Crowdfunding is growing in popularity of use and as a viable means for businesses to generate start-up funds and pre-sales on new launches.
However, they can be tricky and not all are successful! Be wise and learn from others to be successful!
I previously highlighted the successful Kickstarter campaign run by KOOSHOO that was wildly successful (see KOOSHOO blog post) . And with that success the team at KOOSHOO planned a new campaign for their new product!
They shared the details with me on these new multi-size, eco-friendly kids pants...
We're launching The Best Kids Pants in the World on Thursday via Indiegogo. They fit 3X longer than other kids pants so literally grow with your child. We're getting rave reviews from our tester parents and the teaser video we has been watched well over 30,000 times in the past 2 weeks.
This time around it's been different, yet good, and also an incredible learning experience for the KOOSHOO team! So much so that they (and I) thought that sharing their learnings from this crowdfunding round on Indiegogo were just as valuable as sharing what they learned from their first success on Kickstarter.
The goal was simple. Launch a new product and get a great head-start on sales with a crowdfunding campaign.
Here's the blog post about why they're making kids pants. There are some good story elements in there!
As for the business side of it, they approached this campaign with a 3 pronged marketing strategy:
1) Word Of Mouth/Social sharing
3) Paid Social ads
The addition of paid social is new to this campaign (when comparing to their last successful campaign).
A powerful tool that's being used again (in updated form) is their easy sharing page for friends. This is sent to all friends, family and backers to help amplify the message. It's used in addition to writing personally to influencers that they have a previous relationship with.
The goal was to raise a minimum of 30% of the funding goal ($25000) within the first 72 hours. This was for 2 reasons:
1) 90% of campaigns that raise 30% go on to raise 100%
2) on Indiegogo, the platform we're using, once you've hit 30% you appear on their internal radar as a possible campaign to promote. This is not a guarantee - it just opens another option for press
More insights from the KOOSHOO team:
We chose Indiegogo over Kickstarter because we're a Canadian company that has all our costs in USD. Indiegogo allows you to list in a currency of your choice ($USD for this campaign) whereas Kickstarter only allows you to list in your home currency (making you subject to varying exchange rates over the length of your campaign).
We chose to run a 60 day campaign this time (last campaign was 30 days) as we're approaching it as a marathon and not a sprint. A tremendous amount of work goes into generating collateral for a campaign like this (as can be seen in the campaign) and it's nice to have it out to the public for longer if possible.
Reflections from the current campaign from the team at KOOSHOO...
"This campaign has taken a very different path from our first campaign. It's been successful (and there is still 3 weeks to go) though we've also learnt some very valuable lessons along the way:
We closely modeled this campaign off of 2 of Kickstarter's most successful launches, both of which focused entirely on the product being sold and not the philosophy behind the brand. In hindsight, this was a mistake for us.
Our brand is all about ethical shopping and conscious consumerism. This was our primary focus in our first successful campaign but this time, in trying to model our campaign after the biggest crowdfunding successes, we lost the "be a part of something greater" feeling that made us so successful the first time. After the campaign went live we adapted the script to better reflect our philosophy and we have seen better conversions because of this."
The lesson here is: make sure that your why statement is as clearly outlined as your what - especially for cause focused businesses.
"We were working on the campaign right up until it went live.
In hindsight we would have pushed back the launch date (despite the hype we'd built) and tested the campaign on a handful of people before it was live (you can do this through a demo mode). I believe we would have identified some of the weaknesses in the campaign that we believe led to the abandonments and could have addressed them before the traffic arrived.
With a campaign like this a massive amount of traffic comes in the first 72 hours (in our case about 5000 views). Once that traffic has come and gone it's tough to get them back with the same excitement and impulse towards purchase. Losing out on those early conversions completely changed the course of our campaign.
Our goal of $25,000 is what we need to produce this product at break-even. Because we wanted to make these Kids Pants regardless of the outcome (they're too good not to be made), if we had a chance to do it again we'd have set a target like $10,000 - something we knew we'd hit easily - and the 30% would have been a breeze. Hindsight is a beautiful thing :)"
Another key takeaway is from the Google Analytics widget that we installed on our campaign (highly recommended). We were shocked to learn that in the first 24 hours we had 187 cart abandonments - to just 43 conversions. Had we converted just a fraction of those abandonments, this campaign would have been hugely different.
Click through behavioral tracking through Indiegogo (our chosen crowdfunding site) is not available so we cannot know for certain why people were abandoning cart. To us, the abandonments came down to 3 principle factors:
We overhauled our shipping prices and provided more information about the packages up front to address the first two points but frustratingly, we cannot do anything about the confusion surrounding the checkout process with Indiegogo.
If we could do it again, we'd choose to launch with Kickstarter (where we ran our first campaign) and not to work with Indiegogo. We've been quite disappointed with Indiegogo on many levels.
Press, a massive driver of our success last time around, seems to be tiring of crowdfunding storylines. We have 6 pieces with prominent publications that will be coming out once the Kids Pants have arrived on our website. Each of those publications chose to cover the story from our site rather than drive people to another crowdfunding campaign. This apathy towards crowdfunding (the novelty has worn thin since we last ran a campaign) caught us off guard.
These Kids Pants are the best product we've ever made from a design perspective. We thought we'd sell a ton of them because of this. Our major mistake with regards to product is that we underestimated the importance for parents to buy a kids garment and have it delivered immediately. Waiting up to 6 months turned many parents off. We anticipate much stronger sales from our site once they launch because they'll ship immediately. We would not launch a kids product in future via crowdfunding.
With just under 2 weeks to go we're gearing up for a very strong final push. This includes social media engagement, paid social and press. We anticipate that with the many changes made to the campaign, we'll be able to overcome some of our early challenges and finish strong.
The product is too good not to launch so we'll be going to production on the pants regardless of the outcome (we are on a flex funding campaign so we get the funds regardless of hitting our goal). With a lot of press to come we're confident the product is going to be a big success for us, regardless of the outcome of this campaign.
We have learned a tremendous amount about crowdfunding, shopping behavior and our products from this experience. These learnings have already made our company and this product much stronger. Though not the home-run we anticipated, it's been one of the best experiences we've had for our brand. In addition to this, several interesting new business opportunities have presented due to our reach with this campaign."
What a honest, helpful, and open self-review this is by the team at KOOSHOO!
They did not reach their early goal of 30% of the funding goal ($25000) within the first 72 hours. They are currently (as of writing this) at $9224 raised which is 37% of the goal. Again, they will receive all funds whether they reach 25k or not.
Lot's of learnings for anyone considering a crowdfunding campaign on either Indiegogo, Kickstarter, or another platform!
It's all about evaluating, measuring, and adjusting to achieve success. Kudos to the team at KOOSHOO for being open to share, for learning, measuring, and adjusting their campaign, and for being willing to share it with our community here! Plus, well done on the entrepreneurial spirit of persevering, adapting, and prevailing!!
Thoughts or questions on their crowdfunding campaign and the learnings from it?
Interested in the KOOSHOO Kids Pants? Check it out here >>