commission check on the campaign. It’s good to know that they’re obviously reaching out, and it’s obviously great that you guys came back to the crowdfunding community itself and actually delivered on the promise of the overall campaign from the original Skully team.

Given all of this breadth of knowledge, what’s the biggest thing that you’ve learned overall?

John Lauten:
It’s a very good product, and when you have a good product with a good concept, it can be revived, I have learned, despite a failed initial start. You can overcome faking pre-orders if you make it right. Basically, it all comes back down to the fundamentals of a solid technology product that appeals to a core group of fans.

I would also emphasize that you want to do your market research. We did independently verify both the brand, the market desirability, and the potential customers with outside firms just so that you don’t operate the gut feel. You gotta check it out.

Roy Morejon:
What else should the audience know about you guys?

John Lauten:
Skully Technologies is actually one company under a broader group of companies that are transportation technology-oriented. The major investors in Skully technologies are two investors from Spain that also own a variety of other transportation technology companies, including a European electric scooter company called [Torrent 00:12:04], a motorcycle company called Gas Gas that wins world championships around the world.

They also own a ride-share electric scooter service called Moving, which is now launching in Atlanta next month, which is all a part this transportation technology umbrella. I welcome you to check that out. We continue to evolve, but we’re not just a helmet company.

Roy Morejon:
John, this is going to get us into our launch round. I’m going to rapid-fire questions at you. You good to go?

John Lauten:
Yeah. Sure.

Roy Morejon:
What inspired you to be an entrepreneur?

John Lauten:
I love business.

Roy Morejon:
If you could go motorcycling with any entrepreneur throughout history, who would it be?

John Lauten:
Tim Cook.

Roy Morejon:
All right. What would be your first question for Tim?

John Lauten:
How do we sell Skully to Apple?

Roy Morejon:
There you go. Good question. Who did you look up to growing up as a kid?

John Lauten:
Interesting. George Lucas.

Roy Morejon:
What book would you recommend to our audience, or what book’s on your nightstand right now?

John Lauten:
I love the Steve Jobs autobiography.

Roy Morejon:
Good reading.

John Lauten:
Or the biography, of course. He didn’t write it.

Roy Morejon:
Sure. Last question, John: what does the future of crowdfunding look like?

John Lauten:
Very strong. It’s an excellent way to raise capital for a new business.

Roy Morejon:
I agree. Well, John, this has been awesome. Please give our audience your pitch. Tell them what you’re all about, where people should go, and why they should go check you guys out.

John Lauten:
Absolutely. Come to our website. It’s skullytechnologies.com. We’re launching the world’s most intelligent smart motorcycle helmet, and we’re going to ship this summer. You’re going to not only have a more enjoyable rider experience, but you’re also going to have safety features that will protect you and people around you.

Come check out skulltechnologies.com, and we’re also very open to hearing from you. And from a [2.0 00:13:53] model, we’re using input from our Skully nations to design the feature set. So let us know what you’re thinking.

Roy Morejon:
Awesome. John, thank you so much for being on the show. Audience, thanks again for tuning in. Make sure to visit artofthekickstart.com for all the show 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.

Of course, if you loved this episode, make sure to leave us a review on iTunes. John, thank you so much for joining us today.

John Lauten:
Thank you, Roy. It’s been a pleasure.

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