Crowdfunding products: pressure does not make perfect


Crowdfunding products: pressure does not make perfect

One of the most painful examples of delayed promises of crowdfunding is Palestine-based Bold Knot, a great-looking bank-charger-cable on a keychain. The campaign in July 2015 raised $154,903 - 456 percent over their goal, and was featured in publications like Reuters, Forbes, TechCrunch, France 24 and Wamda.

They’ve not managed to deliver on all their promises, delaying deliveries of the product for over a year.

Since then, scathing comments from donors have rolled into their Indiegogo and Facebook pages, asking why they are yet to receive the product and demanding refunds. Here are some comments on the their crowdfunding campaign:

“2015 … 2016 … 2017 ? Or never?” Patrick Mendez, 13 hours ago
“I want my money back. You Frauds!” Rakeshpandya, 1 month ago
“I am tired of waiting. I want a rebate,” Kimberly Johnson, 14 days ago

Wamda tried to reach the Bold Knot team several times in 2016 and 2017 but have yet to receive a response. However, updates from their crowdfunding page indicate the team is both highly remorseful and highly frustrated about the delays.

“We'd like you to understand that we cannot send all units at the same time. The dispatching of units and shipping times depend on which country you are located in… The shipments are disbursed gradually and this is why things are a bit slow. We received and read all of your complaints and I want you to be sure that we are taking care of all of your requests and complaints,” read their updates.

The last update indicated all rewards would be fulfilled by March 2017 - nearly two years after their crowdfunding campaign.

When the focus is moved away from angry donors to the entrepreneurs running the campaigns, delays are just as painful for the latter who are often labelled as shills, liars and charlatans when products don’t appear on time - or ever.

Stress of disappointing customers

Leen Sadder launched the This Toothbrush campaign on Zoomaal in late 2013, raising more than $18,500. Like Bold Knot, she was late in fulfilling donors' rewards - over one year late.

Throughout the tardiness, which Sadder said was incredibly stressful, she sent out regular emails to her over 300 backers to keep them updated on the challenges she was facing finding a manufacturer and reaching a ‘golden sample’.

“It is so stressful to know that you might be disappointing someone. I ended up writing handwritten notes to backers [when shipping the reward] because I genuinely felt a connection with the donors... I felt indebted to them,”  she said.

THIS cutter case dellivered to backers of Sadder's Zoomaal campaign. (Image via THIS Toothbrush)

“One mistakes I made was offering the product itself to everyone who donated…  We had 300 backers but when you go to production, the minimum order quantity, or MOQ, was 6,000,” she said.

Figuring out where to ship all those miswaks and then how to sell the remaining 5,700 products was a turning point for her - turning This Toothbrush from a project to a business.

Without that pressure to fulfill her promise to donors, Sadder’s startup may have never taken off the way it did, she said.

Press and promises, without a product

Crowdfunding campaigns are often seen as a ‘no strings attached’ type of funding.

But for product-based startups without a functioning and tested product in hand, and who are raising money for the first time, it can be unexpectedly grueling process and, to put it plainly, a mistake.

Hind Hobeika, founder of swimming tech wearable Instabeat, launched her Indiegogo campaign in early 2013, raising more than $100,000.

The perks of donating anything above $139 was a promise of an Instabeat HUD (heads up display), delivered by October 2013. The reward was not delivered until two years later.

“You become a consumer-facing company when you are still a research-based company. It is very dangerous because it changes your priorities and makes you think short-term rather than long-term and not necessarily scalable because you’re getting pressure from a few customers [to fulfill rewards],” said Hobeika.

“It’s stressful and it’s online and people are really harsh online,” she said. “Your reputation can be ruined online in a matter of seconds so it’s a big risk to take.”

But more valuable than the funds, which are often insufficient to launch a product anyway, is the proof of demand and visibility a startup receives during the crowdfunding campaign.

“I had one person whose fulltime job was to send emails to press and others during the duration of the campaign,” said Hobeika.

Even before the product was ready, it was featured in publications such as Mashable and Fast Company. The hype allowed Hobeika to get feedback from swimmers, raise interest from manufacturers, and increase visibility among investors and potential users. It also proved that there was a demand for her product.

Pushing the product before pushing the campaign

Maku Sandals, founded by William Choukeir, David El Achkar, and Hanane Kai, is the most recent example the MENA has of running a successful crowdfunding campaign. Launched in October 2016 on Kickstarter, the shoemaking company raised nearly $100,000, far exceeding their $20,000 goal.

The Maku team spent months preparing for their launch and researching crowdfunding campaigns in depth. Once launched, they sent out emails to their contact lists based on a strategic and well-planned timetable that would keep momentum up and maintain continuous traction.

“Nothing was organic, everything was pre-planned,” El Achkar said.

They have recently secured a manufacturer, El Achkar told Wamda and plan to fulfill to delivery the sandals to their backers by April 2017.

Maku sandals raised nearly $100,000 on their Kickstarter campaign. (Image via Maku)

Manufacturing Maku sandals is surely less complex than an electronic product like Instabeat, but the company has already informed their backers of possible delays.

“As of today, we’re sourcing most of our materials from Europe, and assembling and testing in China… The timing of Chinese New Year this year (end-Jan to mid-Feb) is such that it squeezes the buffer we've built into our timeline before Chinese New Year and creates some risks of us missing our deadlines, by a month or so,” read a December 1 update.

Unlike Instabeat and This Toothbrush, however, Maku Sandals began their campaign with a working prototype in place that proved to be a product users enjoyed. What is ahead of them is taking that prototype to mass production and El Achkar is confident they will be able to fulfill their deliveries with little to no delays.

But for others thinking of crowdfunding for their early startup, getting the product as far along as possible before going for crowdfunding is key.

“I just think it can be a very painful experience if not planned well and if you don’t already have manufacturing partners on board,” Hobeika said.

Feature image via Pexels.

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