All posts tagged “Flomio”

May 17, 2013

Researching Kickstarter: The Data Behind Successful Campaigns

Massively successful crowdfunding campaigns are almost cliche these days. Seems any group of bright, motivated entrepreneurs can pull together a Kickstarter page and the $$$$ will start flowing in.

Unfortunately this perception is wrong. Dead wrong in fact. Like pretty much anything else, the key to executing a successful campaign is planning and preparation. At Flomio we spent the better part of two months prepping for the FloJack Kickstarter campaign. We did a tremendous amount of research and came up with a detailed execution plan before pressing the big, green LAUNCH button.

This post is a cleaned up and repackaged version of the data we gathered leading into the campaign (along with source attributions). Hope you find it useful.

Referrals: The Very Long Tail

Have a look at Twine’s referrers:

 

Source: Kickstarter Blog: The New Creator Dashboard

Kickstarter isn’t a store, it’s a marketing campaign. Every project founder I’ve talked to has seen this long tail of referral traffic. Coverage in a top tier tech outlet like Techcrunch or Engadget won’t ensure success. Your story needs to stand on its own and propagate far and wide for a successful campaign.

Project Duration: Keep It Short and Sweet

Source: Kickstarter Blog: Shortening The Maximum Project Length

The data speaks for itself – the optimal length for success is between 28 and 32 days. It’s simply too difficult to keep buzz going about your project for longer than that. Backers procrastinate and start losing interest as time goes on.

Pledge Distribution: Inverted Bell

Source: Kickstarter Blog: Shortening The Maximum Project Length

Projects will see a burst of interest in the beginning but this initial wave will quickly wear off as your first and second degree networks become saturated. You’ll need a strong PR campaign full of “spiking” strategies that engage new pockets of potentially interested users (long tail).

Reward Pricing: <$25, $50, and $100

 

Reward Level

Backings

Dollars Pledged

<$25

38%

10%

$25

18%

8%

$50

14%

11%

$100

9%

16%

Source: Kickstarter Blog: Trends in Pricing and Duration

For many projects the $100 and $50 reward levels are the money makers. However the smaller reward tiers are by far the most popular (by number of backers). They’re an easy way for people to support and spread your campaign.

Rewards: More is More

Source: ViNull – Kickstarter Stats You Can Use

There seems to be a correlation between number of reward levels and campaign success.

Video Script: Have It Your Way

As a group of left brained engineers, we wanted an objective way of looking at successful Kickstarter videos. We were specifically interested in Pebble ($10,00,00 raise), Twine ($556,000), and Smart Things ($1,200,000).

We couldn’t find any data on the topic so we did the analysis ourselves. We transcribed each kickstarter video using a service called Rev. This cost $20 or so. Then we ran each script through basic lexical analysis tool (here). Here’s what we found:

PEBBLE TWINE SMART THINGS
Run Time: 02:48 02:28 04:22
Total Word Count: 359 449 907
Total Unique Words: 196 206 316
Number of Sentences: 38 30 46
Average Sentence Length: 9.45 14.97 19.72
Hard Words: 8.36% 6.90% 5.29%
Lexical Density: 54.60% 45.88% 34.84%
Fog Index: 7.12 8.75 10

Three successful videos with three distinct styles. Pebble used short, simple sentences to communicate their ideas in a very crisp manner. Twine followed the same but in a slightly less formal way. And on the other end of the spectrum Smart Things had a high-fi video with a long script composed of complex sentences and ‘harder’ vocabulary words.

If you’re interested you can analyze the scripts yourself:

Advice From the Pro’s

[vimeo 44324460 w=500 h=281]

This panel interview is full of nuggets of Kickstarter wisdom. The video reinforces and colors much of the research above. I recommend watching it, then watching it again.

The panel includes:

I’ve included some notes on the topics covered. Any mistakes or misrepresentations are mine. All of the good stuff is credited to Eric, Eddy, and Michael.

PROJECT LENGTH

  • 30 – 45 days [37 days]
  • <30d projects have highest success rate
  • remind me button boosts commits at the end 

COMMUNICATION

Eric Migicovsky:

  • highly encourage you to be very, very communicative with your backers. as much as you can
  • three a week (in practice turns into once a week)
  • don’t be afraid to post about bad news
  • they’re there for the whole experience -> told a story about a laser catching fire. it’s fun!

COST AND REWARD PRICING

Eddy Vroman:

  • have a base reward and an up-sell reward
  • reseller packages: 10 pack, 50 pack, 80 pack (sold 7 of these)

Mike Woods:

  • you have no idea what the distribution of rewards will be – kickstarter is your market research
  • important to keep margins on each reward level the same
  • don’t have too many (< 30)
  • price needs to include: your time, shipping, amazon 3% fee, KS 5% fee
  • pricing rule of thumb for CEE (consumer electronics):
    • wholesale price = manufacturing cost * 2
    • retail price = wholesale cost * 2

Eric Migicovsky:

  • best price at the fold. pick macbook air resolution
  • amortize all costs
  • binary outcome -> go over or fail
  • costing – NRE needed to bring that product to market
  • “we actually needed $150k but went with $115k”
  • chose “$115 not for any good reason”

PUBLIC RELATIONS

Eddy Vroman:

  • one of us fully dedicated to press reachout (former PR guy)
  • had a pre-populated list of 300 people (CNET, HN, etc)
  • 30% backers came from Kickstarter, 70% from external (same for Pebble)
  • have good coverage outside of Kickstarter
  • mac blogs, exclusive with CNET
  • nothing happened for first two hours after launch

Mike Woods:

  • pay attention to your backer list (they had an editor from CNET). use their name / email to figure out who they are
  • be really nice to the folks at Kickstarter

 Eric Migicovsky:

  • 30% backers came from Kickstarter, 70% from external
  • Topsy, viral analysis
  • 100 points of contact
  • peak and trough. common KS graph. but other bursts due to blog
  • exclusive launch partner -> senior editor Engadget
  • four or five hours a day doing media stuff. answer all inbound email
  • adstruc :: get quotes, 50% off, $500 for billboard print + install, $10k mo
  • hired a guy to handle twitter launch. respond to every tweet
  • kickstarter referral is totally long tail:
    • FB 3% of referrals
    • Mac Rumors 2.5% [top referring site]
    • KS
    • KS Design
    • Google
    • Engadget
    • etc

CONCERNS

Eddy Vroman:

  • nothing happened for first two hours after launch

Mike Woods:

  • figure out the boring parts where you make mistakes, and correct in advance

Eric Migicovsky:

  • overbuilt the PR strategy (JB: I can’t agree with this enough)
  • choose final ID before you launch, can’t change
  • what cool things could we announce midway through to make it better?
    • drop in bluetooth –> bluetooth LE

LOGISTICS

Eric Migicovsky:

  • keep it simple as possible!
  • colors, options, etc can create a huge combo matrix

OTHER THOUGHTS

Eric Migicovsky:

  • nobody gives a shit about your product at first
  • find people who believe in your product around the world.
  • general video statistic – half the people will stop watching after 45s
  • have everything in text also
  • make the person push the PLEDGE button very quickly
  • be convincing
  • take pre-orders
    • make hardware really cheap. sell 100 rather than 1,000
    • get users. immediate feedback.
    • feedback on production
  • did a lot of work before launch
    • showing it to potential customers
    • showing it to potential copy cats –> have to be ready to go into production
    • copy of product on kickstarter while campaign was underway
March 15, 2013

Home in Flux

A visualized representation of the states I called home during the 2012 calendar year (Flomio’s fledgling first year) –

screen-shot-2013-03-14-at-9-14-43-pm

And my living arrangements during that time –

screen-shot-2013-03-14-at-9-08-06-pm

September 5, 2012

Making the jump: Why leaving a six figure salary for startup life was a no brainer

When we talk to customers, fellow entrepreneurs, or others in the Miami startup community I frequently encounter some form of the following question:

“How did you decide to make the jump from a comfortable salary, benefits, and a predictable career path to get Flomio off the ground?”

Well, being accepted into TechStars was a big part of it (more on that later).

The other part of the story – contrary to what most folks think – wasn’t impulsive. Instead it was a highly calculated move that approached the question from a few different perspectives. This post is my attempt to disect that process and illustrate how such a seemingly huge decision became rather obvious with the right approach.

1-3 Drag Coefficients

Finding a framework to assess my tolerance for risk was a critical first step before making the startup plunge. How much financial risk could I realistically take on at this point of my life? How will that change with time?

(spoiler alert: it decreases substantially)

Jason Freedman has a great post outlining a scoring system for drag coefficients. 1-3 drag coefficients mean you’re ready to be a startup founder (with the epic risk, huge potential upside, and all the responsibility that entails). 4-6 for early seed stage employees (company has traction already, you have a guaranteed salary, but you only own 1-5% of the company), and 7+ for later  employees post Series A (revenue! the most stable bucket – with potential for a nice pay day but probably no riches).

I applied this method to my current circumstances:

  • 1 point: For every 5 years after the age of 20
    • Nope
  • 1 point: Ring, fiance or spouse
    • Nope
  • 1 point: Mortgage
    • Nope
  • 1 point: Undergraduate loans
    • +1 Drag Coefficient
  • 1 point: Graduate school loans
    • Nope
  • 1 point: Each kid
    • Nope

No mortgage, no wife, no rings, and no kids. I did take a few student loans – about $6,000 which is pretty small compared to the national average but technically this caused me to pickup one point there. Still with just one drag coefficient it’s clear my risk tolerance was quite high at this point in my life. It was also equally clear that this won’t be the case for too much longer – I hope to have some of the other factors (like kids) in my life at some point.

Conclusion: My tolerance for risk was probably close to an absolute maximum and would  decrease over time. 

Rapidly Increasing Opportunity Cost

I knew I wouldn’t be earning the same salary or benefits in the startup world. Pre-funding we’d barely have enough money to cover expenses so I’d expect to earn about 25% of my previous salary level. Post-Funding things would get better but still probably top out in the 50-60% range, a pretty big difference.

On top of this I’d forfeit a sizable stock grant I was given as a signing bonus. The vesting schedule was set to a five year period and I’d only completed a year and a half – I’d be leaving 80% of it on the table.

Losing money sucks, but what’s worse is losing a lot of money.

The compensation structure at most Big Tech firms is setup to incent you to stay put. Each year you earn additional options or grants set on a multi year vesting schedule. This starts to compound after three or four years, quickly getting to the point where a departure is just too expensive.

Conclusion: Walking away would become increasingly painful and eventually reach a point where it didn’t make financial sense anymore.

Learning from the Index is Free

I’d always wanted to move into a more business oriented role. I’d considered going back to school but obtaining an MBA from a top tier b-school can run as high as $300k when you account for tuition, cost of living, and foregone wages. I imagine I’d pickup some skills and build a strong network but the additional debt would hike up my drag coefficients and severely limit my flexibility.

Meanwhile, entering startup life would expose me to life-and-death decisions on venture financing, marketing strategies, sales projections, distribution techniques, strategy, etc. It would be invaluable hands on experience that would prepare me for the next startup. All at the fraction of the cost of a traditional MBA program.

“We learn from the index, not the table of contents”

–Bing Gordon

Conclusion: Learning from the index is efficient, effective, and cheap. 

Minimizing Regret

And finally, I found Jeff Bezos’ Regret Minimization Framework to be appropriate:

[youtube=https://www.youtube.com/watch?v=jwG_qR6XmDQ]

My favorite part:

I wanted to project myself forward to age 80 and look back on my life – looking back on my life I wanted to minimize the number of regrets I had.

I knew that when I was 80 I was not going to regret having tried this. I was not going to regret having trying to participate in this thing called the internet that I thought was going to be a really big deal. I knew if I failed – I wouldn’t regret that.

But I knew the one thing I might regret is not ever having tried. It knew that would haunt me every day.

And so when I thought about it that way, it was an incredibly easy decision.

–Jeff Bezos

It’s a powerful approach to take because it uses our mortality to help silence some of the short term noise that might distort your thinking. One day you’re going to expire, so why not make your time count? It’s the ultimate long view.

Conclusion:  Years from now you won’t rerget failure. You regret not trying.

Conclusion

Just like software engineering, when faced with a big decision it’s important to approach it with a number of different frameworks before moving forward. They help minimize errors, inject a dose of objectivity, and reduce noise. If you do it right an otherwise daunting decision becomes rather obvious.