Khierstyn Ross: You Can Use Crowdfunding to Launch Physical Products?

Foreign.

Hey, fastlaners, this is Ryan.

Danny Moran. Welcome to Freedom Fast Lane.

Oh, man, do I have a good one for you today.

Mostly because it gave me so many ideas. And I left this chat with Kirsten Ross feeling like after this interview, people are. They just have no more excuses. They have no more excuses for not having successful businesses. I feel like we lay out the step by step plan very clearly here on the podcast and inside of our trainings and in the tribe. But after hearing this chat with Kirsten.

I was like, wow, this is the.

Cherry on top of, like, really no more excuses. Except for I just haven't done it yet. Because Kirsten has been a part of a variety of really successful crowdfunding campaigns that basically give entrepreneurs the startup capital that they need before the product even exists. If you just have a prototype and a story, you put it in front of the audience, they give you the seed capital, you then have a bigger audience to be able to market more products to. And the snowball takes off from there. It made me want to run home and actually just come up with new products that we could run through the Kickstarter process that she outlines this interview. So I think you're really gonna enjoy this. Regardless of what stage of business you're in. If you have products that are selling well, we go through how to take your successful business and release new products on channels like Kickstarter and Indiegogo and give you a new customer base and new exposure. Or if you're just starting your business, how you can build up little audiences that allow you to be able to basically leverage Kickstarter as a channel, get you all your the customers that you need to get started, and then have all the capital you need to buy the inventory. Like, such an exciting time to be alive and run a business. So I'm getting so excited I'm going to stumble over my words. So enjoy this chat on using Kickstarter and Crown. There we go. Crowdfunding platforms to fund your physical products.

Businesses with Kirsten Ross. Enjoy.

Hey, everybody.

Welcome to Freedom Fast Lane.

Today I'm joined by Kieran Kirsten Ross. Kirsten, thanks for hanging out with us.

Thanks. I'm so excited to be here.

So I'm excited too, mostly because we're going to be talking about some things that my audience probably has never considered and I think that most of them are sitting on potential gold mines and they don't even know it. And you kind of have the experience of mining for the gold, if you will.

So would you take 60 seconds or so.

And talk a little bit about your expertise and your background in that.

Yeah, absolutely. I'm a startup advisor by trade, and about a year and a half ago, I got involved with a local client in Toronto who wanted to bring his physical product, it was wearable tech, to crowdfunding. At the time, I didn't know much about Kickstarter, but we launched and made all the rookie mistakes and ended up raising only 30% of what we needed to to bring this product to life. And from that failure, we didn't have many other funding options because crowdfunding is very public. And so a lot of investors didn't want to back us once they saw the failure the campaign was. So we ended up relaunching that same brand two months later after doing a lot of research into what makes a successful Kickstarter. And we raised $600,000 from that one product. And from that point on, I've actually gone on to advise and manage a few other Indiegogo and Kickstarter campaigns through physical products. And to date, I've done over $1.2 million.

I like how you just casually say $600,000 for one product like it was. It was no big deal.

Could you expound on what type of.

A product that was, that was such a massive success? I mean, how do you go from kind of a failure of a kickstarter to raising 600 grand on one product?

Yeah, it is wearable tech. So it's a vest that helps you lose weight through cold temperatures. It's called thin ice. And we knew we were onto something, because how can something in the weight loss industry fail? Right? So we. We knew there had to be more to it, but that is the. The project.

Why do you think that specific one did so well compared to, you know, a previous bomb? I mean, who goes from only raising 30% of their goal to doing 600 grand? How the heck does that happen?

Yeah, I'd say, like, there are so many reasons why we failed that first time, but the biggest one is because we, in that first campaign, that we did not have an audience going into it. We just assumed that because Indiegogo. So we did Indiegogo with this. We assumed that because a crowdfunding platform has hundreds of visitors or thousands of visitors a day, that all we had to do was launch on their platform and people would find us and fund our business. That is by far the worst assumption that we made.

Once we did research for the second campaign, we realized, oh, crap, we need this audience. So we ended up building up a bit of an audience and making sure that we had a lot of emph on the first day of our launch, on that second time around to hit our goal as quickly as possible. And because we had more emphasis on a very fast start, that is what catapulted us to hitting bigger numbers in that second campaign. Where in the first campaign we raised $1,000 in the first day, in the second campaign we raised like 20,000 in that first 24 hours. And we went on because of that to be featured in Indiegogo's newsletter. And having raised about quarter million dollars by the eight campaign, it was all because of the emphasis of having the momentum on that first day.

So you basically treated it like a product launch almost. I mean, you go to your audience, you use the audience that you have to give you the momentum. You let the momentum carry you to prominence in the channel and then I'm guessing the exposure that you get from that kind of carries the rest of that. Am I close?

That is 100% accurate.

So. So wearable tech is sexy. It's hot. But that's also like most people listening aren't building those types of products. So I want to know what types of physical products do well with crowdfunding and which ones are like absolute no nos. Don't bring your fish oil on my Kickstarter campaign.

I think that any when you look at crowdfunding platforms, any physical product can do well in theory. Where it's suicide to launch is if you are trying to compete with everyone else. So just say like the top campaigns that I'm seeing for a competition are the journals right now or the backpacks or the travel accessories. There's so many different campaigns that are launching for those things. And how you need to stand out is by looking at how your product is truly unique and innovative. So I would say it's not about the kind of product you have, it's about your positioning. And have you actually been able to develop a journal for entrepreneurs that travel or something super specific? Because I find too that in marketing online, just through like keyword research and targeting, you need to be super specific with who you are going after. And if you understand that from a positioning standpoint and you truly do your best to make your product stand out in one niche, that's where you're going to be able to stand out. And it's not really about your product. But the second thing too is you have to validate your idea. I know you probably talk about this on the show so much, but if you launch something without even talking to a single customer or trying to ensure that somebody is going to buy your thing. It's also a road to not being successful. So I'd say those two things.

Well, that brings up an interesting scenario, because if someone has a successful product or successful business that's already off the ground, can they take those products and relaunch them on Kickstarter and use that as a way of almost generating funds for growth? Or does it need to be something that's new in the marketplace?

It should be a new product. It doesn't have to be a new company. I work with, I've actually worked with both kinds. I've worked with the creators that are starting from nothing. They're building an audience and they want this to be their very first Kickstarter launch. And then they do that. But then you're also seeing a trend where companies that were successfully funded on Kickstarter or Indiegogo, when they go to launch product 2.0 or another collection, then they keep going back to Kickstarter and they keep going back to Indiegogo. A good example is Pavlok. It's the wearable that helps you break bad habits. They were a brand created from an Indiegogo launch back in 2014. And then about four months ago, I helped them launch the Shock Clock, which is their second wearable in the series, and they did that and went on to raise even more money that second time around. Or you have Forever Spin that has their first campaign did 200,000, the second one did 450, and then the third one did close to a million. So I think you actually have a huge advantage if you are an established company looking to launch. You need to look at crowdfunding launches as an excuse or an event. So you can't just say, oh, I'm already selling this thing, so why don't I just throw this up? That's not going to fly. But if you have something new that you're working on, treat it like a crowdfunding launch and give an excuse for people to buy. That's generally how it works.

What if it is a modification of a product that is already in existence? Like if you've got a new formulation or a new iteration of a product that's been selling, so you've got the audience, you have the sales history, you know it's already flying, but you've. You're coming back and you're reintroducing it to the marketplace with some sort of a new feature. Can you bring that audience and that customer Base over for that type of. Of an event.

You totally can.

I'm loving where you're going. Yeah, you're getting me all kinds of jazzed up. So I love this. I mean, I tried to preach against commodity types of businesses selling the same thing that everybody else is selling. So is it the same thing with Kickstarter? Have you ever seen kind of a Me Too product to do well if it's positioned right, or is it specifically new changes to the marketplace that are going to do best there?

I've seen the Me Too products do really well. You just don't want to. When you are launching something and you realize that some competitor raised a million dollars for that same thing, the goal should not be to copy them, but make yours different. And you need to focus on how yours can be truly better or truly different. And you can absolutely launch and have a successful one. But it's about a, do you have your own audience and B, can you speak to why yours is necessarily better, but like, can you focus on a different niche or how you can be different with that and then you're absolutely fine with it?

Yeah. The example that comes to mind for me is John Lee Dumas does his book launch, which was basically his version of the Five Minute Journal. They called it the Freedom Journal. Same kind of concept with his own spin on it. And it does. I think it was like $200,000 in its first 30 days as a Kickstarter campaign, which blows my mind because he has the audience. He has a new spin on something that he knows is successful. He adds it to his product line and it's a huge success. So I'm amazed at what you can do. If you have the right positioning and you have the audience, are those the things that you really see drive the difference? If you can manufacture that momentum and you just have a different spin on something that you know is going to.

Work, I would say absolutely that. And having a sizable audience will like. If you have an audience of people that are so freaking excited to buy your thing that the gold right there.

What do you see necessary in the actual campaign itself? I notice they all tend to have emotion driven videos. There seems to be like a component of it being bigger than just a product, almost like creating a movement. What are the things that if you bake into a campaign, can accelerate its success?

Yeah, well, absolutely. The video. I would never advise anyone to launch without a video, so that is massive. Do you want me talk about the mechanics of what makes a good video or just focus on the page? Yeah.

Let's talk about both because this is.

New ground for me. It's one of those things I've always wanted to do and I can make a killer video, but I've never had somebody like you button it all together before.

Right. So things with a Kickstarter video, and by Kickstarter I mean a crowdfunding video, you want to keep it between two and three minutes because you're playing with audience attention span you within the first 10 seconds or so, you really want to have a hook or something that's going to connect with your audience as to, okay, you got my attention. This thing might be relevant to what I'm doing. And then there's a actual formula. Like Darrell Eves from Squatty Potty. I don't know if you're familiar with his stuff, but he, he works with this power pitch formula which is if you study the format of how infomercials, the high performing infomercials with the end goal of selling something, they have an eight pitch format, which I don't know off the top of my head, but it's basically three minutes. You need to have your video do one of three things which is either educate the consumer, inspire or oh, here we go. Drawn a book, educate, inspire or entertain. And to have a winning video, you need to have two of those three things at a minimum.

I'm surprised put like address a big audacious problem in there. I thought that's where you're going to go, is like address a big problem and then introduce the solution. But you didn't go there. Is there a reason for that?

Yeah, not quite yet. Because like you want the hook, which is you're either showing a really sexy product or you're doing like, I don't know, I'm obsessed with the Squatty Potty video. Like they show a unicorn pooing ice cream. Is it some hook? Or you ask a question like, aren't you so tired of waking up late every day? Pose some question and then you go into it over the next bit. You focus on the major problem you're solving and then you go through two or three main features and benefits. I wouldn't focus on all 10. Focus on your top three throughout the video and then you're going to have some credibility markers in there. So if you can have some testimonials or showing people using your thing that works really well because it's proof that what you have actually exists. And then at the very end, once you've sold and shown that this is a real Thing, this is the problem it addresses in your life and why you should be so excited about it. At the very end, you need to have a very clear call to action. What I don't want to see happen at the end of your video is where you say, oh yeah, so share the campaign and back us and tell your friends. And you want one call to action, which is like your help with this project. We need to raise $40,000 to get the first run in manufacturing done. And with your help, you choose a reward package on the whatever right hand side of your monitor. Thank you so much in advance. And that's your call to action.

That's beautiful.

Yeah.

So is it. I'm getting that the audience is obviously important. The positioning of the product, the video. That was a beautiful formula that you just went through. What other features of the campaign will really drive its success?

Yeah. So I've analyzed a few campaigns that have done over a million dollars and what you will see is they're not very text heavy pa they have a lot of beautiful graphics and very to the point of. So I like to read a crowdfunding page as if I'm skimming it. And you want to have the very most important information that someone needs to make a quick buying decision near the top of the page. You don't want to be putting all your press mentions in the middle of your page or at the bottom because most people don't read that far down. So near the top is. What I like to look at is you have the headline of exactly what it is and then you say you have one to two sentences of or small paragraphs of like a summary of what your project is and then a photo of it. And then you can go into press and then from that point on you're focusing on the biggest feature and then a couple of the smaller features and then you just go down that way. So if you have it properly, people are going to read your Kickstarter page based on they've watched a bit of the video and now they just want to see if there's anything else. And I like to have the top down formula of the page follow the same formula as the video because it's most pertinent information near the top. And then what you can include as you go farther down is you can include the FAQs on the bottom. Be realistic with your risks and challenges, have video testimonials or even like there's one campaign I love, it's Ravian heated jackets. They raised 1.3 million on Kickstarter and one of their biggest things was we keep getting questions to see how waterproof is this thing because they have this beautiful jacket that also charges everything, like your iPads and whatever. And they're like, we didn't want to just keep telling you that it's waterproof. We want to show you. So Bryce Fisher, the founder, he's by a pool, he puts on the coat and he jumps in the pool multiple times with devices all in the coat. And then he gets out and is like, see? Completely waterproof. So videos and really showing like that anything you could do to really prove that this thing is awesome, really, really works.

What do you consider? And this is, I hate it when people ask me questions like this. And now I'm going to be that guy. Kirsten, please forgive me, but what do you consider a successful campaign? Do you consider awareness success? Do you consider sales and money raised success? How do you determine if you're happy with the results? And kind of along with that, what should someone's expectations be going into putting up a crowdfunding campaign for a physical product?

So that answer is going to differ based on if I'm on the campaign or if it's just someone managing me managing a campaign. I love everything to go according to plan. So I love seeing that if we projected that we needed 5,000 email addresses and an ad spend of this, I like to see that actually translate into real numbers. Or we see that we think the campaign is going to get a lot of engagement and then it actually manifests because we've done xyz. I love when things go according to plan. From a creator standpoint, I find that a lot of people don't really know where to set their goal. Like they say, okay, we've put $200 into ad spend, so I have a million dollar campaign. There's a big disconnect between what people think they need to put into something and what they think they're going to get out of it. So I like to look at, to be realistic over what numbers you think you should hit. Assuming you have validated your idea and you have ad spend. If you look at your. I might be going off topic here, but if you look at your goal of say like $50,000, what you need to raise to get your idea funded, then if you know you need to raise 50% of that in the first couple of days or as quickly as possible, then you will look at, okay, I need to have about 2% of my email list convert into real sales, which means I need this Big of an email list, which means going from previous Facebook stats or based on what my Facebook strategist says, we need to be putting in about ten grand into Facebook ads before we launch. And really just like doing a calculated launch that way so that you're not really winging it and hoping for the best.

Got it. Loud and clear. And what happens to carry that momentum or carry that success after it's completed? Like it's great to have. If we do an awesome job and have a million dollar launch, what the heck happens then? I've never heard anybody address how you carry that momentum into building a real sustainable brand. Yeah, exactly. Yeah.

I find that a lot of creators less now when I'm speaking them, but a lot of people, and this really bothers me, but they look at the amount of time and money that goes into a launch and realize you basically break even because you shouldn't go into a crowdfunding launch looking for profit. They just don't think it's worth it. But you really need to be looking at this long term. Like you said, Ryan, you are creating a business. And so the money that you're putting into advertising and the time you're spending on a campaign is to build the awareness, get the customer base and get those initial orders. What you do when your campaign is over is you then shut down and you focus on getting the product to your backers on time. So things you need to be doing is you need to focus on making sure you're not super delayed with it because that really, although it's a running joke with crowdfunding that every campaign delivers late, you don't want to be late because if you end up annoying your backers and delivering 12 months later than you said you would, that's going to hurt your ability to launch anything in the future. Because they'll say what's the point? You relate last time having fulfillment and manufacturing lined up to a point where you can deliver on time. The second thing is keep your backers in the loop. Be sure to do regular updates with them even if you have nothing to say. Silence is never a good thing. But then the third thing, it does depend on where you are in your business. If this is your first campaign ever and you are just creating a business, you also need to be focused on on your go to market strategy. So where do you want to take this? After every one of the campaigns I've done, we've left with thousands of new customers. So you can look at okay, if we want to deliver and launch on Amazon in six months. What does that look like for us? It means you want to continue to pre order after your campaign is done. So here's a nice little hack. If you do a Kickstarter campaign that ends, you can contact Indiegogo and do their In Demand, which is still collecting pre orders on their platform. Once your campaign is finished and you could keep collecting money from people until you are able to then deliver, you launch your shop on Amazon. You then have 1,000 customers where you can say, hey, we'd love to give you a 50% coupon to buy this thing if you leave us a review. And then that's a great way to launch strong on Amazon. And then that's how you have a business that carries over long term.

Geez, fast laners. That was a million dollar idea right there. I mean, we talk a lot about building audiences and using that to launch your products on Amazon. Imagine if you took that audience, launched it on Kickstarter, had an even bigger audience, and when it came time, you now have the money to go get all the inventory that it is that you want. You go purchase the inventory, fulfill it, you have profits, you then launch it on Amazon. You have all this firepower, you have buyers now that you can rank for any keyword you want. I mean, that's a multimillion dollar idea, right, that I'm a little lost for words. That was pretty cool. Kirsten. So what have you seen be like when we talk about audiences and launching two audiences and getting that momentum moving forward, what do you usually see as the most successful organized audience that then goes out and and buys the products that are launched? I love the idea of using Kickstarter to build the audience in order to get those email addresses, to get those buyers, get the funding, and that's a perfect launch platform. But before then, if somebody's launching a new idea, where do you see the successful campaigns getting those eyeballs to be able to launch it to? Is it because they have a YouTube channel, because they have an email list, some combination of them all? What have you seen be successful?

Yeah, I think my biggest concern with driving, because a lot of people don't want to spend money before they launch on doing Facebook ads to build an email list because you don't really know what the conversions are going to be. I think that that's actually a very powerful strategy if done properly. So assuming you have this email list and you're building this list, first thing you need to be doing is keeping them constantly engaged. So send an email at least once a Week with broadcast for something when you're 10 days away from launch is when you do the 10 day countdown sequence to launch and you play it so that you're incentivizing people to buy on that first day by having early bird rewards. So you can have like 250 available for 40% off, but it's only for the first 250 people. And so you're telling people that they have to buy on the first day or else they might be losing out on a really good opportunity. That's one way to keep them engaged. But there's actually a new formula that I used for a campaign and we haven't launched yet. We're launching in a couple of days, but holy crap, the engagement has just been insane.

Tell us the good stuff. Kirsten, you got my attention.

I'm just going to be making myself redundant here, but I helped out Founder magazine on their recent launch and within 24 hours they've already raised about 30 grand, which is cool and part of what they did. And this strategy wasn't mine. I just kind of found it from the 10% of it I didn't help them with. They created this insiders group on Facebook. You hear about people doing Facebook groups and I never really saw one do well before a launch until I saw what Founder was doing. I took it because I'm like, oh my God, this is nuts. And I took it and I duplicated that for a couple other campaigns. One that we're doing is Jamstack. What we've done, which was the same formula Founder did, is we in emailing our list, when someone clicks the Facebook ad, they sign up for the email list on the thank you page. It's an invite to ask people to join or to apply for the Jamstack insiders group. So we don't invite them. We say, you have to apply. Because what we're looking for is a street team to help us market the crap out of this campaign. And in exchange for that, we're going to give them perks, the ability to win free swag and a lot of cool stuff. So we ask people to apply. We then funnel the really excited ones into this insiders group, and then that is the super engaged audience. Those are the people that they're sharing. So Jamstack is an amplifier that attaches to the base of your guitar and we have people posting pictures of their sets of guitars. We have people doing live Facebook videos where they're like, chris, I want to thank you. This is a gift from the gods. I'm just so excited and gave us a platform to really show people behind the scenes things. And the group is super engaged. I've never seen that level before because you just don't get that with an email list. So if you can take it that much further and if you have the right content plan within that group to keep them super excited for a few days, then power to you. This is the best thing I've seen so far.

My next question, as silly as it sounds, is how much money can I, Kirsten Ross, right now? Because you have me all excited about this new channel. It seems to me there's almost an incestual pool of Kickstarter as a channel from people almost get addicted to the launch model and then they just move on to other products and that there's very few people who are building sustainable businesses on the back of these launches. Is that just a perception thing or is that the case that a lot of people are just kind of in the Kickstarter business, they do these launches and then they do another one and they never really build sustainable businesses or are you seeing sustainability come out of them as well?

I'm seeing sustainability. It's cool. I haven't actually looked too far into that. I know like based on a handful of my friends that are doing it just to pump out money from Kickstarter. I think where you're going to find fail on that is if you only focus on Kickstarter as a cash cow. You really can't do that. Like I would really limit your launches. Like if you, you know, on Amazon you can launch like six new products in six months. Like I wouldn't use Kickstarter that same volume. I would limit your two best products that people can really get behind and get excited about. Because think of it from a PR standpoint. Like they don't care that you're launching a new crowdfunding campaign. They care about a new product that's really going to change people's lives and help them. So I think it's perception wise, your brand is just going to be cheapened by you just making your business a factory for crowdfunding campaigns. Unless if you have something really novel. So just, I would be careful with that because frankly, what if Kickstarter leaves in 12 months, which it probably won't, but you need to be looking at your business outside of Kickstarter because really that's how you scale and you build sustainability. Kickstarter should just be the go to market for really cool products.

You threw out a number at like 500,000 opt ins or something like that. You mentioned the idea of basically using Kickstarter to build an audience, not just a way to monetize an audience. And I'm curious about that piece of it. Are you building audiences and getting massive amounts of email opt ins from engaged people as the result of doing Kickstarters? And if so, how?

No, it's more the. So there's two ways you see it. You have the pre launch audience where I don't think it was 500,000. I think it was like five to 10,000 emails or less than 500,000. Yes. I'm like, oh, let's not freak people out because 500,000 would be awesome. But I have yet to meet someone who's doing a Kickstarter with that big of an audience.

But are you building.

Are audiences being generated the result of.

They are.

Tell me how that process works.

Yeah, so a, you have email list before, but then people who become your backers are then customers, which means that's your email list. So Kickstarter and Indiegogo will give you access to your backer data, obviously shipping addresses and emails, and that's customer information that you have. So by using that and building that into your email platform, they're now automatically on your list. And then what you're doing like during launch, if people go to your website, you're not actively getting them to opt into your list. I would just be forwarding your entire website to Kickstarter. But after the campaign you can have it so that you're building your list by saying like, either be notified when we go live or when we're available for pre order, or you can just be building that customer list, which is in effect your email list.

Yeah, I mean, it sounds like as a result of doing this, you're getting all of your PR aligned behind basically a channel that serves as your launch platform and you get all of this attention around that and if you have a good model for subsequent products and subsequent sales, that you're in that perfect position to come out of the gate with funding and be able to sustain that through the growth of your business.

Exactly.

Well, Kirsten, you have me all excited about this. I love talking about the maximization of other channels. I think this is a perfect way for both new and experienced sellers to go and get a whole new customer base that doesn't even know that they exist. So thank you so much. I'm chomping at the bit to work with you on a couple things. So where can people like me get a hold of you and where can they find out more about what you do?

Well, two things. I have a podcast if you want to contact me, it's probably best to put my email in the show notes because my name is kind of hard to spell. Or you could just do the letter krowrowdfundinguncut.com and that will get me direct.

Cool. Well, Kirsten, thanks so much for hanging out with us. I'm so looking forward to our future conversations. So thanks so much.

Yeah, thanks Here.

If you loved this episode as much as I did and you're looking at this going okay, I really have no more excuses. We have some training inside of our brand Builder Bootcamp which is our 12 month plan to build a sellable and scalable million dollar physical products business. We have some training on leveraging Kickstarter and I actually spoke privately with Kirsten.

After we recorded and she agreed to.

Do some training inside of that Bootcamp. So we're gonna be beefing up that section and that'll really give you absolutely no excuses because we give you the step by step plan to build a sellable scalable million dollar business as well as we'll have an even more built out section on leveraging crowdfunding platforms in order to get your seed capital so you can join the Boot Camp, which is really the whole 12 month plan to building that business and scaling it to a million dollars and positioning it for sale. You can grab that over@freedomfastlane.com Boot Camp. Also, if you've got questions for Kirsten, she and I talked about doing a Q and A session together, doing another podcast episode where we take some questions from you. If you have questions that you'd like to have answered on the show, head over to facebook.com freedom fast lane. Look for the Q and A thread with Kirsten. You can can ask your questions in the comments there.

We'll take the best ones and we.

Will put them into a podcast episode that we'll do to answer those questions. So I hope you enjoyed today's episode. As always, I believe that entrepreneurs are the secret and the key to solving all the world's problems. We need more entrepreneurship and more capitalism. We can't get enough of it.

So thank you for being part of.

That change and thanks for listening to Freedom Fasting.

I'll see you on the next show.