Three Local Entrepreneurs Discuss Crowdfunding Successes and Failures
It doesn’t take long to realize that Missoula is a unique community. Unique is an overused adjective, to be sure, but there really aren’t any other places that combine Missoula’s contrasting attributes: grit and class, high culture and lack of pretension, innovation and tradition.
That attitude seeps into every corner of the Garden City, especially in the innovative businesses that call it home. But every successful (and even unsuccessful) business needs start-up funds to get going. And, no big surprise here, some of Missoula’s most unique businesses have taken to raising funds through Kickstarter, the crowdfunding network that’s helped thousands of businesses and artistic endeavors take root and flourish.
Take Paul Wheaton, the “grand duke” of permaculture. Haven’t heard of permaculture? Paul’s devotees will be happy to educate you. Or you could simply get some of his “Permaculture Playing Cards.”
Wheaton raised more than $70,000 through Kickstarter to develop and produce his permaculture-themed cards—a standard deck of 52 playing cards emblazoned with permaculture facts and tips.
It wasn’t his first experience with Kickstarter and he’s a fan.
“All five of my Kickstarters were funded far beyond what I asked for. I think it’s one thing when people tell you that they love what you do, and it’s another thing when people put their money where their mouth is,” said Paul. “It sure makes you feel warm and fuzzy all over.”
In an industrial building just off North Reserve, Rob Nowak runs his start-up: GoSnug. After becoming frustrated trying to find a high-quality, technical blanket that would shed water, stand up to his Montana lifestyle, and featured one of his favorite fabrics, merino wool, Rob decided to invent his own.
For the last couple of years, he’s been perfecting his one-of-a-kind blankets. This past January, Rob launched a $50,000 Kickstarter campaign to add new colors to the line and to get the blankets tested by the University of Montana’s Work, Physiology, and Exercise Metabolism Lab.
His $50,000 goal was ambitious, and he didn’t reach it. And therein lies the rub with Kickstarter—if you don’t succeed in raising the stated goal, you don’t get any money at all. None. Zero. Zip.
“I wished I’d started promoting the campaign a couple of months before it launched,” Rob says, but he isn’t discouraged. “I’m really happy with the reach we got and the buzz the campaign created.”
He’s even considering using what’s he’s learned to launch another campaign, one with an improved chance of getting the capital to take GoSnug to the next level. At least Rob is in a pretty big club. Kickstarter estimates that only about 37 percent of projects are successfully funded, and the majority of those raise less then $1,000.
Kickstarter markets itself as a way for creative types to raise funds. But in reality, any project that captures the attention of the Kickstarter community can get funded, provided it fits within their somewhat lose guidelines: no charity or nonprofit fundraising, no financial schemes, and you have to “produce something” with the funds—a play, an album, or a deck of cards espousing permaculture.
The company guides creators through project set-up, which includes developing a title, making a video about the project, writing a short blurb, and setting your financial goal and timeline.
One critical piece is detailing what you’ll give to your backers in exchange for their funding. Often these “rewards” are early or special versions of the product getting funded, and sometimes they’re the finished product. Once your project is ready, you launch it, share it with your networks, and hope the funding comes through.
Jesse Spaulding’s first Kickstarter project, a TV show he and his partners pitched, also failed. A couple of years later, he launched a second campaign. This one proved wildly successful.
The Ghost is a technical, niche product for professional photo- and videographers. Jesse spent a year prototyping and doing market research before launching his Kickstarter campaign. He also advertised in online photography magazines to generate interest and drive supporters to his campaign. All told, he raised more than $161,000 for the Ghost, some of it from across the globe.
“I was very surprised with the international reach from our Ghost Kickstarter campaign,” he said.
While $161,000 may seem like a lot, Jesse offered his supporters an actual Ghost in exchange for their support. For a $1,595 “donation,” you got a Ghost kit mailed to your house. For $1,995, Jesse would assemble it for you. Granted, both price points represented a savings over the actual retail price, but it wasn’t free money by any means.
Basically, for Paul, Rob and Jesse, the Kickstarter platform acted like an online store offering presales. Each of them took orders for their product via the site, adding a discount or a special incentive to further entice backers. Then they used those funds to make the product and distribute it to the folks who gave them money.
Kickstarter provides access to a community of potential supporters, a way to showcase a project online without having to develop a custom website, and a way to accept money without having to develop a full e-commerce site. Of course, Kickstarter doesn’t do all of this for free; it captures a 10% fee from all successful projects.
If you peruse the current crop of Missoula-based projects, you’ll quickly notice that the vast majority are music, film and other artistic endeavors. You can help fund anything from a zombie musical to a documentary film about dogs that ride in motorcycle sidecars. Remarkably, many of these get funded and they each add to Missoula’s wonderfully rich cultural offerings.
But Paul, Rob and Jesse aren’t the only local entrepreneurs using Kickstarter. Two recent additions to the Missoula restaurant scene, the Market on Front and Masala, got some start-up funds through the platform. A local family invented a new board game, Pawn Voyage, and raised $8,500 to turn their prototype into a real game. A local mapping company funded its first map of the Bob Marshall Wilderness through the platform. Without Kickstarter and other crowdfunding companies, it would be much harder for these dreams to turn into realities.
Whether they’re trying to get support for the next great zombie musical or for a new board game, Jesse has some advice for folks trying Kickstarter for the first time: “Do a lot of research and don’t rush into it. Also, don’t expect Kickstarter to market for you. Plan a marketing strategy for before, during and after your campaign.”
But really, he says, just give it a shot. “Don’t hesitate to try crowdfunding because there’s not much to lose.”