Kickstarter by the Numbers

We decided to try Kickstarter for the first product of Stubborn Goods. We reached our goal thanks to our friends and family. This is an overview of what we did and some lessons we learned.

Why Kickstarter?

Stubborn Goods makes packs and bags. Since production requires a minimum quantity order to make sense we thought Kickstarter might be a good way to start.

Besides, I wanted to experience running a Kickstarter project.

One other potential benefit is the Kickstarter page stays up. You can check it out here.

We Raised $5,253

Setting the goal was one of the harder parts to think though. Since the model is all or nothing, you want to set a reachable goal while at the same time raising enough for production to make sense.

We set our goal at $5,200 and raised $5,253. Either we set the goal well or, more likely, our friends and family wanted us to reach it and kept supporting until then.

Kickstarter took $430.47 in fees. About 8%.

Besides the goal, we needed to create a Kickstarter page and assets. Basically a video, tons of pictures and a story. The first attempt was terrible. And thanks to Mike at Outdoor Element, we redid everything. The second attempt was ok, much better, but still ok.

I've heard the advice that you need to make a product for a specific audience and solve a specific problem. I feel I understand that more after running the Kickstarter. Still easier said then done for me.

The first pack was made for me, a nerdy, commuting tech guy. But I tried to position it as a bag that'd work great for anyone. And while true, that makes marketing hard. Including the Kickstarter page. We should have pushed the video and assets to talk specifically to people like me.

Cost of goods

Because some of the materials we use have their own minimum order quantities, we ended up with a fair amount of extras. The total cost of goods, including labor ended up being $6,111.04. Labor accounting for over half of that.

Making a "Made in the USA" product proved to be expensive. We still believe it's important and aren't planning to off-shore anything. I can see why it's so attractive to companies.

Speaking of labor, planning the timeline can be tricky. It's a balance of working with the manufacturer, being optimistic and anticipating some set backs.

We missed our delivery timeline by a month due to snag in manufacturing that took an extra month to get worked out. We had an extra month of padding in the timeline, but that still too optimistic.

We communicated the delay with our backers and only a few people were concerned about where their product was.

Marketing / Ads

Turns out you have to do marketing and advertising to do a meaningful raise. While we knew this, we under estimated both the cost and the importance.

Our most impactful effort was emailing a list of our friends and family. We purchased SerialMailer to do the sending and sent a few emails. Most of our backers came though those emails. Cost for the software was $40.

We also asked everyone to share on social media. Between that and our posts, which we boosted, Facebook was our second highest source of backers. Everything else probably came through those two channels initially. Besides one backer from Twitter.

Costs for Ads on Facebook and Twitter: $248.38 and $83.79 respectively

We tried a PR promotion with the Lister.io agency, and while they were responsive before the engagement, after I never heard from them again. Even after repeated emails. They did do something, because a got a few, like 3, auto response emails from sites saying they got a submission. But as far as I know, nothing was published and no ROI. The Lister.io service was $209.

Lastly, we did a membership with The Crowdfunding Center. They talked about their "huge" mailing list of backers. Crickets. $60

On our own, we tried to get local press without success and we did cross promotions with other people running Kickstarters. No ROI there either, though the investment was only our time and we made some new friends.

We should have planned to spend more on Ads and/or had better targeting.

At the end of the day, it felt like we milked our friends and family. We ended up with 2-3 orders from people we didn't know and those look like they were friends of friends.

Delivery

We did include shipping and delivery in our estimates and pricing. Luckily, a lot of the backers where close and we could hand deliver packs. Even so, we spent $259.12 on shipping and packaging for the packs that had to be shipped.

The bottom line

We lost money on the Kickstarter. We were able to make more product than needed so the story isn't over yet. We ended up with $2,719.84 in inventory at retails prices.

If we can sell that without doing more advertising or marketing we'd net $530. That is unlikely and so after we move those packs we will have probably spent more on advertising and marketing than our potential profit.

Some lessons

Kickstarter was a great learning and testing experience. What I mean is, its time focused, all or nothing model allowed us to go through a full cycle of product development, marketing, manufacturing, and delivery. Something that would have taken a lot longer, cost more, and generally been harder to do without Kickstarter.

Some of our takeaways:

1. Plan on spending more on marketing or have an existing audience that you can market to.
2. Tell a specific story about the product, even if the product can be used by other groups.
3. Not all products are a great fit. Even discounted, I think our price point was on the high side for Kickstarter. Especially since it was our first campaign and we didn't have an existing audience.
4. Ignore all the agencies that contact you after a campaign has started. Not that they're all bad, but it's too late.
5. Spend more time ramping up for the campaign. Building an email list, thinking about the story, reaching out to media outlets, planning the marketing and advertising more.

I don't think we'll do another Kickstarter for Stubborn Goods. I think it could be successful with a large marketing budget and the right product. Moving forward we're going to focus on building our audience and driving people to our site. You can join us here.