Problem is, $50K is too little to interest a venture capitalist, too much to put on your credit cards, and too much to borrow from the bank. If you’re motivated, have a clear vision for your product, and have a good handle on production cost, then there’s another, relatively risk-free option: Kickstarter (www.kickstarter.com).
Basically, it’s an eBay for DIY funding in which you pitch your product plan to the world. Anyone or any company can back your project. The cost is 5% of the funding, but only if the project is fully funded. Unlike a venture capitalist or silent partner, you get to keep all of the intellectual property.
I recently backed a Kickstarter project that transforms a smartphone into a realtime IR camera. Sure, I could just buy a more expensive stand-alone unit off the shelf and not worry about warranty, customer support, or wonder if the designer will be around in two years, but that isn’t the point. It’s fun to support someone’s dream and — at least vicariously — be part of the action.
Back to your dream. Let’s say you need that $50,000 to produce 100 mouse control units at $500 each. As on eBay, you set up an account so that you can get paid. You’ve got to describe your project (including a video or at least photos) and set up categories of backing. Support isn’t an all-or-nothing proposition.
Typically, the first level of support is a thank you email for a pledge of $1. At, say, $25, a backer receives an official project t-shirt. At $100, you might offer a bare-bones PCB with full schematic and instructions.
At $250, you might offer an unassembled kit with all the parts. A pledge of $500 gets you the full product (shipping extra). A pledge of $750 gets one of 10 custom units, in dusty blue, signed by you.
At $1,200, you offer to hand deliver and install a unit at the customer’s site.
You can use Kickstart to fund just about any reasonable project. I’ve seen projects ranging from $1,500 to use drones to search for Sasquatch to $120,000 for a speaker system, to $7,000 for a ghost detector that plugs into an iPhone. I’ve seen projects funded at up to 1,500% over target. For their 5% cut, Kickstart hosts your product website and handles the financial transactions.
In addition to raising money to pay for your dreams, Kickstart is a great test marketing tool. Let’s say that after 30 days your rodent control device has only $3 in pledges. That’s great marketing feedback for a relatively small investment in time and effort.
Perhaps you can redesign the unit so that you can offer it at, say, $200. Or, perhaps you need to invest time in making a quality video that will attract more backers.
Even if you opt to bypass the funding and mortgage your home, the Kickstart site is worth visiting and studying. Take a look at what’s selling and what isn’t.
Most importantly, study the how-to guides on how to put together a killer video, how to put the best marketing spin on your DIY project, and how to plan for the details that tend to fall through the cracks — such as the hidden cost of bubble mailers.
Finally, be careful for what you wish for. If you find you project funded at 300%, then you’d better have time (and space) to build a few hundred of those mouse control units. NV