The second half of the Hardware Heroes conference coincided with the mobile electronics portion of the Startup Launchpad trade show. The conference had another great lineup of speakers. Here are our highlights from their speeches.
Ivan Kan, co-founder of Crowdcreate
How to launch a million dollar crowdfunding campaign
•Successful crowdfunding comes down to execution.
•Crowdfunding is a fundamental shift in how ideas are brought to market. It allows creators to get feedback and make changes along the way, ensuring a greater chance of success.
•You have to tell a compelling story to get people interested and excited about the product, which also gets them to share the campaign.
•Crowdfunding still requires a lot of promotion (social media ads, forums, etc.) and you need to know how to market the product. “If you don’t know who wants to buy your product, you won’t know how to sell it correctly.”
•Be ready to support the product through engagement and customer support. Don’t be caught off guard if the campaign is a success.
Napoleon Biggs, founder of Web Wednesday Ventures
Digital marketing and omni-channel commerce
•People want to share and engage with content online, so brands have to be there. If you’re selling a product, have someone whose job is to get reviews.
•Tencent has created a lot of value in China by creating games and campaigns that teach people how to spend money through WeChat.
•Topical social media content can resonate with fans and expand a brand’s reach.
•Video content is important and key online influencers can be an important way of growing a brand.
Paul Lee, CEO of Aumeo Audio
What happens after your crowdfunding campaign is funded?
•Think about manufacturing options during the crowdfunding campaign because the factories live on thin margins and can be picky. They’d rather manufacture thousands of iPhone cases with a smaller margin than high margin products with smaller orders.
•Know what tests and certifications you need beforehand so you’re not surprised during the manufacturing process.
•Packaging can be planned early and is one of the easiest things to prepare for.
•Consider how products will be shipped to several different countries with different customs and tariffs, etc. Shipping rates should account for this. Not knowing these policies can also result in higher costs from taxes or shipping the goods back.
•Keep your backers updated. If there’s bad news, spend more time engaging with backers. They’ll appreciate a company that’s more open with them.
Caroline Hammett, head of e-fulfillment solutions at Easyship
Shipping Tips for Your Crowdfunding Campaign
•Startups have to be prepared to go global.
•The biggest challenge in global shipping is pricing. Know whether a courtier charges based on deadweight or volumetric weight.
•Know the Harmonized System code based on the types goods and where they’re going to and coming from. Taxes can be prepaid or paid upon receipt by the receiver.
•Find a shipping partner with warehouses in several locations, good tracking, clear billing automation and good customer service.
Sandy Diao, director of strategic programs at Indiegogo
A Breakdown of the Crowdfunding Page (What Are the Essentials You Need to Have)
•Before you launch, consider where you are shipping and the costs associated with those places and Facebook and Google pixel tracking for images.
•Have a web presence and talk about your team. This helps ensure people their money is going to a trustworthy place.
•Be concise about what you’re offering in the overview section. At least half of the traffic is coming from mobile devices.
•If you’re using Indiegogo and claim you’re ready for production, be ready to prove it.
•Offer secret perks through a specific URL after you launch to thank the fans who have been following the campaign and supporting the brand.
•Use graphical illustrations when practical. Most people don’t read text.
•Consider what your best product features are and how you want to display them to the audience. Include a comparison chart for competitors if relevant.
•Have an FAQ. Many people want to quickly search for a company’s policy on things like refunds and shipping.
•Give regular updates. Fans want to hear the good news and it will help if there’s bad news later.
•Respond to comments. People will check there for questions they didn’t think of.
•Tell your brand’s story to the backers. The campaign video doesn’t have to be like a traditional commercial and might backfire if it is.
Glenn Chen, product development director at Asia Combine
Building and Maintaining Global Partnerships
•To find a good partner, consider your target audience, company vision, the partner’s eagerness and be well-informed.
•The target audience defines companies, whether you’re selling to high-end consumers or a wholesaler.
•Startups should be solution-driven and partners should fit the vision of the company.
•If a partner is willing to go above-and-beyond, it helps that relationship flourish.
•Do research on who you’re talking to to make sure the partnership has potential.
Dana Madlem, VP of Services, Rush Order
Separating Fact from Fiction: The realities of Selling and Distributing Hardware Worldwide
•Hardware is still hard. Rush Order saw an average of 31 months before startups started shipping products.
•Distribution is also hard. After crowdfunding, a startup will be shipping directly to the consumer and may never see similar sales volume again. The company then has to shift to shipping to brick and mortar stores or other distributors.
•Only 8.5% of transactions in the US are through e-commerce.
•A product isn’t really sold until after the customer brings the product home and doesn’t return it in the first 30-60 days.
•Toys see fewer returns and the U.S. has the highest return rates in the world.
•Be ready to beta test products and ask questions at every step.
•Consider the cost of government compliance.
•Making a product is difficult, but distributing and supporting it is equally difficult, if not more so.
Peter Xie, founder of VentureFace
Distribution Strategy Guideline for Hardware Startups
•Online retail accounts for only 5 percent of total potential, so offline channels are important for startups.
•Being ready for distribution requires getting the five Ps right: Product, package, price, place, promotion.
•A product should have some additional value over competitors and potential beyond the first generation product.
•The package is the only presentation you have in the store, so make it count.
•Retail price should be at least 2.5x the FOB price and 4x the factory cost to maintain margin while paying retailers and distributors.
•Tell a story about your brand and product and inform distributors how to promote your product.
•Unless you’re in the U.S. or China, start distributing in your home market and expand abroad. Sell online right away.
•APAC is friendly for hardware startups seeking distribution, so consider those countries when first expanding.
Patrick Campbell, CEO of Price Intelligently
How to Use Value Based Pricing for Growth: Lessons from 8,342 Companies
•Everything is amazing for customers but it’s harder than ever to monetize and grow a business. Competition is higher; prices and customer satisfaction are both falling.
•Business is no longer about acquiring customers. Monetization and retention has two to five times more impact on margins.
•Customer research leads to higher rates of growth. Most companies think they’re building high-value products with differentiable features but actually have relatively low-value products.
•Customer profiles are very powerful. Having a quantified buyer persona will help your company make pricing decisions.
•Surveys are an amazing market research tool as but respect the person you’re sending to. If people aren’t compensated for their time, keep the surveys short but send out every few weeks to continue collecting data.
•Force respondents to make a decision weighing different features/options against each other. This helps identify what’s most important to consumers and what they’re willing to pay for it.
•Don’t worry about scale right away. Start small with one question, one data point, one persona and build over time.
Alex So, founder of FastLane Group
Who Doesn’t Want An “Exit
•Different stakeholders have different motivations, but they’re all looking for an exit.
•It’s impossible for a founder to plan for an exit when they first start a company, but they need a time
•Angel investors want a return on their investment. If they put their money in a startup, they want to get it back at some point.
•Employees may have been offered stock options at the beginning when a startup couldn’t afford higher salaries. Employees are also looking forward to a time when they can realize their shares.
•The traditional exit strategy is to move towards an IPO, but a company may exit using a merger and acquisition, trade sale or liquidation.
Angela Chiu, associate director at KPMG
•Many businesses are not concerned with exit plans, but you must think about it at some point. This is the ultimate goal of a business.
•Any startup that wants to appeal to investors needs an exit plan.
•There were more than 3,350 tech exits in 2016 and 97 percent of them were M&As; 2.9 percent were IPOs.
•There’s no perfect time for an exit, but investors often want a payout in three to 10 years.
•Many things can affect an exit, but the best time is when the company has a good business model and good reputation in the market.
•An M&A can give a company new technology, new products and possibly a new market, but synergy is important.
•M&As are natural among hardware startups because other companies want that tech. Consider Google’s acquisition of Nest or Facebook’s acquisition of Oculus.
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