Marketing Your Crowdfunding Campaign

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If you’ve been following along with this series so far, you now have an idea of what platform you want to use, and a good idea of your pricing, rewards, and content. I’ve been mentioning marketing a lot during my articles, but I never went into the specifics of how to handle it. If you have the budget, you could hire a firm or team to do this for you and save yourself the painstaking effort, but if you’re doing it yourself, then this article will, hopefully, get you on the right track. Keep in mind that if you have your own ideas, you shouldn’t be afraid to go for it and try them out!

Pre-Launch Marketing

As mentioned in the previous article, you need to have your social media accounts set up long before you’re ready to go live with the campaign. These accounts and your activity should at least be creating some awareness of what you’re doing in the relevant communities. You need to have also joined and been interacting with the appropriate groups on Facebook and Reddit.

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Having the social media side of things down is great, but it doesn’t supplant mentions on prominent blogs and news sites. Getting an article on a popular blog can account for reaching your entire project goal without much difficulty, so they are essential. Years ago, I saw two similar projects for laser-cut wood stationery running in the same month on Kickstarter. One made $700, while the other made $80,000. Both were pretty similar as far as usability and function go, but one went all out on blogs and marketing, and the other only posted about their campaign in a couple of facebook groups that were not particularly relevant.

When you’re getting ready to tease your product to build hype, make sure your website has a way for people to sign-up for the newsletter/mailing list. I have found Mailchimp to be the easiest platform to use, but there are many other alternatives available, so feel free to rely on whichever suits you the most. Having a popup on your website after 5-10 seconds is an annoying but effective way to get mailing list subscribers. A “Coming Soon” page with a mailing list sign-up for the product is a great idea too.

If you’re not sure where to get featured, research other campaigns in the same genre and search for them using a popular search engine. Once you’ve researched a few campaigns, you’ll quickly figure out the top 10 or 20 places. Large, relevant YouTube channels and Instagram accounts can also be wonderful reviewers, depending on your product. Some sites you’ll find are purely news-based, while others might want to get hands-on with the product and show what it can do. Previously in the series, I mentioned budgeting for additional prototype boards – this is their purpose.

As you find places that could review or mention your product, collect the names of the people posting the articles if they are available (especially for larger websites with many writers). Some sites may only take a press release, while others might respond better to receiving a more informal message. Create a spreadsheet of all the websites, their writers, and their direct email addresses where possible (an info@ or news@ address probably won’t do much for you). Alternatively, you could use a free CRM/Marketing tool like HubSpot to manage these contacts and keep track of when you messaged them. I found HubSpot’s canned messages system made contacting a lot of people using personalized messages much easier for one of my campaigns. If you don’t feel like it’s the right tool for you, keep in mind that there is no shortage of alternatives out there.

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Prioritize your top contacts to send ‘review hardware’ to, and make sure that the hardware is shipped at least a month prior to the campaign to allow time for them to receive and play with it. Send the others your press release or a personal message about your campaign, with a link to the campaign preview and the launch date. Hopefully, you’ll end up with several articles about your campaign going live during the first days of the campaign to get the momentum going. 

If you’re working on a product with broad appeal, contacting your local city’s media outlets (newspapers, radio stations, TV stations) can be an excellent source of additional traffic. Some news sites will appreciate a local interest piece to cover, whilst others may prefer to wait for you to hit your goal and cover the campaign as a local success story. 

Post-Launch Marketing

Once you have launched your campaign, you will want to share the link on the Facebook groups and Subreddits you previously joined, as well as post about the campaign on your own social media pages. Don’t be spammy; this can be a significant negative influence on potential customers. Be respectful of group rules. Posting about something you’ve done with your project and putting the link right at the end can be a positive way to share your campaign.

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The perfect time to send an email to the mailing list you have been building is right after clicking the Launch button. These people have taken the time to sign up and can be expected to already be somewhat invested in the product. The mailing list subscribers are likely to be your early bird backers, purchasing those limited rewards as quickly as they can.

As you hit significant milestones such as 50% funded, fully funded, and hit stretch goals (if you have them), you can follow up with the contacts in your spreadsheet. Don’t be demanding, and don’t email them too frequently if you didn’t hear back from them after your first message, then hitting an important milestone can be a great excuse to follow up. If you’re targeting news sites that require press releases, get these written up before you go live. That way, all you’ll need to do is send them out, saving critical campaign time for more pressing issues.

Elaborating further, press releases might sound difficult or scary, but surprisingly they aren’t. If you’re still not sure you’re up to the challenge of writing a press release, you can hire a freelance reporter to write it for you. However, if you are doing it yourself, consider investigating the style of the site you’re sending to, and simply writing the article about your campaign in the same style so that all they’ll need to do is publish it.

If you have a marketing budget, well-targeted Facebook ads can be surprisingly effective. In my experience, spending $1000 on Facebook has given me about a ten-to-one return with a highly targeted audience. GoogleAds have done nothing for me, with a 0% return on any amount of money spent on the platform for my projects. You can pick up $100 vouchers for GoogleAds (generally requires some spend of your own) relatively easily, so it’s worth giving a go despite my experiences.

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On your website, keep collecting mailing list subscribers. You will be able to send updates on the campaign to the mailing list, and it will be helpful for post-campaign marketing as well as any campaigns you run in the future.

Post-Campaign Marketing

Once you’ve successfully concluded your campaign and are looking for new sales, you can follow up with some of the sites that mentioned you or reviewed your product and let them know you’re now accepting direct sales. A quick marketing push can give you a sales boost from those who had a wait-and-see attitude regarding the campaign, or missed out completely.

Hopefully, you’ve kept the mailing list subscribe popup on your website active, as well as collected mailing list subscribers through your Facebook page. You can send an email out to the mailing list subscribers at this point too to capture sales from those subscribers who have taken the time to express an interest in your product. You’ll probably see a conversion rate of about 5% from these emails.

Facebook ads with a minimum daily budget can be efficient if you have a good target audience. In my experience, the ads get better results after several weeks once the Facebook algorithms learn whom to show the ads to. Consequently, you shouldn’t rush to cancel them if you don’t get the results you were hoping for after just a day or two.

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Marketing is critical to selling any product, but especially so on a crowdfunding platform. Because you only have the funding period to reach as many people as possible, and to make as big an impact on those people as possible, solid preparation becomes a necessity. If possible, you should have everything in place at least two months before you are ready to go live. All your press and media contacts should know about the campaign at least four weeks ahead of its launch date. The work you put into the marketing aspect of your campaign will be the most directly correlated to the amount of funds raised. Having an exceptional product is important, having a quality campaign is very important, but getting people to see that product and that campaign is critical. 

If you haven’t read the first article in this series and want to learn more about crowdfunding in general, check it out. Or sign-up for our service, see what is new with Upverter or contact us for more information if you want to learn more about the capabilities of browser-based design and product development.

Building Your Crowdfunding Campaign

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Just like designing and routing an RF circuit creating a good crowdfunding campaign is part art, part expertise. But just like in an RF circuit, following some best practices can get you through just fine! The more effort you put in up front, the more successful your product/campaign will be. If you go from idea to campaign in a weekend, it’s probably not going to be a huge success.

At this point, you’ve hopefully decided to give a campaign a go and decided on a platform.

Preparing for Marketing

Before you even get started on your campaign content, you should be thinking about marketing. Ideally, when you start getting your very first prototype PCBs, you should have your marketing game on. You’ll want to make sure you have accounts on all the major social media platforms at least Twitter, Facebook, and Instagram.

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If you’re not working on something top secret, post on Twitter, Facebook and Instagram about what you’re doing regularly. This will provide some history for your product which potential backers can look back through to see the product is real and that you’ve been working on it – it’s not just a spur of the moment creation. If you don’t have some history, then it might look like a product you’ve prototyped one week and launched a campaign for in the next. Even though you won’t immediately have any followers on these platforms, keep at it ‘build it, and they will come’.

Using social media management tools like Buffer and IFTTT to help you plan and automate your posts: spend one morning a week setting up posts for the rest of the week and be hands-off.

On Facebook and Reddit, you will want to join all the relevant groups (or subreddits) that you might want to share your campaign to as soon as possible. Some groups have wait periods before you can post, or take a while to get your membership approved by a moderator. You also don’t want to look like someone who just joined the group to spam your product never spam your campaign! If you can post intelligently in these groups and build a good reputation, then when the time comes to share your campaign, it will receive a much warmer reception.

Setting a Funding Goal

Setting your funding goal can be very complicated. I highly recommend creating a worst case scenario look at your costs. Start a Google Sheets or Excel sheet for figuring costs out. Google Sheets is great for teams it’s like multiplayer Excel.

 

Illustration of woman climbing coins to victory

You can find a sample Google Sheet to use as a starting point for your own calculations here.

First, you need to figure out your retail price for the product. If you do not have to compete against another product, a common way to go is to take your total cost to build (don’t forget labor!) and double it. This gives you about a 40% markup to a distributor/retailer/wholesale price, and then a 40% markup from the distributor price to retail. Even if you don’t intend to distribute your product to retailers or through other online stores, it’s beneficial to plan that into your price up front, so when someone wants to order oodles of your gadget, you can give them a price they can work with.

Now, you need to know the minimum number of units you’re able to produce. If your contract manufacturer requires you to make at least 100 units, and every supplier you use allows you to order parts for 100 units, then this will be your number. Keep in mind, you may need to order reels of parts for their machines, even at 100 units, so figure out exactly how much your total cost to make 100 units will be, including component overages, full reels (or re-reels) of parts, and an allowance for boards that will fail QC testing.

Because you’re building an electronic product, you must go through regulatory certification for it. You will likely want a minimum of FCC (USA), CE (Europe) and ISED (Canada) certification if your product is not an intentional radiator (i.e., doesn’t have any WiFi/Bluetooth/other RF or uses pre-certified RF modules) this may cost you between $1000 and $8000. This is a wide range, but it is going to depend heavily on your product. The more cables that connect to your device, the more complex your product is, the more it will cost to test all modes of operation and all configurations. If you have RF capabilities in your product and are not using a pre-certified module, you can expect to pay from $8000 to $20000+ for certifications. If your product plugs directly into AC power (hint: it shouldn’t unless you have a large budget), you might need to use a contract manufacturer who is approved by each country’s regulatory authority, and look at electrical safety certifications for your product, which can be well over $50,000. These are not optional, and are legal requirements to market and sell your product, even if you only sell 1 unit.

Furthermore, you’re going to need something to put your product in, even if it’s just a simple anti-static bag. If you’re going to use product packaging, you need to know how much this will cost. If your contract manufacturer offers a full box build service, they may be able to point you to a suitable company that can provide quotes for packaging and artwork.

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You’re also going to need to ship the product. This cost is often forgotten when pricing up a crowdfunding campaign. You’ll need boxes or mailing bags (hint: mailing bags are cheap and versatile) plus shipping labels. Buying a label printer like a Dymo 4XL can save a considerable amount of labor. If you’re sending parcels internationally, you’ll also need document pouches for customs invoices to be placed in. Don’t forget to calculate shipping fees, keeping in mind that most platforms prefer you to offer free shipping, which will need to be built into the product price. Typically, the most expensive shipping destination should be considered probably Australia, New Zealand or South Africa. If you receive many orders from these destinations, the cost of shipping can eat into your profit margin substantially.

Finally, don’t forget to budget for office supplies (pens, printers, toner, paper, etc.), test equipment and especially labor. You do not work for free and should be paid for your time accordingly. Estimate all of these costs as appropriate, either per item sold or as a fixed cost.

You should now have a line item for every expense you can think of, either as a fixed cost or a per unit sold amount. Add up all the fixed expenses, then multiply your per unit costs by the minimum order quantity. As a note here, if you need to buy, say, 2000 custom boxes but only need to make 100 units – divide the cost for the 2000 boxes across the 100 unit minimum, this way you won’t find yourself short of cash.

The amount you have come up with is almost how much money you need to raise. Make sure you have your shipping costs factored in, as all platforms consider total funds raised to be the sum of all payments, which includes the shipping cost of the product. If you only account for the payment of the product itself, you’ll find yourself short of funds by the amount paid for shipping if you only meet your goal. Don’t forget the platform takes a percentage, so you’ll want to add an extra 15% to the amount. This is more than the platform fee, but you’ll also get some sales which can’t be charged to the customers’ cards, which will reduce the total amount of funds raised. Then add a further 20% on top of that, for all the expenses you forgot as well as for contingencies.

Basically, your campaign goal should be at least 138% of what you calculate every cost, every hour of labor, and every box shipped will cost you. The more precise you can be, the more likely you are going to be able to make some money out of this venture if you barely meet your funding goal. Don’t make any assumptions that you’ll bust the goal; instead, make sure you can ship every order and pay yourself for your work if you only get the funding goal you set.

Determining Your Timeline

Most crowdfunding projects underestimate the time it will take to deliver the reward. As I’ve mentioned before, the amount of post-campaign overhead in time can be huge. Just dealing with shipping orders and customer service might be 2-3 hours per order. If you have the 100 unit minimum example in the funding goal section, this could be 300hrs you haven’t factored into getting orders out the door. That’s almost eight weeks of work you probably didn’t consider!

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You probably want to have some “Early Bird” rewards, which are cheaper than the others and will be delivered first as an incentive to drive early backers and gain campaign momentum. These should ship about two weeks after the fastest you can get the product built, certified and tested.

Build a Gantt chart for your project. Assume a worst case scenario for funds getting out to you in about two weeks. It could be as little as a few days, but for timelines, set everything for the worst case scenario to avoid disappointing customers.

Some items to consider:

  • Two weeks for funds to get to your account.
  • Two weeks for contingencies.
  • First article build time.
  • Two to twelve weeks of regulatory approval testing of the first articles.
  • Full production run time.
  • Time for testing each item, if the contract manufacturer isn’t doing this.
  • Time for final assembly and packaging of each item.
  • National holidays (especially if dealing with China).

You may want to get the first items out the door within a few weeks of the campaign’s conclusion, but unless you already have regulatory approval on a locked down product, this is pretty unlikely to happen.

Realistically, if you have a ready-to-go product, your first shipment is likely to be two months post-campaign at the very earliest. If you have 90% of your product finished up and merely need to sort out a few injection molds, test jigs and maybe a bit of firmware, four months would be optimistic.

From your Early Bird orders, you will want to figure out how long it will take to then deliver the rest of the items. If you plan your rewards prudently, you should be able to stagger deliveries if your campaign goes well by limiting the quantity available per reward tier. This way, you can determine how long your first 100 orders will take to be fully shipped. Keep in mind that your delivery date should be when the last shipment goes out the door, not the first! From there, you can work out how long it will take to do the next 1000 units and so on.

Building Your Page Content

The content page is critical to the campaign’s success. Platforms provide only the most basic capabilities for the campaign page, likely for the purposes of ensuring a good experience for the end user, but this doesn’t give you much creativity at first glance. For example, instead of using text headings, consider using images. Using images will let you add some flair to the page so it doesn’t look too dull, or like a wall of text.

Consider this example of titles: the first is a default title and a screenshot from a Kickstarter project I’m working on, while the second is under a minute’s work in Adobe Illustrator utilizing the PCB icon by Oriza Creativa from the Noun Project (free to use). I’m clearly not a graphic designer, but hopefully, this illustrates the idea.

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Start your content with the most important points: what the product is, what it does for the user, and why you are making it. Don’t worry about the ‘creation journey’ and such until the end. You need to sell the user on the fact they need to have your product in the first paragraph or two.

I’ve seen quite a few campaigns that put a “Featured In” section right at the top, showing what blogs or news sites have mentioned their campaign. All this does is slow the user down in learning about your campaign and product. It’s a great way to lose a potential customer, especially those who have come from the platform directly and usually won’t waste time trying to figure out what you’re selling. Sharing where your product has been featured is great, and is something to be proud of, but leave it to the end of the page.

After that, have some pictures of your product, ideally with callouts pointing out neat features.

Then you can get into the details of what makes your project so remarkable. Make good use of graphics, gifs, and diagrams here.

Before you get too far into the technical details of your product, make sure you include a comparison chart between your reward tiers to make it easy for people to figure out the differences between them. Having the rewards listed down the side of the page can make it hard to compare them. A simple table with each reward level, it’s price, and check marks for what is included makes it much easier for users to discern which one they want. If you have a multitude of reward tiers or configuration options, you could also make a vertical list containing pictures as shown below. Having a clear comparison of rewards will reduce the number of emails you get during the campaign, and give you something to send to people who are not sure which reward to pledge for. Note that this table will have to be an image, as most platforms won’t let you build an actual table into the content.

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Don’t make your page too short; it should have as much effort put in as you expect to raise funds for. If it’s just two paragraphs with a $25,000 goal, nobody will back the project. If you’re struggling to add content, write down headings for the items you want to cover, and then just flesh out each heading. In no time, you’ll have a great page!

Be open with your content. Tell people about challenges for the product, who you’re working with, and what this project means to you. Get them invested in you, your company and your product. Make them feel like they’re an integral part of the project before they’ve clicked Buy.

Creating a Video

For me, this is the hardest part of any project. I’m not a superstar video editor, and I’m not that great in front of a camera. If you’re working on a limited budget, consider putting a call into your local media college or putting a poster up on some wanted boards there. This can be a great way to get students involved, giving you a full cast, producer, editor and film crew on the cheap.

Camera close up creating a video

You want your main video to be under two minutes, but ideally around one minute. It should cover the same items as the first few paragraphs of your content what your product is, why people need it, and what it’s going to do for them. Whilst you don’t need to film your video on a film set, should be somewhere really well lit, with decent acoustics (use a Lav mic) and it should be clean and tidy. The video should be concise, so make sure you work your script out before you film.

If you have lots of really cool things you want to show off, you can usually provide additional videos as part of the campaign page, or the top carousel of media. You can also consider turning them into GIFs and embedding them in the page content.

If you’re not sure what will work well, take a look through recent top projects that are similar in theme to yours, and see what they did for their videos. If their videos are precisely what you’re looking for, you could even reach out to them and ask for a referral to the person/company that made their video.

Setting Rewards/Perks

Keep your rewards as simple as possible. If you have too many reward tiers or different product configurations, it will be too hard for you to manage, and too hard for a potential backer to decide. If you are launching multiple distinct products (such as a full-featured version and a lite version), you may wish to consider two campaigns run one after the other so you can apply what you learn from the first one in the second one.

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You can generally ignore Kickstarter’s and IndieGoGo’s advice on reward pricing as it is typically only relevant to creative endeavors like photography or film. If you’re creating a product, however, its price should be driven by its cost or by market forces rather than by trying to fit it into the suggestions of the platform.

That being said, having a $1-$5 option for people to get updates on the project or a website or Twitter mention can be an easy way to get some snacks/coffee money for when you get to fulfillment! I rarely see the big $5,000-$10,000 option rewards that are usually a dinner with the creator or something similar work unless the dinner outing is with a celebrity or public figure of some sort. It’s fun to dream up, but it might not be worth the time it takes to do so unless you are famous.

I’ve seen many projects offering swag items, namely T-shirts, mugs, stickers and such. Unless you have a company you can hand the fulfillment of these items off to, it’s probably not going to make you enough extra money to make it worth the distraction, customer service, and fulfillment time. Focus on your core product and offer options for one product, or a pack of, and then a premium pack with whatever optional products might go with it that you can outsource/make cheaply.

Early bird options are an exceptional way to get some initial momentum on the project when coupled with well-timed marketing releases by blogs and such. If you can generate a considerable influx of traffic to the project the day it launches, it can help you get a significant percentage of your funding early on. Getting that initial funding percentage is important ‘social proof’. If you reach 40% of your funding goal in the first week, you’re almost guaranteed to reach the full goal given historical campaign statistics. If your standard offerings have a 20% discount off retail, then perhaps you can offer a minimal number of products at 30%-40% off the retail price to build that initial momentum. Don’t allow early bird rewards to add up to more than 30% of your total goal or you might be cutting your margins a bit thin. If you’re expecting a large number of visitors for a major product launch, having two to three stages of early bird can be handy with a 5% price discount difference between each one before getting to full campaign price.

See what is new in Upverter or contact us for more information if you want to learn more about the capabilities of browser-based design and product development. Or sign-up for our service today.

Crowdfunding Platforms for Electronics

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If you decide that crowdfunding might be the right way to go for launching your product, the question will be which platform to launch on? For electronics, there are three choices: Kickstarter, IndieGoGo, and Crowd Supply. You might not have heard of Crowd Supply as they are much smaller than Kickstarter and IndieGoGo; however, they are purely tech oriented and when it comes to support and they offer a lot more to creators than the Big Two.

If you’re looking to make your first product and need help with the startup expenses, Crowd Supply would be my choice, as it has several exciting options for creators that the other two do not. Post-campaign management is easier through Crowd Supply, too. If you expect to be driving the majority of the traffic towards your campaign through your own marketing efforts (e.g., a niche product), then Crowd Supply would be my go-to as well.

If you’re looking to gain extra reach instead of covering the costs of getting your product to market, launching on both Kickstarter and IndieGoGo at the same time could be the optimal choice, as it enables you to make use of their traffic/existing users.

IndieGoGo and Kickstarter have had a multitude of million-dollar campaigns each. If you’re a small business or a hobbyist, however, you probably don’t want to get anywhere near this sale volume unless your product is highly priced. Hiring all the staff, leasing offices and everything else that comes with handling that many orders from nothing are going to consume far more energy and potentially be more expensive than actually building your product.

If you are in a position to handle a million dollar campaign, or even numbers approaching that, then IndieGoGo might be the better option, especially if you are planning to seek venture capital in the future. IndieGoGo is potentially an easy route to venture capital as successful campaigns can proceed on to their venture capital platform.

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Kickstarter

Kickstarter has an enormous user base and many campaigns running. This built-in community can allow you to shine with a well-presented campaign. Becoming a “Staff Pick” can pretty much instantly break your funding goal if you have a product with broad interest. The creator tools are pretty simple to use, and it’s not hard to create or run a campaign on the platform.

However, Kickstarter can let you down post-campaign. I previously mentioned the sheer effort you’ll have to put into customer service/data management post-campaign, and this is where Kickstarter starts to become challenging. Kickstarter, as well as IndieGoGo, doesn’t allow you to do something as simple as print a packing slip for every backer. You’ll need to develop tools for this or pay for a service like BackerKit to do it for you.

Upselling through Kickstarter is pretty tricky. For example, if you want to offer a branded T-shirt during the campaign for an extra $5 in addition to the product purchase, you’ll need to ask every backer who wants one to pledge an additional $5 to the campaign. Then try to figure out what this extra amount is for post-campaign. If you have multiple upsells that are all $5, you will have no way of telling what the customer is trying to buy with the additional funds. Again, you can pay for a third-party service to do this for you, or spend the time developing your own if you are a skilled web developer.

If you need to raise over $100,000 and plan to have the budget to hire people or third-party services to deal with the shortfalls of Kickstarter’s post-campaign management, then this might be the right platform for you.

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IndieGoGo

IndieGoGo, like Kickstarter, has a vast user base. IndieGoGo and Kickstarter have a pretty even market share. Like Kickstarter, IndieGoGo has some great tools for creating a campaign, and sadly, just like Kickstarter, it can let creators down post-campaign.

Once again, merely creating a packing slip for shipping to a customer requires third-party websites or in-house tools. There are fewer tools available for IndieGoGo than Kickstarter; however, the data from IndieGoGo is easier to work with yourself if you’re up to the challenge of developing your own tools.

Just like Kickstarter, upselling isn’t particularly feasible, and just like Kickstarter, if someone wants two of something, they will need to back the campaign twice (and to pay for shipping twice if the products have shipping costs).

Similar to Kickstarter, this could be the right platform for you if you’re looking at making a significant amount on pre-sales due to the large built-in user base. As mentioned earlier, it could also be the right platform if you’re looking to gain venture capital after the campaign has concluded.

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Crowd Supply

Crowd Supply has a much smaller volume of traffic than the big two but has an audience exclusively made up of geeks and tech-savvy individuals. If you’re creating a niche product, or not relying on the native platform traffic as part of your marketing, then Crowd Supply is an excellent option.

If you’re looking at raising millions of dollars for a project, Crowd Supply might not be the right platform for you as it is much smaller, and you’ll need to drive a very significant amount of that traffic to the platform yourself (or engage their marketing team to do so). If you’re looking to raise anywhere between $1,000 and $100,000, then this could be the right platform for you.

Unlike Kickstarter and IndieGoGo, Crowd Supply can handle all your fulfillment and marketing needs if you are willing to pay a higher percentage of your raised funds to them.

As a smaller company, Crowd Supply needs to be innovative, so they strive to provide more support and post-campaign tools than the Big Two provide. This additional support makes it very attractive to smaller businesses and those that have a niche product.

See what is new in Upverter or contact us for more information if you want to learn more about the capabilities of browser-based design and product development. Or sign-up for our service today.

Crowdfunding vs. Traditional Marketing for Electronics

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If you’re developing a product to sell, you need a way to ‘get it out there’. This can involve significant expenses, like certification testing and manufacturing of a minimum order quantity. Crowdfunding is a popular way for small businesses (including hobbyists) as well as large companies to reach new customers and help cover the upfront costs of releasing a new product. I have run several Kickstarter campaigns and have been involved in multiple other campaigns it’s a stressful but potentially rewarding process that could help bring your product to life. 

When you boil it down to its essence, a crowdfunding campaign is a fancy pre-order system with some built-in marketing. The backers/contributors of the campaign don’t own any part of your company, intellectual property, or other rights. They are just placing orders for the product in advance of production, typically for a significant discount.

Launching a small business that sells an electronics-based product would involve you (or your company) designing the product, manufacturing an initial run and then launching it on your website. It can be very daunting for a new company to go down this route for several reasons, primarily:

  • Upfront costs
  • Getting the word out that your product exists
  • Driving traffic to your website

There’s no point launching a fantastic product if nobody knows it exists! Marketing then becomes an indispensable part of your campaign and can make or break your product, regardless of how good the product itself is. History is full of examples of technically inferior products being far more popular than superior products. This all boils down to good marketing. Some of that is merely letting people know the product exists, and some of it is telling people they must have that specific product. Apple is an excellent example of a company with great marketing, whether you’re a fan of their products or not. On paper, their products are highly priced, and there are technically superior products available for less, but Apple’s marketing power is enormous; therefore, their products sell very well. Now, if you’re not a company the size of Apple, you probably don’t have the marketing budget, reach or contacts that it has, so how do you get the word about your product out there?

Getting blogs/social media/news sites to talk about a new product from a small company is hard, especially if that product is only available on your website. If your company is a bit larger and already has a customer following, this can be easier to accomplish but would still take significant effort. By crowdfunding your product, you can give a blog/news site something more to talk about than yet another product from yet another small company. Having a well-written campaign with an excellent video and photos can make you stand out from the crowd when it comes to the editors of these sites looking at your product.

Even if your project budget covers the cost of production and marketing, crowdfunding could be yet another marketing tool for you. Having your product be successful on a crowdfunding platform can provide ‘social proof’ marketing by showing that your product is popular, thus encouraging potential customers to buy it because all these other people have done so. It also allows people to feel emotionally invested in the product by helping bring it to life, and those customers can become brand evangelists for you in the future, helping with the marketing of your future creations.

Use Cases

As I see it, there are two primary use cases for utilizing a crowdfunding platform for your product launch. I will note here that in this series of articles, I expect that you have a product pretty much ready to launch – you’re launching a product, not an idea. Crowdfunding is not the place to launch an idea and make it into a physical product, these projects almost always fail to gain funding and for a good reason – people want the thing, not the process of developing that thing.

Covering Costs 

You’ve spent months/years putting all your (or your employees’) heart and soul into the development of this product. It’s been prototyped, it’s gone through EMC pre-compliance and it’s been through some user testing, but your manufacturer needs you to order a minimum of N? units, and that’s beyond your budget. Alternatively, perhaps it needs RF, electrical safety, or some other certification and/or an injection mold or two, all of which are very expensive. 

Increasing Sales Reach

If you have your expenses and first manufacturing run covered, you might want a faster return on that investment. You use the crowdfunding site(s) to gain sales from the customer base already on the crowdfunding platform. Some platforms can give you 30%-70% of your funding goal, despite your best marketing efforts, purely from users seeing your project on the platform, rather than being directed there via your efforts. Combine this with your marketing efforts, and you can make your product launch a much bigger success.

Cost

It’s not free to crowdfund, everyone wants their cut of the revenue, and you’ll have quite a bit of labor expense just to handle the campaign itself. 

Before you even get to launch, you may need to hire someone to create the crowdfunding campaign’s video if you don’t have the skills to do it yourself. The videographer/editor could be anywhere from $500 to $5000 or more depending on whom you choose to help out and what they are giving you. You’ll also need some professional photos and graphics for your campaign which could cost another $500-5000 if you are not skilled in these fields. You might think you can wing it on these, however, the more professional the campaign videos, photos, and graphics are, the more likely you are to be successful. The video and photos provide the potential customers their first impression of you and your product.

You will also need prototypes to send out for marketing purposes if you want to make an impact. Expect to be making at least 20-30 prototypes to send out.

The platform will end up receiving about 8%-12% of your funding amount comprising their fees (about 5%) and payment processing fees (3%-5% + a set charge per payment). If you’re on IndieGoGo or Kickstarter, you might end up handing over another 2%-10% to a company like BackerKit to help with managing the campaign after it’s finished just dealing with shipping hundreds of units can be a nightmare.

For labor, you’re probably going to spend a month before you launch creating the campaign, and doing pre-marketing (contacting news sites/blogs). Additionally, you can expect to do very little else but marketing and email during the 30 days your campaign runs. If you have staff, expect most of them to be doing this full time as well.

Post-campaign, you will probably be doing a lot more customer service than a typical web sale, as it’s a pre-order and people will want to know the status of their order. Some will email you incessantly. You also need to deal with the inferior backer tools that IndieGoGo and Kickstarter provide if you utilize their platforms. Customer service can add hundreds of working hours of labor compared to the same volume of webstore sales.

To sum it up, unless you can do high-quality graphic design and video editing in-house, you can expect to need $2,000-$12,000 upfront to get your campaign launched. You’ll lose around 12% of any funding gained to the platform, and it will cost you two months of wages before/during the campaign and potentially 1-3 hours per order for customer service/data management post-campaign.

Pros to Crowdfunding

Despite the costs, there are some great reasons to consider crowdfunding.

  • Make more pre-sales than you’d otherwise be able to.
  • Built-in marketing through the platform.
  • Blogs/news sites may be more likely to write about your product if it’s on a crowdfunding platform.
  • Guarantee you have the money to launch your product.
  • It can be quite entertaining!

Cons to Crowdfunding

  • A significant amount of effort to create/launch/manage a campaign.
  • Typically expected to offer the product(s) at a significant discount (eats into margins).
  • Some platforms (IndieGoGo mainly) are considered fraudulent by many banks, and the customer’s funds will never make it to you. Likewise, they can have low trust in some online communities.
  • It can be extremely stressful!

There are many other pros and cons to crowdfunding, some of which are platform specific and some of which will be project specific. IndieGoGo, for example, offers a funding mode which allows you to keep the funds even if you don’t reach the goal. If you are using crowdfunding to raise funds to launch your product, I wouldn’t recommend that. If the campaign doesn’t reach the goal, you’ll still need to raise the additional capital to manufacture the product to fulfill the orders that were placed. Even if you use the typical ‘all or nothing’ campaign funding, you can still get caught short with unexpected expenses or project delays that eat through your budget.

Crowdfunding a new business or an existing side business can help you immediately jump into the project as a full-time job, potentially with paid staff to help you out. Depending on your circumstances, this alone could be worth ignoring the drawbacks and launching a product you’ve been working on through a crowdfunding campaign. If you have an existing business, it could allow you to grow your business far more rapidly than you could otherwise.

IndieGoGo, in particular, has excellent opportunities for a successful campaign to proceed to venture capital funding. If you want to go down the venture capital route, a highly successful campaign on the right platform could give you the right connections to make that happen as well as provide a clear demonstration that your product is in demand.

If you are looking to distribute your product through vendors such as Digi-Key or Mouser, using Crowd Supply as your platform can give you the introductions you need to become a supplier. If you feel a distribution model is key to making your business continue to thrive, it could be worth the effort to run a campaign.

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Make a PCB Online From Start to Finish

Using the right online PCB design software gives you flexibility and lets you collaborate with other designers.

Whether you’re a hardware or software person, you’re probably ingrained with that entrepreneurial spirit. You’ve got the vision and the knowledge you need to turn your electronics dreams into reality, but you’ve still got one more obstacle to overcome: you need to build it.

Sometimes budgets don’t measure up to the overall vision of your device. Unless they have the cash to spare, entrepreneurs have to operate on shoestring budgets and need to find the most cost-effective ways to reach their goals. Since the circuit board forms the central nervous system of your electronic device, you’ll need access to PCB design software that can meet your device requirements without breaking the bank.

That’s why online PCB design software might be the best choice to start designing your device. So what is the best way to get started? How do you get from a design on paper to creating deliverables for a manufacturer? The road from concept to product can be made smooth with a great online PCB design software platform.

Which Platform is Right for Me?

If you start searching for an online design platform, you might be unsure which platform is the best for you. So how do you pick the right platform? First things first, avoid the freemium sites. No one wants to spend hours designing their device, only to be told that they need to pay in order to keep their schematic.

When you find a platform, you should make sure it takes you all the way to generating your manufacturer deliverables. An online design platform should actually be a complete platform that includes schematic, circuit board layout, and bill of materials features. The platform should also be integrated with a thorough components library.

Just because an online platform is free doesn’t mean that it can’t contain advanced design features. The most powerful online design software should include rules checking and design constraint features. This will ensure that your designs will meet basic quality standards. Other features like a 3D viewer are extremely useful.

One great way to break into PCB design and bring a new device online quickly is to use a development board. These boards are very versatile and contain many features that can help expedite your design process. The documentation on these boards is very thorough, and tutorials for using these boards can be found online. These boards also mount easily to PCBs and make it easy to interface with other components.

Schematic and Layout

Whether you’re designing online or you’ve spent a bunch of money on a software package, you’ll start designing your product by drawing up a schematic. Your schematic will contain all the electronic components and display your connections between components. You can also write some important notes for yourself in the schematic. Think of it as a blueprint but without all the measurements.

At first glance, it may seem unnecessary to build a schematic of your design. Why not just jump straight into a PCB layout? Why should I have to build the device twice? Once you complete your layout, it may not be obvious how components are connected. This is where schematics are invaluable: they give you a broad view of your device. It is easy to see how components connect to each other, while these connections can be less obvious on a finished PCB layout.

Once you finish your schematic, your layout should be automatically captured and generated based on your schematic. The generated layout will include all the components in your schematic and will have pre-mapped connections between components. You’ll still need to route between components, place copper pours for power and ground, and arrange components to your liking.

When you view your layout for the first time, you may find that it is not how you imagined. Components might appear in odd places, and connections between components might not appear as you imagined. The layout might not initially meet your form factor requirements, and the schematic gives you the opportunity to rearrange your components to fit your packaging.

Once you are inside the layout, you might find that it becomes useful to use more advanced design and routing techniques to save space in your design. Placing traces in multiple layers is important in PCBs with a large number of components but strict form factor requirements. An online platform should include via placement capabilities so that you can route between multiple layers.

Enforcing Design Rules

PCB design is one of those fields where it is easy to start building simple devices. When you are not worried about high speed, high frequency, low power, high current, high temperature, RF communication, or mixed-signal capabilities, most designs you create will likely operate just fine. Designing in consideration of these other requirements is difficult to master and requires adhering to a specific design rule or many.

If you have not designed devices in any of the above areas in the past, you may not have all the relevant design rules memorized. That’s why your online design platform should have the capability to enforce standard design rules for different applications. Not all design rules are set in stone, meaning that certain design rules are meant to operate as constraints. Certain constraints on feature sizes and clearance need to be met in certain applications.

Certain features, especially those appearing in multilayer boards, should also be customizable in an online design platform. Trace sizes, pads, via dimensions, and copper pour areas should all be customizable. This is especially important if you work with certain parts like development boards, as the footprint of these devices cannot be changed. You will need to design your routing and copper pour features to accommodate development if you decide to use them.

Automated PCB manufacturing

Manufacturing Deliverables

It should go without saying that you should always build and test a functional prototype of your device before you start ordering fabricated prototypes. Ordering a large-run is only a good idea if you have tested your functional prototype and your fabricated prototypes, followed by completing any required redesigns. All prototypes should be thoroughly tested before moving to full production, and this will give you an opportunity to fix any problems in your design if needed.

Once you finish your design, checked that it meets standard design rules, and decided you are ready to fabricate a prototype, it’s time to prepare deliverables for your manufacturer. Your design platform will need to generate certain documents based on your board layout. A great online design platform should quickly generate your manufacturer outputs. These documents include a bill of materials, Gerber files and Excellon files, and CAD/CAM files of your device.

All of these files will tell your manufacturer the information they need to plan out the fabrication and assembly process. The bill of materials is important as it contains sourcing and pricing information for components that appear on the board. It should also contain acceptable substitutes for your components in case there is a problem with sourcing. Always check with your manufacturer and get a list of required deliverables.

Collaboration

If you are putting together a team of designers or you are working in a remote organization, an online PCB design platform is perfect for team collaboration. A great online platform gives the design owner the power to add collaborators and document design changes. You should be able to switch between versions easily and download different versions of finished layouts.

Collaboration is extremely smooth and easy in an online PCB design platform. This type of collaboration is excellent for new designers as it gives multiple people an instant view into a project. When more people are collaborating, there is a better chance that design problems can be caught before a board goes to production.

You don’t need to be a large company with a massive budget to jump into PCB or electronics design. Now you can have access to the tools you need to build your dream device with browser-based design software. IoT 360 helps you achieve your design goals with built-in a ton of built-in components and an intuitive user interface. IoT 360 gives you the power to design professional-level devices while helping you stay within your budget.

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