This is a guest post by Elena Mikhaylova, the CEO of CrowdfundProductions, a company that puts on crowdfunding events and helps entrepreneurs launch crowdfunding campaigns.
In 2008 the number of the Internet connected devices exceeded the world’s population, and it keeps growing. According to Cisco, an average person is expected to own five devices by 2017. Almost sixty percent of adults in the US already own a smartphone.
Devices have more and more of an influence on our daily lives, beyond being just communication gadgets. Soon, devices are going to become even more integrated with our environment via home systems and appliances, cars, and even gardens. All of this is a part of “The Internet of Things (IoT)”.
A couple months ago we wrote about the wearable technology projects on Kickstarter and Indiegogo. To continue our research, we are going to talk about smart home, car and garden campaigns on Kickstarter. We’ve completed a review of 176 projects from 2012 to the first six months of 2014. You can see out our findings in the infographic below.
Image Credit: CrowdFundProductions
To help us better understand the current situation, we invited the creators of several recent and current campaigns to join the discussion. Below, we’ve compiled a list of these campaigns. You can find our discussion with these creators about the Internet of Things and Kickstarter after this list.
Stefan from Athom (Netherlands), the creator of Homey, The Living Room ? Talk to your home!, which raised almost 204,000 Euro in June.
Nadia Bruno, a creator of STEAKLOCKER – THE FIRST IN-HOME DRY AGE STEAK FRIDGE, which already has raised $190,000+.
Alan Zhow from Belleds Technologies, the creator of The Q: World’s First Smart Home Audio and Lighting Platform, which has raised 62% of their $100,000 with 9 days to go.
Edd from QL London (UK), the creator of LILA: The Ultimate in Bluetooth 4.0 Home Safety & Security, which has raised 29,000+ British pounds with 27 days left on Kickstarter.
Yen Tung from Sentri, the creator of Sentri: Welcome to a Smarter Home which has raised more than $332,000+ with 3 days to go
Radek Tadajewski from oort – Internet of Everything, the creator of OORT-control your whole living environment with a single app, which has raised more than $100,000 with 69 hours to go.
Our Discussion: Tell me your story – How did you come up with this idea?
Radek: Our team realized that there were no systems that allowed consumers to control their homes and offices directly from their devices. There were various devices that could be controlled by smartphones, but nothing that brought all of a person’s devices together to be controlled by one app without requiring a bridge. We came up with lots of potential devices that we could create to showcase the power of oort’s unique system. We’ve decided that the best way to pick which ones to create would be to discuss the ideas with potential buyers, and felt Kickstarter would enable us to do that.
Yen: We decided to create our first smart home product from the angle of Home Security because we see a big potential of the market. That’s how we came out Sentri. It’s simple designed, so even my grandma can set it up. The price is sweet enough for apartment renters like me. The intelligent algorithm learns your home rhythm and informs your of irregularities at home. And we spend a fair amount of time on the industrial design and provide a beautiful display and even personalize its appearance to blend in with the decor.
Edd: The idea for LILA came from QL team member Rob, as a solution to an everyday problem – that nagging feeling of ‘Did I remember to close that window?’ From this we developed the first stage of LILA, which was a simple system, designed to remind the user if any doors or windows were left open when they left home and to alert the user of any unauthorised entry while they are away. At this stage we started exploring the potential of the system and the ideas kept coming. We created the LILA Juice to combat another one of those everyday problems ‘Did I turn off the hair straighteners?’, and we expanded the security side of the system with the LILA Phonic which functions as the alarm siren. There are plenty more ideas lined up too, but we’ve had to limit things for now to ensure an achievable target.
Alan: Belleds was founded by a team of MIT graduates with a goal to reduce energy consumption by accelerating adoption of LED lighting. We won the MIT Clean Energy Prize competition Audience Choice Award this year. We developed a cost-effective wireless smart home audio and LED lighting system by reinventing networking (invented by Mr.Bell) and lighting (invented by Mr.Edison), hence our Belleds = Bell + Edison. Both inventors are admired by Belleds founders as they changed the world over the last 100+ years. Belleds team strives to make an impact in the world by bring wirelessly connected Smart LED lighting to every home to conserve energy and enrich people’s life with color and sound.
Stefan: The idea came upon us several years ago due to our own itch: laying in bed in the dark, and not being able to reach for and find the light switch. After expanding this hobby project bit by bit over the years, we incorporated it into one of the courses of our study regarding Ambient Screens and Technology, and improved it. Then, we began to see the business potential in it. Again in our study at the University of Twente we wrote a preliminary business plan for it, and the idea remained present in our minds. Since we both wanted to start our own tech start-up, and the idea withstood marketing test and gained interest in our private circles, we decided to go with it.
Nadia: I was part of the development team for a dry age steak house in the Midwest, and we wanted to provide the same quality for in-home use. We decided on Kickstarter as it is the largest crowd funding site and we are planning a subsequent campaign on Indegogo.
The term Internet-of-Things is becoming more and more popular. Do you see more projects that belong to this category trying to raise money through crowdfunding?
Radek: I think that the amount of IoT projects that will launch via crowdfunding will grow, as the IoT’s popularity soars. Lots of projects are really simple ideas that don’t need to be created by big companies, so inventors will increasingly turn to crowdfunding to bring their ideas to life.
Edd: Most certainly. It’s already happening. It’s a fantastic space to be in right now with experts predicting the Internet-of-Things exploding into a trillion dollar industry.
Alan: Absolutely. It was one of the hottest topics in 2014 CES with many leading companies promoting IoT products and technologies. IoT is a broad field which includes wearables, smart home, connect car, intelligent building, eHealth, etc. Tech companies like Intel and Qualcomm made huge IoT announcements at CES early this year. Recently, both Apple and Google are aggressively entering the IoT battle field with Apple announcing HomeKit which Belleds will support, and Health Kit. In June, IoT was at the heart of the annual Google I/O event. Since many IoT related companies are targeting consumers, hence more and more IoT related companies will try to raise money through crowdfunding.
What is the main goal of your crowdfunding campaign?
Edd: Well the key goal is to reach our funding target which will allow us to bring LILA into production without the need for other external funding. In addition to this Kickstarter allows us to get a better understanding of where our target market lies and has shown us interest from areas we hadn’t even considered.
Yen: The most important thing is to prove market traction, increase exposure, and get product feedback from crowd.
Radek: Indeed, our goal is to run a beta test. We have received lots of interesting comments, suggestions and partnership proposals. It’s been a great combination of crowdfunding and crowdsourcing. All of this will help us improve our product and at the end, we will be able to offer people exactly what they need.
Stefan: The goal of our campaign is a hybrid: to allow us to build our own company from a project with the funds, to attract customers to validate the concept in the market, and with that gaining a better position towards private investors, now that we already have a first seeding round and customer validation.
How much time did you spend from the time you had decided to run a Kickstarter campaign and the day when you campaign went live?
Stefan: We spend quite some time with preparations. Of course, the project was already running for a few years, but real Kickstarter preparation, including the text, video script, filming, editing, adjustments, etc. took us around two months, a month longer than we initially hoped.
Nadia: All in all it took about 6 months.
Radek: After the idea came to us, we were so excited by the potential of our products and the IoT market, we worked around the clock to bring the idea to fruition as quickly as possible. The preparation took about six weeks.
Yen: 3 months.
Edd: We started preparing back in February and launched this campaign in the beginning of June. During this time we went through various concepts, prototypes, and re-designs before we were happy. One of the most time consuming areas was making the campaign video which was filmed and edited ourselves, rather than using a production company.
Alan: It took us over 4 month time.
Is the campaign going according to your predictions? What has been the most interesting discovery for you during this campaign?
Radek: The most interesting discovery was the outpouring of support from potential backers. We have received lots of ideas that we can potentially realize in the future.
Alan: We haven’t reached enough backers from social media networks. We are looking for ways to improve our campaign on Facebook. It was interesting to discover many international backers from around the world.
Stefan: We really did not know what to predict. We knew we had an interesting concept, but with Kickstarter you never know, it’s all about getting momentum. What we really learned along the way is the importance of the first days, and the slope of the curve. As you can see on sites like Kicktraq, every (popular) project has the same thing: skyrocketing on the first two days, and steadying down later, to have another little boost in the end. We surely experienced that as well, and it can create quite the mixed feelings 😉
Yen: We were expecting most backers should be from USA. But actually we have a lot of backers from all over the world. A lot of Europeans, Asians, and even a lot of backers are from South America and Middle East. That’s something we didn’t expect. But it’s a good thing. We see Sentri’s potential in many markets now.
Edd:The input and support from backers has been beyond what we hoped for. So many of our backers have come to us with suggestions and comments to help make our LILA campaign a success.
Yen: Mostly Kickstarter itself.
Radek: Kickstarter is still the best source of backers, but thanks to the good press, we are receiving lots of interesting business proposals.
Nadia: The main sources have been; Kickstarter 23% and our efforts via social media, digital media and website at 77%.
Edd: Kickstarter itself is a great source of traffic at the start of a campaign because you are listed as a new project. That only lasts a day or 2 so getting a word out about a campaign is one of the most important things to do. If no-one knows what you have to offer, then no-one will back you! Personal contacts were the first place to start because if your friends & family won’t help you out then who will?? We asked them to share what we’re doing on all their social networks. The next people to help us out were our backers. A lot did this without you even asking because they want the project to be a success so they can get their reward. We spot our backers tweeting, posting, blogging and commenting about LILA all over the place. It’s very humbling to see the efforts people will go to.
Stefan: What we have really experienced, and want to give as a tip, is to start close. It all starts with sharing it with your own family and friends using social media and mail merge, encouraging them to back and/or share the project again. We could also publish a press release via the University of Twente, and reached Tweakers.net, the largest Dutch tech site, quite quickly because of our quick rise by friends. When they picked it up, others followed, creating the momentum needed to succeed the campaign.
The success rate on Kickstarter is below 44%. We just heard that in the Netherlands (the latest addition to KS family) it has been only 14% over the first two months. What did you do to make sure you are going to win this battle?
Nadia: We have a very unique product, we provided appropriate rewards and we worked very hard to get the message out.
Radek: I think we’ve already won the battle, because as I wrote earlier, we have received lots of good ideas, suggestions and business proposals which will help us to develop our product. That was our purpose at the beginning. The real value of Kickstarter, beyond funding, is the relationships it builds.
Yen: Make a great product, and throw a great pitch on Kickstarter.
Edd: It’s very difficult to gauge exactly why some projects are so successful, while others fail even though they appear to have a very good product or service to offer. One of the main things we feel makes the difference is the coverage a campaign gets. The problem is that a lot of tech websites and writers will only pick up projects that have already hit their target, and so you’re left in a catch 22 position of needing coverage and not getting it!
Many people believe that summer is a bad time to run a crowdfunding campaign (because of vacations and lower traffic to Kickstarter). Would you agree with that?
Nadia: We don’t know because we’d have to run the same campaign in winter in order to test that theory. Our thought was that we wanted to be on the minds of people that are currently in the mood for BBQ.
Edd: We did take this into account, and made the decision to run our campaign for a longer duration to compensate.
Alan: It seems to be the case. Traffic from Kickstarter audience is less than what we anticipated.
If you had done the campaign again, knowing what you’ve learned by now, what would you do differently?
Alan: We would do more PR and preparation before launching on Kickstarter.
Edd: Maybe hire a PR company so we can get more sleep! Overall, we are happy with how the campaign has been presented, but we are always getting feedback and have new ideas on how to improve the campaign. And that’s a great thing about Kickstarter that your campaign isn’t static, it can evolve and improve all the time.
Yen: I will try to reach media earlier.
Nadia: We would have opened with more media.
My Main Takeaways:
Americans are still the main source of backers and creators on Kickstarter. But the situation is changing. More and more people from around the world are discovering crowdfunding, making it really an international phenomena. Take this into consideration while planning your campaign.
All the creators mentioned the importance of media coverage. Don’t postpone your PR activities until the start of your campaign. Start early, take your time, plan smart.
While Kickstarter can bring a significant traffic to your page, it is your job to make the first push by engaging your own first degree connections. Then, make sure to constantly communicate with your backers. Hundreds of enthusiastic supporters can make a difference for your campaign more than any professionals you hire.
I have just to repeat what Radek had said: “The real value of Kickstarter, beyond funding, is the relationships it builds.”
About the Author
Elena Mikhaylova is a serial entrepreneur with twenty years of experience in diverse industries including crowdfunding, PR, and social media marketing. She is an internationally published author of hundreds of articles, several research papers and two books.
Elena has been a speaker at a number of international conventions and conferences and an instructor at Colorado Free University. She was also an organizer of one of the top ten largest crowdfunding meetups in the United States and was recognized as Top 1% on LinkedIn in 2012.
