The event was a great opportunity for startup founders to go over the challenges when bringing a hardware product to market and share some tips to build effective crowdfunding campaigns.
#1 Did the “wow effect” fade away?
The hardware landscape is now crowded with companies. When we take a look at funding, the figures speak for themselves. According to CB Insights, in 2016 a total of $4.4B flew into consumer hardware in 624 deals and about half of this amount went into early-stage ventures. 2016 broke all records registering 450+ first-time financings. Rythm, the Californian company who built Dreem, a wearable device improving sleep quality, was among of them. “Consumer hardware startups continue emerging at a fast clip,” writes CB Insights. The interest of both investors and entrepreneurs has risen.
It’s true that technological progress has encouraged new players to jump into the pool. “Digital fabrication is now in your garage”, recognized Clarissa Redwine, Design & Tech Outreach Lead at Kickstarter who moderated the panel. The accessibility of 3D printing technology and the decreasing size and cost of sensors - just to mention some of the drivers - have strongly contributed to strengthen the hardware community worldwide.
On the one hand, the process of building hardware products has been democratized. “Now, hardware startups know exactly which steps regarding design and manufacturing processes to follow,” explained Jacob Flood, founder and CEO of Mindset, maker of headphones that aim to improve the wearer’s concentration. In other words, design and manufacturing processes can now be very clearly outlined.
On the other hand though, more fish in the ocean means more competition, as well as smarter competition. Unsurprisingly on the consumer side, this translates into higher expectations. Quality standards for products have never been this high. Therefore, the wow effect tends to be harder and harder to trigger for hardware startup companies.
#2 Crowdfunding: take good care of your pre-launch
Increased competition across the hardware landscape has raised the standards in terms of what the quality of a crowdfunding campaign should be. “It’s almost like your creative assets need to be better than the product itself,” explained Roy Morejon, President of Enventys Partners. Today, it’s not so much of a “nice-have” than a “must-have”: all the written content, photographs, graphics and videos have to be outstanding quality-wise. More importantly, your target customers should be able to create an emotional connection with your project and identify themselves as the perfect users of the product just by engaging with your content.
"There are 14.5 millions of backers on Kickstarter who funds on average 2 campaigns. “It’s hard to build trust with a community when you actually need years to build products,” said Roy Morejon
Pre-launch is actually the phase you should pay the closest attention to. It all starts with drafting the right messaging and communication about the problem you’re actually solving. “We spent a lot of time figuring out what the problem we were solving was and how we could convey that message in the most effective way,” explained James Flood.
What’s more, pre-launch is the time when email addresses are collected, first - and precious - feedback on your product and early users’ testimonials are received. This will help set your expectations based on data and facts as well as your success metrics.
Beyond that, pre-launch should be dedicated to building a community around the product. In this regard, “the smaller the community the better,” outlined Sam Hickmann, founder of JOY, a kid tech company known for selling the Octopus smartwatch. In the best case scenario, these people are going to engage passionately with your product and serve as beta users. “We knew that our target - young parents - were not the usual Kickstarter backer-type. So we used a lot of Facebook ads, 2-4 months before the launch to create lead generation,” recalled Sam Hickmann.
#3 More communication and more communication
Once the campaign is launched, don’t forget about those early users that gave you precious feedback in the first place. Respecting delivery times matters a lot - because it goes back to trust between your audience and your product - but keeping your backers very regularly in the loop matters even more. Even before shipping, make sure you’re spending extra special care on your communication, which should be hyper-transparent. “We would post regularly a lot of content between 4,000 to 5,000 words,” explained James Flood. Content could cover updates about your product timeline, or pictures of the team working on the product. “In each post, we always made sure to include questions for our backers,” Flood shared, because in the end, it’s all about community engagement.