So our Kickstarter campaign is over and we’ve moved on to pre-order via our website. It’s an unusual move to go straight to self funding if a campaign wasn’t successful so I believe its worthwhile laying our experience out here to explain our thinking as well as share our experiences for anyone that may benefit.
Why We Love Kickstarter:
The relatively new world of crowd funding is an amazing gift to people wishing to bring their ideas to life. From tiny one-person craft projects to feature films and everything in between, there are so many amazing products now available that would never have reached market otherwise.
No matter how many times I explain the basics of crowd funding to people that aren’t familiar, I’m still super pumped to do so; the projects we have backed and the crazy runaway success stories, the real community feel of many projects and resulting great faith, as backers, we place in the people running the projects. It always blows people away.
We loved the interaction we had with so many of our backers, and the supportive comments, emails and messages we received. We also built a great network of support and knowledge sharing with other creators, even those in direct competition with us.
The nature of the short campaign window provides an excellent call to action. With tiered rewards and a campaign clock ticking, many that would otherwise have gone away to think about a purchase will be encouraged to take the plunge immediately. There is also a bit of a “special club” feel to many campaigns especially due to the backers knowing their rank in the purchase queue.
What We Don’t Love About Kickstarter
Speaking now of watch projects specifically, in return for the trust placed in creators and the (often long) waits between pledge and reward shipment, backers receive a generous discount off retail price; a great and fair model.
However - in following many campaigns in the lead up to ours, we were stunned how low some creators were able to go with both their individual pledge pricing and their goal amount.
Being based in Hong Kong we have the benefit of easy access to many manufacturers, and have taken full advantage of this, stocking up on quotes for a multitude of watch components. We’ve a fairly good idea of the costs involved in watch manufacture.
It looks very much like many projects will be barely breaking even, or making just small returns for the huge investment in time a new product design and campaign requires.
On a small scale this is still beneficial for backers and creators, backers get a great deal in return for a little risk, and creators get their brand out into the world and if all goes well can build on this; hopefully creating subsequent projects that will result in a sustainable business.
The major problem here is, the expectation of what a good watch should cost is now extremely low – not only are newcomers unfairly compared to the established brands (with all their purchasing power we can never match) we are now competing against the next dozen small brands producing their first piece at cost.
Our Recommended Retail Price which is carefully calculated based on our costs and the margins required to every get into retail stores and actually make this a financially viable business have been constantly judged as unrealistic.
This doesn’t bode well for the micro brand world.
Why Self Fund Per-Orders then?1. Numbers.
We spent a long time crunching Kickstarter numbers trying to decide how much financial risk we were willing to take on our project.
If we set our goal at 20% of the cash required to launch, we’d most likely meet it immediately and coast through the rest of the campaign easily based on this initial momentum. “Funded in under 10 minutes” “300% funded” we’d be on the Kickstarter featured list etc. etc. This appearance of immediate and great success would continue to boost pledges and we’d most likely be far more successful than had we set our goal at (say) 60% of that required.
We’d also be able to add stretch goals due to the early ‘funding’ leading to greater incentive for existing backers to share and promote the campaign.
In hindsight it’s easy to wish we had done this, but it’s always easy in hindsight.
What if we just meet the goal and we need to front 80% cash? (And have only sold a small number of watches at a heavy discount - doesn’t look good for a full price model!)
We decided instead to go the responsible route and set our goal to where we were financially comfortable and hope for enough momentum to get us through. This didn’t work out for us in the end, but what it did allow us to do, was to go back to our manufacturer, show him the large number of backers we did have and request a lower minimum order quantity. Luckily he eventually approved.2. Brand
Brand wise, Kickstarter was probably the wrong place for us to launch. The Metropolitan started at a higher price point than most Kickstarter projects, putting off many regular backers.
The fact that we were on Kickstarter then alienated us from what was probably our bigger market, those that are happy to pay more for a piece but have a negative view of watches that come through crowd funding platforms.
Having said that, we never would have had the nerve to launch straight into pre-order ourselves, and the Kickstarter campaign gave us a great insight into the number of people willing to support us, so here we are.
The Metropolitan isn’t meant to be a mass-market crowd pleaser. It will be produced in a very limited run for those that appreciate subtle details and quality, and who like something a little different from the pack.
Glenn has gathered a really dedicated band of followers that appreciate exactly what it is we are doing, who are happily justified with their choice every time a new hands-on review is published.
It has been a very long (and exhausting!) process from the beginnings of an idea, through endless prototypes, the craziness of the crowd-funding campaign to our pre-order but we are so enormously grateful for the invaluable experiences and the friends we have made along the way.
We’re very much looking forward to soon seeing The Metropolitan out there in the world and using all we have learned to take Ayers Watches on to ever greater things.
Thanks for your support.