When it comes to crowdfunding, you often only hear about big winners like Pebble, the smartwatch that raised over $10 million via Kickstarter and has gone on to become a cornerstone of the rapidly growing wearable technology industry.
But what you rarely hear about are the failures—and there are a lot of them. Only 40% of projects on Kickstarter meet their goals (and take home any money at all). And over at Indiegogo it’s even worse; while the site doesn’t make its stats public like Kickstarter, The Verge has reported that only one-in-10 projects reaches its goal. So what differentiates a crowdsourcing winner from a crowdsourcing loser? We decided to ask a recent crowdfunding winner, Ion Glasses, to find out.
Last November, Ion Glasses made a big splash on social media after raising $60,000 on Indiegogo. The Wayfarer-like frames provide discreet, programmable notifications and act as an audio remote. People were quick to label the Spain-based company “a stylish alternative to Google Glass.” We called up Ion co-founder Ricardo Urias at his home in Madrid and had him walk us through his crowdfunding experience.
Do something you know
When Urias, a former manager of strategy and innovation for Havas Worldwide Group, first got together with his business partner Santiago Ambit, a product developer and innovation manager at Sage, they decided to focus on glasses because Urias had previous experience in the field. “It was a sector in which nobody was doing something really relevant,” says Urias.
Have the product before asking for the money
Before Urias and Ambit took the Ion concept to the crowdfunding audience, they dedicated a substantial amount of their own funds to develop the technology. “It was very important to have, at least, the product half of the way,” Urias believes. “When we started with Indiegogo, we already had the technology part fully developed, had tested it, and it worked perfectly.”
Urias explains this was crucial for making the crowdfunding campaign work. “We really believe that it was much more important…to have reached at least some success; that to a platform like Indiegogo, it’s one of the indicators that says that this project can become reality.”
Figure out which crowdfunding site works best for you
There are many more crowdfunding sites out there, so it’s important for an entrepreneur to choose the platform that will work best for his company. Ion choose Indiegogo for several reasons, including the ability to keep any and all funds raised, the fact that the site works well with international start-ups, and, maybe most importantly, that Indiegogo allows optician products and Kickstarter doesn’t.
Treat the crowdfunding audience as a test market
The most attractive aspect of crowdfunding wasn’t the money, says Urias, it was the process by which crowdfunding interacts with the public. “This was like a test of the acceptance of the product,” he says, revealing that feedback from Indiegogo donors led them to create an open source API for outside developers. “For us, it was not only our source of funds, but also a source of information about how can we improve.”
Be realistic about the money you can raise
It’s easy to be seduced by the dream of crowdsourcing superstardom. But not all of us can create the kind of buzz the helped Pebble raise $4.7 million in a week. For Ion, it was a matter of raising just above the minimum funds needed to manufacture the glasses ($50,000 for 3,000-4,000 units), and Urias felt it was important not get greedy. “Of course, if we had asked for $1 million it would be wonderful, but probably it would be much harder to do.” He says that asking for so much money can make donors hesitate, fearing that if the outlandish goal is not met then the donors won’t receive their product—an all too common occurrence in crowdfunding campaigns in over their heads.
Promote what makes you unique
Despite Ion’s initial comparisons to Google Glass, Urias is quick to point out their product is a far simpler device that mostly acts as a discreet notification device rather than a fully functioning computer on your face. Instead, he plays up Ion’s design. The company embraced style and fashion to make the glasses desirable and unique. “If you want to make a wearable for techies, you don’t need to worry a lot about the design. But if you want to be mainstream, if you want to reach as many people as possible, what you develop has to deserve to be worn,” Urias insists. “Fashion was very important [to us]. We don’t want people wearing the Ion Glasses to be perceived like Robocop; like a cyborg.”
Do your best to stay true to your word
Despite getting so much right—building a working prototype, creating buzz, and meeting their crowdfunding goals—even Ion slipped when it came to delivering their product on time. They weren’t able to meet their original February goal and manufacturing complications pushed the glasses’ delivery date to the second half of May. It’s a hurdle Urias admits may lose him some customers, but he says delivering the best product possible is more important. “We rather prefer to have a product that would respond to the expectations of the people than being on time with a product that we are not being confident about it,” he admits.
Honesty is the best policy
All along, Urias’ strategy for managing customer satisfaction has been to tell the truth. “If someone is not happy with this delay, we don’t have any problem to return their money,” he explains. “We don’t want people to be unsatisfied. All that we are doing is to see that satisfaction.”
Keep your eyes on the present—and the future
For now, the Ion Glasses team is focused on making sure their first product is a massive success. But that doesn’t mean Urias hasn’t already thought about what the start-up’s next move might be. In addition to developing multiple models of the Ion Glasses frame, Urias wants to keeps exploring the potential of wearable devices. “This technical component that we have already achieved is able to be used in many other wearable devices,” he says. “So, we will try to adapt it.”