Episode 153: Mastering Crowdfunding with Khierstyn Ross

One second. Okay. It's funny, your head starts jigging back and forth. You know when my head starts dancing around like that?

Yeah.

Do you know when it does?

No.

What triggers it?

Netpayroll.net oh, that makes sense.

How many people start like you, you dance, I will come out of the bathroom which goes right by your office, your area and you'll be like wiggling and dancing and I'm not that type of guy. Until I get the notice from net payroll that our payroll has been mailed yet again. Boom.

We all have those things that move us, you know.

Yeah. And for you wouldn't think an employer gets excited about paying payroll, but I've had three companies, I've been processing payrolls now for 20, 25 years. I had my first business when I was 22, so almost 25 years now I've been doing payroll. And it's always been a nightmare until netpayroll.net well, that's something. Yeah. I mean it hasn't always. Listen, other companies got the payroll done. It wasn't a nightmare. But there was inevitably a problem around the corner. Net payroll never a problem. And when there is a problem, it gets fixed right away and I start dancing again.

Yeah. Wonderful.

I wish they meet the problem that they forget to pay everyone and everyone forgets that I forgot to pay them and I got to keep the money.

You don't wish.

I don't wish that, but I do a little bit. But even if they did that net payroll would fix it. You know why?

Why?

Because they are small. Customer focus. If you want to be the big fish in a little pond, NetPayroll.net is the company go to. If you want to be a big fish in a big pond, netpayroll.net is the place to go. They are the best and they even offer a 60 day money back guarantee. Now I, I called them and said on the 59th day saying, you know what? Really not happy with the service. I'd like all the money back and could you cover the payroll? And they said, that's not how it works. The fee you pay us will refund no problem. I thought they'd pay everyone's payroll. I thought I had that loophole.

Yeah, I'm glad you clarified.

Yeah, because I put myself on payroll for $2 million. I got paid $2 million and then I thought they would pay for it. So it doesn't work that way. But otherwise it's a perfect service. 60 day money back guarantee. If you're not 100% satisfied for any reason? They'll refund your money and you can move on. But I promise you, you will be three thrilled guaranteed. Talking about being thrilled, one more thing we're going to be thrilled about is this episode of the Profit first podcast. Welcome to episode one 153. There's a little. Ow.

Ow.

All right, one of these times you'll get jazzed up and start.

Yeah, one of these times you almost did everyone be like, woo, woo.

Yay.

If we serve booze, would you drink during?

Yeah, of course.

Would you?

Yeah.

Okay, maybe that'll loosen you up and you'll start grunting and stuff.

Maybe not.

Maybe not. Well, if you don't recognize these voices, let me tell you who they are. I'm Mike Michalowicz, the author of Prophet First. You're listening to the proph Profit first podcast and I'm joined in studio by Kelsey Ayers.

Hey, everybody.

And this is a show where we explore every single element of profitability. We talked about a spa owner who started a business that shows spas how to run a business, yet she was running up debt no more. She told us how she used profit first last week and now is eradicating debt, had a profit distribution. She's got junior partners on board who are her children and grew an amazing business. You could have heard that last week. We have a lot of good episodes. Yeah, we have a lot of good episodes. And listen, this is where you get them on itunes, stitcher, tunein radio, Google play, all those places. That's where you can listen to stuff. That's where you can binge listen. Why not spend a weekend just cranking on your profitability while you're mowing the lawn, while you're driving around. Kelsey, what have you been up to?

So I think I told you last week I started going to the gym in the morning because it just wasn't working out in the evenings. And it's been great. So this is my second week of going to the gym at 5am and I love it. I feel. I feel really good.

What exercises do you do?

I usually do the elliptical or the treadmill, but just really high incline. And I only do it for 20 minutes. And then one day I'll do legs and the next day I'll do arms. And I always at home, I always do like core exercises, usually like a pilates yoga kind of flow that I do.

That's awesome. And how do you measure success? Do you feel yourself getting stronger? Can you do more push ups or something crazy?

Yeah. Yeah. And I love It. And also as I'm doing like the elliptical, my ease with it and then I'll kind of bump myself up.

That's awesome. Good for you. Good for you.

Yeah, just. It feels good. Yeah, it should feel good feeling. Yeah.

So for me, it's funny because. Very similar. My wife has been working out now for about three months and she's been going to a Pilates studio.

Oh, good.

Like the one downstairs in this building.

Yeah.

And so she goes, I'm now planking. She actually just texted me again today. She's now planks for a minute 45. And so I asked what kind of plank? And she's like, she goes, oh, a plank. You know, the normal plank. I'm like, do you mean like face down? Or I'm like a side plank or is it.

Yeah, there's multiples.

Hands extended on your elbows, right? Is it one handed? You can do this thing called a clock tower plank. She goes, oh, there's only one that everyone knows. I'm like, oh, so on your hand. She goes, no, the one on your elbows, face down. So it was funny. Sometimes I ask a question, I'm like, why did I ask that question? I'm trying to like, I'm trying to engage in the conversation. I'm like, why did I ask?

I know.

Do you ever do this?

You can't take it back though, to.

Your boyfriend or any of your exes. You ever do that?

Yeah.

Mm.

What?

You would just rub it in their face. They would ask something and you just.

Start, oh, no, the opposite. I'm like you in this situation.

Oh, you ask a question and you get punished for.

Yeah, yeah.

But you're just trying to further the conversation. Right?

And it's like the sake of a relationship is to learn, right? To grow. So, you know, I challenge, I question and expect the same.

So you sometimes get that. You get punished for asking a question where the answer was obvious.

Yeah, not in this current relationship, but yeah. Okay, previous.

Yeah, I do too with my current relationship. But like, listen, I adore my wife. She feels the same way about me. But this is one thing that, that when I'll ask her a question, if it was. If the answer was so obvious, she'll get frustrated I asked the question in the first place.

Yeah, she.

She's really efficient when it comes to talking. She's like, no, this is what we gotta tackle. Yeah. Unless she's talking about her feelings, then it just goes and goes and goes.

Isn't it funny? It's like two different sides of your brain.

It really is.

It's hard to verbalize emotions, though.

It's very hard to verbalize emotions. I also learned as guys talk to women that guys, we. I gotta stop trying to fix things. She's like, oh, I'm having a problem with one of my friends. I'm just making this up. I'm having fun. Oh, like, why don't you just sit down, have a talk, talk it out. She's like, let me tell you about the problem. I'm like, I can't. I don't want to hear the problem anymore. You're just telling. But I realize now there's relief in just sharing the situation because you learn about the problem from your own perspective.

I don't think that's a gender thing. I think both genders do that.

Come on, man.

Obama disagrees with you.

You naturally want to fix the situation rather than just listen.

Yeah, you're right. You're right.

They just need to talk.

Yeah, I guess there's some different perspectives. Yeah. You process it by either talking about it or you just start throwing ideas. Okay, here's the deal.

What's the deal?

We started a new phone number. The calls are coming in already. I don't know if any of them are airable yet. I got to go through them. You can swear if you wish, but we prefer people don't do it. Call this number, write this down, and listen. If you're. You're. Say right now, you're in your car, pull over. Don't grab a piece of paper. Like, I don't want that. That nonsense. I want hardcore. Write this on your arm.

Nonsense.

No, I just want you right on paper. I want you writing this on your arm. Like in grade school when you go. I mean, a tattoo is really. With a pen. Like, you show your parents. Like, what did you do? Is that a tattoo? Yeah, it was just a pen. Or maybe. Maybe you were writing that like a potential boyfriend or girlfriend's number. You know, you write down your hand, oh, my God, this is so awesome. That's why I want. I want to be your potential boyfriend. Which I'm turning red because I'm like, oh, my God. These guys listening right now are like, mike wants to be my boyfriend now. There's anything wrong with that? I'm just saying some people are saying that right now.

You did say you were polyamorous, right?

I am polyamorous. I've become polyamorous. Write down on your hand or other body part. 844-876-7221. You know, if you Spell out on your phone. You know that spells 844. The 8 7, 6. It spells. It spells. So dial 844-TARAM-SEBOLA. Dial TARAM SEBOLA.

Don't do that.

Yeah, don't do that. Just dial 844-876-7221. This is our profit first shout line. We want to hear your profit first success story. Just share a quick story about yourself, your name, and then shout it out. I'm profitable. Whatever you feel compelled to shout out, we want to hear it. All right, let's get to the show at hand. Her name is Kirsten Ross. She is a crowdfunding platform launch specialist. That's a mouthful to say. A crowdfunding product launch specialist. You know the crowd planning. Ah, the crowdfunding platforms out there, right?

Yeah.

Indigo, Kickstarter. I guess it's Indiegogo, right? Yeah, Indiegogo, Kickstarter. There's many other ones out there. So many people go about the wrong way. They just put it out there and they think it's amazing success. You need to actually go through a process. Not only does she. Does she help people do this, She's a host and founder of Crowdfunding Uncut Podcast. So she's a pro podcaster. And we're about to learn how to use crowdfunding to become profitable. Karesten. It's official. Welcome to the show.

I had so much fun listening to you guys go back and forth.

Did you really?

Do we have to start the show?

No, no, you can join. You can join us. And they go back and forth part. We like that, but it's kind of true. You ever noticed that when you're talking with a significant other that sometimes the way they process information is different than the way you do?

Yeah. Or they'll take my question and get defensive over it. And it's like, that is not how I meant for this to go over. All of a sudden we're arguing, like, how did this happen? I just had a question where I'm trying to understand you more. So, yes, I think depending on who you deal with, it can be. Just be careful how you deliver it.

Total.

So now I got to ask you, Tone is everything.

Before getting the interview. Kirsten, what's the dumbest thing? I'll give you a second because I'll share mine. What's the dumbest thing you've ever argued over? You too, Kelsey. The dumbest thing. I'll give you mine. Tire pressure. Literally, the. The topic was tire pressure, and there was a different understanding. I'm not Going to say who was with massive 3 day. No more talking to each other. Arms cross the chest. Argument over tire pressure. Do you have one, Kels?

Yeah.

What was yours?

Iggy Azalea lyrics. Song lyrics.

Oh, that's fair. That's fair. I get that.

No, it was like, clearly the lyrics.

Oh, you knew the lyrics and the other person didn't, and they said they did and you didn't. Yeah, awesome argument.

But it's like, I can pull up the lyrics. It's right there.

Oh, yeah, but proof never. Proof never helps with an argument. Kirsten, what's. What's your crazy topic?

It has to be Eminem lyrics, because I know some of his songs like the back of my hand. And someone's like, no, you can't possibly know them. I'm like, oh, yeah? Tr. Try me.

What. What's your favorite Eminem song?

Oh, it's got to be Lose Yourself.

Of course. Okay. You nailed it.

Honestly, like, I have this thing. Oh, I probably shouldn't be saying this, but I have this, like, weird thing where I don't like doing karaoke in my own country because I might get caught. So I wait until I go international, and then you bring me to, like.

You really think?

Yeah. Well, now, cats out of the bag, right? Because I have, like, more of an international friendship crowd and whatever. And it's like. So now I go on the mic when I'm, like, really drunk. Karaoke bars. And I'm like, you only get one shot.

Oh, yeah.

That's like my signature thing, right?

That's awesome.

That is awesome.

Do you do Lose Yourself? What do you sing at karaoke?

Well, up until two months ago, I only. I was on this, like, Eminem streak for. Keep in mind, I do karaoke, like, four times a year, so I would do this Eminem streak for the last two years. And then finally I was like, you know what? I'm gonna try, like, something else. So I finally, like, actually sang a real song. It ended up being Blink 182, but I was like, it's just not the same.

Not the same.

Not the same.

Yeah.

I'm into Pat Beatar now.

Yeah, that's good.

I'm really into Pep, so I'm learning all her songs on guitar. And give me Hit Me as your best shot is the one I'm cranking.

Yeah.

All right, Kirsten, let's get down to the business at hand, because I think we've lost every listener by now talking about nonsense. We gotta talk about the serious stuff. Let's talk about crowdfunding, let's start with this. Don't most crowdfunding campaigns crash, don't work, just fail?

Yeah, I'd love to start by talking about what is failure. Good point. Honestly, there are two points where a crowdfunding campaign can fail. We'll get into them. But one of them is you obviously don't hit your funding goal, so you don't make enough sales to hit your target. Second one is what if you do get funded and then you don't deliver product? So just like the stats alone for the number of campaigns that don't hit their funding goal on Kickstarter is around like 37% of campaigns are successful on Kickstarter for funding.

I'm saying 37% don't receive funding. Is that what you're saying?

Do, do those are successful?

Yes. Only 37% get funded funding. And that's only Kickstarter. That's not even taking into consideration Indiegogo campaigns too.

Okay, so if only 30% get funded, 37% get funded. But you also have this people don't fulfill, then afterwards do you have any sense of how many campaigns, once they get funded, don't actually successfully get fulfilled?

I don't have those stats, unfortunately. If I had to guess off the top of my head, it would be, I would say about 20 to 25% don't fulfill.

Wow.

And then majority are actually late in delivering.

Okay, yep, I funded one campaign once ever and it was a year late. They fulfilled it a year late. So first of all, why should people consider crowdfunding in the first place? Let's start there.

Oh man. Crowdfunding is, I think if you have a product that people really love and you have the audience for it, as in you need to build up your audience. But if you have the right product and that you know will sell, instead of going to like thousands of dollars in debt to manufacture a product yourself before you even have any customers. Because that's like the go to method of funding is people will like go to an angel investor or the bank and get a bunch of loans to manufacture this product without even really knowing if someone's going to buy it. And so what crowdfunding gives you the chance to do is partially develop a product and bring your idea to the world so that you create a marketing campaign and basically throw it up on Kickstarter Indiegogo and see what happens with it. And assuming success, believe that you can game your success with the right steps and strategy. With that you're able to walk away with Hundreds of new customers and your manufacturing completely funded. And so it's a lower risk way for you to actually validate an idea and bring it out to the market and also get funding for your idea.

Okay, so that's a very profitable strategy. Don't borrow first. Yeah. Have the customers pay you first. But you also said you can kind of game and I think you said in a positive light. But you can also position yourselves for the best outcome. Is that what I heard?

100%.

How do you do it?

How do you do it? Well, it's actually a good thing. I'm in the middle of writing a massive article where I spent the whole morning outlying my thoughts here. So let's hope I can articulate in terms of a crowdfunding product launch. So I specialize in physical products, anything you could ship, basically. And while there are two things you need to do to make sure you're successful, the first one is make sure you have a product people are going to pay for. You should actually do some initial validation before you even launch your crowdfunding campaign. But the second thing is you want to have an audience to launch to. That's actually number two. Having the audience thing is something that a lot of entrepreneurs are not aware of. They don't realize they need this until they do a quick Google search and are like, well, why do I need my own audience? If Kickstarter has this massive community of backers, it doesn't make sense on paper, right? And especially if you go to Kickstarter or Indiegogo.com, you're going to see a lot of successful projects right away. So it could seem like the whole crowdfunding thing is a way for you to print money. But what actually happens is these platforms, as soon as you launch a new product, you have to trick the popularity algorithm. So in order for you to rank on their website and get the traffic that these crow crowdfunding communities have, you need to prove to be a hot and popular project so that as soon as you launch your project, you want to have an influx of sales so that the algorithm on the platform will pick you up as a hot project and start to boost your rankings on the website so that you can become more discoverable and start to take advantage of the backer community that is on these platforms.

Okay, So I want to make sure I understand this. So when I launch a product, that means that the campaign to raise money starts, it doesn't mean I'm actually selling the product at that point. I mean, it's not Available, but Kickstarter has started and there's a certain time window I have to raise all that money. Is that correct?

You're partially correct. Okay, so when you. So Mike, just say you're launching your next book and you want to use Kickstarter for it. Okay, so you're going to have say 30 or 35 days to raise funds for your new book, but you're not actually getting donations for your book. What you're getting are pre order sales. So if you say that my funding goal is $15,000 to bring the first round of 500 books into manufacturing, then your goal is to hit that, the $15,000 mark and you're raising that money through pre orders and then you go, and we'll fulfill those orders in a few months.

Gotcha. Okay. Okay. And why do I want to trick the algorithm or not trick it, but why do I want the algorithm to say I'm popular? Not me personally. We all know who I am. I'm just saying.

Well, Mike, you're so popular. Okay, why don't I tell you a story of how I got into crowdfunding. Okay, so about two years ago, I partnered up with a guy in Toronto who was raising like, looking to prepare a crowdfunding campaign for his wearable clothing. It's like a vest that helps you lose weight called Thin Ice.

Oh, interesting.

Yeah, it's super cool. The science behind it is really sound. He actually got inspired by it through Tim Ferriss findings on the Four Hour Body. I won't bore you guys with the details there, but he's like, hey, Kirsten, you do some work online and I don't know anything about digital marketing. Do you want to partner up on this project? And I was like, sure. How hard can crowdfunding be? So we ended up doing a video, putting a page together, and launching it on Indiegogo a couple months later. And we failed miserably. We had a goal of $50,000, we raised 17,000. And we knew that it couldn't be the product because it's a product in the weight loss industry. And what product in the weight loss industry fails? I don't get it. So we're like, there's gotta be something wrong with this. We don't understand why we failed. And so after actually doing research into how to do a crowdfund proper, we realized the biggest mistake we made was ignoring this thing called the popularity algorithm, where what you have to do is you need to get. It says that you need to get an influx of sales on your very first day from your own audience so that when those sales come in, they will boost you on the site to then get into the popular sections and get more traffic and create a snowball effect. Right. So if you. And so the second time around, when we did this, and we're like, okay, well, if we need to have a ton of sales on the first day, let's do it. And so we spent about three months restrategizing, building up a small audience, and relaunched. And we ended up raising about 20,000 on that first day. And in that one month, we ended up raising about $600,000 from it.

God, how did you build up that market?

Initially, what we did, it was through friends and family and a lot of sharing on social media. As soon as we started to get those initial backers in, and we had a bit of an email list, around 1,000 people from a couple of previous backers and the new audience we had built.

Awesome.

Okay.

But it was. Yeah. And so what ended up happening was because we had an influx of sales on that first day, we ended up. Over that first week, we were one of the top campaigns on indiegogo because we had hit the popularity algorithm. And because of that, they ended up featuring us in their newsletter about eight days into our campaign, which only happens to their popular campaigns because they take a commission off of the money that you bring in. So when they did that, we ended up raising, like, $155,000 just from that newsletter blast. And so these are some of the residual effects that can happen when you make sure that that first day is big. And that all comes down to having that audience of raving fans before you launch.

It sounds like that's. It almost sounds like it's the only way. Because if you didn't have that algorithm kick in the first time, you raised 17 grand. Next one, on the first day, you raised 20,000. That's all through your own first, your own efforts. And then once they kicked in, they raised an additional $580,000.

Yeah.

Okay.

And if you look at the stats, because indiegogo and kickstarter tell you where your traffic comes from. And when we look at the sales breakdown, about just over 300,000 came from Indiegogo alone. And it's not from the newsletter, but it was just from the getting residual traffic that's already on their platform. Because our project was easy to find because we had, like, you know, we created that snowball effect from the first day.

Does that mean people who are supporting a crowdfunding campaign are already maybe funding someone else, and then they start shopping for other ones. Is there a shopping effect, basically, that's going on?

Yeah, there absolutely is. Like, because I'm a nerd. There's a stats page on Kickstarter, actually. I'll share that with you. But the Kickstarter stats page will tell you how many backers have actually supported projects on their platform and how many are returning. And about 25% of the backers on these. These platforms are return visitors.

Okay, I get that.

Super cool.

Hey, can. Can you overraise. You raised 600,000, which sounds beautiful, but now you got to deliver 600,000 ice vests, right?

Yes.

How do you go about. Can you raise too much?

You can, yeah. As one of my clients said, raising money on a crowdfunding campaign is debt, essentially, because you get these pre orders and you now have to take that money and deliver product. And so the really scary thing about even, especially if this is your first time doing a campaign and delivering product, is there are so many points of failure. Like, you take half of a million dollars and you better hope that your prototype is finished in development and there are no additional costs. You better hope that you estimated shipping costs properly, you better hope that you dealt with, like, know, your inventory costs, your fulfillment costs and like, and have a buffer for any problems, which. So I think that without the right preparation ahead of time, the more money you raise, you have a higher point for where you can fail.

Right.

Who's best suited to use a crowdfunding campaign? What kind of businesses should be considering this?

Well, honestly, as long as you have a physical product that you validated and you know will sell and you are willing to go through the three to six months, you need to build up an audience to make sure that you're going to be successful. Those are two things. But one thing I'm actually encouraging people to do is before you even attempt a crowdfunding campaign, you should not be crowdfunding for an idea. So when you go to launch your campaign, you actually want to be at a certain point in product development so that you have a healthy estimation of what your costs are going to be. So if you have ask me at what point or who should crowdfund, it should be someone with a proof of concept, with a prototype, and they have a bit of funding to make this work. Right. And by a bit of funding, I mean it really does depend on how much you want to raise overall. But what it comes down to is just not crowdfunding for an idea, because then you're going to run into a whole bunch of problems later on because you, you probably have underestimated the cost of your product and how much you should sell it for and how much it's going to cost to produce.

What about going back to the crowdfunding platform? Is this more designed for the one hit wonder or is this something where I can build momentum and every time I have a new product, maybe even once every couple months, come back to Kickstarter?

You can absolutely do that. I have quite a few friends who do this. You take Forever Spin, for example, which are really cool spinning tops. It's like a novelty gift item. Victor Grabowski, he raised like two or three hundred thousand dollars his first time around. He came back, he fulfilled the product, and eight months later did another campaign with the new product and then built it again and again and again. Pavlok is the same thing. They're an Indiegogo campaign that raises over a quarter million dollars, comes back, launches a shot clock, does over a quarter million again, and then you transition your sales into an e commerce business. So this is absolutely a sustainable model that you can build that first crowdfunding campaign into.

Okay, now I want to know a little more of the particulars at least. My understanding is with Kickstarter, if I set a goal of raising $10,000 and I only raised 9,000, the funds don't get released to me. Is that an accurate rule? And do all the websites act that way? I have to raise a certain amount of money?

Yeah, that is an accurate rule with Kickstarter. With Indiegogo, they have two kinds of funding. You can choose the fixed funding, which is the same as Kickstarter's all or nothing. So if you don't hit your goal, no money changes hands. But they also have a flexible funding model, which means you can keep all the money you raise. However, if you fall short of the goal that you set, they charge you a premium on every dollar that you bring in.

Okay, is there a suggested path that people should take and reason? Are there pros and cons to each one?

100%. While flexible seems like a great option if you have to plan for worst case scenario, and if you do not hit your goal and you fall short of your goal, only choose flexible if you can actually do something with the money. And if you can't, then choose fixed.

Okay, what about legal obligations if I raise money on Kickstarter, you were telling me it was your gut, but you said about 25% of the orders that get funded or the projects that get funded. Your sense is 25% of them either don't get fulfilled or don't get properly fulfilled. Is there a legal obligation? Meaning if I sell something and I don't deliver it, do I need to refund that money? How do laws apply here? Or rules?

So, full disclaimer. I'm not a lawyer, and if you want to make 100% sure, go speak to an attorney.

Nicely done.

Listen, just have to protect myself here, but as of US Law, my understanding is that unless if there is fraud happening, you as the entrepreneur that has done the crowdfunding campaign, you have no legal obligation to fulfill product. Okay, Because. And it's written all over Indiegogo, Kickstarter that, like, they're not liable, but you, as the backer or the customer that's supporting these projects, are looking at this like. Like an investment. And you may not actually get your product or your money back.

Okay, so if I go into this raising funds, I suspect that if I go in intentionally trying to defraud people, a fake product, trying to get money and don't deliver on, that's fraud. I assume, again, you got to talk to a lawyer about this. But if I go into a situation with the intent of fulfilling it, but then fail to fulfill it because the manufacturing cost overrun or something like that, maybe that's where the obligation's not. I'm just wondering how many people. Have you ever heard of people trying to scam the system?

Oh, yeah, there are horror stories. I can't think of a. There was one campaign. I can't remember exactly the name of it, but they raised hundreds of thousands of dollars and then ended up spending the money on, like, hookers and blow and in Mexico or something like that.

Was that Kelsey's campaign? Kelsey has a jewelry business, and she was trying to raise some money. So I can see her blowing on hookers and blow. I can totally see that.

I can't believe you blew me up.

Oh, my gosh. Of course. But, like, it's that freak incident that makes news, right? It's not. That is not the norm by any stretch of the imagination. But, like, I think. Oh, don't quote me on this, but Scully, the motorcycle helmet, that raised about $2.2 million. Yeah, I mean, there's a big disclaimer that they couldn't. They just ran out of money. And their prototype, they couldn't bring it to manufacturing because of complications. But they may have had some bad press. Don't quote me on this, but I vaguely remember something about that with their campaign.

All right, we swear to God, we won't quote you, but you just quoted yourself and recorded it. So basically, basically you quoted yourself. So okay, so what about, you said this is for product based businesses, not for ideas. What about service based businesses? We have a lot of service based businesses listening. Is there any outlet for, for them to raise funds in a means like this?

Yeah, for sure.

What?

Okay, so service based business, like say a business consultant.

Yeah, business consultant. Or say a membership organization hypothetically called Profit First Professionals. You know, they have members and they want to, you know, hypothetically expand their building or something like that.

Yeah, 100% so that it's. It is possible with the right framework of a campaign. So if, just say because I'm a consultant, if I were to go on Kickstarter myself and say, hey guys, I'm raising money just to get awareness out there. And then some of my packages that you could buy included like one hour consult or all the things that is not scalable and won't sell. Because the backers that you see going to these websites, they want to, they're doing it to help you raise funding, like money to get your project funded. Right. So there's no reason. It's just a marketing play for me. And it looks kind of skeezy for me just to sell like one hour content. However, what if you were to raise money for a digital course?

Yeah.

Oh, that's seen. Right. So Julien Bro from Harbig in Montreal here, he went on to raise over $70,000 for a digital course called not another boring course for accounting or investment or something like that. And that's what they did. He at first thought he could raise money for an app and that he looked into it. Not so. But then he's like, well, digital course, like, I need $5,000 to manufacture this course, so why don't I build an email list and then launch it on a crowdfunding platform? And he was successful with that. I think that the biggest thing you got to watch out for with digital courses, it's the same thing. You need to have an audience of qualified buyers. But also just make sure that your reward packages or the pricing tiers that people can purchase are really attractive.

Is there a theme or a strategy for that? What makes it attractive? The pricing tiers, I would say.

Well, yeah, for example, I personally wouldn't create a bunch of rewards that have nothing to do with the campaign. Like don't go creating a bunch of name tags and T shirts that you could sell. But instead the obvious one that stands out is you buy the course, or you can sell six months of membership to this course for a reduced rate or something like that. So you, you keep it super specific to the course itself and discount it. As for your. Because they're your beta founders essentially. So you discount that from the price that you'll be selling it regular once the course is actually live and working.

Gotcha. And I know I'm going back to some of the basics here, but I've heard of Indiegogo. I've heard of Kickstarter. Is that all the crowdfunding platforms out there? Kelsey's like, not. There's more.

Well, there's some like in the, the non profit realm, there's a whole bunch.

Name some. Do you know some? Kelsey Ayers Dot com. Kelsey needs money. Dot com. Yeah, Kelsey's hungry for money. Kelsey likes blow and hookers. Dot com.

I love that one.

So rude.

That one. Yeah, very popular. What are they, Kirsten, what are the other sites?

Oh man, GoFundMe is another big one.

Oh yeah, I've heard of that.

Okay, what else? I, I don't actually deal with. Well, this is gonna make me sound like an idiot, but I don't any other platforms besides Indiegogo and Kickstarter, so I tend to shut them out. Another similar one that's not exactly crowdfunding, but it follows the same model for any sort of creative types is Patreon. Patreon is a good one. Patreon. Yeah, they're more like of an ongoing thing so that if I say looking to make money on my podcast, then I will use the same thing that says, okay, audience, if you pay me $25 a month, you're going to get this one like price reward. And so it's more of an ongoing subscription thing to support your, your passion project or whatever. But it follows the same outline as a crowdfunding campaign.

Okay, so, you know, I want to talk a little bit about GoFundMe because I had an experience with it on the. I used, I know someone that used it. I hosted an event down in Florida for authors and we were going to go on this boat trip and just spend time exploring, writing their next book. And one guy gets down there and he says, oh, to fund my Travels, I use GoFundMe. And that's the first time I heard about it. And GoFundMe allowed him, I think, to get money for his cause, but with no expected return, he just said, I'm going to send some pictures and some videos to you guys, but I'm looking to do this for my own education. I don't know how familiar with GoFundMe, but is that the purpose of that site? And, and, and why would anyone even. Okay, so why do people give money to that?

They.

Okay. I believe that people give money to causes they believe in.

Okay. That resonates with them. Yeah.

So GoFundMe is not really for products, but it's more for personal projects. So if you're looking to raise money for your sick mother or your travels or to take a year off and learn art history or something like, that's what that is for.

Okay, okay. Okay. And, and, and there's, in that case, I think there's no expected return to the people that donate money. Maybe updates, but they don't, they're not going to receive anything besides that, right?

I'm not sure. I think it depends on the expectations you set with your project, but I believe it's donation based. However, I would need to do a quick search. It's funny, like I, you could tell I'm super niche because I'm like, I don't even know what's happening with the other platforms. I'm just so tired.

I love it. I love that you're that focus because you've been wildly successful doing this for your clients. The last question I have for you before we go is where can people get started in exploring Indiegogo and Kickstarter to see if they should do this? How do they get started?

Well, I think a great resource is going to be going to my website if I could plug that. Cause I do have a checklist that's. That's for free.

Oh yeah, totally.

I have a free. Yeah, it's a product launch checklist. You can go to crowdfundinguncut.com, it's U N C U T with that and like in it's what, a 10 page checklist which will walk you through exactly what you need to do to prep for your product launch as well as validate your idea or talk to your customer base to make sure you've got something that could be crowdfunded. And I do have other resources available on the site to answer those questions. Or you can email me just the letter krowdfunding uncut.com if you are not sure and you want to pitch me your idea.

Good. All right. Because I was gonna ask you next. We'll find out more about you, but you just shared it so good. So we're set. So go to email krowdfundinguncut.com or visit crowdfundinguncut.com we'll include that in the show notes. Kirsten, thanks for these insights. I know there's so much more to learn, so I encourage everyone listening in. If you want to learn about crowdfunding, Kirsten is the source. Go to her. Go to her.

Thank you so much, Mike.

Thank you. Kirsten, thanks for joining the show.

Thanks, Kirsten.

Hey, cool. Thank you. We'll see you later. And Kelsey, I got an idea first. Punch me. You know, my idea is I think for crowdfunding that we should run a test like, you know, for us say we want to raise funds for a new facility across the street. Is that movie theater. And one idea, grand vision. Renovate that movie theater and make this a place where entrepreneurs other lectures can come in but we can use as a teaching location, right? Yeah, but that's hundreds of thousand dollars to fix that. To go to Kickstarter and try to raise $100,000 from the get go is a little hard. So I think in running a test and if you're up for it, maybe you could run the test. Yeah, just, you know, Kelsey, we'll do a GoFundMe and you say, I'm just looking to raise money for hookers and blow.

I wonder how many people will support me.

Y. That was my buildup. That was a joke. That whole buildup was for that as a joke. Just end on that. It was fun. You were writing it down. You're like, oh my God. Hookers and blow. Sure. Yes, boss. Yes.

Messed up.

All right. I know I'm a little messed up. I would like to renovate that place. Yeah, that's another vision. But hey, we're gonna do a few things here. First we're going to talk about our corporate partners. But then we're going to share what we learned from this episode. And we do have a shout out from Gregory Ashcraft that I want of the Ashcraft firm that I want to talk about. But first, I do want to thank our corporate partners, make the show a reality. And do you have a trivia question for me?

No.

Okay, good. That's the one I want. Do you watch you. I will pull up a trivia question for you.

I like that.

And then can you talk about our corporate partners in the meantime while I look it up?

Yeah, sure.

All right, lay it on me.

Okay, so first we have a zero Xero is a hero. They are a cloud accounting software. Awesome. Super user friendly. Next we have Fundbox. So Fundbox is a cash flow system.

Fundbox is a cash Flow accelerator.

Accelerator. That's what I wanted. So if you aren't getting your accounts receivable in, they will spot you the money until you do. Fundera is your one stop shop for business loans.

There you go.

What's next? Receipt bank. Oh, love that receipt. Bank is awesome. You can scan your receipts in and it'll automatically sync with your accounting software. Who else is that? Everybody.

Nextiva.

Nextiva is our favorite I.T.

Y.

So it's a voice, a VoIP phone system.

Yep.

Super user friendly. I love them. I call them usually weekly because we're just always ordering new look at their line. But incredible, incredible customers.

Yeah, great people. And netpayroll.net and netpayroll.net yeah.

This is, this is our payroll company.

They are our payroll companies. Our final shout out to them. They came on for six episodes and so thank you to netpayroll.net just check them out. I'm telling you, it's worth checking them out. They offer 60 day money back guarantee if you don't like their services and trust me, you will. So you'll be with them for life. But just check them out. All right, you ready for a little trivia question?

I'm ready.

Okay. What is someone who shoes horses called? What is someone who shoes horses called?

There's a special name.

Yeah, they have a spec. They have a. Yeah, a special name. Just like a cobbler.

Right?

Cobbles, shoes. Someone that shoes horses.

What's a Schumann?

Horseshoeman. Very, very, very far. It's a farrier.

Oh, I would have never guessed.

Yeah, never guessed that one. A couple easier ones then. What's the capital of Spain?

Madrid.

Yep. Which country is Prague in? A little bit hard or Turkey? No. Czech Republic. Longest river.

Denial.

No, that's just your life experience. It's Amazon. It's Amazon. Name the world's biggest island. This is a good one.

Biggest island.

Yeah.

Would a continent count like a.

No continent doesn't? That's. That's the trick. Right. So if you're thinking Australia, you can't. Okay. It's not Australia Australia, but it's pretty close.

New Zealand.

No, not bad. Greenland.

Okay.

Which is considered an island, but it's so big you think it'd be a continent. One last one. Do you want your history? Last question. When did the Cold war end? This is modern time history. You were born. You were around.

19.

You were born.

I was born 1991.

1972.

I was not born.

Okay. It was 1989. You were born in 1989. It was 1989 when the Cold War end. All right, that was a little bit rude of me. Thanks for joining the trivia. And you know what? If you skipped over our sponsors, you probably missed that amazing trivia. Now I want to know the knowledge you gained. This is anything but trivial. What'd you learn from Kirsten?

Oh.

Yeah. There you go.

Thank you. So I think overall I love crowdfunding as an option.

Have you ever used it?

I have not. But I do have like a nonprofit leg of my business that, that I'm going to use crowdfunding for. But it's very different than like Kickstarter because it's not a product and it's not so much a, you know, presale.

You know, maybe it's a GoFundMe. Are you still gonna deliver a product or service or is it just you're serving a cause?

Serving a cause.

So maybe it's GoFundMe.

Well, they have, there's a slew of these websites that do just for causes and they all have like their, you know, little caveats and things.

Okay.

But my biggest takeaway was the benefits of using crowdfunding beyond just raising money is that you have this built in customer base of beyond your normal reach that you've acquired because of this site, because of those shoppers on Kickstarter. Indiegogo. That's pretty awesome.

That is really awesome. You know, my takeaway is at the very end, I didn't expect this to be a takeaway. When she said, I don't know the answer. And she goes, because I'm so niche focused. Yeah, she's really, you know, world famous maybe is not the word, but she's famous for her crowdfunding knowledge. And I was like wondering like, you know, what does she know that other people don't know? She knows not to focus on other areas. She keeps on improving her knowledge in this one arena. So that was kind of the big takeaway was, wow, it's kind of cool to hear someone say, you know, I don't know the answer to that because I ain't my expertise.

Yeah. But you know, it's so right because as technology and these different platforms change so much that you really do, you need to invest all of your time.

So I like hearing that. That was kind of an unexpected bonus. The specific tips I got regarding crowdfunding day one matters big time. I didn't appreciate that. I thought, I have time. So even though you have a 30 day campaign, you have a one day campaign, you have a 25 day campaign, you have A one day campaign. Second thing is, you can't crowdfund ideas so much. It's gotta be released. The platforms she was talking about about is product based and it can't be in conceptual phase. It's got to be ready to roll out.

Yeah.

Otherwise you'll fail to deliver.

And how many have you seen that have really just been ideas?

You know, I don't go in there that often. I supported one for a knife, believe it or not. I'm not into like knives or anything, but because I'm a co owner in Hedgehog Leatherworks, Right. There was a guy that was launching knives and I thought it'd be good to support this guy. And it was, he did it, but it was delayed and delayed. And I'll tell you, the experience was like, you know, I don't trust this guy can deliver on the long term. I don't know if he's going to be a successful business long term. And it kind of turned me off to the business. And that kind of drives home that final point she was making. Only 30% of campaigns ever get funded and then she feels about 25% fail to deliver. And I think, I think it's better not to get funded than it is to get funded and fail to deliver.

Yeah, absolutely.

Yeah. Because now I'm like, I don't know if I want to do business with this, this particular company again in the future. Okay. So that's what we learned. We want to know what you learned, my dear friends. Yeah. You're getting into the music already, right? It's good music. Yeah, I like it.

Yeah.

Do you like this type of music?

I don't love it, no.

Yeah, no, no. It's not your type, but I love this type of music.

Oh, good.

That's why I think we picked it.

Yeah.

So here's the deal. We want to know what you learned, dear listener. That's right. I said, dear, dear listener. Go to your podcaster. I don't care if it's itunes or tunein or Stitcher, Google Play or some kind of like weird site you found us on. Post your review, please rate, share and review or rate, review and share whatever organ sequence you want to do in it. But we want to know, what do you think about this show? We want to know your comments, what's been your experience. We want to know, you know, everything about you and, and we want you to share it with your friends. So. So please do that. Okay. And one more thing. We crank up the music just a little bit so we can get to the next part. Oh, there it is. A little bit louder. Nice. Right? Gets you more and more excited. Why are we getting so pumped up for profitfirstprofessionals.com? that's right. That's the site where it all happens. Kels. It's funny. People ask me, mike, where does the Internet begin? I'm like, profit first professionals. They said, yeah, yeah, okay. But where does it end? Profit first professionals, we are the alpha and omega of the Internet. It's really true.

Yeah.

A lot of people did not know that.

Now they do.

Yeah, they do. Now they do. There's one more thing that's a problem. First professionals, not only are we the entire loop of the Internet, my eye. As I drew that in the air, my eyes followed and I got dizzy as I did the entire loop in the air circle with my.

And he's continuing to do it.

Yeah. My sing finger is circling around and my eyes. Eyes. Can you look at? You can't take your eyes off. It's hard to right and gets you dizzy. So now Kelsey's spinning her finger in the air. That is what private first professionals is like. Once you're in, you never want to leave and you get a little bit dizzy. Here's what you do. Go to proffers professionals.com. click on the find button. Then fill out the form there. And it says, tell me all the details about you. How can we help you become more profitable? Then click on the submit button. And the magic things happen behind the scenes. Magnificent beasts called software go to work and move data, meaning knowledge, around. And then we have one of our people, usually Ron, will call you or email you and say, here's a first professional that can help you out. We'll hook you up with another person and drive profitability in your business. It's magical. Just like my finger going in the air. Just like it is again now. All right. Anything else you want to talk about?

Nope. That's it.

We got to go. Enjoy the rest of the music, guys. Here comes the big build. We'll see you later.

Bye.

Forever. Forever.

Sam.